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FAQs

Find answers to common questions and who to get in touch with if we can’t help. Please check the information we provide in each section before contacting us – it may save you time. If you can’t find the information you’re looking for then please submit your question to us using our online question form or call one of our helplines

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FAQs

Foreign exchange and binary options servises offered in NZ

What is a Binary Option?

Binary options allow you to predict the short term movements in price of a share, commodity, currency or index. They often promise to make you money quickly, but you could lose your entire initial investment. They are very high risk, even for experienced investors. See more about binary options.

Do providers of binary options and foreign exchange trading need to be licensed?

Yes, if they are issuing derivatives to retail investors in New Zealand they must be licensed by us.

Binary options are derivatives.

Foreign exchange trading involves issuing derivatives if providers use:

  • ‘contracts for difference’ – where you exchange the difference between the initial value of a share, currency, commodity or index and its value at the contract’s end
  • margin forex contracts – where you deposit a fraction of the amount you are actually trading into a ‘margin account’ which acts as a buffer against possible losses. 

To check your provider is licensed, see our list of licensed derivatives issuers.

When did you start licensing derivatives issuers?

Licensing for derivatives issuers was introduced by the Financial Market Conduct Act in December 2014.  From 1 December 2017, providers of short duration derivatives, such as intra-day binary options, will also need a licence. 

Licensing is a good thing because:

  • licensed providers are checked and monitored by us
  • you have more protection if things go wrong. All financial service providers must belong to a dispute resolution scheme, which will make sure you have a fair hearing if you have problems or a disagreement with your provider
  • you’ll receive offer and reporting information, which should help you better understand their products and services.

My foreign exchange broker has just told me they must close my account because of New Zealand regulatory requirements. Why? 

Most foreign exchange brokers issue derivatives.  If they are offering derivatives to retail investors they must be licensed by us – even if they are making an online offer from outside of New Zealand. Some providers have applied for a licence but others have decided to leave the New Zealand market. This means they cannot accept new retail business from New Zealand and they must close all New Zealand retail customer accounts.

Why can’t I use an Australian regulated, European regulated, or US regulated foreign exchange provider?

You can, but it’s illegal for them to offer derivatives to retail investors in New Zealand without being licensed by us. If they are willing to break the law to get your business, it’s likely they will be cutting corners in other areas and you will have much less protection if things go wrong.

Generally you’ll be a retail investor unless you meet certain criteria, for example, you’re a family trust or you have a large sum of money – in which case you could be considered a wholesale investor.

If you are a wholesale investor, derivatives issuers can continue to deal with you without being licensed by us.

We recommend you only use providers licensed by us, even if they are or appear to be regulated overseas.  It’s hard to distinguish between genuine and fraudulent overseas providers – putting you at a much higher risk of being scammed.

I am worried about a foreign exchange (FX or Forex) company I have given money too. What shall I do?

FX fraud is a growing problem. The FMA recommends using only a licensed provider and avoid using overseas fx trading services not licensed by us – even if they appear to be regulated by an overseas authority.

You should be especially wary of forex trading ‘training’ and ‘tools’ that promise a particular product or technique that gives access to better exchange rates or easy money.

While software programmes and training courses can teach an investor how to make forex trades, no person or programme can ever accurately predict movement in foreign currencies.

See more about:

If you suspect fraud please contact us using our complaint online form.

 

What to do if you have a dispute with a provider

Can the FMA help me resolve a dispute with my investment provider?

No, we cannot help you directly. All businesses who offer financial services must belong to an independent dispute resolution scheme.

Your provider must provide the name of their dispute resolution scheme in their disclosure documents, or you can search for it on the Financial Service Providers Register.

If you have a dispute with your financial service provider there are several ways you can address the problem:

  1. Raise the matter with the company or individual directly.
  2. Make a complaint to the company or individual using their complaint process – this should be described on their website or in documents they sent to you.
  3. Contact the dispute resolution scheme they are a member of to help resolve your problem. This service is free. They can give advice on how to make an effective complaint and may be able to assist you. However, ensure you should take your complaint to the business or individual as well.

What is a dispute resolution scheme (DRS)?

To register on the FSPR, all individuals or businesses that provide a financial service to customers must belong to a dispute resolution scheme. There are four approved dispute resolution schemes:

  1. Banking Ombudsman - investigates and resolves disputes between customers and their banks. The Banking Ombudsman also deals with complaints about a range of non-bank financial service providers.
  2. Insurance & Financial Services Ombudsman - considers complaints against insurance and savings organisations and some other financial service providers that are members of its scheme.
  3. Financial Services Complaints Limited - considers complaints against financial service providers that are members of its scheme.
  4. Financial Dispute Resolution - (operated by FairWay Resolution) considers complaints against financial service providers that are members of its scheme.


Credit - including hire purchase and debt

I have a question about my credit card with a finance company.

Consumer Protection and the Commerce Commission have information about your rights when you use credit cards, store cards, buy goods or services on credit or get cash loans.

