New Zealand’s FMA introduces new standard condition for certain market licence holders
New Zealand’s Financial Markets Authority (FMA) is introducing a new standard condition for certain market licence holders following consultation.
The new licence condition will focus on business continuity and technology systems. It will come into effect on 1 July 2024.
The standard condition is relevant to the following types of market service licences:
- Managers of registered schemes (but not restricted schemes)
- Providers of discretionary investment management services
- Derivatives issuers
- Prescribed intermediary services (peer-to-peer lending providers and crowdfunding service providers).
The new standard condition requires licence holders to have and maintain a business continuity plan that is appropriate for the scale and scope of its service. Licence holders will also be required to make sure that their critical technology systems are operationally resilient.
If the licence holder suffers an event that materially affects the supply of its service, it must notify the FMA as soon as possible, or no later than 72 hours after it has determined the event is a material incident.
Most market services licence holders are required to notify the FMA of any event that materially impacts the operational resilience of their critical technology systems. This includes an event that materially disrupts or affects the provision of the licensee’s market service or has a materially adverse impact on recipients of those services.
FMA Director of Specialist Supervision and Response, Peter Taylor, said:
“The feedback from our consultation on the new standard condition shows that the market is also supportive of our plan. We have used the feedback to refine our approach and help reduce regulatory burden”.