Keep up-to-date with the key developments affecting the financial services sector.

Key areas this month include:

Conduct of financial institutions

The Financial Markets (Conduct of Institutions) Amendment Act 2022 introduces a new conduct regime for banks, insurers, and non-bank deposit takers. Once the Act comes into force, it will require them to hold market services licenses, impose fair conduct obligations protecting consumers, and regulate their and their intermediaries’ sales incentives.

Consumer credit

The Credit Contracts and Consumer Finance Regulations and Responsible Lending Code have been amended to reflect the changes Cabinet announced in March 2022 to lenders’ affordability enquiries. The amended versions apply from 7 July 2022.

Banks

The Reserve Bank has issued revised versions of BS11, BS17, and the White List relating to outsourcing. The FMCA disclosure requirements for banks’ perpetual preference shares are being amended. The Reserve Bank has lifted the dividend restriction on banks.

Reserve Bank functions

The Reserve Bank of New Zealand Act 2021 is now fully in force. Among other things, it gives the Reserve Bank new cash stewardship powers, eg to set standards for money handling machines.

Tax

Inland Revenue has issued an interpretation statement about the land sale rules, as well as a public ruling on importers’ GST input tax deductions. It is seeking feedback on a draft QWBA on the deductibility of interest on shareholder advances, and on a draft interpretation statement on cash basis persons under the financial arrangements rules.