The Financial Markets Authority (FMA) – Te Mana Tātai Hokohoko – today published a consultation document on its proposal to introduce a new standard condition for certain financial market license holders. The new license term will focus on business continuity and technology systems.
Operationally resilient companies are important to the integrity and availability of New Zealand’s financial markets. The FMA wants to ensure that market service providers are prepared to respond to business continuity and cyber risks that may arise. Not only does this support well-functioning financial markets, but it also gives consumers confidence that their information and investments are properly managed.
This consultation is relevant for the following types of market service licenses:
- Manager of registered systems (but not restricted systems)
- Provider of discretionary investment management services
- issuers of derivatives and
- Mandatory intermediation services (peer-to-peer lending providers and crowdfunding service providers).
The new standard condition requires licensees to have and maintain a business continuity plan appropriate to the scale and scope of their service to ensure their critical technology systems are operational. If an event occurs at the licensee that significantly impairs the provision of his service, he must report this to the FMA as quickly as possible, but no later than 72 hours after the event.
The 72-hour period reflects each license holder’s dependence on the technology and the likelihood of disruption to consumers and investors. It also reflects the importance of technology in maintaining sound and efficient financial markets.
In 2020, the FMA introduced a BCP and technology resilience standard condition for financial advisory providers. This requirement is also included in the Financial Institutions Code of Conduct, which will come into effect in 2025.
The FMA has previously identified deficiencies in the cyber resilience and operating systems of the companies it licenses, including underinvestment in technology and the use of unsupported or outdated systems.
Paul Gregory, FMA Executive Director for Response and Enforcement, said: “The financial services sector faces increasing technological risks that require licensees to meet minimum business continuity and technology standards.”
“With this proposal, the FMA continues to introduce this standard condition for all license types to reflect the importance of ensuring the continuous provision of their market services by license holders. This gives consumers and investors confidence that they can access their services and products when and how they want or need it.
Consultation on the proposal runs until September 1st.
Download the Consultation Document for the Proposed Business Continuity and Technology Systems Standard Term.
Remarks
The latest CERTNZ Data Landscape Report for January-March 2023 shows that most of the reported cybersecurity incidents came from the financial and insurance services sector.
/Public release. This material from the original organization/author(s) may be point-in-time material and may be edited for clarity, style and length. Mirage.News does not represent any institutional position or party and all views, positions and conclusions expressed herein are solely those of the author(s). View in full here.
Comments are closed.