New Zealand FSP – Financial Services Provider

We have recently noticed an increasing number of entities looking to be listed on the New Zealand Financial Service Provider Register (FSPR). Being a listed entity on the FSPR, to provide financial services to New Zealand resident clients, and not exclusively to overseas clients, is now a requirement, while New Zealand must now be an important target market on your business. Your Business Plan need clearly to show all your related and directed marketing/advertising actions.

With an increase of entities needing assistance in applying for registration on the FSPR, we have also noticed trends in the way the FSPR handles such applications. FSPR registration can become a lengthy process where the entity is required to answer quite a wide set of in-depth questions from the FSPR. These questions may involve the provision of further information regarding:

  • business operations;
  • directors and employees and their roles within the business;
  • location of business and staff members working from the office;
  • types of financial services to be provided, both now and in the future.

All this process can be frustrating to entities applying for registration.

The FSPR is also likely to raise the issue of additional licensing during the registration phase. Additional licensing may be required depending on the type of financial services the entity may provide. As an example, if you are a derivatives issuer providing services in or from New Zealand, you will need to apply to be listed on the FSPR and for a Derivatives Issuer License through the Financial Markets Authority (FMA). These applications should be complete simultaneously to ensure the FSPR registration can be processed quickly.

The FSPR appear to be pushing for entities to be licensed under the new FMA licensing regime and this has been raised as an additional question in the registration process, regardless of whether the business provides financial services that require licensing through the FMA. Very often, FSPR applications are sent to the FMA for final review, thus increasing time to getting a response and further extending the registration process.

In addition, the FSPR has tightened the minimum requirements which must be met before applying for FSPR registration.

If you are thinking about applying to for registration on the FSPR, consider your business model and the type of financial services provided:

Do you meet the requirements for registration?
Do you need any other type of license and if not, have you received legal advice on this issue?
Are you ready for the FSPR to conduct spot checks at your office in New Zealand?
Do you have directors and employees with relevant experience?
Are the appropriate engagement agreements in place?