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Proposed levy targets financial auditors and advisers


Financial auditors and advisers could be hit in the pocket if the recommendations in a discussion document released this morning are adopted.

Colin Williscroft
Fri, 10 Jun 2011

Financial auditors and advisers could be hit in the pocket if the recommendations in a discussion document released this morning are adopted.

The document examines third-party funding options for the Financial Markets Authority, the External Reporting Board, the Companies Office and the Insolvency Trustee Service.

Commerce Minister Simon Power said the main financial market regulator, the Financial Markets Authority, had been given more grunt but it needed more resources if it was to deliver.

“In particular, the FMA has taken on new regulatory functions to help lift the bar in terms of market behaviour, and drive a culture of visible, proactive, and timely enforcement."

The discussion document proposes a number of different levies to cover the cost of these extra functions, and of administering the Financial Advisers Act.

These include a Financial Adviser Act (FAA) levy on registered financial advisers, authorised financial advisers and qualifying financial entities.

An FMA levy on either financial service providers and certain issuers, or all companies and other entities is another option raised in the document, as are a combined a combined FAA/FMA levy and an auditor levy on each licensed auditor.

Other talking points in the document include a levy to cover some of the operational costs of the additional functions of the External Reporting Board, which will be responsible for all financial reporting, audit and assurance standards-setting and changes to the fee structure of the Companies Office and the Insolvency and Trustee Service, to cover the costs of providing these services to companies.

“The Government recognises that in order for the FMA to do its job it needs to be adequately resourced, and market participants, who stand to benefit from operating in this stronger regulatory environment, should contribute to that,” Mr Power said.

The Government has previously announced that from 2014/15 the FMA’s budget will be about $26 million – an increase of around 44 per cent over the $18 million budget for the current regulators.

The Ministry of Economic Development will hold forums in Auckland and Wellington to discuss the proposals.

Submissions on the document close on July 8.

Colin Williscroft
Fri, 10 Jun 2011
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Proposed levy targets financial auditors and advisers
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