Dear Contact,

Welcome to our October FSC Connect newsletter where we provide an update on the Financial Services sector and what is happening within the FSC. It's been a productive month continuing business in the new normal and planning of the Generations Digital Conference. We are thrilled to be presenting the digital format of the conference and look forward to seeing many of you there, if you have not registered yet, head to the Generations Conference website.

Another key event to close October is the Annual General Meeting which will take place on Wednesday 28 October 2020, read on for further details.

The regulatory update provides an overview of current consultations and submissions, we thank all members who have contributed to submissions.

As the FSC Committee updates highlight, committees have had a busy month achieving key goals and making headway with their work plans. 

Our Get in Shape and FSC Connect webinars continue to attract an impressive number of viewers, this is an encouraging step for FSC digital events. If you have a suggestion for future topics or themes you think should be covered, please email events@fsc.org.nz.

In addition to the conference, this month also features World Investor Week which has a number of useful webinars and initiatives planned by the FMA and participating industry organisations. Improving the professionalism of the industry is a key focus of the FSC, and so we encourage you to participate in as many sessions as possible. Further details and links are provided below.

Enjoy the monthly news and we look forward to seeing you all virtually at the Generations conference, October 13 -15.

Have a great week,

Richard and the FSC Team

Save the date for the Financial Services Council Annual General Meeting on Wednesday 28 October at 4.00pm. The AGM will be held virtually with a possible in-person venue being announced closer to the date, depending on COVID restrictions. 

Register in advance for this meeting via Zoom.

After registering, you will receive a confirmation email containing information about joining the meeting.
 
 

Options for establishing a data right in New Zealand
MBIE sought feedback to determine if New Zealand needs a consumer data right and if so, how it should be designed.

The FSC held two Focus Groups and received a large amount of feedback. Thank you to all who have contributed and please contact us if you would like a copy of the submission.  

Current Consultations

Reserve Bank Act Review Phase 2, Third Round
Further consultation is underway on the prudential framework for deposit takers and depositor protection which is the last round of this review. Of particular mention is Chapter 6 of the Consultation which asks whether the FMA’s onsite inspection power should be expanded in the same way that is proposed for the Reserve Bank (which would also apply to insurers).

Please contact us if you would like to contribute to our submission on this Chapter 6 or any other aspects of the Review.  Submissions close on 23 October 2020.

New Consultations

Insurance (Prudential Supervision) Act (IPSA)
On 1 October the Reserve Bank relaunched their review of IPSA by way of a paper setting out the scope of the review (no comment sought at this stage) and the following timeline of their consultation process:
 

The above consultation modules will be followed by possible Cabinet decisions and draft legislation (second half of 2023 at the earliest).

Once the initial consultation paper is released in November, a Focus Group will be established via the FSC Regulation Committee. Please contact us if you would like to be involved.

Insurer Solvency Standards Reviews
The Reserve Bank on 1 October also released a review paper on the associated Insurer Solvency Standards, which govern the minimum amount of capital that insurers are required to hold. A second, substantive consultation paper outlining their response to IFRS 17 and the structure of solvency standards is expected to be issued in either November or December 2020.

The FSC IFRS17 Working Group will be holding a Solvency Standards (Principles and Timeline) Focus Group to provide feedback, please contact us if you would like to be involved.
Submissions close on 12 November 2020.
 
FDR FX Hedges Rules Consultation
Officials have been reviewing the application of the FDR FX hedges rules which allow the fair dividend rate (FDR) method to be applied to foreign currency hedges. A consultation letter details issues with the rules and proposed solutions to these issues. We will be discussing this consultation at our next FSC Taxation Committee, please contact us if you would like to be involved.
Submissions close on 20 November 2020.


Regulator Engagement
The FSC Regulation Committee was delighted to host MBIE last month to discuss the Finance and Expenditure Select Committee’s Report back of Financial Markets (Conduct of Institutions) Amendment Bill. We are welcoming MBIE back on 20 October to continue these discussions. If you are not part of the Regulation Committee and would like to attend, please contact us.









 

Excellent engagement and progress means that the new data collection process and data dashboards are complete. Thank you to all FSC members that have contributed to the development and completion of this work. The new database build is making good progress, with testing to take place through October and November ready for implementation for the quarter ended 31 December 2020.
 
If you’ve questions (for example, what new data do I need to provide? What’s the new reporting process? How do I get involved? What do I need to do?), please get in touch with haydee.stroud@fsc.org.nz.
 
Please continue with the current data reporting process until advised otherwise.

The Professional Advice Knowledge Hub has now been launched. Take a visit to access a wealth of resources designed for the advice community. These include recordings of all past Get In Shape webinars and registration details for upcoming sessions. 

View past Get In Shape webinars on demand:

Session 9: Risk Management and Implementing a Risk Framework

Session 10: Privacy - Reviewing your obligations under the Privacy Act

• The Adviser Transition Working Group have formed a focus group to assess how the FSC can best provide effective guidance to advisers on their disclosure requirements. This material alongside a disclosure focussed Get In Shape webinar will be valuable to advisers in our community.

• The FSC KiwiSaver Early Withdrawals Working Group is preparing to send out a survey to relevant members. The purpose of this survey is to gain an understanding of what budget assistance support is provided and available to KiwiSaver members in New Zealand when they run into financial hardship.

• The new Investment and KiwiSaver CEO Forum met last week to discuss the strategic issues facing the investment market, including the retirement savings gap and sustainability of the superannuation system.

Over the past 8 months, 22 leading insurers from across the globe have been collaborating under the auspices of UN Environment Programme’s Principles for Sustainable Insurance Initiative (PSI) to explore and pilot methodologies that insurers can use towards implementing the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosure (TCFD).

The PSI hosted a global webinar to provide a progress update on its project that assesses climate-related physical, transition and litigation risks in the context of insurance underwriting portfolios, with a focus on climate scenario analysis. It serves as a prelude for the final report to be published by the end of 2020.