The Financial Markets Authority (FMA) – Te Mana Tātai Hokohoko – has launched a consultation seeking input on regulatory returns for licensed financial institutions.
At the same time, the FMA has issued an information sheet to assist smaller businesses in complying with new requirements under the Financial Institution (CoFI) licensing regime.
These actions form part of the FMA’s broader initiative to enhance its regulatory framework while supporting firms through the transition.
Licensed insurers, registered banks, and non-bank deposit takers will be required to submit periodic regulatory returns to the FMA. This obligation stems from the standard conditions for financial institutions outlined in the Financial Markets Conduct Act 2013 (FMC Act).
These returns help the FMA monitor licensees’ ongoing performance and ensure they continue to meet regulatory requirements.
The consultation paper outlines the proposed set of questions that financial institutions will be expected to answer as part of their regulatory returns.
The FMA is inviting feedback on these questions, the frequency of submissions, and the overall format. Submissions are open until Oct. 25.
The FMA collects regulatory returns for several reasons, including:
The FMA has assured stakeholders that the information gathered will be treated as commercially sensitive, though aggregated, non-identifiable data may be released for public reporting.
The FMA proposes that financial institutions submit their regulatory returns annually, covering the financial year from July 1 to June 30, with a deadline of Sept. 30 each year.
However, since the final list of required questions may not be available until March 2025, the FMA is considering an extended period for the first round of submissions, running from October 2025 to June 2026, with a reporting deadline of September 2026.
The regulator is also assessing whether a formal framework or methodology is necessary for this process. While the FMA currently sees no immediate need for such a framework, it may consider introducing one following further industry consultation.
This consultation takes place within the current legislative framework but may be influenced by ongoing government initiatives, such as the “Fit for Purpose” financial services conduct review announced in May 2024. This review could lead to changes that simplify fair conduct program requirements and introduce a single financial market conduct licence.
While legislative reforms may eventually streamline data collection across different sectors, the FMA does not expect these changes to impact the first round of regulatory returns.
However, the agency has committed to reviewing the regulatory return process as the government’s policy decisions develop.
Alongside the consultation on regulatory returns, the FMA has issued guidance specifically aimed at smaller financial firms preparing for the CoFI licensing regime, which is due to take effect in March 2025.
Under the Financial Markets (Conduct of Institutions) Amendment Act 2022, financial institutions must implement Fair Conduct Programmes (FCPs) to ensure they treat consumers fairly in their operations.
The FMA’s information sheet offers practical advice to smaller firms on how to develop and maintain their FCPs. It highlights that these firms will likely need simpler FCPs compared to larger institutions due to their size and operational complexity.
Clare Bolingford, the FMA’s executive director of regulatory delivery, noted that the CoFI regime is principles-based, allowing businesses to tailor their approach according to their specific circumstances.
The FMA has already held several webinars and one-on-one sessions with smaller firms to guide them through the CoFI application process. It plans to continue supporting businesses in meeting the March 2025 deadline for CoFI licensing, with further workshops and consultations planned.
