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FMA and Trustee Responsibilities

A trustee is a legal term, which means an individual or an organization that is entitled to manage or administer the property and assets of a third party. (UK Home Investopedia, 2019)

Licenses and supervises Authorized Financial Advisers

Financial Markets Authority (FMA) along with the Reserve Bank of New Zealand (RBNZ) is a member of New Zealands Council of Financial Regulators, New Zealand Treasury and the Ministry of Business. (Financial Markets Authority New Zealand FMA, 2019) According to the state law, Financial Markets Conduct Act, and the rules defined by Financial Markets Authority (FMA), a trustee can delegate some of his duties to others by hiring Authorized Financial Advisers (AFA) whose duties are to manage the financial issues. Financial Markets Authority plays a crucial role in providing services in finance and investments. A trustee licenses and supervises Authorized Financial Advisers (AFA). Before applying to AFA certain eligibility requirements should be met. A trustee hires an AFA according to the rules and regulations defined by Financial Markets Authority. There is a certain procedure to apply for AFA. Firstly applicants have to register on Financial Service Provider Register (FSPR) and join the Dispute Regulation Scheme (DRS). AFAs must stick to standard conditions and requirements by Financial Advisers Act 2008 and the Code of Professional Conduct. It is necessary for Authorized Financial Advisers to meet competence requirements. Under the standard conditions and rules of authorization, AFA must have a current written Adviser Business Statement (ABS) and it is to be confirmed annually that ABS is current through the Annual AFA Information Return. A trustee has to follow all of the above mentioned steps to hire an AFA. Changes can also be made by the trustee about the terms and conditions and the time period of Authorized Financial Advisers. Trustees duty is to license and supervise Authorized Financial Advisers. To give license, the above mentioned procedure needs to be followed. After licensing Authorized Financial Advisers, the AFAs are entitled to work for the trustee according to the terms and conditions specified by the trustee. AFAs job is to handle all the issues relating to finance and investment. He manages the financial status and works for the benefits of the trustee. AFA assesses the financial needs, goals and by using the data attained generates a financial plan and find ways to implement that plan. They work for the benefits of the beneficiaries. By observing Financial Market Infrastructure, an Authorized Financial Adviser plays a role in uplifting the financial status of the firm it is representing. After licensing the AFA, trustees only work is to supervise the Authorized Financial Advisers. The Trustee has to check whether the financial advisers are performing their duties according to the standards specified by Financial Markets Authority (FMA), Trustee Reserve Bank. Trustee/ Regulators job is to supervise the activities of Authorized Financial Advisers, what they are doing, what steps they have taken to improve the financial status, what plans they have formulated to uplift the investment, what measures they are taking to implement the plan, the current outcome of their work, their goals and what they have achieved so far.

Licenses NBDTs

Financial Markets Authority (FMA), Trustee Reserve Bank also licenses Non-Bank Deposit Takers (NBDTs). The Non-Bank Deposit Takers Act was formulated on 1 May 2014. (Barker amp Javier,2010). According to this act it is necessary for all the Non-Bank Deposit Takers to get a license before initiating the business, the following procedure is required to be followed for licensing a NBDT. Anyone who wishes to get a license has to apply to the Reserve Bank. The Reserve Bank deals with the Non-Bank Deposit Takers (NBDT) in New Zealand to maintain a creative and efficient financial system to avoid any damage that can be done by the failures of NBDT. Firstly, the applicants are required to submit an NBDT license application form and suitability notice for the senior officials and directors. Non-Bank Deposit Takers deal with the financial services i.e. lending and borrowing money and other related services. NBDTs have to register themselves on the register regulated by the Reserve Bank. Before issuing the license following things should be kept in mind i.e. whether the applicants would be able to comply according to the rules and regulations specified by Financial Markets Conduct Act 2013 (FMC) or not. And also if the applicants other business affects the business of NBDT for which he is applying. Every suitability notice should contain the names of directors and senior officers and it should be signed by the directors himself in case of directors and by 2 directors of NBDT in case of senior officers. The persons who sign the suitability notice knowing that the material provided in it is false are conducting an offense and will be treated accordingly by level 3 penalty. License is given according to the condition specified by the Bank. The Bank is entitled to change, amend and even remove license after giving the license. Every NBDT has to follow the conditions imposed by the Bank strictly otherwise Bank has the right to remove their license at any time. The Bank can change these conditions according to the current requirements by giving a Bank Statement of the reason of why this change is necessary. The Bank can cancel a license if the NBDT is not complying according to the rules specified by the Bank or if the information provided to get the license was false in any way. For canceling the license, the Bank has to send the notice to the NBDT and its trustee, explaining the reason of the cancellation of the license. This notice involves a written statement of the cancellation of the license and is sent to license holder and trustee (Spencer, 2014). A trustee has also duty to perform. He has to notify the Bank if Non-Bank Deposit Takers are not complying according to the Financial Markets Conducts Act 2013. Trustees are licensed by FMA Financial Markets Authority under the Financial Markets Supervisors Act 2011. They have certain obligations under the Act. Thus to give license to the Non-Bank Deposit Takers, the above mentioned procedure is followed strictly by the trustee.


Spencer, G. Taking stock of financial sector regulation.Financial Markets Authority New Zealand FMA. (2019). Retrieved from https//www.fma.govt.nzBarker, F., amp Javier, N. (2010). Regulating non-bank deposit takers.Reserve Bank of New Zealand Bulletin,73(4), 5-18.
Spencer, G. Taking stock of financial sector regulation.

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