FMA wants to increase its hourly rate
Most DIMS providers will likely have to pay $3565 to be licensed under the Financial Markets Conduct Act next year.
Friday, November 29th 2013, 6:49AM 
3 Comments
by Susan Edmunds
When the new rules kick in, those who are offering class DIMS advice will have to be licensed, along with other financial services providers, such as fund managers.
The FMA has released a discussion document about the fees it will charge, because it says the licensing regime will result in extra costs for the regulator.
“These costs need to be fully recovered from licensees.”
It has called for submissions on its proposals.
Ongoing costs after licensing will be collected via the FMA annual levy, which it says will need to be adjusted. Consultation on those adjustments will take place next year when the levy comes up for review.
The FMA has recalculated its hourly rate and says licensing fees will be set with a combination of a flat fee and an hourly rate for work beyond that.
“On balance, we believe that a flat fee plus an hourly rate will allow for an accurate cost recovery process for FMA and a fair fee for licensees. We expect the majority of market services providers will be submitting ‘standard applications’ and will only pay the flat fee. We envisage that the hourly rate on top of the flat fee would only be charged to providers who submit ‘resource intensive’ applications. The hourly rate will allow FMA to capture the outliers of the licensing regime rather than the majority of licensees.”
People charged more would be those who submitted incomplete applications or providers with large and complex legal structures or who were high-risk.
It says: “The hourly rate incorporates FMA resource costs. Licensing different types of market services providers will vary in complexity and time taken to process applications. The variation between FMA resource requirements for licensing each type of market services provider will determine the difference between the fees.”
It says the hourly rate is uses to calculate FMA fees has not been changed since 1998 and is no longer accurate. It wants to increase the rate from $166.62 to $178.25, including GST.
The FMA board member hourly rate would remain at $230.
At the moment it is not consulting on adviser fees administered under the Financial Advisers Act.
The FMA also proposes that fund managers pay $3565, derivative issuers $10,695, independent trustees of a restricted scheme $2139 and regulated intermediaries $6238 for their new licenses.
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I guess someone has to pay those big fat public servant salaries on offer at the FMA (see earlier article below) I thought regulation was supposed to benefit the consumer foremost and not the bureaucrats? We are seeing this happen time and time again in New Zealand with many different industries that are regulated (not just financial services) and people are getting sick to death of it.
"The report revealed that one FMA employee is paid an annual salary of between $500,000 and $510,000, two receive between $280,000 and $310,000 and three are paid between $260,000 and $270,000."
Meanwhile the regulator pays it's top 6 salaried staff $2 million per year and wants to raise that.
The exact opposite of what was intended is the outcome. As always with regulation.
God defend New Zealand against this.
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more cost to the consumer
but not one whit of success by the FMA in improving public confidence in markets or advisers
just about any other career looks more attractive than being an adviser
the only reason I'm still here is because 99% of my clients are very nice people