The Ministry of Economic Development has released a discussion document (together with a Q & A) which considers a range of potential changes to the fees and levies that fund the institutions that regulate New Zealand's corporate environment and financial markets. This is partly to address the recent changes to these institutions, including the establishment of the Financial Markets Authority (FMA) in May and the External Reporting Board (XRB) which replaced the Accounting Standards Review Board on 1 July 2011. It also addresses the funding shortfalls the Companies Office and the Insolvency and Trustee Service currently face.
Funding the FMA
The FMA's budget, which reflects an increase of around 44 per cent over its predecessors' combined budgets, is to be funded by a combination of Crown funding, direct fees for services (such as, the Authorised Financial Adviser (AFA) authorisation fee), targeted levies and a new FMA levy.
The FMA levy is proposed for the additional funding required for the FMA's general monitoring, supervision, surveillance, and investigation of financial markets. The preferred option is to only levy financial service providers who are required to be registered under the Financial Service Providers (Registration and Dispute Resolution) Act 2008 and issuers who are required to file financial statements under the Financial Reporting Act 1993, so that the greater share of the FMA levy is targeted at firms who are more heavily involved in New Zealand's financial markets. This would be in addition to the Financial Advisers Act 2008 (FAA) levy being proposed for Qualified Financial Advisers, AFAs and registered financial advisers to contribute to the funding required by the FMA, the code committee and the disciplinary committee, in performing their functions and duties under the FAA.
Other options being explored are applying the FMA levy to a broader range of companies and other organisations that fall under the FMA regulatory regime and combining the FMA and FAA levies.
The FMA will also be funded by a proposed "auditor levy" on each licensed auditor under the Auditor Regulation Act 2011 for the FMA's new auditor oversight function expected to begin on 1 July 2012 (although some preliminary work will need to be done by the FMA before then).
Funding the External Reporting Board
An XRB levy of $10 is being proposed for all companies and other entities that prepare financial reports to meet the forecast shortfall in the funding of the XRB.
In response to a recent fees review of the Companies Office, MED is proposing the following changes for companies:
- reintroducing an annual return fee (set at $22.50);
- reducing the registration fees; and
- introducing a liquidation fee of $2.50 per registered company payable annually to cover the funding deficit to the Insolvency and Trustee Service for the provision of liquidation services.
Changes are also proposed to the registration and annual return fees for limited partnerships, building societies, credit unions, industrial and provident societies, friendly societies, and contributory mortgage brokers.
Personal Property Securities Register
Fees are also being revised for the Revised Personal Property Securities Register, as the current fees no longer cover the costs associated with the register.
The closing date for submissions is 8 July 2011. The new fees and levies are expected to commence by 1 February 2012.
For further details click here.