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Financial Intermediaries Task Force

Financial Intermediaries Task Force. Cathy Quinn Member. Commission perspective. Concerned about regulatory regime for investment advisers for some time Supports the Task Force’s work Agrees with the issues and the need to give them priority Encouraged by Government’s initial response

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Financial Intermediaries Task Force

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  1. Financial IntermediariesTask Force Cathy Quinn Member

  2. Commission perspective • Concerned about regulatory regime for investment advisers for some time • Supports the Task Force’s work • Agrees with the issues and the need to give them priority • Encouraged by Government’s initial response • Can’t pre-empt Government decisions

  3. Commission perspective Will cover today the Commission’s • concerns about current regulatory environment for advisers and • issues the Commission believes are important in designing regulation appropriate for New Zealand

  4. Priorities for reform Disclosure important, but not enough • Regulation of advisers almost entirely disclosure based • Current rules inadequate for informing investors • Commission recommended changes now in the Securities Legislation Bill • Support the Task Force call for more • Financial literacy important but long term goal

  5. Priorities for reform • Industry standards so that advisers are competent and consider their client’s interests • Clear standards of conduct for advisers • Cost-effective ways for investors to have disputes resolved • Effective enforcement to increase investor confidence

  6. Co-regulatory model • Commission supports the broad scope of Task Force review to include range of products • Need a flexible approach to regulation • Co-regulation could achieve this but a regulatory back-stop is important • Transitional arrangements will be needed to allow the industry to adjust

  7. International standards • NZ regulation of intermediaries should comply with international standards • FSAP found shortcomings • NZ needs to be seen to provide markets of integrity that meet international standards • Design of regulation should keep in mind progress on trans-Tasman recognition • But also must be appropriate to the needs of the New Zealand market

  8. Dispute resolution • Vital aspect of regulation • Cost effective redress for investors • Independent disputes resolution body • Voluntary nature of current schemes is a weakness • Non-members’ clients have only Court action as an option

  9. Enforcement • Support independent disciplinary body • Private enforcement has not been effective • Recent legislative changes have given more enforcement powers to the Commission • Regulatory powers often more cost-effective than Court actions

  10. To sum up • Task force’s report welcome - addresses key concerns • entry and ongoing standards • dispute resolution • effective enforcement • Co-regulatory option a good choice for New Zealand • Design of system crucial to good outcome

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