The big four Australian owned banks will each have to cough up NZ$350,000 a year in Financial Markets Authority (FMA) levies from August.
The levy comes through new fees to be paid by all registered financial service providers to help fund the FMA. According to an announcement on the Companies Office website, registered banks or deposit takers with total assets that exceed NZ$50 billion will pay NZ$350,000. That includes all of ANZ, ASB, BNZ and Westpac. Banks with assets above NZ$10 billion but below NZ$50 billion, which includes Kiwibank, will pay NZ$80,000.
Insurers, trustees and statutory supervisors, managers of managed investment schemes, and providers of other financial services such as contributory mortgage brokers, brokers and authorised futures dealers, will also have to pay fees.
Last year ANZ, the country's biggest bank, complained that it faced an annual NZ$800,000 bill to help fund the FMA when its major regulator is the Reserve Bank.
ANZ's comments came after a Ministry of Economic Development discussion document was released last year on proposed fees and levies encompassing the FMA, new auditor overseer the External Reporting Board, the Companies Office, and Insolvency and Trustee Service, alongside the introduction of a Financial Advisor Act levy. See more here.
Meanwhile, in a statement Commerce Minister Craig Foss said the new levies for the FMA, External Reporting Board, and new fee structure for the Companies Office would see NZ$16.4 million provided in funding for the FMA and NZ$3.66 million for the External Reporting Board annually.
“The new levy and fee structures will help fund a well-regulated market that all investors can trust. It’s important that our regulators are properly resourced,” said Foss.
"The FMA levy will be a tiered system where different market participants pay differing amounts, according to their size and the benefits they receive from a well-functioning financial market. The majority of the FMA levy will be collected through the Financial Service Providers Register," Foss said.
“The tiered levy system was finalised following a thorough consultation period with stakeholders. I’m confident we’ve struck the right balance."
However, bank lobby group the New Zealand Bankers’ Association (NZBA) is unimpressed. Although the NZBA had no issue with an industry contribution to FMA costs, CEO Kirk Hope said there was a problem with how the FMA levy is apportioned across the industry.
"One of the principles of the levy model design was that levies be proportional to benefits received. The approach announced today does not reflect that principle well," said Hope.
“Banks are well-regulated responsible lenders operating at the top end of the market. The levies should better reflect the costs and benefits where they actually fall,” Hope added. “The FMA has an important job to do to crack down on the irresponsible end of the market. The benefits to already responsible participants are not at all evident compared to the costs they are being asked to shoulder."
(Update adds comments from NZBA).
4 Comments
And the BNZ has been bailed out how many times!
And the deposit guarantee while spread to far was created for the benefit of who in the first instance to allow them to keep operating their business.
Too big to fail creates an arrogance where as it should create some humility.
Yes it complicated and interconnected, but now that the dust has settled, should we try and move to a different path as opposed to changing laws to enable them to remove security from depositors so they can access more funds.
Banking should serve the people and be an enabler of the real world, not an end to itself serving a financial economy with no relation to the real world.
now that the FMA has its funding and the hundreds of staff it needs to run. and given that not much is happening now in terms of ipo's, investigations etc.. i would question whether it should be downsized already? whacking costs disproportionately onto efficient businesses and essentially end-users is not the way to create efficient markets. and it shouldn't be the basis to subsidise FMA jobs. We are a small nation and I would have thought costs should reflect that.
now that the FMA has its funding and the hundreds of staff it needs to run. and given that not much is happening now in terms of ipo's, investigations etc.. i would question whether it should be downsized already? whacking costs disproportionately onto efficient businesses and essentially end-users is not the way to create efficient markets. and it shouldn't be the basis to subsidise FMA jobs. We are a small nation and I would have thought costs should reflect that.
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