New Zealand FSP License: FSPR Registration & FMA Derivatives Issuer Licensing Guide

Overview of the New Zealand FSP License

The New Zealand Financial Service Provider (FSP) registration and licensing framework operates under a two-tier system managed by the Financial Markets Authority (FMA) and the Financial Service Providers Register (FSPR). This distinction is critical: FSPR registration alone is not a license and does not confer regulatory supervision.

New Zealand has established itself as a respected Asia-Pacific jurisdiction for financial services, offering a transparent regulatory environment built on English common law principles. The country is a FATF member nation with robust anti-money laundering frameworks, lending significant credibility to firms operating under its regulatory umbrella.

For firms seeking to offer forex, CFDs, or other derivatives to retail clients, the Derivatives Issuer License issued by the FMA under the Financial Markets Conduct Act 2013 is required. This license demands a minimum of NZD 1,000,000 in net tangible assets, rigorous compliance frameworks, and ongoing supervisory obligations. The total licensing process takes approximately 5-6 months, and New Zealand applies a 28% corporate tax rate to resident companies.

Regulatory Framework

New Zealand's financial services regulation is governed by multiple authorities and a comprehensive legislative framework:

Financial Markets Authority (FMA): The primary conduct regulator for New Zealand's financial markets. The FMA licenses and supervises derivatives issuers, financial advice providers, managed investment scheme managers, discretionary investment management service providers, and crowdfunding and peer-to-peer lending platforms. It employs a risk-based supervisory approach.

Financial Service Providers Register (FSPR): Operated by the Companies Office under the Ministry of Business, Innovation and Employment (MBIE), the FSPR is a mandatory public register for all entities providing financial services in New Zealand. Registration on the FSPR is a prerequisite for any FMA license application.

Key Legislation:

• •Financial Service Providers (Registration and Dispute Resolution) Act 2008 -- Establishes the mandatory FSPR registration regime and dispute resolution scheme requirements
• •Financial Markets Conduct Act 2013 (FMC Act) -- Governs FMA licensing of market services, fair dealing obligations, disclosure requirements, and investor protections
• •Financial Markets Conduct Regulations 2014 -- Supporting regulations specifying capital requirements, reporting obligations, and licensing conditions
• •Anti-Money Laundering and Countering Financing of Terrorism Act 2009 -- Establishes comprehensive AML/CFT obligations for all reporting entities
• •Financial Service Providers (Registration) Regulations 2020 -- Updated registration regulations addressing substance requirements for overseas entities
• •Financial Markets (Conduct of Institutions) Amendment Act 2022 (CoFI Act) -- Effective 31 March 2025, requiring banks, insurers, and non-bank deposit takers to maintain Fair Conduct Programmes

License Types and the Registration-Licensing Distinction

Understanding the distinction between FSPR registration and FMA licensing is essential. Many overseas entities have historically registered on the FSPR to create a misleading appearance of being regulated in New Zealand without holding any FMA license. FSPR registration alone does not mean an entity is regulated or supervised by the FMA.

Capital Requirements

Capital requirements vary significantly depending on the type of license sought:

Derivatives Issuer License: Minimum Net Tangible Assets (NTA) of the greater of NZD 1,000,000 or 10% of average revenue. At least 50% of required NTA must be held in cash or other liquid assets. If NTA falls to 90% or less of the required amount, the issuer must cease entering new client transactions without express FMA written approval. The FMA retains discretionary power under Regulation 201 of the FMC Regulations to impose additional capital conditions.

MIS Manager and DIMS Provider: Capital requirements are set through FMA standard conditions on each license, determined during the licensing process based on the FMA's assessment of adequacy relative to the business. Financial statements must comply with NZ Generally Accepted Accounting Principles (GAAP).

Financial Advice Provider License: No prescribed statutory minimum capital requirement. Requirements are assessed on a case-by-case basis by the FMA during the licensing process.

FSPR Registration Only: No capital requirements apply to basic FSPR registration without an FMA license.

Application Process and Timeline

The licensing process involves two sequential stages, beginning with FSPR registration before progressing to the FMA license application:

Fees

The fee structure encompasses FSPR registration costs, FMA license application fees, and ongoing annual levies:

FSPR Registration Fees (effective 1 July 2022):

• •Application fee: NZD 300 (excl. GST) / NZD 345 (incl. GST)
• •Criminal history check: NZD 11.30 per person (excl. GST)
• •FMA levy at registration: NZD 600 (excl. GST)

FMA License Application Fees (incl. GST):

• •Derivatives Issuer License: NZD 10,695 (covers first 70 hours of assessment)
• •FAP Class 1: NZD 703.80 | Class 2: NZD 882.05 | Class 3: NZD 1,060.30
• •MIS Manager: NZD 3,565 (covers first 25 hours)
• •Variation applications: NZD 115 plus hourly fees
• •Additional assessment hours: NZD 178.25 per hour

Annual FSPR Confirmation Fee: NZD 75 (excl. GST)

Annual FMA Levies (effective 1 July 2025, excl. GST):

• •Derivatives Issuers: NZD 18,200
• •Financial Advice Providers: NZD 340 base + NZD 300 per nominated representative
• •Financial Advisers: NZD 400
• •DIMS Providers: NZD 2,200 to NZD 90,000 (based on funds under management)
• •MIS Managers: NZD 2,100 to NZD 670,000 (based on total managed assets)
• •Other financial services (Class 7): NZD 660

Dispute Resolution Scheme Membership: Varies by scheme and business size, ranging from approximately NZD 350 to NZD 3,000 per year for most categories.

