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488 posts

Ultimate Geek
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Topic # 230509 27-Feb-2018 11:08
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I've dealt with many regulators in my professional career (MOH, Pharmac, DIA, Worksafe, RSM, NZ Police, IRD, NZTA, Justice Dept etc...) as well as being on the Govt side for some time providing advice to the public.


Generally if you ask (the right person! at) a regulator a question they will make a genuine attempt to provide you with a useful answer; whether it's a binding ruling or general non-legal advice based on some assumptions.


In recent dealings with the Financial Markets Authority however even the most straight forward queries are met with "we cannot provide legal advice" and "we recommend you seek legal advice").


I wonder if this comes down to a misguided sense within the department of risk aversion (i.e. ass covering) and ignorance as to the role of a "public service" or professional bias (i.e. cronyism) feeding third-party legal services and supporting large financial services over the little guys.


Has anyone had any positive dealings with them or can recommend any useful contacts?


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162 posts

Master Geek
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  Reply # 1965009 27-Feb-2018 12:00
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I think the general rule would be that if you are doing or even vaguely thinking about maybe doing anything that requires attempting to deal with the FMA, you need a lawyer.
Probably a specialist

 

 

 

Please note I am neither a lawyer not a financial adviser.
The suggestions or observations offered above do not constitute legal or financial advice.
Use at your own risk.
Your mileage may vary.
&c.




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Ultimate Geek
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  Reply # 1965031 27-Feb-2018 12:30
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Pretty much every other regulator *could* claim the same thing; but in practice are generally pretty helpful.

 

In most cases (my cases) lawyers are just going to ask the regulators the same questions.

 

I'm not a lawyer either however as above have dealt with a number of regulators and no stranger to drafting legal documents. 

 

Sure the lawyers always get to have the final sign off (and in many cases provide the initial high-level direction) however in my line of work I've found that by gaining understanding of the processes through open and informal discussion with regulators etc can save significant time and money otherwise wasted on lawyers providing erroneous or irrelevant written advice.

 

The FMA literally say on their own website and in recent media statements to come and talk to them about fintech projects. However from practical experience general written enquiries take up to a month to receive a reply and generally result in "we cannot provide legal advice" as above which makes me wonder that sort of advice they believe they can provide..


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Uber Geek
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  Reply # 1965191 27-Feb-2018 15:46
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solutionz:

 

I wonder if this comes down to a misguided sense within the department of risk aversion (i.e. ass covering) and ignorance as to the role of a "public service" or professional bias (i.e. cronyism) feeding third-party legal services and supporting large financial services over the little guys.

 

 

I think most likely CYA. I don't think it's intentional cronyism. It's just that the system is set up so that the FMA cannot provide useful advice. No doubt people there have been told that it is not FMA policy to give advice, so any advice given is on the employee's head. And everyone is busy with whatever they do; there's no spare time to give out advice. And lots of "non-technical" project managers and such, who don't know anything but Gantt charts and ITIL and Powerpoint.

 

 


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  Reply # 1965235 27-Feb-2018 16:28
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solutionz:

 

Pretty much every other regulator *could* claim the same thing; but in practice are generally pretty helpful.

 

In most cases (my cases) lawyers are just going to ask the regulators the same questions.

 

I'm not a lawyer either however as above have dealt with a number of regulators and no stranger to drafting legal documents. 

 

Sure the lawyers always get to have the final sign off (and in many cases provide the initial high-level direction) however in my line of work I've found that by gaining understanding of the processes through open and informal discussion with regulators etc can save significant time and money otherwise wasted on lawyers providing erroneous or irrelevant written advice.

 

The FMA literally say on their own website and in recent media statements to come and talk to them about fintech projects. However from practical experience general written enquiries take up to a month to receive a reply and generally result in "we cannot provide legal advice" as above which makes me wonder that sort of advice they believe they can provide..

 

 

 

 

Do they allow you to go in and have a meeting with them? That way, nothing is in writing. These days I find sending email to some companies is a  total waste of time, vs actually meeting with the people. Often you don't get a reply, so if local, I end up going into their offices and ask why I haven't had a reply. 


