New Zealand Regulator Adds Extra Layer of Checks for Advisers Selling FX & Futures

The main financial watchdog in New Zealand, Financial Markets Authority, that regulates financial markets products has increased the licensing procedure for Authorised Financial Advisers (AFAs). Under the new guidelines advisers will be required to supply references from key parties, show a Certificate of Standing from a professional body and additional information such as a CV and professional memberships. The move comes on the back of an ongoing programme to strengthen New Zealand’s regulatory environment.

The regulator's announcement for AFAs means advisers will need to fulfil enhanced requirements before gaining authorisation as an approved adviser. According to the notification on the regulator's website, the changes are focused on: “Testimonials and the introduction of a new Supplementary Application Information Form.”

Under the FMA’s authorisation AFAs can engage in a range of activities relating to financial transactions. These are categorised under different categories. Under Category 1. Advisers can deal in investment focus products which include; securities, land investment products, futures contracts and investment-linked insurance contracts. In addition, Category 2. Products which are generally less complex (non-financial).

AFAs are managed under legislation that was introduced in 2008, known as the Financial Advisers Act 2008. The legislation was introduced to create a regulated and efficient marketplace for financial services. According to the official documentation, the purpose of the act is to: “Promote the sound and efficient delivery of financial adviser and broking services, and to encourage public confidence in the professionalism and integrity of financial advisers and brokers.”

The additional checks the regulator will take for advisers are:

• A testimonial from a manager, a peer and client
• A Certificate of Standing from a professional body if appropriate. This replaces the Professional Body Testimonial.
• Supplementary information: including a CV; details of professional memberships; copy of your ABS; DRS membership history; plus additional requirements for applicants whot have worked overseas.

The FMA regulates futures and OTC brokers offering currency trading. There are over 56 regulated brokers and banks.

New Zealand became an easy target for brokerage firms looking for lapsed regulations, the least corrupt nation in the world offers a two tier system. One mode of Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term which regulates listed and OTC instruments with capital requirements similar to those in developed markets such as the UK and Singapore. And a second system which does not govern FX as such, but gives an impression of regulation under the Financial Service Providers Register (FSP), a directory of firms offering financial services products in New Zealand. The FSP registration process is being strengthened by the authorities, thus impacting the status of FX firms operating in the island nation.

Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term Magnates believes that FX brokers registered under the FSP will be gradually removed or migrated to full regulation under the FMA as regulated futures brokers (category 1) over the next 12 months.