Contents
The Financial Markets Authority (FMA) wants feedback on an annual regulatory return regime for licensees under the Conduct of Financial Institutions (CoFI) legislation. Submissions close at 5pm on Friday 25 October 2024.
Content of regulatory returns
The purpose of the annual returns is to provide the FMA with the up-to-date information it needs to assess a licensee’s compliance performance and risk so that it can ensure fair treatment for consumers and prioritise its supervision and monitoring activities.
The proposed form return comprises questions across 11 sections, including questions on:
- Business structure, including the relevant services provided by the FI, its authorised bodies and any intermediaries
- Review and maintenance of the Fair Conduct Programme (FCP)
- Associated products and Distribution methods
- Consumer care, handling conflicts, and incentive management
- Conduct risk management, including board oversight
- Complaints handling and resolution
- Remediation of issues and their timelines
- Employee resourcing and training
- Outsourced functions
- Business continuity and operational resilience of technology systems
- Record-keeping policies and consumer contact information updates.
Possible legislative changes
The consultation document is based on current statutory requirements. The FMA will consider whether tweaks are needed to reflect the updated fair conduct programme changes and move to a single financial market licence announced by the Government in May, once the amendment bill becomes available.
However, the FMA acknowledges that to harmonise returns for licensed firms (e.g., by creating a single return that covers all of the market services a firm provides) would “take some time” to implement, and is also seeking feedback on any concerns FIs have on the impact the proposed return will have on compliance costs in the interim.
Reporting period
Generally, returns will need to be filed by 30 September (for the period from 1 July to 30 June in the relevant year) providing a three-month window to complete the return. But, given the return format is unlikely to be finalised and available until March 2025, the FMA is considering a shortened reporting period – 1 October 2025 to 30 June 2026 – for the first return.
