New Zealand's FMA Proposes to Update Guidance for Brokers Obligations

New Zealand's FMA (Financial Markets Authority) has issued a new consultation paper proposing to update its guidance for brokers.

In 2014, the FMA published a guidance note on broker obligations. Since then, the Financial Advisers Act 2008, which set out the obligations for brokers, has been repealed.

The equivalent obligations are now contained in the Financial Markets Conduct Act 2013, and brokers are now referred to within that legislation as "client money or property service providers".

The FMA is proposing to update the 2014 guidance, to align with the new regulatory regime, and incorporate additional information to address issues it has observed through recent monitoring and misconduct cases.

The regulator also proposes to incorporate additional guidance for custodians, who have specific obligations in addition to those that apply to all client money and property service providers.

Custodians are required to comply with obligations relating to audit and assurance, reporting, reconciliations, and are expected to ensure any sub-custodians used also comply with the relevant obligations.

The consultation is open until 1 November 2022.