Permitted Activities

Under Section 5 of the FSP Act 2008, financial services encompass a broad range of activities. The specific activities permitted depend on the registration category and any FMA license held:

Activities Covered by FSPR Registration:

• •Keeping, investing, administering, or managing money, securities, or investment portfolios on behalf of other persons
• •Issuing or managing means of payment (credit and debit cards, electronic money, money orders)
• •Providing credit and lending services
• •Operating money or value transfer services
• •Changing foreign currency
• •Insurance services

Activities Requiring a Specific FMA License:

• •Forex, CFD, and derivatives trading with retail clients -- Derivatives Issuer License
• •Regulated financial advice to retail clients -- FAP License
• •Pooled investment fund management -- MIS Manager License
• •Discretionary portfolio management -- DIMS License
• •Equity crowdfunding platforms -- Crowdfunding Service Provider License
• •Peer-to-peer lending platforms -- P2P Lending License

The FMA may also designate additional activities as requiring licensing for the purposes of compliance with FATF Recommendations or other international obligations.

Ongoing Compliance Obligations

Licensed entities face comprehensive ongoing compliance requirements that vary by license type:

Derivatives Issuers -- Specific Obligations:

• •Client agreements must be written, legally enforceable, and executed before any derivative issuance
• •Product Disclosure Statements (PDS) must be filed on the Disclose Register
• •Daily reconciliation of investor money and property with separate trust accounts
• •Report breaches (actual or likely) to the FMA as soon as practicable
• •Notify FMA of director and senior manager changes within prescribed timeframes
• •72-hour notification for operational resilience incidents affecting critical technology systems
• •Annual regulatory returns due by 30 September for the 12-month period ending 30 June
• •Financial statements per NZ GAAP, maintained in English, in New Zealand
• •Licensed auditor review and lodge statements with Companies Office within 4 months of balance date

AML/CFT Obligations (all reporting entities):

• •Conduct and maintain a business risk assessment
• •Establish, implement, and maintain an AML/CFT compliance programme
• •Appoint a dedicated AML/CFT compliance officer
• •Conduct ongoing customer due diligence (CDD)
• •Report suspicious transactions to the NZ Police Financial Intelligence Unit
• •From July 2026, the Department of Internal Affairs (DIA) becomes the sole AML/CFT supervisor, replacing the current three-supervisor model (FMA, RBNZ, DIA)

Annual FSPR Confirmation: File annual confirmation, pay the NZD 75 fee plus applicable FMA levies, and update AML/CFT reporting entity declarations.

Advantages of New Zealand FSP Licensing

New Zealand offers several strategic advantages for financial services firms seeking a well-regarded regulatory framework:

Regulatory Credibility: New Zealand is a FATF member nation with a transparent, well-structured regulatory system. FMA-licensed entities benefit from the country's strong international reputation and credible supervisory framework, making the jurisdiction particularly attractive for firms targeting sophisticated institutional and retail clients.

English Common Law System: The legal framework is based on English common law, providing familiarity and legal certainty for international businesses. Contract enforcement, dispute resolution, and regulatory proceedings follow well-established precedents.

Asia-Pacific Gateway: New Zealand's strategic location provides an excellent base for firms serving the Asia-Pacific region, covering time zones from East Asia through to the Americas.

Cost-Effective Registration: Basic FSPR registration costs are low at NZD 300 plus levies. Even a full Derivatives Issuer License application at approximately NZD 10,695 is competitive compared to equivalent licenses in Australia (ASIC), the United Kingdom (FCA), or the European Union (CySEC/MiFID II).

Efficient Processing: FSPR registration is processed within 2-5 working days, and the total FMA licensing process of 5-6 months compares favorably to 12-18 months in many comparable jurisdictions.

Well-Defined Regulatory Structure: The clear separation between FSPR registration and FMA licensing provides flexibility, allowing firms to scale their regulatory footprint based on their actual business activities and client base.

Important Considerations

Firms considering New Zealand FSP registration or FMA licensing should be aware of several critical factors:

FSPR Registration Is Not a License: This is the single most important point to understand. Registration on the FSPR does not constitute licensing, does not confer FMA supervision, and does not authorize the offering of derivatives or regulated financial advice to retail clients. Firms representing FSPR registration as equivalent to FMA licensing risk deregistration and enforcement action.

Substance Requirements: Following amendments to the FSP Act and the 2020 Registration Regulations, overseas entities must demonstrate a genuine connection to New Zealand. This includes maintaining a physical office, employing local personnel, and providing financial services from within New Zealand. Shell entity registrations without real operational substance are actively targeted for deregistration by the FMA.

FMA Deregistration Powers: Since the 2014 amendments, the FMA has broad powers to direct deregistration of entities whose registration creates a false or misleading appearance regarding the extent to which they provide financial services in New Zealand or are regulated by New Zealand law.

Corporate Tax Rate: New Zealand applies a 28% corporate tax rate to resident companies, which is significantly higher than offshore jurisdictions such as Seychelles, Vanuatu, or the British Virgin Islands. This should be factored into the overall cost-benefit analysis.

Dispute Resolution Scheme Membership: All FSPs serving retail clients must join an approved DRS. Four schemes currently operate in New Zealand: the Banking Ombudsman, Insurance and Financial Services Ombudsman (IFSO), Financial Services Complaints Limited (FSCL), and Financial Dispute Resolution Service (FDRS). IFSO and FSCL are merging effective 1 July 2025.

Regulatory Evolution: New Zealand's financial services regulation continues to evolve, with the CoFI regime effective from March 2025 and the AML/CFT supervisory consolidation to DIA planned for July 2026. Firms should monitor these developments and ensure ongoing compliance with changing requirements.