New Zealand Financial Markets Authority: ‘No Action’ Relief As A Result Of Covid-19

COVID-19 is having a significant impact on many market participants. We recognise that this may lead to practical difficulties which affect their ability to meet their regulatory obligations. Where a market participant breaches, or expects to breach, a regulatory obligation as a result of the COVID-19 circumstances and seeks relief from the FMA, the primary approach we intend to take is ‘no-action’.

A key benefit of this approach is that it allows the FMA to act in a quick and decisive way in an environment where uncertainty may lead to unnecessary operational / regulatory burden and investor detriment. We will consider whether the relief requested is specific to the individual circumstances of the entity, or appropriate for a wide range of market participants on a class basis.

FMA is also providing relief for some entities from certain obligations by way of class exemptions. If you are covered by a class exemption, you do not need to seek ‘no action’ relief. See list of current COVID-19 related class exemptions.  

What is a ‘no action’ approach?

A ‘no action’ approach means that the FMA will not take action against a person for breach of a statutory or regulatory obligation. It is an expression of regulatory intention about how to exercise the FMA’s functions. An FMA ‘no action’ confirmation does not necessarily preclude third parties from taking legal action in relation to the same conduct or conduct of that kind.  

Our expectations

This approach is aimed at allowing market participants to continue focusing on serving their customers’ needs. We expect market participants to be communicating more regularly with their customers during this time, and to be responsive to any specific customer needs where possible. Our expectation remains that participants should be treating their customers fairly at all times.

Accordingly, as part of this approach, there is a general expectation that where possible, breaches will be remediated at a later date, and as such the requirement to comply is being delayed rather than removed. We also expect market participants will take steps to mitigate any risks resulting from the breach.

The ‘no-action’ approach is not intended to apply to ongoing and open-ended breaches, or where there is significant risk of customer detriment. Exemptions may be required in certain, limited, circumstances, however we expect to deal with most requests for relief due to COVID-19 with this ‘no-action’ approach.

We strongly encourage financial market participants to promptly report past or inevitable and imminent breaches due to COVID-19 to us.

How to apply

If you need ‘no action’ relief in respect of any breaches resulting from Covid-19, please provide us with the following information, preferably by email to questions@fma.govt.nz

Who needs the relief?
Give the full name, address and corporate status of the person(s) seeking the relief.

State the jurisdiction in which you are incorporated or constituted, and any securities exchanges upon which your financial products are listed.

If you are licensed or authorised by us, please provide us with these details. Please also provide your Financial Service Provider (FSP) number.

What do you need ‘no action’ relief from?
Give the provisions of the Acts and/or Regulations that you are unable to comply with as a result of Covid-19. Tell us any conditions you consider appropriate, for example:

- when and how you intend to remediate the breach(es)
- what steps you could take to mitigate outstanding risks (for example to your customers) if you cannot comply with your obligation(s)
- any alternative requirements that would be in place to protect your customer/investors.

If possible, tell us why granting ‘no action’ relief would be consistent with the purposes of the relevant Act. For example, would it avoid unnecessary compliance costs and promote flexibility in the financial markets (see sections 3 and 4 of the Financial Markets Conduct Act 2013)? Or, if the obligation you need relief from is contained in the Financial Advisers Act 2008, if possible tell us why the cost of complying would be unreasonable or not justified by the benefit of complying. 

Why do you need relief?
Explain why you cannot comply with your obligations as a result of Covid-19.

- When does the obligation you cannot comply with fall due or when did the breach occur?
- Please indicate if your request is urgent
- Tell us any other information you consider relevant.

Our process

We will acknowledge your application. We will then consider it and may be in touch with you to discuss or to seek further information. There is no fee. We will notify you of our decision by email. We will also publish details of no action decisions that affect a wide range of market participants in the table below.  If you want to rely on one of these decisions, please let us know by emailing us at questions@fma.govt.nz.

Please note that any decision by us to grant relief is discretionary, and will be based upon the information that you provide to us. Should additional factors come to light that call into question the bona fides of the information provided, we may revisit our stance.

If you have any questions on the above, get in touch at  questions@fma.govt.nz.

No action relief granted

Class exemptions granted

We have also granted the following class exemption notices in relation to COVID-19. They come into force on 29 April 2020. If the obligation you are seeking relief from is covered by one of these notices, you do not need to seek ‘no action’ relief. If you are unsure whether your situation is covered, please email questions@fma.govt.nz. The conditions under the notices must be met before the exemptions will apply.