Standard Conditions Issued for Peer-to-Peer Lending Service Licences
01 September 2016
Late in 2015 the Financial Markets Authority (“FMA”) consulted on proposed variations to standard conditions for market service licences. The FMA has now completed the consultation process and issued updated information on standard licence conditions for peer-to-peer lending services (“P2P lending services”). The new conditions are effective from 31 March 2016, which means that the new audit procedures and financial resource requirements apply to licensees for accounting periods ending on or after 31 March 2016.
The standard licence conditions are:
Note that condition 7 does not apply to a P2P lending service that is a registered bank, a non-bank deposit taker (as defined in the FMC Act), or a licensed insurer.
Condition 7 also does not apply to a P2P lending service that is a market participant requiring capital under the NZX Participant Rules (“NZX Rules”), provided that the P2P lending service:
- Is not exempt from the capital adequacy requirements in the NZX Rules
- Complies with the capital adequacy requirements in the NZX Rules
- Provides the FMA with copies of any notification given by it to the NZX if its net tangible current assets (as defined in the NZX Rules) is at any time less than 120% of its prescribed minimum capital adequacy (this information must be provided at the same time as it is provided to the NZX)
- Provides the FMA with copies of the final version of any reports from the NZX relating to its compliance or non-compliance with the capital adequacy requirements in the NZX Rules
- Notifies the FMA if it ceases to be subject to regulation by the NZX as soon as reasonably practicable.
The full standard licence conditions for P2P lending services are available here.
In addition to these standard licence conditions, the FMA may impose additional specific licence conditions on individual P2P lending services on a case by case basis.
For more on the above, please contact your local BDO representative.
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