The Financial Markets Authority will “continue to act” on entities which should not be on the Financial Service Providers Register after issuing a warning about another such registered entity.

But investors should be aware registration is not an official approval of a provider and does not necessarily indicate it is licensed or regulated.

TigerWit Prime Ltd was yesterday added to the watchdog’s “businesses to be wary of” list, for falsely claiming to be licensed, supervised and independently audited by New Zealand government agencies.

The company, however, is registered on the FSPR, and continues to be so, an issue addressed by two OM Financial directors on NBR last week.

Every person or business offering a financial service in or from New Zealand must be registered.

The FMA today issued an advisory following a number of warnings about financial service providers it has issued this year.

These can range from warnings and alerts (where investors may be at risk), to businesses to be wary of (when the FMA has received complaints), to unregistered businesses (businesses incorrectly claiming to be registered on the FSPR).

Following the warning about TigerWit Prime, NBR asked the FMA what the point of the FSPR is, particularly as that entity remains on the register.

A spokeswoman says the warnings are done to advise the public about concerns with a particular business, recommending people do not invest money with them until it has investigated further.

The FMA will first engage with a company and its directors and if the company does not respond to the concerns a warning may be posted before consideration is given as to whether the company should be removed from the FSPR.

“The FMA has concerns that some companies are taking advantage of New Zealand’s reputation as a well-regulated jurisdiction by registering on the FSP and making false or misleading claims about what this means.

“We continue to act in relation to entities we consider should not be on the FSPR but it is a detailed, statutory process and issuing a warning is one way we can help the public immediately to be informed when making investment decisions while the FMA works through the process.”

Registration is not an official approval and does not necessarily indicate whether the provider is licensed or regulated in New Zealand or elsewhere, the spokeswoman says.

The lists and registers of those approved can be found here.

Consultation
The spokeswoman says the FSP Act pre-dates both the FMA and the Financial Markets Conduct Act, which has introduced licensing of a broader range of financial services.

Furthermore, the Financial Advisers Act and the FSP Act, introduced in 2011, are currently being reviewed by the Ministry of Business.

Submissions closed last week.