The first regulatory returns must be submitted by September next year
The Financial Markets Authority (FMA) has finalised the information financial advice providers (FAPs) must provide in their regulatory returns, in a move that will allow FMA to implement a more effective, risk-based approach to monitoring FAPs.
The information will be used by the authority to monitor licence holders’ ongoing capability to effectively perform the financial advice service according to the applicable eligibility criteria, as well as other requirements in the FMC Act, including annually updated information on the nature, size, and complexity of the FAP service.
Following industry feedback on the proposed standard licence conditions for all classes of FAPs, a balanced reporting option that includes fewer questions than proposed, as well as refinements to some questions was selected by FMA.
The dynamic reporting form will require FAPS to only answer questions relevant to their licence class and the financial advice services they provide. Where applicable, questions will be pre-populated with data already on file (e.g. data from previous year or other regulatory returns), so FAPs will only need to confirm its accuracy.
The published reporting requirements are tailored to the three different classes of licences.
“Overall, these regulatory returns support our supervision approach, so we can target our resources efficiently to identify those areas of highest potential risk of harming consumers,” said Clare Bolingford, executive director for regulatory delivery.
“We will take a reasonable approach while the market implements information-gathering processes and systems. We will engage with the sector to provide guidance and expectations for completing the first regulatory returns leading up to the reporting commencement date in July. We expect that in subsequent years, FAPs will provide increasingly more accurate answers as their processes mature.”
For the reporting period July 1 to 30 June 2024, FAPs must complete the first regulatory returns, and submit it to FMA by Sept. 30, 2024 online via its website. Click here to download the Regulatory Impact Statement.
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