FMA now accepting licensing applications under CoFi regime
From today the Financial Markets Authority (FMA) – Te Mana Tātai Hokohoko – will begin accepting licensing applications for financial institution licenses under the Conduct of Financial Institutions (CoFI) regime.
Tuesday, July 25th 2023, 3:49PM 
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Under CoFI, about 100 registered banks, licensed insurers, and licensed non-bank deposit takers such as credit unions will need to be licensed by the FMA to provide financial services to consumers.
CoFI, which comes into force on March 31 2025, requires these institutions to put fair treatment at the heart of their business.
Each institution must treat consumers fairly – the “fair conduct principle” – through the requirement to establish, maintain and implement a fair conduct programme. They must take all reasonable steps to comply with the programme and with regulations that ban target-based sales incentives and regulate other types of incentives.
FMA executive director of Regulatory Delivery Clare Bolingford says “It is important that consumers get the financial products and services they need throughout their life, when they need them, and have trust and confidence they will do what they are meant to. The overarching requirement for institutions to ‘treat consumers fairly’ is paramount throughout the lifecycle of a financial product.
“It applies when institutions are designing products and at the point of sale, where financial institutions should think about whether the product is right for the consumer rather than selling to just anyone. And it remains front of mind post-sale and throughout the customer relationship, particularly when consumers need clear information or when dealing with a claim or complaint.”
“It’s important for firms to allow sufficient time to prepare their license application and consider the contents of their fair conduct programme well ahead of 2025 - we encourage firms to start that work now and submit their licence application as early as possible. We're here to help with the process and answer any questions.” she says
Institutions need to establish their fair conduct programmes before they submit their licence applications, but they don’t need to be fully implemented until the regime comes into effect.
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The National Party has called the CoFi law a solution looking for a problem. Many within the financial sector have accused it of legislative overkill and a needless replication of the FAP programme. CoFi is just the latest example of overregulation adding unnecessary complexity to industry when it doesn’t need it. Inevitably the costs associated with these changes will get passed on to consumers.
This is legislation orchestrated by a bunch of politicians whose ideology makes them have an instant distrust of industry.