Most Read Contributor in New Zealand, September 2016
Transitional provisions for the new requirements governing
discretionary investment management services (DIMS) in the
Financial Markets Conduct Act 2013 (FMCA) and the
Financial Advisers Act 2008 (FAA) were announced, together
with other changes, by the Commerce Minister yesterday.
An extended transition period for existing DIMS providers to 1
June 2015 to apply for a licence and to 1 December 2015 to update
their client documentation. New providers will need to comply from
1 December 2014.
Alignment of the requirements for DIMS under the FAA with those
applying to other DIMS providers under the FMCA. An additional
eligibility requirement will be introduced for AFAs who provide
personalised DIMS under the FAA, to enable the FMA to assess their
capability. Additional matters will be added to the existing
disclosure statements of AFAs offering DIMS, and requirements for
client agreements and reporting will be introduced under the
Regulatory flexibility to ensure additional costs are not
imposed on those offering limited services. For example, an
exemption is to be introduced for AFAs who manage their
clients' investments only for limited periods or under limited
circumstances (e.g. when the client is on holiday).
A 40% drop in the base fee for a DIMS licence - from $3,565 to
$2,139. This is based on the average application taking 12 hours,
recognising that many smaller DIMS providers may have more
straightforward offerings. A further $178.25 per hour still applies
after 15 hours of FMA time.
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