Dalziel Lianne: Financial Service Providers (Registration and Dispute Resolution) Bill — First Reading 
Dalziel Lianne: Financial Service Providers (Registration and Dispute Resolution) Bill — First Reading 
[Volume:644;Page:14002] 
Hon LIANNE DALZIEL (Minister of Commerce) 
: 
 I move  
That the Financial Service Providers (Registration and Dispute Resolution) Bill be now read a first time. 
 It is my intention that the bill will be referred to the Finance and Expenditure Committee. 
As the title indicates the bill sets up a registration system for financial service providers and establishes a requirement that they all belong to an industry-based approved dispute resolution system to improve consumer access to redress in the financial sector. It is the second bill arising from the Review of Financial Products and Providers that we have dealt with in this final sitting of the year. I am aware that such bills would normally be referred to the Commerce Committee. However the first of these bills was an amendment to the Reserve Bank of New Zealand Act and it makes sense that these other bills go to the same committee that dealt with that bill. That committee is under the very able chairmanship of my colleague Charles Chauvel. 
The new registration system will identify for the first time all entities providing financial services in the New Zealand market—in fact I find it rather extraordinary that we do not have a single register that is able to identify all such entities at this stage. This will assist all relevant regulatory authorities to both monitor and enforce the law and enable sectoral data to be collected. It will allow more effective monitoring and evaluation of financial service providers including facilitating effective coordination and information-sharing between financial sector regulatory authorities so that the requirements on firms are streamlined. The establishment of such a register will provide easy access to information about financial service providers. Having a register will enable New Zealand to meet specific anti - money-laundering obligations under the Financial Action Task Force or FATF as it is referred to—the particular recommendations that it has made—and it will ensure that the controlling owners directors and senior managers of financial service providers do not have certain criminal convictions are not bankrupt and are not the subject of a management ban under companies securities or consumer legislation. 
The bill covers a wide range of entities including banks building societies credit unions managed funds securities issuers money transfer services finance companies credit providers foreign currency exchanges and insurers. The definitions are intended to be as broad as they can possibly be. 
The register will be operated by the Companies Office. The Companies Office has been consistently assessed by the Business New Zealand - KPMG survey as the most helpful Government department in New Zealand. It provides a world-class service with efficient and user-friendly processes to help reduce compliance costs for business. This bill leverages off that expertise and capability. 
Virtually all financial service providers are companies or entities that are already required to register with or provide information to the Companies Office. Giving the Companies Office the function of registering financial service providers means that efficiencies will be gained and that compliance costs will be minimised for businesses which will have to deal with only one registration body. There will not be duplication of requirements to provide registration information. For consumers it will mean that there is one easily accessible point for information on financial service providers. For example a consumer could find information about a financial service provider—such as its constitution trust deeds prospectuses and other disclosure documents; details of senior management; and financial reports—all from a single online source. The registration function will be separate from any other merit licensing or qualitative fit and proper tests that the relevant financial sector regulator will carry out. But all information on the financial services provider will be accessible making it a comprehensive database of information on a provider. 
The registrar of financial service providers will undertake enforcement functions in relation to breaches of the registration requirements and will have the power to share information with the Securities Commission the Reserve Bank of New Zealand and other prescribed agencies that carry out supervisory and enforcement functions relating to money-laundering or terrorist financing—for example the police. 
The bill also establishes access to a comprehensive industry-based dispute resolution system to improve consumer access to redress in the financial sector. Effective dispute resolution and redress mechanisms are essential to encourage consumers to participate in financial markets and to promote market discipline for financial providers. Existing voluntary industry-based dispute resolution schemes such as the Banking Ombudsman and the Insurance and Savings Ombudsman already provide effective access to redress for consumers. However they do not currently extend to building societies credit unions finance companies financial advisers and some superannuation schemes. This bill will not see those schemes replaced. In fact some of the existing schemes may expand their coverage and others will model themselves on the existing schemes. 
Membership of an approved dispute resolution scheme will be mandatory for financial service providers that transact with consumers. Consumers in this context include small to medium sized enterprises. I think that is a considerable advance in consumer protection; it recognises that small businesses can be as vulnerable as natural persons. Dispute resolution schemes will be approved by the Minister of Commerce if the schemes meet the principles of accessibility independence fairness accountability efficiency and effectiveness. 
In conclusion I would like to extend my thanks to the industry participants who contributed to this bill through the consultation process and to the officials for all their hard work. I am pleased that the parties in this House have agreed to facilitate the referral of this bill to the select committee. I look forward to seeing the committee look carefully at the detail of the bill. I commend the bill to the House.