FMA snaps at register abuse

The market watchdog is expecting to use more bite when policing abuse of the financial services providers register. The Financial Markets Authority said it had received more than 1000 complaints about businesses or people on the register during the past three years. While the number is steadily dropping, the FMA said in a report out yesterday that abuse of the register remains “a major source of complaints”, including from people struggling to get funds out of accounts. The complaints are focused on businesses that are registered in New Zealand but have a substantial part or all of their operations overseas. Registration is compulsory for those providing financial services in this country but has been abused by “businesses and individuals who use New Zealand’s reputation as a well-regulated country to target overseas investors”, the FMA said. The FMA said it had reviewed 208 providers over the past three years and kicked 69 off the register. “If a business or individual is registered . . . but not providing financial services to people in New Zealand . . . registration creates a false or misleading impression to investors that the business or individual provides financial services in New Zealand and is regulated under New Zealand law. We will take action to deregister these businesses and individuals to ensure they are not using FSPR registration to benefit commercially by trading off New Zealand’s reputation.”