Monday 4th of April 2011

It’s fantastic to finally be getting to Christchurch. Christchurch advisers have been in everyone's thoughts at every roadshow event. Since 23 February the Commission has said we’d be sympathetic to Christchurch advisers who are struggling to meet the FAA compliance requirements so it’s good to be able to speak more tangibly about it now that the Government’s announcement of an extension has happened.  I look forward to meeting around 40 advisers on Tuesday and answering their questions face to face. Readers may be interested in some stats.  As at late last week we had:

• Received 115 AFA applications from Christchurch advisers
• Of those, 31 have been licensed
• 84 are in progress
• Around 40 individual advisers have contacted us to describe the difficulty they are having completing their compliance journey (there is some overlap with the figures above).
• A few financial advisory firms have also been in touch, usually on behalf of their affected advisers or inaccessible client records.  We are getting an understanding of their issues and, in qualifying cases, will agree a pathway to compliance with them.

Here's a summary of the extension provision:

• The Order under the Christchurch Earthquake Response and Recovery Act provides extended deadlines for registration and authorisation for financial advisers if they want to take advantage of them.
• It applies to advisers who have their sole or principal place of business within the districts of Christchurch City Council, Selwyn District Council or Waimakariri District Council.  If an adviser has been adversely affected by the earthquake and doesn't seem to be covered by the Order they should contact us.  Each situation will be dealt with on a case by case basis.
• Canterbury based financial advisers have until 30 June to register and until 30 September to become an AFA.  This means they can continue to provide financial adviser services without becoming authorised until 30 September.
• They have until 30 September to comply with the disclosure regulations. Until then they must comply with the existing SMA disclosure requirements.  If they rely on the extension the disclosure extension also applies.  This is not optional.
• If they are already an AFA the original 1 July disclosure requirements date applies.
• Once authorised, Canterbury advisers must comply with their obligations under the Act, the Code and their terms and conditions of authorisation.  The extension does not affect the conduct obligations that are already in force and apply to all financial advisers.
• The order only applies to individuals, not companies, nor nominated representatives of QFEs.

What do affected Canterbury advisers need to do?  Splitting them into four categories:

1. If an adviser is already an AFA, they can ignore the order and are subject to FAA  disclosures from 1 July 2011  (the disclosure extension only applies if an adviser takes up the extension to be an AFA).
2. If they have already applied, they can contact us to confirm whether they’d like to be authorised by 30 June as originally planned, 30 September, or somewhere in between. We’ll do our best to fit in with their compliance readiness.  If we haven’t heard from them we'll contact them just before we send out their AFA certificate to be sure they’re ready.
3. If an adviser doesn’t have their application in yet, but want to take advantage of the extension, we’d encourage them to:

• get in touch with us so we know who they are
• make plans to ensure they can meet the new deadlines
• speak to their training provider and ETITO to make sure courses and exams will be available during the extension period
• check referees are in a position to provide or update testimonials
• let their clients know when they plan to be registered and authorised

1. If an adviser plans to be a nominated representative they should speak to their QFE to see whether their nomination can be delayed to 1 October

If at any time a Christchurch adviser wants to speak to one of my team we have a dedicated person available.  His name is James Sime and advisers don’t have to go through our 0800 434567 number to speak to him.  His direct dial is (04) 474 2062. They can also email James on  james.sime@seccom.govt.nz and there is a factsheet on our website. We encourage all advisers who can comply with the original dates to continue to work towards those deadlines.  This will help minimise any consumer confusion and will serve to ensure Christchurch is able to offer as many registered and authorised advisers as possible from 1 July.