12. Question No. 12—Commerce and Consumer AffairsNANCY LU (National) to the Minister of Commerce and Consumer AffairsQuestion No. 12—Commerce and Consumer Affairs12. NANCY LU (National) to the Minister of Commerce and Consumer Affairs: What proposals has he made to streamline and simplify the conduct requirements for financial institutions in New Zealand?Hon ANDREW BAYLY (Minister of Commerce and Consumer Affairs): Yesterday I announced at the Financial Services Council meeting my intention to simplify regulations cut red tape and reduce costs to financial institutions. There were three elements: first of all the proposal to move from three to two regulators; secondly to reduce from a maximum of six licences to a single licence; and thirdly to reform the Conduct of Financial Institutions requirements to make it easier for smaller financial institutions to meet their obligations. We are committed to reducing compliance and regulation where appropriate and getting the economy back on track.Nancy Lu: How will clearly defining the roles of the two regulators assist financial institutions?Hon ANDREW BAYLY: Currently some institutions are accountable to up to three regulators. What I announced yesterday is a move to just two regulators—the first being a prudential regulator who is of course the Reserve Bank but more importantly moving to a single conduct regulator being the Financial Markets Authority (FMA). By making this change financial institutions will have clearer lines of responsibility which means they can focus on running their businesses more effectively.Hon Dr Duncan Webb: What initiatives has he announced in respect of the Credit Contracts and Consumer Finance Act and how does that differ one little bit from the announcement of the last Minister on 8 August 2023?Hon ANDREW BAYLY: I announced yesterday that we are looking into the credit contracts Act because our intent is to improve the regulation which the previous Government has made an absolute hash of—hash of. What we're intending to do is to make sure that vulnerable borrowers are still protected but just as importantly making sure that credit is available to those who need it but have been excluded under the current regulations.Nancy Lu: What are the benefits of moving to a single licensed regime of conduct?Hon ANDREW BAYLY: Currently some institutions have to apply up to or hold five licences with the FMA. With the new Conduct of Financial Institutions—or CoFI—bill that requires an additional licence. What we're proposing to do is to move to a single licence issued by the FMA—or Financial Markets Authority—which means less duplication reduces the operational burden for institutions without compromising conduct requirements.Nancy Lu: How will this Government make it easier for smaller financial institutions to meet their CoFI obligations?Hon ANDREW BAYLY: As I announced yesterday I'm requesting that the FMA issue clear guidance on the minimum requirements necessary for smaller institutions to meet their obligations under CoFI regulations and legislation. This will allow the smaller institutions to develop a more tailored approach ensuring obligations are both proportionate and fit for purpose while balancing the importance of fair treatment for customers.