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Commerce Minister Lianne Dalziel has welcomed the Finance and Expenditure Select Committee’s call for fresh submissions on proposed changes to the Financial Advisers Bill.
The changes include a revised definition of who is a ‘financial adviser’ and an alternative approach to who would regulate financial advisers.
Currently the bill has an all-encompassing definition of a financial adviser. But the proposed changes will redefine a financial adviser as someone whose main business is providing financial advice. The Select Committee wants feedback on proposed changes to the co-regulatory model currently contained in the bill involving frontline supervision by Approved Professional Bodies (APBs) with oversight by the Securities Commission, and recommends simplifying the model so that the Securities Commission undertakes the main supervisory role.
"These suggestions meet concerns that were raised with me since the Bill went to Select Committee," Lianne Dalziel said.
"One particularly compelling argument for the alternative supervisory regime is that it will enable greater regulatory control of financial advisers to be fast-tracked by up to two years. It will also enable greater consistency of regulation to be imposed across the many different groups offering financial advice than might have been possible with a range of APBs setting the standards for their own members.
"It's become clear to me that following the recent finance company collapses and the Blue Chip debacle the public wants greater regulation in place sooner rather than later. Moving frontline supervision straight to the Securities Commission would be an effective way of making that possible and doesn't preclude the possibility of devolving frontline responsibility back to APBs at some future date," Lianne Dalziel said.
"Now the industry will have the opportunity to consider this option and make a submission on it.
"In my first reading speech I raised the matter of the broad definition of financial advisers. It was never the intent of the Bill to capture every person who discusses financial matters but it was necessary to start this way so we would have a clear picture of who should and should not be covered. Subsequent feedback from the industry has enabled the definition to become clearer and more focussed."
"The recent collapse of finance companies together with industry feedback and investor responses has demanded a change in focus for this Bill. Where it was once primarily about reviewing the regulations around the financial sector and encouraging industry participation, it is now on rebuilding investor confidence as quickly as possible."
Lianne Dalziel said she expects a good response from financial advisers, both institutional and individual, to the consultation document released by the Select Committee. It also provides another opportunity for the public to reconsider and comment on the options.
The Select Committee has called for further public submissions on the Financial Advisers Bill before 16 May 2008.
A copy of the new proposals is available on the Select Committee section of the Parliament website at http://www.parliament.nz/en- NZ/SC/SubmCalled/a/2/c/48SCFEfinancialadvisers200805161-Financial-Advisers-Bill.htm