ASB has opted out of the retail derivatives game, cancelling its Financial Markets Authority (FMA) licence to offer the high-risk products last week.
A spokesperson for the bank said: “ASB has made the decision to no longer provide regulated offers of derivatives to retail customers and therefore we no longer require a derivatives issuer licence.
“Few ASB customers have held products that require us to hold a derivatives issuer licence and we currently have no open transactions provided under this licence.”
The FMA has issued 25 derivative licences (including ASB) in a mixed market ranging from niche operators to mainstream institutions: for example, ANZ, BNZ, Westpac and Kiwibank are all licensed retail derivatives providers.
But the sector has been a constant source of regulatory attention with three licences currently suspended and a string of FMA actions of late – most recently, the censure of contracts-for-difference firm, CTLR Investments, this March for poor client controls.
Elsewhere last week, the Asset Class KiwiSaver funds offered via the Booster scheme have gone greener after completing the shift to a new set of environmental, social and governance (ESG) funds.
The Asset Class funds, advised by the Hastings-based Stewart Group, began the move to ESG-themed equities and fixed income strategies last year in concert with underlying investment provider, Dimensional Fund Advisors (DFA).
In a release, the Stewart Group says the ESG funds screen out the usual range of sin sectors (tobacco, alcohol, guns etc) while also either excluding or under-weighting companies with “relatively high carbon emissions and poor sustainability scoring”.
“Stewart Group and DFA have completed a thorough stress testing analysis for the new allocations and have concluded that the performance of the new funds to interest rate and other market shocks or scenarios is not expected to materially change compared to the previously held funds with no ESG overlay,” the statement says.
The changes also come with fee reductions across the three Asset Class funds – covering conservative, balanced and growth risk settings – that are currently priced between 1.14 to 1.28 per cent.
Meanwhile, nationwide wealth management group, Forsyth Barr, struck a distribution deal with peak NZ agricultural body, Federated Farmers, last week.
The deal will give Forsyth Barr, now the largest wealth management group in NZ by adviser numbers, access to members of the influential farmer lobby organisation.
“Under the partnership, Forsyth Barr will deliver market and sector insight and analysis, investment advice and wealth management services to members of Federated Farmers through a variety of channels including seminars, publications and advisory sessions,” a joint statement says.
Neil Paviour-Smith, Forsyth Barr managing director, said the advisory firm already had strong links to the NZ rural community.
“We understand the very important contributions the industry makes, and some of the challenges facing farmers today,” Paviour-Smith said. “Our goal is to make Forsyth Barr’s expertise available, supporting Federated Farmers’ goal of adding value to the business of farming for its members.”