Don't dump co-regulation, says ISI
The government should revisit the co-regulation model for its new rules for financial advisers says the Investment Savings and Insurance Association. Hearings began yesterday on the Financial Advisers Bill and the related Financial Service Providers (Registration and Dispute Resolution) Bill.
Tuesday, July 8th 2008, 7:05AM
by Rob Hosking
That approach was changed earlier this year to one where the Securities Commission became the sole watchdog. ISI chief executive Vance Arkinstall told MPs on Parliament's finance and expenditure select committee yesterday the principle of co-regulation should be revisited, but in a different way to what was earlier proposed.
"The industry proposes the establishment of an independent statutory body made up of the Securities Commission and the industry to set standards and rules for investment advice," Arkinstall says.
"A strong precedent for this approach exists in the highly successful models of the Registered Architects Board and the Chartered Professional Engineers Council."
Arkinstall says this meets the government's preference for a strong central regulator in the form of the Securities Commission, but also captures the value of co-regulation and industry input.
The Association also wants the government's proposals for institutions to be accredited under the new regime to be extended to agents of financial institutions who meet "rigorous qualifying criteria".
"This will have the added benefit of the accredited financial institution accepting responsibility for the acts of its agents and will provide greater security to investors if something should go wrong."
Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.
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