Details of FMC regime revealed

Craig Foss' press release linked to four Cabinet papers, setting out Cabinet's decisions regarding the regulations and the Bill's implementation.

For financial advisers the most relevant decisions are those that relate to disclosure about financial products and providing discretionary investment management services (DIMS).

Key points on disclosure include:
• confirmation that the product disclosure statement (PDS) will follow the two-part format previously discussed, with a one or two-page key information summary and a more detailed second part;
• a decision to favour highly prescribed PDSs for managed funds, and extend the new KiwiSaver reporting regime to all managed funds;
• an agreement in principle that PDSs should be "evergreen", and that frequently changing information such as financial information should be disclosed elsewhere; and
• replacement of the requirement for all directors to sign the prospectus with two directors being able to sign a PDS on behalf of a board.

Officials will consult further about the contents of the PDS for different types of product, with the Minister indicating that final decisions will be likely to be made at the end of this year.