FMA rules on offshore firms Lagos — New Zealand’s Financial Markets Authority (FMA) in a statement today confirmed more stiff measures to towards operations of offshore firms. The regulator confirmed that offshore firms have recently been removed from the Financial Services Provider Register, which is commonly abbreviated as FSPR.

It is the responsibility of Financial Services Provider Register (FSPR) to serve as the Registrar of Companies. But the Financial Markets Authority (FMA) has the authority to order the Registrar to remove companies from the FSPR where it is suspected that a company maybe providing false or misleading information as to the extent of its regulatory coverage in New Zealand.

In an effort to carry out its responsibility of check and balance against the registrar, the FMA has been reviewing referrals from the Registrar. This becomes necessary when there are concerns about whether the substantive business activities of a firm require it to be registered on the FSPR in New Zealand.

Th renewed attention by the FMA to its licensing comes as concerns loom over the likelihood that some offshore companies rigister on the FSPR primarily to take advantage of New Zealand’s reputation as a well-regulated jurisdiction. This concern stems from complaints from offshore investors who have lost their money to forex companies, or other types of service providers operating abroad that are registered on the FSPR. An example is the case of Forex Trend. The Forex firm has been deemed insolvent as it has failed to meet its clients withdrawal requests. The regulators have removed a total of 23 firms from the register. Another 20 firms are being blocked from ompleting registration on the FSPR.

“We are aware of instances where the FSPR is not being used for its intended purpose. This is taking advantage of New Zealand’s good reputation for being a well-regulated jurisdiction and a good place to do business,” said Liam Mason, FMA General Counsel.

Regulators in the various regions seem to be paying more attention to rules regarding offshore companies. The recent rules developed by the Russian Central Bank towards the development of its Forex laws has also strongly addressed issues concerning offshore companies.

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