FMA steps up enforcement of provider register

AUCKLAND: The Financial Markets Authority is stepping up enforcement of people misusing the financial services provider register (FSPR), which continues to generate the most complaints to the market watchdog.

The authority has been cracking down on the FSPR in recent years, removing firms that signed up to it even though they were not providing services in New Zealand. The issue for the FMA is that being on the register has been touted as akin to a licensing regime by some foreign firms, even though it is not.

During the past three years, the authority has received 1080 complaints about 296 different companies or people relating to the register, almost half of which were in the first year, a report on the register shows. Of 115 registrations reviewed, 69 firms were deregistered and another 21 quit of their own accord. Of the 93 applications for registration referred to the FMA, only 19 were allowed to proceed.

Director of regulation Liam Mason said that last year there was a ‘‘real increase in companies voluntarily deregistering’’. The watchdog is now going to pursue misuse of the register more aggressively, targeting New Zealand directors who provide little or no governance to the entities for which they are legally responsible.

‘‘Being a director carries serious responsibilities and criminal liabilities in some cases,’’ Mr Mason said.

‘‘This is a fair warning that when we see a company that’s abusing the FSPR and its directors and we’re able to take a look at those directors, then we’ll be taking those seriously.’’

In legislation tabled in Parliament last month, the Government plans to require firms on the register have a greater connection to New Zealand. — BusinessDesk