Further confusion sorted
12 Dec 2017
Following on from last weeks story on the confusion with a Financial Services Register website definition IBANZ has now received confirmation that Financial Markets Authority (FMA) advice on "broker" registration was incorrect.
We questioned if insurance brokers are indeed not considered brokers under the FAA as stated on the FMA website.
They have looked into the matter and advised us that there appears to have been some oversimplification in their external presentation. FMA will replace the paragraph in question shortly with the following:
- Insurance and mortgage brokers are only considered brokers under the FAA if they receive, hold, pay or transfer client money or property which is used to buy, hold or sell a financial product (as defined in the FA Act).
- For insurance brokers, the client money handling obligations under the FAA do not apply as there are alternative provisions of under the Insurance Intermediaries Act 1994.
- Mortgage brokers are unlikely to hold client money or property and therefore
Any IBANZ Members who have followed the previous FMA advice and not registered their company as a "broker" should review that decision. If your company holds client money (premium) then registration is required on the FSPR under:
"Custodians (Class 6C in the Regulations) and Brokers (Class 6B in the Regulations)"