Financial Institutions making steady progress getting CoFI licences

With less than eight weeks until Christmas, the majority of financial institutions have now embarked on – or even better, completed – their Financial Institution (CoFI) licence application process.  

CoFI introduces a new regulatory regime to ensure registered banks, licensed non-bank deposit takers and licensed insurers (collectively, financial institutions) comply with a fair conduct principle when providing relevant services to consumers. Financial institutions are required to be licenced to continue providing relevant services to consumers in New Zealand from 31 March 2025.  

The FMA is continuing to work closely with entities. We are pleased to see a significant number have either been licenced already or have submitted their application to us. Many more have started the formal application process or are about to start, following their Boards’ approval of their Fair Conduct Programmes (FCPs).   

Michael Hewes, Director for Deposit Taking, Insurance and Advice, acknowledges the efforts and resource that financial institutions have been putting into their preparation and applications for CoFI. 

“The banks, insurers and non-bank deposit takers who have gained their CoFI licence have shown that they understand the importance of ensuring the fair treatment of their customers. We appreciate their support for the regime, demonstrated by establishment of their conduct programmes and early applications for licensing.  

“Not all who need to, however, have started their application process. As we near the end of the year, it is important to remember that a licence or exemption application takes around 60 working days to process and shouldn’t be left to the last minute to submit,” says Michael. “We want to ensure that those entities who haven’t yet submitted their application are getting ready to do so.  

“There are some firms who have told us that they are likely to seek an exemption to requiring a fair conduct programme. There are also some firms who have indicated to us that they are likely to seek an exemption from the regime as a whole. We would really encourage those firms to have a Plan B, in terms of getting a CoFI licence. The law is very clear about what is expected. 

“An important part of our licensing process is the support the FMA has available to help entities. We are here to help make the online application process as straightforward as possible.”   

“We have published multiple guidance documents on the Financial Institution licensing page to support with CoFI preparations and we have team members available to answer your questions. If you have a question about the process or making your application, please contact us,” concludes Michael.