Commerce minister plans extensive financial services laws overhaul

“More than ever, New Zealanders need to be able to access good financial advice,” and it shouldn't be available only for the wealthy, Bayly said.

But he's concerned that current regulatory settings and “legislative architecture” governing the financial services sector are too complex.

Bayley said he's about to start the process of repealing the Business Payment Practices Act, a law that requires large companies and other entities to disclose their payment practices on a public register.

Also on the list for review are the Credit Contracts and Consumer Finance Act, and Conduct of Financial Institutions, or CoFi, legislation.

Bayly said he doesn't want to discard CoFi but he does want “a broad review” and that while the overall framework “is solid,” he wants to ensure its requirements are fit for purpose and to reinforce the principle that the responsibility for determining fair conduct lies with those applying for licences.

He is looking for a “tailored and proportionate” approach and wants the Financial Markets Authority (FMA)  to provide clear guidelines for smaller organisations that don't have the same resources as large institutions.

Bayly said he also wants to look at ways to improve the efficiency of the current financial dispute resolution services. He questioned whether NZ needs four financial dispute resolution organisations.

“I'm concerned about the impact of an overbearing regulatory environment and its effect on financial advisers,” he said.

The ability of financial advisers to provide services “should not be hindered by unnecessary red tape and costs.”

And it's fundamental that we do more to support more New Zealanders to save for their future because many are not saving enough.

Bayly said some organisations now find themselves regulated by three separate bodies and he would like to simplify regulation.

He wants the Reserve Bank (RBNZ) to concentrate on prudential regulation and the FMA to focus on regulating financial markets conduct and some functions currently performed by the Commerce Commission will be moved to the FMA.

He also wants to refine the operational relationship between RBNZ and the FMA.

The Insurance Contracts Bill the government is looking at is aimed at ensuring consumers have more clarity “about the deals they're striking.”

Bayly said he understands that insurers want to know what their obligations will be under the bill. “My decisions will be guided by my goal to create certainty and clarity for both insurers” as well as their customers.

Bayly also plans to look at KiwiSaver with a view to improving capital markets and to get more capital flowing to Kiwi businesses as well as improving financial literacy among New Zealanders.

The Companies Act is now 30 years old and aspects of it are outdated and could be improved.

He wants to “modernise, simplify and digitise” the Act.