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NZ Herald
4 days ago
- Business
- NZ Herald
KiwiSaver: In wake of Aussie failure, what would happen here if a KiwiSaver provider failed?
Providers are subject to oversight from a supervisor, who can also choose to appoint a third-party custodian or act as custodian themselves. 'I think we've got a more effective regulatory regime. It's set up really well to protect KiwiSaver members and investors,' Callanan said. There is always the risk that investments could go wrong, but KiwiSaver schemes do have some protections in place. Photo / Getty Images He said the supervisor was 'effectively a trustee'. 'We're in place to ensure that KiwiSaver providers are doing the right thing for investors. If there was an issue with a KiwiSaver provider then the supervisor would be able to step in and take control back and come up with a solution.' Callanan said that could involve appointing another manager if necessary. 'We have the power to step in and to take control back in the interests of those investors.' He said that because there were a limited number of independent supervisors, they were closely regulated by the Financial Markets Authority. 'In Australia, there are hundreds of responsible entities who play that role.' Callanan said if a fund manager was failing, it would not be able to access investor funds. 'That's another area that in those scenarios that I've seen in Australia hasn't worked. You've got fund managers just dipping into investor monies, you know, to go and buy a Lamborghini or whatever they feel like on a whim. 'That just couldn't happen here because we've got independent custodians and again, Public Trust is an independent custodian for a number of KiwiSaver providers, and that can give investors confidence.' He said there was also a strong conflict-of-interest regime in place. 'Even for fund managers who might undertake what is called a related-party transaction ... the Financial Markets Conduct Act stipulates the process they have to go through to work with their supervisor to get that transaction across the line.' But that does not mean you cannot lose money in KiwiSaver. Callanan said there was always the risk that investments could go wrong and financial markets might not perform as expected. 'But if you're with a KiwiSaver provider in New Zealand, you can have confidence that there's a mechanism in place in the supervisors that if something was to go wrong with that manager, the supervisor would step in and stop you falling down the metaphorical cliff. 'There's always the possibility that someone makes a silly financial decision or you could pick an investment that's really bad. My advice would be to avoid a situation where you have all your eggs in one basket.' He said that could only happen with the KiwiSaver schemes that allow people to choose their own investments. 'Most KiwiSaver providers are offering these diversified products and you can be really confident you've going to get a good outcome because you've spread your risk in an appropriate way.' Financial Markets Authority (FMA) director of markets, investors and reporting John Horner said the law prescribed the segregation of duties in relation to managed investment schemes. 'Generally, while the manager of the scheme is responsible for investment decisions, the custodian is responsible for holding and safeguarding the scheme property – segregation of legal ownership – and for keeping records of the scheme property – segregation of functions. Supervisors licensed by the FMA are responsible for custody. Depending on the scheme's governing documents, a supervisor may appoint another appropriate independent person as custodian. 'MIS [managed investment scheme] managers and supervisors are obliged to act with care, diligence and skill. MIS managers are expected to maintain strong capital positions, professional indemnity insurance, parent company guarantees or other, similar arrangements. Managers are also required to notify the supervisor if they are, or are likely to become, insolvent. The supervisor is responsible for monitoring the manager's performance of its functions and obligations, as well as its financial position. 'In the event that the fund manager becomes insolvent or is otherwise unable to continue operations, the supervisor has the power to appoint a temporary manager to ensure the continued management and operation of the fund until a permanent replacement is appointed.' – RNZ
Scoop
21-05-2025
- Business
- Scoop
Have Your Say On Financial Markets Conduct Amendment Bill
Press Release – The Finance and Expenditure Committee This bill is one of three that the Finance and Expenditure Committee is considering related to financial services. The Finance and Expenditure Committee is calling for submissions on the Financial Markets Conduct Amendment Bill. The closing date for submissions is 11.59pm on Monday, 23 June 2025. This bill is one of three that the Finance and Expenditure Committee is considering related to financial services. The other two bills are the Financial Service Providers (Registration and Dispute Resolution) Amendment Bill and the Credit Contracts and Consumer Finance Amendment Bill. Please take care to upload your submission on the relevant bill. The bill would: change minimum requirements for fair conduct programmes to allow for more flexibility and to reduce unnecessary prescription and compliance costs require the Financial Markets Authority (FMA) to issue a single licence covering different classes of market services change provisions that require firms holding a licence under the Financial Markets Conduct Act, or authorised bodies, to obtain regulatory approval from the FMA before certain changes in firms take effect introduce on-site inspection powers for the FMA to, without notice, enter and remain at a place of business of a financial markets participant for compliance monitoring purpose make a number of other technical amendments. Make a submission on the bill by 11.59pm on Monday, 23 June 2025.
Scoop
21-05-2025
- Business
- Scoop
Have Your Say On Financial Markets Conduct Amendment Bill
The Finance and Expenditure Committee is calling for submissions on the Financial Markets Conduct Amendment Bill. The closing date for submissions is 11.59pm on Monday, 23 June 2025. This bill is one of three that the Finance and Expenditure Committee is considering related to financial services. The other two bills are the Financial Service Providers (Registration and Dispute Resolution) Amendment Bill and the Credit Contracts and Consumer Finance Amendment Bill. Please take care to upload your submission on the relevant bill. The bill would: change minimum requirements for fair conduct programmes to allow for more flexibility and to reduce unnecessary prescription and compliance costs require the Financial Markets Authority (FMA) to issue a single licence covering different classes of market services change provisions that require firms holding a licence under the Financial Markets Conduct Act, or authorised bodies, to obtain regulatory approval from the FMA before certain changes in firms take effect introduce on-site inspection powers for the FMA to, without notice, enter and remain at a place of business of a financial markets participant for compliance monitoring purpose make a number of other technical amendments. Make a submission on the bill by 11.59pm on Monday, 23 June 2025.
National Business Review
02-05-2025
- Business
- National Business Review
Westpac pinged $3.25m for overcharging, misleading customers
Westpac has been slapped with a $3.25 million penalty for misleading customers who were otherwise entitled to advertised discounts, while overcharging its business customers. New Zealand's fourth-largest bank admitted to breaching the fair dealing provisions under the Financial Markets Conduct Act
