Financial Services Providers: What Is Involved in Registering as a Financial Service Provider in New Zealand?

For the last time, New Zealand has become an extremely popular place for financial services. This English-speaking country boasts a clear regulatory system and political stability. On the other hand, it doesn’t automatically mean that anybody can easily start a business there. If you are eager to operate legally in New Zealand, you require making a bunch of crucial steps. The article illustrates what you should do to have your financial service firm registered in NZ.

Make sure you are a financial service enterprise

It is of supreme importance to realize that not every business in finance is bound to incorporate. According to the Financial Service Providers Act 2008, your firm belongs to this niche if you have to do with any of the stuff from the list:

• Give investment or financial advice
• Deal in securities or foreign exchange
• Lend money or manage funds
• Issue or operate financial products

If you provide any of the stuff mentioned above, you definitely should incorporate as a financial service enterprise. Nevertheless, there might be exceptions. For example, that’s a situation when you work with wholesale clients only. Double-check before moving ahead.

Register on the FSPR

Furthermore, you require registering on the Financial Service Providers Register, mostly known for its acronym – FSPR. The given body is managed by the country’s Companies Office that in turn lists all approved providers.

If you haven’t incorporated your firm in this English-speaking country yet, start there. Apparently, you can have a local firm registered. On the other hand, if you’re abroad, it is possible to start a foreign firm and appoint a local agent.

To complete incorporation, you require:

• Providing company as well as director details
• Choosing which services you are going to offer
• Passing a criminal history scan
• Appointing an AML/CFT officer
• Paying the incorporation and annual fees

However, you should understand that incorporation on the FSPR is not equal to getting a license. Based on what you do, a license from the Financial Markets Authority might be required.

License (if necessary)

If you’re providing certain services to the public, then an FMA license is required. These services include:

• Derivatives issuance
• Investment management
• Retail financial advice
• Crowdfunding or peer-to-peer lending

There’s no doubt that getting licensed is a crucial move. Here, you require demonstrating you’re ready to operate, have appropriate governance, and your systems and staff members are up to standard. You require submitting a business plan, compliance policies, to say nothing of details on risk management.

Join a Dispute Resolution Scheme

You can’t do without DRS (Dispute Resolution Scheme). Join it when serving retail clients. You can choose from up to four government-approved schemes. It is required to join one before completing your FSPR incorporation.

The given schemes are born to help entrepreneurs to resolve client complaints fairly. Furthermore, they roll out useful guidance on handling disputes and improving transparency.

Execute your current duties

Once registered, get down to the following responsibilities:

• Filing year-to-year returns
• Updating your FSPR details as required
• Staying compliant with AML/CFT laws
• Renewing licenses and paying taxes
• Cooperating with any FMA inquiries

Authorities are especially strict with FSPs incorporated in New Zealand but operating elsewhere with no local presence. It’s not recommended to use this country’s incorporation as window dressing. It would be extremely risky, and in the worst case, you may stumble on deregistration.

Conclusion

Incorporating as a financial service enterprise in this Pacific English-speaking state is not a problem if you follow the rules. New Zealand generally welcomes honest, well-run firms, but you can’t rely on light regulation any longer. Get ready for building a real presence and meeting your obligations. Otherwise, your undertaking will not thrive in New Zealand.