FMA opens CoFI licensing applications

FMA opens CoFI licensing applications | Insurance Business New Zealand

Insurance News

FMA opens CoFI licensing applications

About 100 financial institutions in New Zealand will need to be licensed to continue providing their services

Insurance News

By
Kenneth Araullo

The Financial Markets Authority (FMA) – Te Mana Tātai Hokohoko has officially begun accepting licensing applications for financial institutions under the Conduct of Financial Institutions (CoFI) regime.

There are about 100 banks, insurers, and other non-bank deposit takers that will need to be licensed under this new regime in order to continue providing financial services to customers. CoFI will officially come into force on March 31, 2025, and will require institutions to put fair treatment at the heart of their businesses.

Under the CoFI regime, each institution must establish, maintain, and implement a fair conduct program. Licensees must also take all reasonable steps to comply with said program and regulations that ban target-based sales incentives and regulate other types of incentives.

In a news release, FMA executive director for regulatory delivery Clare Bolingford said that the overarching requirement for institutions is to treat customers fairly, and this should be paramount throughout the life cycle of any financial product.

“It applies when institutions are designing products and at the point of sale, where financial institutions should think about whether the product is right for the consumer rather than selling to just anyone. And it remains front of mind post-sale and throughout the customer relationship, particularly when consumers need clear information or when dealing with a claim or complaint,” Bolingford said.

Bolingford also encouraged institutions to allow sufficient time to prepare their license application and consider the contents of their fair conduct programs ahead of the regime’s opening in 2025. She also urged firms to begin their work as soon as possible and submit their applications early, with the FMA ready to answer any questions regarding the process and help when needed.

Recently, the regulator published its scenario analysis information sheet to help climate reporting entities (CREs) in meeting their obligations under the Climate-Related Disclosures (CRD) regime.

What are your thoughts on this story? Please feel free to share your comments below.