Contents
The Financial Markets Authority (FMA) is proposing to consolidate standard conditions across licenced market services into a single set, which will have consequences for all businesses licensed by the FMA, including recently licensed creditors under consumer credit contracts.
The consultation paper and the proposed conditions can be accessed here.
Submissions close on 11 December 2026. We have summarised the key changes.
Consolidation of standard conditions
The consolidation will be delivered through a Standard Conditions document which will include a matrix specifying the market services on which each condition is imposed. The FMA is recommending a number of changes to existing conditions. Among the more significant are:
- making creditors under consumer credit contracts subject to standard conditions, covering business continuity and technology systems, complaints handling, ongoing licensing requirements, outsourcing, record keeping and regulatory returns,
- extending the “internal complaints process” condition for financial advice providers to all licensed market services,
- extending the requirement on financial advice providers and financial institutions to continue meeting the licencing criteria (“ongoing requirements”), to all licensed market services,
- for financial advice providers, tightening the mandatory FMA reporting timeframe for operational resilience events under the “business continuity and technology systems” condition to 72 hours, rather than 10 days, and
- revoking some existing conditions (see below).
The FMA has also indicated that it is still working on how a “suitability of products for investors” condition should be applied to derivatives issuers – an issue consulted on in June 2024.
Five standard conditions to be revoked
| Condition to be revoked | Current market services the condition applies to | Reasons for revocation |
|
Compliance |
Crowd funding Derivatives issuer Discretionary Investment Management Services (DIMS) Independent trustee (corporate) Management Investment Scheme (MIS) Manager Peer-to-peer lending service |
To be replaced with the “ongoing requirements” condition which already applies to other market services |
|
Governance arrangements |
Crowd funding Derivatives issuer DIMS Independent trustee (corporate) MIS Manager Peer-to-peer lending service |
To be replaced by the “ongoing requirements” condition |
|
Notification of material changes |
Financial Advice Provider (FAP) Financial institution |
Duplicates existing reporting obligations in the Financial Markets Conduct Act, FMC Regulations, and the regulatory returns framework |
|
Professional indemnity insurance |
Independent trustee (corporate) Independent trustee (individual) |
The reduced availability of professional indemnity insurance, and the increasing reliance on indemnities from the relevant scheme(s). |
|
Skills and expertise |
Crowd funding DIMS Independent trustee (corporate) MIS Manager Peer-to-peer lending service |
Removal of a compliance burden from licensees. |
Consumer credit providers
No standard conditions currently apply to the provision of consumer credit, which became a licensable market service only on 1 July 2026 when regulatory responsibility transferred from the Commerce Commission to the FMA.
The FMA has proposed that six of the Draft Conditions apply to consumer credit providers: Business continuity and technology systems; Internal complaints process; Ongoing requirements; Outsourcing; Record keeping, and Regulatory returns.
For consumer credit providers who are financial institutions, these will be familiar obligations. However, other consumer credit providers will need to focus on ensuring they are compliant with the proposed conditions. The “Outsourcing” and “Business continuity and technology systems” conditions in particular are likely to require careful consideration. For example, lenders will need to consider whether their outsourcing contracts contain suitable termination provisions so lenders can continue to meet their licence conditions.
It will consult separately on the specific information consumer credit providers would need to provide in regulatory returns (if the “regulatory returns” condition is ultimately imposed on the sector).
Next steps
The FMA has indicated that it will provide six months’ written notice of any new requirements arising from this standardisation project. But providers should consider making a submission and the impact of the potential changes on their existing policies and processes to establish whether any changes are needed.
Please contact one of our experts should you require any help.
