A cornerstone of the Government’s proposed regime for regulating mortgage brokers and other advisers is the appointment of industry organisations as approved professional bodies (APBs) to police their members.
Megan Salt, chief executive of the New Zealand Mortgage Brokers Association said that the proposals appeared to make it possible for single commercial entities, such as financial institutions to apply to become APBs.
The Government has published a discussion paper seeking views on how the co-regulatory system would work and Salt said she would be asking whether single commercial entities were best-placed for the role.
"The question I am going to be asking is if a single entity can be an APB, will that effectively deliver protection to the consumer.
"Some of these organisations may be excellent but their duty is to their shareholders.
"If a profit making organisation is an APB is that a level playing field?
"The issue for us will be that we are trying to ensure that regulation is appropriate to the risk to consumers. We want to see a level playing field for all financial intermediaries whether employed by a bank, an independent association or a broker."
Salt was responding to a Ministry of Economic Development iscussion paper on the co-regulatory model proposed for financial intermediaries released earlier this month.
The discussion papers is seeking feedback on the co-regulatory model including definitions of what constitutes a financial intermediary and a financial product, and the different levels of intermediaries. The paper is seeking views on the conduct and disclosure standards for intermediaries and the powers and rules of the APBs.
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