Registration for new entities on the New Zealand Financial Services Provider Register (FSPR) has become an incredibly stringent process. There has been an increase in the number of questions asked of applicants, as well as a shift in the type of information being sought prior to registration on the FSPR is approved.
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An integral part of the FSPR application is that the entity or individual seeking registration must be able to show that they intend to provide financial services in New Zealand. This does not just mean having a physical office located in New Zealand, but includes the requirement that the individuals who hold Senior Management positions in the business be domiciled in New Zealand. In order to establish this, the FSPR may request copies of the following for each staff member involved in the business:
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- A certified copy of a VISA allowing the individual to live and work in New Zealand (where the individual is not a New Zealand citizen)
- Proof of residence.
These requests are becoming more frequent and highlight the attempt by the FSPR to crack down on entities intending to provide financial services using the guise of New Zealand regulation.
In conjunction with applications becoming increasingly difficult, the FSPR also undertakes regular reviews of the Register and the financial services being provided by those entities listed on the Register. The FSPR has the power to strike off individuals or entities on the Register in accordance with Section 18(1) of the Financial Service Providers (Registration and Dispute Resolution) Act 2008. The terms of deregistration under this section of the Act, allow an FSP to be struck off where the individual/entity:
- is no longer qualified to be registered;
- has failed to notify the FSPR of changes to company details;
- is not in the business of providing financial services;
- has been registered due to a false or misleading representation or omission;
- has failed to pay the statutory fees.
In just two (2) months, December 2015 and January 2016, the FSPR has removed two hundred and twenty-six (226) businesses and individuals from the Register in accordance with Section 18(1). The FSPR publishes deregistration notices on their website at the following link.
The New Zealand Financial Markets Authority (FMA) also provides public updates on unlicensed financial service providers. The “Unregistered Businesses” list is updated frequently and warns individuals not to use the services of the company. The Unregistered Business List can be accessed here.