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Ultimate Geek
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  Reply # 1965246 27-Feb-2018 16:53
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My guess would be that this is because most of what the FMA regulates involves bollocks loads of money. Generally speaking, the more money (potentially) at stake the less likely those involved will have a "friendly chat" over the regulations they enforce. :)




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  Reply # 1965303 27-Feb-2018 17:50
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mattwnz:

 

Do they allow you to go in and have a meeting with them? That way, nothing is in writing. These days I find sending email to some companies is a  total waste of time, vs actually meeting with the people. Often you don't get a reply, so if local, I end up going into their offices and ask why I haven't had a reply. 

 

 

I initially asked for a meeting and was told to email my questions; I received a call amount a month later telling me they couldn't offer legal advice.

 

Since then I consulted with a number of lawyers and accountants on various aspects of the project.

 

I called the FMA again recently to confirm a couple of seemingly straight forward points; I was told someone would have to call me back but this time received an email later in the day again saying they couldn't offer legal advice. This person had made some incorrect assumptions (based on second-hand info from the call taker) so I emailed back to clarify and was met with the same response.

 

As another user pointed out to me via PM:

 

 

The FMA won't say anything to confirm that you are _outside_ their authority (they are quite helpful in helping you apply for licences etc to bring you in their regulation though).

 

 

In my experience this appears quite true. My queries relate to a type of private investment entity and confirming that we would not fall under specific retail investment regulations of theirs which they are very reluctant to answer.

 

This goes against my experience with other regulators. If you went to NZTA and asked whether a certain contrivance fell under their regulations they wouldn't simply fob you off to get your own advice and risk prosecution if you got it wrong. IRD was more than forthcoming with information on the tax side of things.

 

I understand certain departments being under resourced however the time taken to provide a useful answer to basic questions would be similar in time taken to fob companies off which makes me suspect there is something seriously wrong with the mandate or culture of the FMA.

 

This is based on my experience with at least 4 different people in the department and similar experiences by other fintech startups.


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  Reply # 1965321 27-Feb-2018 18:25
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solutionz:

 

I've dealt with many regulators in my professional career (MOH, Pharmac, DIA, Worksafe, RSM, NZ Police, IRD, NZTA, Justice Dept etc...) as well as being on the Govt side for some time providing advice to the public.

 

 

 

Generally if you ask (the right person! at) a regulator a question they will make a genuine attempt to provide you with a useful answer; whether it's a binding ruling or general non-legal advice based on some assumptions.

 

 

 

In recent dealings with the Financial Markets Authority however even the most straight forward queries are met with "we cannot provide legal advice" and "we recommend you seek legal advice").

 

 

 

I wonder if this comes down to a misguided sense within the department of risk aversion (i.e. ass covering) and ignorance as to the role of a "public service" or professional bias (i.e. cronyism) feeding third-party legal services and supporting large financial services over the little guys.

 

 

 

Has anyone had any positive dealings with them or can recommend any useful contacts?

 

 

Not myself, but it is interesting as to the type of advice a govt department should provide and their responsibility if they give the incorrect advice. 

 

eg, I received the wrong advice from the IRD once. I found out the error myself, but if I'd acted on their advice I would have paid the wrong amount of tax.  Some of the CSR's at IRD do not know tax rules beyond the simple stuff.  

 

 


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  Reply # 1965334 27-Feb-2018 18:45
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surfisup1000:

 

Some of the CSR's ...

 

 

 

 

I am guessing some just follow flow charts. The answers if coming from true knowledge is possibly well above the pay scale of front line staff.


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Ultimate Geek
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  Reply # 1972589 11-Mar-2018 00:37
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Its not just the FMA, its other government departments as well.

 

I wrote to Minister Jackie Dean and to Justice Minister Amy Adams before the election, about our banking industry.

 

Both say the same thing, we don't give legal advice and to get your own.

 

They will always be protecting their own interests first. Anything they say to people could be used against them in the courts.

 

This is also true of the council. And the IRD. Working in the chartered accounting industry as I do, I know the IRD do get stuff wrong. I listed to a Judge in the High Court advising a lawyer acting for the IRD that they had their information wrong.

 

No government department will ever give legal advice that is for your benefit, but they may refer to acts of law or statutes when they are telling you why they won't look into your issues.

 

That is how the system works. No government department including the FMA or IRD are ever held responsible for their wrongs.

 

Regulatory bodies are there to stop people bringing claims against government departments to the courts, amongst other things.

 

As some else mentioned, if you need legal advice you should speak to a lawyer who specialises in the area you need advice on.

 

 

 

 

 

 

 

 


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