FNZ faces a temporary ban from taking on certain new clients in the UK without written consent from the Financial Conduct Authority, according to press reports, signalling a step-change in regulatory oversight of platforms in the jurisdiction.
The Citywire New Model Adviser report says the FCA issued a notice effective October 11 this year requiring FNZ to seek permission from the regulator before entering “into any agreement with an existing or new client” involving the migration of assets onto its UK platforms.
Earlier this year the UK financial regulator handed FNZ a so-called ‘section 166’ notice, triggering a review by an independent ‘skilled person’.
The FCA says the section 166 provision allows the regulator to source a third-party view if it is “concerned about aspects of a regulated firm’s activities or want further analysis”.
Auditing and accountancy business Grant Thornton is carrying out the FNZ review, according to Citywire.
The news report says the FCA would remove the stop on new business for FNZ when it has “received adequate assurance from the firm that it has completed all material remedial actions identified by the skilled person”.
FNZ has struck regulatory trouble in the UK previously after the Competition and Markets Authority halted the group’s takeover of ASX-listed financial software supplier, GBST.
And in another move highlighting the central role of FNZ in the UK financial architecture, the FCA also recently designated the platform provider as a ‘co-manufacturer’ – a change bringing “significant regulatory implications”, The National Law Review (NLR) reported in November.
“By classifying FNZ as a co-manufacturer, the FCA emphasizes that firms providing platform services are not merely facilitators but active participants in product development,” the legal publication says. “This classification holds FNZ accountable for ensuring that products are designed to meet the needs, objectives, and characteristics of the identified target market.”
The decision sets an important industry precedent, the NLR says, for other platform providers as well as those “involved in insurance product distribution”.
“This underscores the necessity for firms to evaluate their roles in product development and ensure compliance with the FCA’s product governance rules.”
FNZ founder, Adrian Durham, stepped down as chief in August to assume special advisory and director roles at the global platform giant established in Wellington in 2003.
Blythe Masters, a co-founder of FNZ shareholder Motive Partners, replaced Durham as chief executive.