Three Bills introduced to Parliament as part of phase two of financial services reforms

On 31 March 2025, the Minister of Commerce and Consumer Affairs (Hon. Scott Simpson) (Minister) introduced three Bills to Parliament as part of the ongoing wide sweeping "fit for purpose" financial services reforms. These Bills are the:

• Financial Service Providers (Registration and Dispute Resolution) Amendment Bill (FSP Bill)
• Credit Contracts and Consumer Finance Amendment Bill (CCCFA Bill)
• Financial Markets Conduct Amendment Bill (FMCA Bill)

We summarise the respective Bills below.

 

Financial Service Providers (Registration and Dispute Resolution) Amendment Bill

The FSP Bill amends the Financial Service Providers (Registration and Dispute Resolution) Act 2008 (FSPA). There are two major changes. Firstly, the Minister will have the power to require independent reviews of approved dispute resolution schemes. Secondly, the amendments permit regulations that will prescribe requirements for the boards of dispute resolution schemes, including:

• minimum standards imposed on members' skill, knowledge and experience;
• the grounds for the disqualification of members; and
• the requirement that members and the board are reasonably independent of financial service providers.

 

Credit Contracts and Consumer Finance Amendment Bill

The CCCFA Bill amends the Credit Contracts and Consumer Finance Act 2003 (CCCFA), the Financial Markets Conduct Act 2013 (FMCA), the Financial Markets Authority Act 2011 (FMAA), the FSPA, and associated legislation.

Under the CCCFA Bill, regulatory responsibility for credit contracts and consumer finance will be transferred from the Commerce Commission to the Financial Markets Authority (FMA).

The Bill will remove the duty under section 59B of the CCCFA for directors and senior managers of a creditor to exercise due diligence to ensure the creditor complies with its statutory duties and obligations.

The CCCFA Bill replaces the requirement on creditors and mobile traders to be certified with the requirement for these people to be licensed under the FMCA. Those who are already certified, or exempt from certification, are treated as holding a licence.

The CCCFA Bill reverses the default position that parties that are affected by a failure to make certain related disclosures are not liable for the costs of borrowing, the lease, or the transaction. Further, the Bill empowers the Court to make an order for redress based on these costs if it finds the disclosure failure caused loss / damage and other orders are insufficient. Section 95A of the CCCFA provides the court with discretion to provide relief to creditors where they have failed to make certain disclosures and section 95B provides guidelines for when relief under section 95A can be granted. The Bill now allows sections 95A and 95B to apply retrospectively to consumer credit contracts entered between 6 June 2015 and 20 December 2019 (Relevant Period) where they previously did not.

This retrospective change may affect ongoing class action suits against ANZ and ASB Banks, who are being sued for failing to provide proper disclosure information to customers during the Relevant Period (Simons & Ors v ANZ Bank New Zealand Limited and ASB Bank Limited [2022] NZHC 1836). If the Bill is passed, the Court could extinguish or reduce the effect of any failure by ANZ or ASB to make disclosures to their customers under the amended sections 95A and 95B.

 

Financial Markets Conduct Amendment Bill

The FMCA Bill amends the FMCA and the FMAA.

The amendments simplify and clarify the minimum requirements for fair conduct programmes (FCP), including:

• clarifying the requirement of communicating with consumers in a timely, clear, concise, and effective manner to expressly include communication covering the price of services / products;
• a new requirement requiring the resolution of consumer complaints in a timely and effective manner;
• lowering the level of prescription attached to the employee training, supervising, and monitoring requirements; and
• removing requirements relating to existing legal obligations and the regular review of FCP effectiveness.

The Bill requires the FMA to issue a single licence that would cover all different classes of market services. Therefore, a firm that holds multiple existing licences would have these licences consolidated into a single licence.

The Bill will introduce provisions that require firms holding a licence under the FMCA and authorised bodies to obtain FMA approval before making certain changes. These changes include:

• when another person obtains "significant influence", with such an influence being when a person obtains 25% or more voting rights or the ability to appoint 50% or more of the directors;
• before entering a significant transaction; and
• before amalgamation.

The Bill also introduces the power for the FMA to conduct on-site inspections at the place of business of financial market participants for compliance monitoring purposes.

Lastly, the Bill will make certain existing exemptions made under the FMA's exemption powers permanent. This removes the burden of having to apply for exemption renewals.

 

Our view of the changes

We are pleased to see that the "fit for purpose" financial services reform is being progressed, despite the change in Minister. Additionally, we broadly support any attempt to reduce the extensive compliance cost burdens that firms face.

We previously submitted against the FMA having the power to conduct unwarranted on-site inspections. We maintain this stance. The introduction of this power in the FMCA Bill risks increasing the compliance burden faced by firms.

In addition, we submitted against the approval of changes in control for FMCA licence holders. We maintain this position in light of the FMCA Bill change in control amendments. These changes will increase compliance burdens for licence holding firms and we consider that the FMA's existing powers, such as the ability to issue interim stop orders, notices under section 25 of the FMAA, and the FMA's powers under the Corporations (Investigation and Management) Act 1989, are sufficient to deal with changes of control that breach / may breach the law.

You can read our submission on MBIE's fit for purpose services conduct regulation consultation here.

 

Next steps

The three Bills are awaiting their first reading. There has been no further clarification on timelines.

Please get in touch if you would like to further discuss these reforms, or regarding submissions when the Bills reach the Select Committee, which we expect to be later this year.