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Financial Markets Conduct Act 2013

Licensing and other regulation of market services - Issue of licences, conditions, and duration - Expiry, suspension, or cancellation of licences

409A: Restriction on suspending or cancelling licence to act as financial institution

You could also call this:

"The government needs permission from the Reserve Bank to stop a financial company's licence."

Illustration for Financial Markets Conduct Act 2013

The Financial Markets Authority (FMA) cannot suspend or cancel a licence for a company to act as a financial institution without the Reserve Bank's consent. You need to know that the Reserve Bank will only give its consent if it is satisfied that withholding it would not affect the financial system. The Reserve Bank considers this for banks, non-bank deposit takers, and insurance companies to keep the system sound and efficient. This rule does not stop the FMA from using its powers under section 403 or 414(2) if needed. The FMA and Reserve Bank work together to make decisions about licences for financial institutions.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS1428448.

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Part 6Licensing and other regulation of market services
Issue of licences, conditions, and duration: Expiry, suspension, or cancellation of licences

409ARestriction on suspending or cancelling licence to act as financial institution

  1. The FMA must not suspend or cancel a licence that covers the service of acting as a financial institution unless the Reserve Bank has given its consent.

  2. The Reserve Bank may withhold its consent only if the Reserve Bank is satisfied,—

  3. in a case where the licensee is a registered bank or a licensed NBDT, that withholding the consent is necessary for maintaining a sound and efficient financial system:
    1. in a case where the licensee is a licensed insurer, that withholding the consent is necessary for maintaining a sound and efficient insurance sector.

      1. This section does not prevent the FMA from exercising a power under section 403 or 414(2).

      Notes
      • Section 409A: inserted, on , by section 11 of the Financial Markets (Conduct of Institutions) Amendment Act 2022 (2022 No 36).