FMIs play a critical role in New Zealand’s financial system, deputy governor Christian Hawkesby said, although most Kiwis will not be aware of them as banks and other financial institutions provide the direct interface with customers.
“Most of us don’t think about the underlying infrastructures we rely on for daily economic life, but we can be severely impacted when something goes wrong,” Hawkesby said in a news release. “If a designated FMI failed or encountered problems, electronic payments and financial market transactions could be severely disrupted. This in turn could have flow-on impacts for New Zealanders, our financial system and the wider economy.”
Consultations for the FMI standards were held in July 2021 and September 2022, with the feedback largely supportive of the approach to follow international practice and included useful technical suggestions. The standards will come into effect from March 1, 2024 and support the implementation of the FMI Act, a comprehensive regulatory regime for designated FMIs.
Meanwhile, FMA executive director for regulatory delivery Clare Bolingford said that issuing the FMI standards is a significant milestone and the culmination of several years’ work with the sector.
“We thank everyone who contributed to the development of the Standards which align with international best practice while reflecting the specific characteristics here in New Zealand,” Bolingford said.
The New Zealand regulator also recently began accepting licensing applications for financial institutions under the Conduct of Financial Institutions (CoFI) regime.
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