Most Read Contributor in New Zealand, September 2016
The Financial Markets Authority (FMA) is now
receiving applications for market services licences under the
Financial Markets Conduct Act (FMCA) and has issued how-to
guides for applicants.
We walk you through the process.
FMA has prepared licence application
guides for fund managers, derivatives issuers, discretionary
investment management service (DIMS) providers,
independent trustees of restricted schemes, crowd funding and
peer-to-peer lending intermediaries.
Each guide sets out:
the minimum standards for the licence, including specific
questions which need to be answered in respect of the standard
together with commentary on those questions
what licence applicants will be asked to provide in the
application form, and
guidance on what further information may be sought by FMA.
Application fee (including GST)
Hours after which additional fee may be
Manager of registered scheme
Independent trustee of a restricted scheme
Crowd funding service
Peer-to-peer lending service
FMA can charge an additional fee (calculated on hourly rates)
for complex applications requiring longer than the specified
The FMA is required to apply a discount where applicants apply
to be licensed for a second (or more) service at the same time or
within six months of their initial application. In most cases, a
50% discount will be applied. But, where the subsequent application
or variation relates to a derivatives licence, the discount will be
The independent trustee guide indicates that independent
trustees cannot apply for any other licence type at the same time.
Helpfully, however, it acknowledges that independent trustees need
not necessarily be individuals - a licensed independent trustee may
be an individual or a sole corporate trustee.
The deadlines differ.
Derivatives issuers have until 1 December 2014, with a two-year
deemed licence granted to banks and other existing authorised
futures dealers should they require a licence under the FMCA
(essentially, if they are entering into derivatives with anyone
other than wholesale investors).
DIMS providers have until 1 December 2014 but MBIE is consulting
on this and may provide a transitional period.
For MIS managers and independent trustees, the deadline will
depend on transitional provisions and when their first scheme opts
into the FMCA regime. Continuous MIS managers and independent
trustees have until 1 December 2016 to be licensed but would (if
new trusts are established or continuity is lost) need to move
We expect some intending providers of independent trusteeship
services will seek licences as soon as practicable, so as to be
available to a range of schemes ahead of their opt-in dates.
We would recommend that anyone considering making a licence
application makes sure they understand whether they will have the
benefit of any transitional relief and allows adequate time to
complete the licensing process.
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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