According to information provided to Forex Magnates reporters by Cypriot law firm A.G. Paphitis & Co, brokers who are domiciled in New Zealand, but don’t provide financial services to clients in the country, are not faced with the need to park a hefty minimum capital requirement totalling NZ$ 1 million. However, they still need to meet other relevant provisions under the regulatory framework in the country.
According to current legislation, the New Zealand Financial Markets Authority (FMA) does not require offshore brokers to get licensed by it in order to provide their services outside the country. However, they still need to have a valid registration with the country’s Financial Service Providers Register (FSPR).
The brokers who meet all of the requirements to register with the FSPR should be able to continue their operations normally.
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The news comes only days after the official announcement by the FMA about the launch of the second phase of its regulatory effort–licensing provisions, which have affected several hundred businesses and triggered a substantial shift in the quality of investor disclosure for financial products in New Zealand.
With the new regulation implementation, New Zealand authorities are building a solid regulatory cushion primarily for the convenience of local investors. While there are no guarantees about the future of the local financial-intermediaries regulatory framework, the FMA has repeatedly stated that it boasts one of the most modern ones in the world.
However, it is up to the clients of the brokers to establish whether they can sufficiently trust a New Zealand registered company, knowing that they do not enjoy the same treatment as New Zealand residents.