Draft Code to Minister for approval

Thursday 2 September 2010, 5:05PM
By Securities Commission

The Commissioner for Financial Advisers, David Mayhew has approved the draft Code of Professional Conduct for Authorised Financial Advisers, and sent it to the Minister of Commerce, Hon Simon Power for his approval.

Mr Mayhew says approving the draft Code is a significant milestone towards implementing the new regulatory regime.

"It is clear that the Code Committee consulted widely when preparing the draft Code and has included minimum standards on all the required matters. I am satisfied that the Committee has discharged its obligations and produced a draft Code which is consistent with the legislation. I'm now pleased to be able to forward the draft Code to the Minister of Commerce for his approval. This is a very important step towards the new era of regulation for the industry."

Under the Financial Advisers Act 2008, the draft Code must include provisions for with minimum standards for professional conduct covering ethical behaviour, client care, competence, knowledge and skills and continuing professional development. Mr Mayhew also wanted to be satisfied that the draft Code is consistent with the purpose of the legislation and will be sufficiently clear so that financial advisers understand their obligations and the disciplinary committee will be able to enforce the Code.

Mr Mayhew says the draft Code should go a long way towards restoring investor confidence.

"The Code will be the tool for imprinting professionalism on those financial advisers in New Zealand who provide personalised advisory services to retail investment clients. It also forms the benchmark for adequate consumer protection standards for such services provided through corporate entities such as retail banks."

The Act allows the Minister to review the Code for up to 90 days.

The Commissioner's letter to the Minister of Commerce can be found on the Securities Commission website (PDF 181KB)

The draft Code of Conduct for Financial Adviser can be found on the Code Committee's website: