New Zealand FMA starts accepting license applications under the CoFI system from now on

The New Zealand Financial Markets Authority (FMA) recently announced that it will begin accepting applications for financial institution licenses from July 25, in compliance with the requirements of the Code of Conduct for Financial Institutions (CoFI) system.

The CoFI system will officially come into effect on March 31, 2025, and requires fair treatment as core business requirements for registered banks, licensed insurance companies, and licensed non-bank depository institutions (such as credit unions).

It is reported that under the CoFI system, about 100 of the above-mentioned financial institutions need to obtain a license from the FMA to provide financial services to consumers. Every organization must meet requirements to establish, maintain and enforce a fair conduct program to ensure fair and equitable treatment of consumers. These agencies must strictly adhere to the program and comply with regulations prohibiting target-based sales incentives and regulating other types of incentives.

Clare Bolingford, executive director of supervision at the FMA, said: “It is vital that consumers have access to relevant financial products and services when they need them, and have confidence in these products and services. Financial institutions have a strong commitment to consumers throughout the life cycle of financial products. Fair treatment is an overall requirement.”

Financial institutions should prepare their license applications by 2025 and fully consider the contents of their fair conduct plans.