In 2018, joint reviews conducted by the Financial Markets Authority (FMA) and Reserve Bank of New Zealand identified a significant gap in financial services regulation. They found that banks and insurers failed to establish sufficient systems to monitor the risks of poor conduct or customer outcomes.1
In late June 2022, New Zealand's Parliament passed the Financial Markets (Conduct of Institutions) Amendment Bill. The legislation, also referred to as the “CoFI" bill, introduced a new regime that will require financial institutions to comply with a “fair conduct principle.” A firm's license to do business will depend on how the FMA assesses its conduct toward consumers in the context of these CoFI-established requirements.
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