The Financial Markets Authority (FMA) is currently considering licensing rules for custody providers after a 2017 International Monetary Fund (IMF) report highlighted this as a regulatory gap in the New Zealand market.
IIS strongly supports licensing for custodians across the investment industry rather than just for registered schemes. It would be extremely disappointing if the regulator opted to only licence custodians that supply services to registered schemes (such as IIS), which generally use robust custody solutions already.
Regardless of the outcome of the FMA thematic review, it should not affect the IIS PIE fund custody arrangements that have been structured to institutional standards.
IIS will keep a watching brief on the development of custody regulations.