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Australian brokers can apply for NZ compliance exemption

Australian insurance brokers may be able to secure a temporary exemption from NZ's new financial services regulations until mid-2013.

The Financial Advisers Act 2008, which contains disclosure and conduct regulations, came into effect on 1 July.

Any Australian brokers with clients in NZ will have to comply with the regulations, which will be administered by the New Zealand Financial Markets Authority (FMA).

Some overseas organisations – specifically those that provide advice to wholesale clients – are exempt.

However, a temporary exemption to 30 June 2013 may also be available to Australian brokers providing personalised services to retail clients in NZ if they meet certain conditions.

This exemption is designed to ensure Australian businesses can continue to provide services while more permanent mutual recognition arrangements are being considered between NZ and Australia.

If more permanent mutual recognition arrangements are put in place, Australian insurance brokers may be able to rely on the exemption beyond 30 June 2013.

However, if this does not happen, brokers may be required to comply compliance with the new legislation from 1 July 2013.

To be eligible for the temporary exemption, the broker must:

• hold a current Australian financial services licence;
• provide financial services in Australia; 
• not have a place of business in NZ;
• provide the services from a place of business in Australia;
• notify the FMA it wishes to rely on the exemption; and
• provide the FMA with details of the specified representatives who will be providing the services on its behalf and also a list of its NZ-based clients.

There are also a number of other significant conditions that must be met and continue to be met to be eligible to rely on the exemption. For full details, members can contact the FMA here.

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