The latest Level 4 COVID alert is likely to see fewer financial services deemed as ‘essential’ under formal exemptions compared to previous lockdowns.
In a release, the Financial Markets Authority (FMA) says it is collaborating with the Reserve Bank of NZ and the Ministry of Business, Innovation and Employment (MBIE) to develop “a list of financial services we consider essential to the functioning of New Zealand’s markets”.
“We are working towards having these included in the next round of amendments or receiving a class exemption from the [formal government] Order,” the FMA statement says. “We anticipate what may be considered essential financial services to be narrower than in previous Alert Level 4 scenarios.”
Currently, the exemption only applies to banks and licensed non-bank deposit-takers for “carrying out critical financial services”, namely:
- processing and maintaining systems for processing financial transactions and services (for example, payment, clearing, and settlement; wholesale funding; insurance services; card re-issue; fraud monitoring; and capital markets activities);
- providing consumer and business access to credit and lending services;
- ensuring provision of funding for ATMs, and to move currency and payments (such as armoured cash carriers); and,
- providing necessary banking support for customers who need assistance from carers and/or are unable to use remote banking services, as required.
But the ruling leaves the rest of the financial services industry – including fund managers, administrators, supervisors and advisers – in regulatory limbo-land as the sector is “currently not included” in the government list of ‘essential’ businesses.
“Firms are still able to go on-site to maintain critical systems/infrastructures which cannot be completed remotely,” the FMA says.
The government order also allows all businesses to keep important operations ticking over including “back-office functions, Treasury, payment, settlement, and registry functions, or other similar activities”.
“However, financial services firms may not currently provide any services face-to-face to the public,” the FMA says. “In all cases, if employees need to work on site, they should be strictly limited.”
As at last Friday, the combined regulators had yet to update the industry with a more detailed list of permissible activities but the FMA says it hopes “to provide more clarity on the role of financial services at Alert Level 4 shortly”.