Feature
CoFi Bill draws closer: the good and bad news
The Financial Markets (Conduct of Institutions) Amendment Bill passed its second reading, with hopes brokers avoid a worst-case scenario from the new law. Daniel Dunkley reports.
Second reading passed The Financial Markets (Conduct of Institutions) Amendment Bill passed its second reading in parliament on May 12 and will proceed to the Committee of the Whole House. The Bill, criticised by many participants in the financial services sector, and political parties including National and ACT, will progress through the legislative process as it looks set to become law. However, a Supplementary Order Paper many hoped would resolve key issues has not yet been published. The SOP is circulating in a “targeted consultation” and is expected to be introduced ahead of the Bill’s third reading. CoFI has been criticised across the
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June 2022
financial services industry. The first reading of the Bill triggered fears that the new law would capture brokers, and force intermediaries to be part of financial institutions’ conduct regimes. Insurance brokers had expressed fears that they would be fully captured by the Bill and regulated twice — once by CoFi and also by the Financial Services Legislation Amendment Act of 2019. However, recent noises from Cabinet suggest the law will not capture brokers directly at the legislative level. Brokers are not expected to be captured by insurers’ conduct regimes. Rather, insurers are likely to be responsible for ensuring brokers and distributors treat customers fairly.
