Ministry of Business, Innovation and Employment
NZBA is grateful for the opportunity to submit on both the draft regulations and the proposals around disclosure. The process around the development of the Financial Markets Conduct Act 2013 (the Act) has been a good example of policy development that has actively involved the industry. NZBA commends the on-going commitment to meaningful consultation and engagement.
Ensuring the regime is workable is essential both for entities offering products and for those looking to use them. If the design of the regime is too onerous, product providers may choose to simply pull certain product classes, which may in the end lead to negative outcomes for the market overall.
This is particularly relevant in the derivatives space. Large numbers of small and medium firms currently use these products to manage their commercial risk. If it were made too onerous to offer these products, these companies are the ones that will suffer. While providers may go out of their way to accommodate large high-value clients, these smaller clients may in effect be excluded from the derivatives market, which would impair their ability to manage their risk.
Similarly, ensuring that the requirements around consent and oversight are practical is essential to protecting the ability for entities to provide a wide variety of products to serve the needs of their customers.