Early action key to licensing success
As the March 31 deadline approaches for financial institutions in New Zealand to obtain a financial institution (FI) licence, Finance Direct’s proactive approach serves as a valuable example for smaller firms, the Financial Markets Authority reported.
Registered banks, licensed insurers, and non-bank deposit takers providing relevant services must secure this licence to continue operations.
Finance Direct, a small firm with just six employees, began its application process in mid-2024.
Risk Officer Jeanne Schaaffhausen (pictured above) led the initiative and shared her experience with Anita Frazer (pictured above right), FMA’s head of licensing and regulatory services.
“We knew we needed to get it done and didn’t see any need to wait. We just wanted to get ourselves sorted and licensed,” Schaaffhausen said.
Preparing for the application
The process took Finance Direct between three and four months to complete. Schaaffhausen explained the importance of preparation and understanding what FMA was seeking.
“I felt better after talking with our designate that it was more about showing we understood what fair conduct is and we could demonstrate that,” she said. “The FMA wasn’t looking for us to rewrite the book.”
Support from FMA
Schaaffhausen highlighted the significant support Finance Direct received from FMA, which recently published its annual report for the financial year ending June 30.
“The online portal was easy to use, and I liked the simplicity of each step. It was great to be able to pick up the phone and talk with our designate,” she said.
Additionally, webinars, informational sheets, and direct visits from FMA staff provided valuable guidance.
A clearer path ahead
Being granted the FI licence has brought Finance Direct relief and clarity regarding compliance expectations.
“It gave us a clearer understanding of our ongoing compliance expectations, including the documents and procedures we need to keep up with,” Schaaffhausen said.
Finance Direct’s experience underscores the importance of starting the application process early, leveraging available resources, and maintaining clear communication with FMA to navigate the licensing process effectively.
Read FMA’s interview with Schaaffhausen here.
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