A new Order in Council this week will bring into effect changes to the territorial application of the Financial Service Providers (Registration and Dispute Resolution) Act 2008 (FSP Act) on 16 December 2021.
The link to the Order in Council issued is available here.
Who needs to read it? Why?
This update will be relevant to all financial service providers who have been relying on the transitional provisions in the FSP Act to be exempt from registration under the new section 7A. This will be particularly relevant to overseas financial service providers with New Zealand retail clients above a minimum threshold.
What does it cover?
Clause 3 of the Financial Service Providers (End of Transitional Period) Order 2021 states that Clause 2 of Schedule 1AA of the FSP Act ceases to apply at the close of 16 December. Clause 2, in turn, provides for the transitional period and exempts persons who are subject to the FSP Act only by virtue of the new section 7A from the requirement to be registered on the FSP Register, or to be a member of an approved dispute resolution scheme.
Therefore, all financial service providers who have been relying on the Clause 2 exemption will need to be registered on the FSP Register and become a member of an approved dispute resolution scheme (if they provide a financial service to a retail client) by the close of 16 December.
Our view
Overall, it is good that prior notice has been given as to the end date of the transitional period under the FSP Act. This provides financial service providers who have been relying on it with greater certainty as to their future obligations. They will need to become compliant by the end of the transitional period.
What next?
If you have any questions in relation to the end of the transitional period under the FSP Act or would like assistance in compliance with the regime, please contact one of our experts.
