Earlier this week, the Financial Markets Authority (FMA) emphasised the importance of compliance with the conditions of the Trans-Tasman Mutual Recognition regime (MRSO regime) by issuing a formal warning to an Australian financial product issuer.
Such issuers are able, through the MRSO regime, to operate in New Zealand without needing to comply with the full extent of the Financial Markets Conduct Regulations 2014. This is on the basis that they are already supervised by the Australian Securities and Investments Commission (ASIC).
Who needs to read it? Why?
All providers that operate under the MRSO regime, or may do so in the future, should pay attention to this timely reminder of the importance of compliance with the regime’s conditions.
What does it cover?
The conditions that must be met for the MRSO regime to be available include:
- continued regulation by, and compliance with, the Australian securities regime;
- providing a warning statement alongside any Australian disclosure documents;
- maintaining an agent for service in New Zealand; and
- lodging with the Registrar notice of certain events or changes (for instance, the exercise of a power by ASIC) within a prescribed period.
As the FMA’s Executive Director of Regulatory Response makes clear:
Compliance with the requirements of the MRSO regime supports fair, efficient and transparent markets in NZ, and the FMA will take regulatory action, where necessary. It is important that issuers taking advantage of the MRSO regime understand and attend to their obligations.
Warnings like this one are explicitly intended to:
- …reinforce to overseas issuers offering investment products in New Zealand under the MRSO regime that they must ensure they are complying with the New Zealand regime as well as the regime in their local jurisdiction, particularly as they have fewer obligations to comply with than issuers not utilising the MRSO regime to offer products in New Zealand
…lead other overseas issuers utilising the MRSO regime to offer products in New Zealand…to review their compliance procedures to ensure they are adequate.
If you have any questions around the MRSO regime and its conditions, or the financial products regulatory regime more generally, please contact one of our experts.
This article was co-authored by Sam Short, a Senior Solicitor in our Financial Services team.
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