The Financial Services Legislation Amendment Bill (FSLAB) likely won’t get a second reading in parliament until at least the second week of September.
As parliament wrapped up its August activity last week, FSLAB was bumped slightly from 20 to 21 on the order paper as the ‘Birth, Deaths, Marriages and Relationships Registration Bill’ ascended in importance.
Generally, parliament only gets through a handful of agenda items each day suggesting FSLAB would be slated for a mid-to-late September second reading.
According to a government statement, once parliament resumes on September 4 it would give “priority” to legislation including the Canterbury Earthquakes Insurance Tribunal Bill and the Conservation (Indigenous Freshwater Fish) Amendment Bill.
At the end of July the select committee considering FSLAB, which will bring the financial advisory regime under the Financial Markets Conduct Act (FMC), recommended a raft of – mostly minor – changes to the draft legislation summarised last week as:
- removing the requirement that only a natural person can give financial advice, to allow for the provision of online advice (“robo-advice”)
- expanding the minimum standards of competence, knowledge, and skill to all categories of people giving financial advice to retail clients
- requiring all people who give regulated financial advice to comply with standards of ethical behaviour, conduct, and client care
- adding a requirement that anyone who gives financial advice must put the interests of the client first and disclose prescribed information
- limiting who can give regulated financial advice
- simplifying the regime and its terminology, for example by removing the categories of Authorised Financial Advisers (AFAs), Registered Financial Advisers (RFAs) and Qualifying Financial Entities (QFEs)
- amending the requirements to be registered on the New Zealand FSPR to prevent its misuse.
The currently 115-page FSLAB will fundamentally alter both the structure of financial advice businesses – by moving from individual to entity-licensing – and bring a vastly-expanded adviser population under similar regulatory standards.
In statement this May, Commerce Minister, Kris Faafoi, said: “The FSLAB aims to ensure more Kiwis are able to access good quality financial advice. Regardless of how a consumer chooses to access financial advice, the new requirements will provide reassurance that the advice is sound and their interests are being put first.
“My hope is that over time the changes that we make will increase consumers’ trust in the financial services industry and lift their ability to manage and future-proof their finances.”