FSC522: The Regulatory Framework - Accounting and Finance Assignment Help

Assignment Task

Task 1: Applying Regulatory Acts

a. Regulated financial advice

Do Nikau and Mia give regulated financial advice in this situation? Give reasons for your answer.

You are required to:

1. Explain whether Nikau gives financial advice and regulated financial advice in this situation?
2. Explain whether Mia gives financial advice and regulated financial advice in this situation?
3. Cite and explain the relevant section(s), including sub-section(s), of the Financial Markets Conduct Act 2013 that support your view.

b. Disclosure

In the case study, Nikau works through a client interview and provides disclosure at two different stages (Transcript 1 and Transcript 3).

1. Transcript 1: What information will Nikau disclose at this stage? You are required to:

• Identify and explain four pieces of information Nikau’s disclosure statement will include about him and Aotearoa Mortgages Limited, to meet obligations under the Financial Markets Conduct Regulations 2014.
• Ensure you use relevant information from the case study when explaining the information Nikau will disclose.

2. Transcript 3: What information will Nikau disclose at this stage? You are required to:

• Identify and explain three pieces of information Nikau’s disclosure statement will include about him and Aotearoa Mortgages Limited, to meet obligations under the Financial Markets Conduct Regulations 2014.
• Ensure you use relevant information from the case study when explaining the information Nikau will disclose.

c. Privacy Act

From each of the following categories, select two information privacy principles (IPPs) that are complied with in the case study:

1. Collecting personal information
2. Holding and accessing personal information

• Using and sharing of personal information

For each IPP provide one example from the case study to show how Nikau complies with that IPP. Clearly identify which IPP relates to each example.

d. Duties

For each of the following duties, provide one example from the case study to show how Nikau complies with that duty:

• 431J
• 431K
• 431L

e. AML/ CFT Act

In Transcript 2, Mia carries out customer due diligence (CDD on Ari). You are required to:

1. Summarise the differences between the three levels of CDD and determine which level applies in this situation. Cite the section of the Act that applies to your response.
2. Cite the section of the AML/CFT Act that covers the identity requirements for the level of CDD you identified in i. Explain which identity requirements apply in this situation.
3. Cite the section of the AML/CFT Act that covers the verification of identity requirements for the level of CDD
4. Verification of identify requirements:

• Name the document that provides suggested best practice for verifying customer name and date of birth in this situation.
• Explain whether Mia complies with best practice for verifying customer name and date of birth in this situation.
• Assuming Ari does not have any other primary photographic identification, recommend an alternative combination of identification requirements Mia could have requested to comply with best practice requirements in this situation.

f. Enforcement:

• Explain four possible sanctions that may apply to Aotearoa Mortgages for a breach of AML/CFT Act requirements.
• Name the supervising entity responsible for monitoring and enforcing Aotearoa Mortgages compliance with the AML/CFT Act.

g. Fair Trading Act

In the email from Ari to Nikau: Issue 1. What argument could Ari make that Aotearoa Mortgages has breached the Fair-Trading Act?

You are required to:

1. Cite the section of the Fair-Trading Act that could have been breached.
2. Explain why this section could have been breached.

2. Consumer Guarantees Act (CGA) Email from Ari to Nikau: Issue 2. What argument could Ari make that Aotearoa Mortgages has breached the Consumer Guarantees Act?

You are required to:

1. Cite the two sections of the Consumer Guarantees Act that could have been breached.
2. Explain why these two sections could have been breached.

Task 2: Licensing

After many years of experience giving financial advice under Aotearoa Mortgages, Nikau has decided to set up a financial adviser business with a small group of other existing advisers. They will operate as financial advisers engaged by the new financial adviser business. The business will be called Tohutohu Mokete Limited (TML).

There will be no Nominated Representatives in the business.

TML will recruit additional new-to-industry advisers once the new business becomes operational.

You are required to:

a. For TML:

1. Identity the six steps in the pathway to become operational and outline the key requirement(s) at each step.
2. Identify the financial advice service license class required and outline what this class of license will permit TML to do.
3. Once operational, explain four consequences for TML breaching its licensed obligations.

b. For the new-to-industry financial advisers that will be working for TML in the future:

1. Identity the three steps in the pathway each must take to become operational and outline the key requirement(s) at each step.
2. Once operational, explain the five consequences for one of these financial advisers if they breach a FMCA duty.

c. For complaints:

One of the standard conditions imposed on TML will be that they must have an internal process for resolving client complaints.

1. Identify at least five key elements of an effective complaints process.
2. For each element, give one example of a policy or process that supports that element.

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