Consultation on FMA good conduct guide complete

Consultation on FMA good conduct guide complete | Insurance Business

Consultation on FMA good conduct guide complete
The Financial Markets Authority (FMA) has announced the completion of the consultation on the good conduct guide released earlier this year, with the final version of the guidance to be published in the New Year.

In a statement, FMA CEO Rob Everett said that in the draft guide and subsequent discussions with industry, the regulator recognised that the Financial Markets Conduct Act (FMC Act) does not include broad conduct obligation for providers beyond the prohibition of mis-selling and misrepresentation under its Fair Dealing provisions.

The FMA noted that several submitters paid particular attention to the legal status of FMA expectations with regards to the conduct set out in the draft guide.

“The guide does not create or replace any legal obligations on financial services providers,” explained Everett. “Its intention is to prompt their leaders first to consider why good conduct matters; and then to think about how to make that happen within their own organisations.”

Other submitters, on the other hand, pointed out that the guide did not provide sufficient and more concrete details, particularly about what constitutes good and bad conduct and what it takes to comply.

In response to this, the regulator reiterated that the guide was never intended to be a checklist of the practices and processes required of the firms, but rather a guide on FMA expectations as well as some indicators on what would reflect a good approach to conduct risk.

“The true test of any provider’s approach to conduct will not be how much it sounds like what is in the guide,” Everett said. “It will be whether they can show customers – and the FMA if necessary – that what they do is consistently effective at producing good customer outcomes.”

FMA said that the final version of the guidance and a report on the submissions received will be published in the New Year.


Related stories:
FMA good conduct guide slammed as ‘fuzzy law’
Insurance industry reacts to FMA good conduct guide