Chauvel Charles: Financial Service Providers (Registration and Dispute Resolution) Bill — First Reading 
Chauvel Charles: Financial Service Providers (Registration and Dispute Resolution) Bill — First Reading 
[Volume:644;Page:14005] 
CHARLES CHAUVEL (Labour) 
: 
 In New Zealand at the moment there are registration requirements for some financial providers such as banks building societies and credit unions and for some products such as prospectuses under specific legislation but the provisions that require these protections are not comprehensive and they do not identify what financial services a particular entity provides. This situation does not comply with international standards for combating money-laundering and the financing of terrorism.  
Members will be aware that in 2005 the Government announced a review of the regulation of non-bank financial products and providers. The previous speakers referred to this review. The aim of the review was to develop an effective and consistent regulatory framework to promote confidence and participation in sound and efficient financial markets which are clearly essential as we build prosperity in this country. The review has combined a number of separate reviews of financial products and providers that were planned or already in train.  
The Financial Service Providers (Registration and Dispute Resolution) Bill implements some aspects of the highest-priority priorities under the review which are necessary to achieve compliance with international obligations and to better protect consumers. Other aspects of the first stage of the review are being implemented through companion legislation the Financial Advisers Bill and the Reserve Bank of New Zealand Amendment Bill (No 3).  
This bill proposes the establishment of a compulsory register of financial service providers. The purposes of the proposed register include identifying the service providers and ensuring that the controlling shareholders directors and senior managers are subject to criminal checks to enable members of the public to access information on the products and services provided by the entity and to provide information about which consumer dispute resolution scheme the entity should belong to. The purposes also include assisting the registrar and other regulators to enforce legislation regulating the financial sector.  
The bill provides for the Registrar of Financial Service Providers and Financial Advisers to have responsibility for establishing and maintaining the register. The registrar will be the person holding the office of Registrar of Companies—an existing position. That person 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 and other agencies that carry out anti - money-laundering supervisory and enforcement functions such as the financial intelligence unit of the police.  
The bill also includes provisions for establishing a comprehensive industry-based consumer dispute resolution system to improve consumer access to redress in the financial sector. The purpose of the dispute resolution system is to provide a simple low-cost avenue for consumers to seek redress. The dispute resolution system will be fully funded by the industry. Government involvement will be limited to approving schemes including periodic renewal receiving periodic reports and powers of inspection if necessary rather than involvement in the day-to-day operation of a scheme. The schemes to be set up under the bill are intended to be accessible independent fair accountable efficient and effective. I welcome the indication from the Opposition that there will be a commitment to constructive dialogue at the Finance and Expenditure Committee over the details of the bill and I very much look forward to its consideration in that committee.