The Financial Markets Authority (FMA) is toughening its approach to the misuse of the Financial Service Providers Register (FSPR) it announced this morning
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The Financial Markets Authority (FMA) is toughening its approach to the misuse of the Financial Service Providers Register (FSPR) it announced this morning.
The regulator’s report on the FSPR sets out its work to prevent the misuse of the FSPR between 2014 – 2017.
The FSPR was introduced in 2008, and in 2010 it became a legal requirement for businesses or individuals providing financial services in New Zealand or for New Zealanders, or from New Zealand. It is overseen by the Registrar of the FSPR, which is part of Companies Office.
The FMA says it will target New Zealand directors of FSPR businesses who encourage or facilitate abuse of the FSPR. Directors are personally liable under the Companies Act for a company’s compliance with a number of obligations.
FMA will use the full range of its enforcement tools against directors of firms who register under false pretences or in breach of the regulations. The FMA’s powers range from administrative orders and warnings to criminal charges.
Liam Mason, Director of Regulation at the FMA said: “In our experience, some local directors of businesses on the FSPR provide at most an administrative service with little or no real governance role in the company.
This report sets out clearly our expectations of these directors, their responsibilities and scenarios where we could look to take further action.
The legal action brought by companies challenging deregistration from the FSPR clearly shows the value these businesses place on registration in terms of giving them credibility in the eyes of investors.”
Other details in the report include:
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The regulator’s report on the FSPR sets out its work to prevent the misuse of the FSPR between 2014 – 2017.
The FSPR was introduced in 2008, and in 2010 it became a legal requirement for businesses or individuals providing financial services in New Zealand or for New Zealanders, or from New Zealand. It is overseen by the Registrar of the FSPR, which is part of Companies Office.
The FMA says it will target New Zealand directors of FSPR businesses who encourage or facilitate abuse of the FSPR. Directors are personally liable under the Companies Act for a company’s compliance with a number of obligations.
FMA will use the full range of its enforcement tools against directors of firms who register under false pretences or in breach of the regulations. The FMA’s powers range from administrative orders and warnings to criminal charges.
Liam Mason, Director of Regulation at the FMA said: “In our experience, some local directors of businesses on the FSPR provide at most an administrative service with little or no real governance role in the company.
This report sets out clearly our expectations of these directors, their responsibilities and scenarios where we could look to take further action.
The legal action brought by companies challenging deregistration from the FSPR clearly shows the value these businesses place on registration in terms of giving them credibility in the eyes of investors.”
Other details in the report include:
- 115 registrations on the FSPR have been reviewed, resulting in 69 firms being deregistered from the FSPR and 21 choosing to deregister voluntarily
- Of 93 applications for registration on the FSPR referred to the FMA, just 19 were allowed to proceed
- Three financial service providers (FSP) have brought legal action against the FMA following a decision to direct the Registrar to deregister the company from the FSPR. These cases have been resolved in the FMA’s favour
- The Registrar of the FSPR reviewed 1956 FSP applications in the period covered, carrying out 142 onsite visits
- The FMA has received a total of 1080 complaints against 296 businesses or individuals on the FSPR.
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