Council of Financial Regulators sets work priorities for 2020
On Friday 29 November, the Council of Financial Regulators (CoFR) announced its work priorities for 2020.
The members of CoFR are:
- Reserve Bank of New Zealand (Reserve Bank)
- Financial Markets Authority (FMA)
- Commerce Commission
- Ministry of Business, Innovation and Employment (MBIE)
- The Treasury
The full media release is available online.
Who needs to read it? Why?
The CoFR’s work is relevant to all industries regulated by the CoFR’s members (including, but not limited to):
- issuers of financial products (to retail or wholesale investors)
- licensed market service providers
- registered banks
- non-bank deposit takers
- credit unions
- brokers, and
- financial advisers.
What does the 2020 work programme cover?
The work programme includes seven separate work streams.
Each stream is led by one of the CoFR agencies, but involves all the members (alongside other government agencies as necessary) in a coordinated effort to tackle issues that reach across the financial system.
The work streams are as follows:
Climate change – led by the Reserve Bank
- to facilitate a smooth transition to a low-carbon and climate-resilient economy, while supporting the soundness and efficiency of the financial system.
Financial Inclusion and Consumer Engagement – led by the Commerce Commission
- to coordinate the work of CoFR members to improve consumers’ access to, and understanding of, financial services, particularly in hard-to-reach communities.
Conduct and governance – led by the FMA
- to develop coordination and joint action on governance and conduct issues, and to ensure that banks and insurers maintain progress in these areas.
FinTech – led by the FMA
- to ensure the regulatory system facilitates innovation that improves outcomes for customers and financial system participants.
Residential Property insurance – led by the Treasury
- to support resilience, affordability and consumer information in the residential insurance market, while managing costs and risks to the Government.
Credit unions – led by the Reserve Bank
- to work together on the health and sustainability of the credit union sector.
Review of the Regulatory System Charter – led by MBIE
- to promote active stewardship of the financial markets regulatory system, taking into account proposed changes to the responsibilities of the different CoFR agencies.
The role of CoFR is critical in ensuring co-ordination across the regulators of the financial services sector especially at present time when it faces multiple issues. The inclusion of the Commerce Commission in August this year was a significant development. In our view, the addition of the Department of Internal Affairs and Ministry of Justice in relation to their anti-money laundering roles would be a further strengthening of the CoFR – given the importance of the AML/CFT regime to the sector.
The issues that the CoFR members have selected for their collective work programme are instructive as to the importance all those in the sector should give them. In particular, the top four:
- Climate change;
- Financial inclusion;
- Conduct and governance; and
should be on the strategic agendas in all boardrooms throughout financial services in 2020.
The remaining three, residential property insurance, credit unions and the regulatory system charter, are important but more specialised topics which will be more important to those directly affected.
Read our previous discussion of the CoFR’s vision and membership.
If you have any questions in relation to CoFR or its announcement, please contact one of our experts.