Commerce and Consumer Affairs Minister Kris Faafoi has today released a paper on compliance costs for those operating under the new financial services regime. The review covers the licence fee payable to the FMA and the annual levy to contribute to the FMA’s funding more generally.
Faafoi says he is releasing this discussion document to seek feedback on the proposed fees and levies. He has heard concerns about how the costs of the regime will affect smaller practices. “Those practices are a hugely important part of the ecosystem and I want to ensure that compliance costs are appropriate for those practices.”
He acknowledges the input from the industry on the design of the new regime and says “We now need your input to ensure that the details of the regime are workable and appropriate.”
In particular the discussion paper seeks feedback on the following proposals:
There are two sets of fees being proposed, transitional and full licensing.
This process is seen as relatively straight forward and unlikely to vary much among different applicants. As the FMA will incur similar costs for all applicants the fee will be spread evenly across all applicants through a flat transitional licence application fee.
There will be additional fees for each authorised body within an application and for late applications to vary licence conditions.
The process for a full Financial Advice Provider (FAP) licence will need to take account of a wide range of factors and therefore the fee will reflect the complexity of the application based on a FAP:
The complexity and therefore costs increase from “a” through to “c”. The proposal is to have a flat fee for each category plus an hourly rate for complex applications that take longer to process than estimated. Also there will be an additional fee for each authorised body included in an application and for later variations to licence conditions.
At this stage there is no proposal to charge a separate renewal fee; any applications to renew a licence would be charged the full application fee. Currently licences under the FMC Act are granted for 5 years, the FMA is considering whether to remove expiry dates.
Submission on the Discussion Paper
Submissions to the Ministry of Business, Innovation and Employment (MBIE) must be received no later than 5pm on the 22nd February 2019.
IBANZ will be making a submission and is seeking input from members on their response to this paper
These charges will apply to all members - corporates and individuals. The costs will be significant, we therefore urge members to read the discussion paper and give us their comments on what is proposed.
Proposed fees and levies are set out in the paper.
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