News Round Up: July 4

Australian firms exempt from Financial Advisers Act; Number of KiwiSaver default schemes ‘worth examining'; Long wait for Hubbard investors; Sir John Anderson to chair Financial Summit.

Monday, July 4th 2011, 7:20AM

Australian firms exempt from Financial Advisers Act
The Financial Markets Authority (FMA) has announced Australian regulated firms have been granted an exemption from the Financial Advisers Act 2008 for New Zealand based clients.

The FMA said the purpose of the exemption was to allow Australian regulated firms "to provide financial adviser services into New Zealand, provided certain conditions are met."

The exemption is until June 30, 2013 and is only on a temporary basis, "to ensure Australian businesses can continue to provide services into New Zealand from July 1, 2011 when the new Financial Adviser laws come into force, and while more permanent mutual recognition arrangements are being considered with Australia."

The exemption extends to firms that hold a current Australian Securities and Investments Commission license and do not have a place of business in New Zealand, have informed the FMA of their wish to be exempted and provided details of their representatives and New Zealand clients.

Australian firms seeking exemption are also forbidden from actively marketing to New Zealand clients.

"This means they can not engage in any conduct that might solicit or induce clients, or any conduct that might have that effect."

Number of KiwiSaver default schemes ‘worth examining'
Changes to the number and nature of KiwiSaver default scheme providers is "worth examining in slower time", according to a Treasury paper on Budget 2011 KiwiSaver reforms.

The paper, dated February 18, is one of a host released by the Treasury last week relating to Budget 2011.

The paper also revealed Ministers rejected proposals for a ‘soft' compulsion recommendation and that the Treasury was aware the changes would create "uncertainty and unpredictability which is not helpful or encouraging to individual savers."

One of the proposals rejected by Ministers would have seen "all eligible employees who have not previously been auto-enrolled and are not already members of KiwiSaver or an approved superannuation scheme, who do not indicate in advance of the enrolment that they do not wish to be enrolled."

The need to carefully communicate the recommendations was also highlighted, as the paper acknowledges the changes "may reduce perceptions of the stability and predictability of the scheme."

Long wait for Hubbard investors
In their seventh report to investors, the statutory managers of Aorangi Securities and Hubbard Managed Funds have reported that the schedule and amount to be repaid to investors "is unclear."

Citing the complexity of third party loans, the managers said they hoped to distribute 8c in the dollar to Aorangi investors this month, but that was dependent on the repayment of a refinancing loan and less than expected.

The payout reflects "the difficulty the statutory managers continue to have in collecting loans and sorting out ownership issues relating to various farms."

"Investors will have a long wait for repayment on investments because assets purported to have been transferred to Aorangi may still be owned by Mr and Mrs Hubbard."

Sir John Anderson to chair Financial Summit
Commerce Minister Simon Power has announced Sir John Anderson will chair the Government's Financial Summit which will examine issues around irresponsible lending.

Power said Anderson's experience and expertise across both the community and financial sectors would ensure "this summit results in action"

He said one of the key things he wanted the summit to achieve was to send a message to all financial sector providers - from larger and more mainstream to smaller, third tier players - that they all need to practice and commit to responsible lending and consumer debt management.

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KiwiSaver mismatch a 'huge challenge' for advisers »

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