The financial regulators of New Zealand have many initiatives in the pipeline. This article lists the ones recognised by the Council of Financial Regulators.

In April, the council published a table of regulatory initiatives that had been put off because of the onset of the Coronavirus. This has now been updated to inform financial service businesses about future initiatives.

Q4 2020

For all firms in this last quarter of 2020, a consultative exercise (organised by the Royal Bank of New Zealand) will start on the subject of principles-based guidance in respect of cyber-resilience.

For banks in this last quarter of 2020, the periods of comment for two consultative exercises are coming to a close. One, run by the Treasury and RBNZ, is to do with their review of the Reserve Bank Act (prudential regime for deposit takers and deposit insurance), while a select committee process is likely to commence on the Reserve Bank of New Zealand Bill.

The authorities are starting to consult the financial sector about the following in this quarter.

• Capital requirements for banks - exposure draft on the capital review (RBNZ).
• Standard terms for Residential Mortgage Obligations (RBNZ).
• A restructuring of the Banking Supervision handbook (RBNZ).
• Encumbrance policy (RBNZ).
• Revised process for approving banks’ internal capital adequacy models for credit risk (RBNZ).
• Regulations for the Conduct of Financial Institutions regime (MBIE).

Implementation work, meanwhile, is restarting on breach reporting and materiality (RBNZ), with breach reporting to start on 1 January 2021, while the RBNZ has begun to prepare for potential negative OCR – this is to be completed by 1 December.

There are two regulatory initiatives this quarter for managed investment schemes. One is a "return to normal" involving the restricted schemes member confirmation notice (FMA) - usual requirements apply again on 1 November (after a two-month extension) and the other is the second stage of a two-part industry survey for a thematic review of liquidity management (FMA), scheduled for early November.

For financial advisors, the FMA is publishing the results of a consultative exercise regarding standard conditions/application guide for full licensing.

Q1 2021

For all firms in the first quarter of 2021, the RBNZ is conducting a review of the Financial Strength dashboard (possible scope extensions) and another consultative exercise of standards for banknote-processing machines.

For banks, two consultative exercises start: one on a review of the Dual Registration and branch policy (RBNZ) and the other on a standardised approach to measuring operational risk (RBNZ).

A new financial advice regime will come into force on 15 March.

For credit providers, a temporary measure will expire on an addendum to the Responsible Lending Code on 31 March (extended from 30 November 2020). A consultative process will start regarding further amendments to that code.

For financial market infrastructures, a consultation will start on proposed standards under the FMI Bill (RBNZ/FMA).

Q2 2021

For all firms in the second quarter of 2021, a consultative exercise will begin on the forthcoming executive accountability regime. It will involve the Ministry of Business, Innovation and Employment, the RBNZ and the Financial Markets Authority.

Meanwhile, the RBNZ will start consulting banks about its large exposures policy review.

For credit providers, applications for "fit and proper" certifications will begin on 1 June (ComCom).

Nothing is scheduled for Q3 2021.

Q4 2021

For banks in this quarter, consultative exercises start on a likely exposure draft of the legislation for deposit takers and deposit insurance (Treasury and RBNZ) and counter-cyclical capital buffers (RBNZ).

For credit providers, new requirements will come into force under the CCLAA on 1 October; there will be new duties for directors and senior managers after 1 October; and those directors and senior managers are to be certified by then.