There are many European countries offer the registration of Financial Service Providers (“FSP”). However, country reputation and level of free flow of cash are all the important criteria when you made the decision. Especially, there are some of the European countries are facing the edge of bankruptcy.
New Zealand is an island country in the south western Pacific Ocean. The country geographically comprises two main landmasses – that of the North Island and the South Island. The high degree of economic freedom, perfect infrastructure, freedoms on foreign exchange and capital funds attracts different sizes of financial institutes to setup their establishment there. New Zealand has been recognized as an international investment and Heritage planning centres.
Who must register as Financial Service Providers?
Entities and individuals who live or have a place of business in New Zealand; and are in the business of providing financial services (in New Zealand or overseas) must register to provide that particular financial service on the Financial Service Providers Register (“FSPR”).
The common examples of financial service provider required to register are building societies, credit providers, credit unions, financial advisers (including financial planners), finance companies, foreign currency exchange dealers, fund managers, insurers, investment portfolio managers, issuers, money changers, registered banks, some professional trustees (such as trustees of debt securities or superannuation scheme trustees).
What Types of Financial Activities are allowed under the registration of Financial Service Providers in New Zealand?
- A contributory mortgage broke
- Deposit takers, lenders and registered banks;
- A public issuer
- An issuer of securities to the public
- A statutory supervisor of participatory securities
- A trustee in respect of securities offered to the public
- A unit trustee
- A superannuation trustee
- A promoter of securities offered to the public
- A manager of participatory security or unit trust
- Keeping, investing, administering, or managing money, securities, or investment portfolios on behalf of other persons
- Operating a money or value transfer service
- Issuing and managing means of payment
- Giving financial guarantees
- Exchanging foreign currency
- Entering into or trading on an exchange (in an over-the-counter market or otherwise) the following on behalf of another person:
- Money market instruments (including cheques, bills, certificates of deposits);
- Foreign exchange (including forward foreign exchange contracts);
- Derivative products including, but not limited to, futures and options;
- Change rate and interest rate instruments, including products such as swaps and forward rule agreements;
- Transferable securities;
- Other negotiable instruments and financial assets
How to Register to Financial Services Providers?
Step 1 – Setup a New Zealand Company
The most common type of New Zealand Company is a look-through company. Details could be refer to our page here.
Step 2 – Apply for Financial Services Providers at the FSPR
The main legislation that concerns the proposed company as a Finance Service Provider would be under the Financial Service Providers (Registration and Dispute Resolution) Act 2008 (‘the Act’).
The Financial Service Providers (Registration and Dispute Resolution) Act 2008 (“the Act”) requires those persons providing the financial services to register. However, the Act states that it only applies to a person or entity who is ordinarily resident in New Zealand or has a place of business in New Zealand.
In other words, your entity must have a physical place of business in New Zealand and local consultant who deals with your FSP’s clients. Virtual office solutions and mail forwarding addresses DO NOT qualify.
The Registrar interprets “place of business” as the place where the company or entity usually transacts its business. The successful applicant has to advise the Registrar and provide supporting documentation as to how the entity will actually be transacting its business in New Zealand and how it will be operating the financial services listed in the application from this address.
If you do not intend to provide financial services from New Zealand and do not wish to establish a working office in New Zealand, you are not eligible to apply for FSP registration.
The FSPR will carry out a criminal history check with the Ministry of Justice of the convictions which will disqualify any of the individuals named in your application (directors, senior managers and controlling owners). You will be advised of the result in two to five working days.
If all criminal history checks are clear, registration as a financial service provider is complete.
Step 3 – Registration of Financial Dispute Scheme
From 1 July 2014, Financial Service Providers are required to commence FSPR registration BEFORE joining a dispute resolution scheme. Once registration is completed, the applicant then has 10 days in which to join a dispute resolution scheme.
The financial resolution scheme (“DRS”) is required to be approved by Consumer Affairs in New Zealand and there are three DRS have been approved.
- Financial Services Complaints Limited
- Insurance & Savings Ombudsman
- Financial Dispute Resolution Scheme (FDR)
The financial resolution scheme providers are required to verify FSPR registration / compliance before setting a membership in place. One of the issues that they will be verifying is whether the company meets the requirement for “physical presence” in New Zealand.
What we can do?
Application of Financial Service Providers is not an easy task. In case you have any further inquiries, please do not hesitate to contact us for further consultation. We could assist our customer to find out the best resolution which fit them!