If you're worried about a loan you've got with a finance company, please contact the Commerce Commission.

We also suggest you seek legal advice. This is free from any Citizen Advice Bureau or Community Law Centre. Some help is available from budget services organisations such as Family Budgeting.

 

How can I get my money back?

Can the FMA get my money back?

No, we cannot help you to get your money back.

Whether you can get any money back depends on the type of investment you have and the financial status of the company or person you have invested in.

We suggest you seek legal advice from a lawyer to discuss your circumstances and work out your options.

If you have contacted their dispute resolution scheme provider and they are unable to help you, you can file a complaint with us; but we generally will not be able to assist you directly.

See our ‘Make a complaint’ page for more information on the range of complaints we can help with.

I've paid money to someone registered on the FSPR and now can't access my funds. Can the FMA help me get my money back?

Just because someone is registered on the FSPR does not mean they are licensed or regulated and you may not be able to get your money back.

If you have tried contacting them and used their dispute resolution scheme without success, you can make a complaint to us. We will not be able to help you get your money back if the company or individual is based overseas however; we can provide you with publicly available information about them, such as where they are registered and who their directors are from the Companies Office.

If the business is located in New Zealand, we may have more ability to help, however we cannot assist individual investors.

 

Fraud or scams

How do you know if an investment is a scam?

See our ‘How to spot an investment scam’ guide to learn some of the hallmarks of scams.

You can also check:

If the scam relates to an illegal investment offer or scheme you should also contact us.

You can also report any online incidents such as; scams, frauds, computer security, privacy breaches or suspicious spam messages to NetSafe.

Can the FMA tell me which businesses to avoid?

We publish an A-Z list of all the businesses and individuals we recommend investors be wary of.

What do I do if I think someone has stolen my identity?

You should contact the Police in the first instance.

 

How to check if a business is legitimate

Can the FMA confirm if a company is legitimate?

We do not provide security or confirmations of legitimacy for any business or individual on the FSPR. We strongly suggest before investing any money that you:

See our ‘Become a smart investor’ guide for more information.

How do I check if a business is registered in New Zealand?

You can check whether or not a company is registered in New Zealand at the Companies Office. You can also find basic details about a company such as; names of directors, addresses, registered shareholders and financial statements there.

What is the Companies Office?

The Companies Office is the government agency responsible for administrating the register of companies in New Zealand. It administers a number of other business registers such as the Financial Service Providers Register (FSPR).

What is the FSPR?

The Financial Services Providers Register (FSPR) is an online register of the people, businesses, and organisations that offer financial services in or from New Zealand.

By law, any business or person providing financial services in or from New Zealand has to be registered and the company name or individual has to be listed on it. Some examples include financial advisers, finance companies, fund managers and foreign currency exchange dealers. Businesses or individuals are only able to be registered on the FSPR if they are actually providing financial services from a place of business in New Zealand.

If a company is registered on the FSPR does the FMA regulate them?

Not necessarily. The numbers of businesses and individuals that we regulate have grown under the new laws but we don’t regulate everyone. See Who we regulate.

IMPORTANT: As part of the process, limited criminal checks are done on a business or individual who is applying to be added to the FSPR. No other checks or assessments are made. Being registered on the FSPR does not mean a business or individual is licensed or regulated by us or that they are based in New Zealand. We have lists of individuals, markets and businesses licensed or authorised to operate in New Zealand. If you use an unlicensed provider, it’s very unlikely you will recover your money if things go wrong, particularly if they are based overseas.  Read more

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What sort of information will the FSPR tell me?

The FSPR can help you:

  • obtain a business address
  • see the types of financial services the registered company, or individual, provides to customers. Some examples include; money transfers, investment management or financial advice 
  • see any licences or an authorisation status that the company or individual may have
  • see what dispute resolution scheme they belong to.

How do I know if my bank is safe?

The Reserve Bank of New Zealand (RBNZ) registers banks, licenses insurers (insurance companies) and undertakes their prudential supervision – that means they monitor how stable and safe they are. You'll find further information on the RBNZ website.

How do I know if my insurance company is licensed?

Check the Reserve Bank of New Zealand website for a list of licensed insurance companies.

 

Compliance matters

Can we come into speak to you on whether we need to be licensed/registered?

Our ‘Licensing and registration’ pages explain who needs to be licensed and/or registered. If you cannot find what you are looking for please email us at questions@fma.govt.nz

Can you give me legal advice on my business structure and if I comply?

We do not provide legal advice. In most cases you will need to talk to a qualified legal adviser who can tell you how the law applies to you and your particular business. We can help you though with your disclosure, financial reporting, licensing and other regulatory requirements.

How do I find my FSPR number/change my contact details on the register?

To find your details, visit the Companies Office website and type in your surname in the search box. This will bring up your details.

To change or update your details on the FSPR, you will need to log in to the Companies Office website using your RealMe login and password.

Click here to log in to the Companies Office website or here to find out more information about how to update your details.