Seeking Your Views

1. The Financial Service Providers (Registration and Dispute Resolution) Act 2008 requires financial service providers (FSPs) to be registered. In order for FSPs to be registered they are required to be members of a dispute resolution scheme if they provide financial services to the public. The dispute resolution scheme may be either an approved dispute resolution scheme or the reserve scheme.

2. Section 50 of the Act provides that an approved dispute resolution scheme is one approved by the Minister of Consumer Affairs. Section 51 of the Act provides for applications to the Minister for approval. Section 52 then sets out the matters the Minister must have regard to in considering whether or not to approve a scheme. Section 53 provides that the Minister may approve a scheme only after consultation with the Ministers of Finance and Commerce.

3. The provisions in the Act providing for the approval of non-government industry-led dispute resolution schemes are a new regulatory approach. With any new regulatory approach, it is desirable to prepare some guidance for those who are either interested or affected parties.

4. Accordingly, this consultation paper has been prepared setting out draft guidelines intended to assist those considering making an application to become an approved dispute resolution scheme. It discusses how a dispute resolution scheme could meet the various matters within its control that the Minister will have regard to in making a decision on approval. The paper also outlines the proposed process for making and considering applications to become an approved dispute resolution scheme.

5. The purpose of the paper is to provide guidance to industry. It is not intended as a manual or type of prescriptive instruction on what must be done to obtain approval. Feedback from consumers, industry and other interested parties on the draft guidelines are welcome, especially where more guidance is needed or where something is not clear or is unhelpful. The discussion paper is also intended to help both industry and consumer interests to better understand the process of obtaining approval.

6. Complementing this discussion paper is a separate consultation paper outlining proposals in regards to the reserve scheme for financial service providers.¹

Making a Submission

7. Parties who wish to make a submission are invited to respond by 5.00pm Friday 31 July 2009. Please contact (fsp.schemes@mca.govt.nz) if you are experiencing difficulties meeting this deadline.

8. Submissions are to be emailed in either Adobe PDF or Microsoft Word format to (fsp.schemes@mca.govt.nz), with "Submission on Approval of Financial Sector Consumer Dispute Resolution Schemes" as a subject heading. Alternately, submitters may send or fax their submission to:

Consumer Policy
Ministry of Consumer Affairs
PO Box 1473
Wellington

Fax 64 4 470 2533

9. Submitters should indicate any documents attached in support of their submission in a covering letter. The Ministry of Consumer Affairs will acknowledge receipt of all submissions electronically. Please contact Hannah Melvin at fsp.schemes@mca.govt.nz or phone 64 4 462 4278. if you do not receive electronic acknowledgement of your submission within five business days.

Consideration of Submissions

10. The Ministry of Consumer Affairs will have regard to submissions and will then make recommendations to the Minister of Consumer Affairs on final guidelines to assist schemes applying for approval. The final guidelines will then be published on the Ministry of Consumer Affairs website. Concurrently, decisions will be taken on the rules of the reserve scheme.

11. An indicative overall implementation timetable for the approved schemes and the reserve scheme is given below.

¹ Financial Service Providers Reserve Dispute Resolution Scheme: A discussion paper, available at this website xxx or contact Anne Yau at fsp.schemes@mca.govt.nz