FMA keeping an eye on transitional licence holders
The "safe harbour" for advisers has ended and the FMA is keeping an eye of transitional licence holders who have not gained a full licence.
Thursday, March 16th 2023, 6:25AM 
1 Comment
by Kerry Meadows-Bonner
The FMA says while the majority of transitional license holders have completed the full licence process, it will continue to monitor the progress of firms that hold a transitional licence, to ensure they either proceed to complete the licensing process, or decide to exit.
FMA media relations manager Andrew Park says if FAPs are still operating under transitional license at this point, then they can continue the process of gaining a full licence, but must suspend providing financial services until it has a full license.
“Like any of our market licensing regimes, firms are able to apply for a licence at any time. The effective date of March 17th simply means that you cannot provide advice without a full licence.” says Park.
He says the FMA continues to engage with the market to understand how firms are prepared for the final stage of the regime now coming into effect and ensure consumers benefit from access to quality financial advice.
“The FMA is tracking advisers relying on the safe harbour for competency standards under the Code of Conduct, who are still working towards the completion of their NZCFSL5 qualification, to meet the standards of competence, knowledge and skill.”
“We are engaging with licensed firms to understand what measures they have in place to manage any situation if any of their advisers are still completing the qualification. We have been assured to date that firms will manage this so that only those advisers who meet the competency standards will be providing advice.”
All licensed FAPs and ABs have until June 17 to complete notifications on the FSPR about their business, and connect any advisers associated with or working under their license, to their registration on the FSPR.
Holding a licence means all firms must meet standards and conditions (if any) of their licence together with duties and obligations under the law including the code of professional conduct for financial advice services.
There are three types of FAP licence:
- The Class 1 licence application process is purpose-built for sole advisers
- Class 2 licences are intended for businesses that engage more than one adviser
- Class 3 licences are most suited to large organisations that engage nominated representatives.
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Why is there 3 months grace to file the paperwork? It's hardly onerous paper.
And in Phils other story, will FMA know how to monitor the new regime only towards the end of next year when the first mandatory returns are in? What were the monitirs doing during the 2 year transitional period? Is SFA really the answer?