Yet another rewrite coming on Financial Advisers Act

A further major rewrite of the Financial Advisers Act 2008 looms as Commerce Minister Simon Power last night announced the government would be "issuing comments soon" on provisions in the current law that senior bankers fear will stifle economic activity.

"Treatment of advice to wholesale clients, generic advice often issued by institutions rather than individuals, and how the regime deals with group corporate structures" will be the subject of further announcements, Power announced at the INFINZ (Institute of Finance Professionals New Zealand) annual awards dinner in Auckland.

The announcement was among the most significant of a raft of major decisions Power confirmed last night, implementing much of the agenda laid out by the Capital Markets Taskforce in its report last December.

Power also announced:

• a six month extension to July 1 for registered financial advisers to gain qualifications, although they must still register by December 1 this year;

• a new "super-regulator" Financial Markets Authority, an agency encompassing the Securities Commission, elements of the NZX regulatory function, and various government agencies' corporate oversight functions;

• the inclusion of auditors under the FMA rather than regulated by the New Zealand Institute of Chartered Accounts - a big change of heart for Power, reversing views expressed just over six months ago;

• and changes to the law covering KiwiSaver providers, making the fund managers rather than the trustees liable for loss

• and a shake-up in the leadership of securities enforcement with the creation of the FMA.

The decision to revisit fundamental elements of the Financial Advisers Act follows a flurry of intense pressure on Power from major corporates and the banking, accounting and legal professions to recognise the law passed in 2008 created serious barriers to doing international business by subjecting banks to rules written to protect unsophisticated "Mum and Dad investors".

Power acknowledged numerous direct approaches and recent reports by BusinessWire and other media expressing concern about "the treatment of wholesale clients; class advice, i.e., generic advice often issued by institutions rather than individuals; and how the regime deals with group corporate structures."

"I've been listening very closely to those concerns and can reassure you the government is actively considering solutions to the issued raised.

"I expect to be able to make further announcements on this in the near future," Power said.