MED throws out FMA funding fee proposal

• Tweet

The Ministry of Economic Development (MED) has rejected all four of its original funding proposals for the Financial Markets Authority (FMA), opting instead for a tiered system with “no charging based on individual advisers.”

Tuesday, September 13th 2011, 6:53AM 2 Comments

by Benn Bathgate

The MED proposal document - currently before Minister Steven Joyce - has also been passed on from Commerce Minister Simon Power, who cited the potential for a conflict of interest ahead of his departure from politics to the private sector.

The MED's Geoff Connor outlined some of the detail in the proposal, saying it included "none of the four proposals in the discussion paper."

"What we're looking at now is more of a tiered approach, and that tiered approach would be around entities, so there'd be no charging based on individual financial advisers."

He said issues around charges for individual advisers were "the element of the proposals in the discussion document that was causing the problems in terms of some people having to pay disproportionate amounts, and also maybe encouraging people to leave the market."

"So now it's a tiered approach based on whether the entity is a bank or an insurer or another type of issuer, or whether they're an FSP that's not in any of the other categories."

Connor said the MED was informed "about a week and a half ago" that Power would be transferring responsibility for the decision.

Power's press secretary Brent Webling said the decision was a precaution ahead of his move from politics to the private sector.

"The setting of these levies has the potential to affect the whole private sector, and since he announced his resignation he made it clear he was interested in moving into the private sector and with that in mind he thought it was appropriate - he didn't want to create any perception that he had a particular view on a part of the market."

Benn Bathgate is a business reporter for ASSET and Good Returns, email story ideas to benn@goodreturns.co.nz

Comments from our readers

Commenting is closed