The Financial Markets (Conduct of Institutions) Bill (COFI) will be given new teeth to eliminate consumerism, like the man running in parliament.
Thursday, June 23, 2022, 8:10 AM
and Eric Frykberg
Commerce and Consumer Affairs Minister David Clark explained this when the bill went through his committees in the House last night. (Tuesday)
The law was passed along party lines with Labor, the Greens and the Maori Party voting in the election, and the National and Act voting against it.
The COFI bill would impose stricter codes of conduct on financial institutions such as banks and insurance companies. But a plan to impose the same rules on intermediaries such as mortgage advice was thwarted after it complained of “unfair and costly” regulation compared to the rebuilding the wheel.
Speaking about the bill, Clark said there aren’t many amendments about it right now, but some are necessary.
“A big issue right now is the lack of regulation regarding marketing incentives such as overseas trips as a reward for purchasing certain insurance policies,” Clark said.
“These kinds of motivators create a strong conflict of interest, even as people get closer to their marketing goal.”
Clark said consumers should be protected from this serious trade, so rules should be put in place against it. However the details remain.
Elsewhere in his speech, Clark reiterated details of changes to certain parts of the original bill. This came out in a Memorandum of Understanding (SOP), which gave counselors and other advocates a respite from the heavy hands of what they said were unnecessary because these things were found in the FAP process. .
Clark defended the need for restrictions in a business he said had previously been addressed. And he rejected the usual complaint against the Government: it was the one that linked the business sector to endless professional activities.
He argued that COFI klaw was not a superfluous addition to existing legislation.
“This bill is the final step in the Government’s response to the financial crisis in the banking and insurance industry,” Clark told the House.
“This piece of law sits on the authority, which is a kind of protection if you will.
“It runs things like the FSLA, the CCCFA, the Fair Trading Act, the Consumer Guarantees Act, which is responsible for specific areas (the protection of consumers).
“This is the government that is based on those laws, and if those other governments are enforced, it can be taken as a witness to the implementation of this government.”
During the debate, the bill was introduced by the National Party. Clark’s friend, Andrew Bayly, said the law was aimed at finding a problem and cited evidence given to the parliamentary election committee.
“The Reserve Bank and the Financial Markets Authority are clear there is no evidence of systemic malpractice in New Zealand. They have had separate cases but no systemic problems.
Bayly said before enacting this law, the Government should have the right CCCFA law. Instead, it is the imposition of a “plethora” of laws that simply impose huge costs on each.
Todd McClay also opposed the law, saying the government’s allegations of fraud were inappropriate.
“Fraud is against the law and you can’t do it again with a law like this.”
Despite these controversies, a clause in clause in the bill was passed to the Houe.
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The COFI bill aims to further eliminate sales incentives
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