New rules to try curb abuse of financial register

That FMA went on the offensive last year, booting more than 50 overseas firms off the register. Photo / Getty Images.

The Government plans to raise the threshold that businesses must meet to make it on to the Financial Services Providers Register over concerns some overseas firms are abusing it.

The register is a list of people, businesses, and organisations that offer financial services.
While all in the sector must be registered, this does not mean the entity in question is officially sanctioned by authorities.

The Financial Markets Authority can direct that companies be removed from the register where it is likely it provides a misleading impression about the extent to which it is regulated in New Zealand.

That FMA went on the offensive last year, booting more than 50 overseas firms off the register amid concerns some were taking advantage of the country's reputation of "being a well-regulated jurisdiction and a good place to do business".

Under proposed changes announced today, the Government said entities could be on the register only if they were providing financial services to New Zealanders.

They must also be providing these services from a business in New Zealand.

Officials are also considering other measures to try curb misuse of the register.

According to a spokeswoman for Commerce Minister Paul Goldsmith, this could include requiring applicants to provide information that they are licensed or supervised in their home jurisdiction before they can register.

The Government could also prohibit firms from referring to their registered status in any of their overseas advertising.