Financial services and New Zealand’s COVID-19 strategy

  • Opinion

    23 September 2021

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Auckland moved to Level 3 of the COVID-19 alert system from 11.59 pm on Tuesday 21 September 2021, while the rest of New Zealand remains at Level 2 as provided by the COVID-19 Public Health Response (Alert Level Requirements) Order (No 12) 2021 (Order). The Government guidelines on how financial service businesses and staff should operate are here for Alert Level 3 and here for Alert Level 2 (the Guidelines).

The COVID-19 levels present particular challenges for financial services businesses, whose workforces may be a mix of employees and independent contractors, e.g. financial advisers and nominated representatives, particularly where business models involve direct interaction with the public either at business premises or at a place chosen by the client. Client and co-worker expectations in terms of vaccination can also be difficult to manage.

This time is different

The Delta variant of COVID-19 has changed organisations’ workplace health and safety risk both for clients and the workforce. This is a complex and developing area, and we are seeing many fund managers, financial advice providers and other financial service providers needing to undertake a careful balancing exercise between health and safety duties, privacy and human rights concerns, and employee rights.

The Guidelines refer to “banks and financial institutions” in places but does not address other financial service providers. Therefore, other financial service providers are required to interpret a range of general requirements. For example:

  • Previously in Alert Level 4, everyone was required to work from home, if they could, unless they were essential services.  Financial services, in contrast to last year, were not included as essential services (but there were specific exemptions).
  • At Alert Level 3, everyone is still required to work from home if they can.  The Guidelines say
  • “If business involves close physical contact, it cannot open.  All other businesses can operate, but with restrictions.”
    • “Customers cannot come onto your premises — unless you are a: … bank or financial institution — in person customer transactions can only happen if online or phone banking options are not possible.”
    • “Financial advice firms can open its office for workers if it can ensure that Alert Level 3 distancing and hygiene measures are taken.  Customers and clients cannot enter the workplace.”
    • “Your employees can go into someone’s home to work if they are a tradesperson” A list of examples in the Order does not refer to financial advisers.  For financial services, the FMA is of the view that everything should be done remotely where possible, and there will be very limited reasons why a financial adviser would need to visit a client’s home.
  • At Alert Level 2, everyone can go to work, and all businesses and services can open but must follow public health rules.  In particular, “banks and financial institutions” can open and allow customers onto their premises.

The Order itself also has additional restrictions and exemptions not covered in the Guidelines, including to minimise travel between areas with different alert levels, and the details of on-premises restrictions.

In particular, there is an additional condition that banks must have systems and processes in place to prevent food and drink from being served for consumption on premises.  Financial service providers should consider themselves subject to a similar constraint.

Vaccinations and the workplace

To deal with the new and ongoing impacts of Delta, organisations should consider the following key issues:

  • Prepare health and safety risk assessments and business continuity plans (BCP), which consider the impact of the Delta variant of COVID-19: This is core for organisations to plan the workforce’s return to the office and customer/client interactions, and will be critical as New Zealand moves down (and potentially up) through alert levels with Delta present in the community. It will also help organisations adapt to a future where, as the Government has said, “the elimination strategy does not mean zero cases”.
  • The vaccination status of workers (employees and contractors): While organisations cannot require an individual worker to be vaccinated, they can (and in some cases should) require that certain work is performed only by a vaccinated person based on the risk to the person, to other workers, and to customers. When determining if certain work should be performed by a vaccinated person, an organisation should rely on a health and safety risk assessment (which is inherently a fact specific assessment).
  • Prepare a vaccination policy: Reflecting the additional steps in place to protect workers, and customers or clients who may come into contact with its workers. This will be particularly important where an organisation has ‘front line’ workers who interact with the public, as well as workers who may be required to undertake home visits or meetings outside the office.

For further information on COVID-19 vaccination and the workplace, please find our article here.

Our view

The latest Delta outbreak has seen the longest Level 4 lockdown in Auckland. Despite this, it has not caused significant disruption in the market to the same degree as last time. This suggests that the financial services sector has adapted well to the most recent lockdown.

It is unclear how long Level 3 will run in Auckland. The Government is due to review the position on Monday 4 October. But with a steady stream of cases currently, there is no guarantee that Auckland will re-join the rest of the country in Level 2 then. The Upper Hauraki cluster also serves as reminder that parts of the rest of the country may go up levels at short notice.

We understand that the FMA has signalled that they are willing to extend regulatory relief if firms are experiencing problems coming out of the lockdown, despite there not being the same demand for this as there was last year.

New Zealand’s COVID-19 elimination strategy has evolved in the past months, influenced by the higher transmissibility of the Delta variant, and the roll out of vaccines.

As we move forward, the financial services industry should be considering how it will move forward with the evolving focus on vaccination, and the possibility that communities may not reach zero cases.

What next?

The period for which the lockdown will apply is not fixed. As mentioned above, the current alert levels will be reviewed on Monday 4 October. We will keep you updated by continuing to update this alert should there be further guidance from the FMA on financial services operating under Alert Level 3.

If you have any questions in relation to the alert levels or are unsure how they affect your business, please contact one of our experts.

At MinterEllisonRuddWatts, our people, systems and processes have responded well to the change in alert levels.  While our Auckland office closed, we are fully open for business and remain available to support you and your business throughout this period.