The new condition will come into effect in July
The Financial Markets Authority (FMA) is enhancing its regulatory framework by introducing a new standard condition focused on business continuity and technology systems for market licence holders.
The move aims to bolster the cyber and operational resilience within the financial markets, ensuring that entities can effectively manage and respond to incidents affecting their services.
New standard condition for licence holders
Set to take effect on July 1, the new licence condition mandates that certain market service licence holders develop and maintain comprehensive business continuity plans.
This requirement applies to managers of registered schemes (excluding restricted schemes), providers of discretionary investment management services, derivatives issuers, and prescribed intermediary services such as peer-to-peer lending and crowdfunding service providers.
Licence holders are required to ensure the operational resilience of their critical technology systems. Furthermore, they must notify the FMA within 72 hours of identifying any event that materially impacts their service provision.
“If the licence holder suffers an event that materially affects the supply of its service, it must notify the FMA as soon as possible, or no later than 72 hours after it has determined the event is a material incident,” FMA said in a media release.
Streamlining incident reporting
To streamline the reporting process, FMA has introduced a secure online notification form.
The form is designed to simplify the reporting of incidents that impact the cyber and operational resilience of technology systems, ensuring timely notification and response to such events. It is “intended to be light-touch” and compatible with the Reserve Bank’s cyber incident notification process for regulated entities.
“The FMA continues to build its regulatory framework for promoting cyber and operational resilience in the financial markets,” said Peter Taylor (pictured above), FMA director of specialist supervision and response. “The feedback from our consultation on the new standard condition shows that the market is also supportive of our plan.”
Enhancing financial market resilience
The introduction of the new regulations and reporting processes highlights FMA’s commitment to enhancing the resilience of New Zealand’s financial markets against operational and cyber threats.
By establishing clear requirements for business continuity planning and incident reporting, the FMA said it aims to safeguard the interests of market participants and consumers alike.
“We have also ensured that Reserve Bank regulated entities are not further burdened by ensuring this process remains compatible with the Reserve Bank requirements,” Taylor said.
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