Most Read Contributor in New Zealand, September 2016
Australian-regulated financial advisers will be exempt from the
new financial services regulatory regime until 30 June 2013 so that
they can continue to service their New Zealand-based clients while
long-term arrangements for mutual "trans-Tasman"
recognition are developed.
The Exemption should be available for many Australian licensees.
But there is some devil in the detail, including the provision that
licensees relying on the Exemption should not solicit retail
clients in New Zealand (presumably to prevent the Exemption being
used as "backdoor" route to business expansion in New
Zealand, without full compliance with the FAA and FSPA).
What relief does the Exemption provide?
Australian licensees who have no place of business in New
Zealand, and their "specified representatives", can upon
notification to the Financial Markets Authority
(FMA) be exempt from:
the requirement to act only through registered or authorised
individual advisers or having to be registered or authorised
the restrictions on holding themselves out as financial or
disclosure obligations for personalised services to retail
in respect of specified representatives, the requirement to be
individually registered and the prohibition on holding out as being
in the business of providing financial service unless
A "specified representative" is essentially an
individual who is a "representative" of the Australian
licensee under the Australian Corporations Act 2001 and who is
notified to the FMA.
What clients and services does the Exemption relate to?
The Exemption applies in relation to all Australian personalised
retail services to:
existing clients of the Australian licensee (at the time it
notifies the FMA that it wishes to rely on the Exemption) that have
a residential address in New Zealand, or
clients who become clients of the Australian licensee when
physically located in Australia, or
clients who become clients of the Australian licensee while
physically located in New Zealand, other than as a result of
solicitation by the Australian licensee or its specified
In addition, the services must be provided from outside New
Zealand through a "specified representative" and must be
the same as (or no more than) the services that the Australian
licensee is permitted to provide to Australian clients.
The "grandfathering" of existing clients at the time
of reliance on the Exemption recognises that those clients are, as
a matter of history, current clients of the Australian licensee
(and do not represent the forming of any future relationships with
clients physically located in New Zealand).
Similarly, allowing the client relationship to commence when the
client is physically in New Zealand, as long as the Australian
licensee (or a specified representative) does not solicit the
client, recognises the possibility that there may well be cases
where the Australian licensee is approached by the client on an
Conditions of Exemption
To rely on the Exemption Australian licensees must:
notify FMA of its intention to rely on the Exemption
include in that notification the names and contact information
of its "specified representatives" as well as a copy if
its current New Zealand retail client list
register as a financial service provider under the FSPA
become a member of an approved New Zealand based dispute
submit to the non-exclusive jurisdiction of the New Zealand
courts and appoint an agent for receiving notices in New
ensure that its specified representatives are adequately
trained and competent under Australian law
provide disclosure to New Zealand retail clients in accordance
with the Corporations Act, as well as written "health
warnings" indicating the licensee's reliance on the
comply with certain ongoing notification requirements to the
FMA (including providing an updated client list, where
maintain procedures o record client details, and to show when
those clients advise the licensees that they have moved to New
not engage in solicitation of retail clients in New
Chapman Tripp was involved with the development of the
Exemption. For any queries, please contact the lawyers featured as
Our thanks to Jamie Hoyle, Solicitor, for writing this Brief
The information in this article is for informative purposes
only and should not be relied on as legal advice. Please contact
Chapman Tripp for advice tailored to your situation.
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