FSP rules tightened
People with recent overseas criminal convictions will not be able to register as financial services providers, under changes announced today.
Tuesday, March 12th 2013, 1:06PM 
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Registered financial advisers have been subject to only limited disclosure obligations.
But Commerce Minister Craig Foss said Cabinet had agreed to strengthen the financial service providers registration regime.
“The proposed changes will further help prevent the misuse of the register by overseas entities trying to take advantage of New Zealand’s reputation,” he said. “These measures will help maintain New Zealand’s reputation as a trusted place to do business and work towards achieving the Government’s Business Growth Agenda outcomes.”
The Financial Markets Authority will be able to direct the registrar of financial services to decline registration where the FMA is not convinced it is necessary or desirable, and the registrar’s inspection powers will be widened to seek any information necessary, including whether an application should be referred to the FMA.
People with foreign criminal convictions for theft, fraud or money laundering in the past five years will not be able to register. People with New Zealand convictions are already disqualified.
The issue of foreign convictions was debated last year when Tone and Dennis Munro registered as financial service providers, just months after being convicted in Australia of lying to investors.
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Further - all FSP registrations should be subject to a "fit and proper person" test, which should be annually renewed.
These actions apply in other jurisdictions, and are not overly onerous for the 99% of industry folks who intend to play by the rules. They have the added advantage of improving consumer sentiment towards the entire financial services industry.