Part 3: Supporting Standards For Business

5. Securing customers’ interests (G)

G: VC (PDF 1MB), G: VC (PDF 1MB), G: GEN (PDF 1.33MB), G: GEN (PDF 1.33MB), G:SCI (PDF 1.05MB)

Without prejudice to the generality of Regulation 4(1)(a), a regulated entity shall secure its customers’ interests, including by:

  1. ensuring that its culture, strategy, business model, decision- making, systems, controls, policies, processes and procedures take into account its customers’ interests;
  2. acting in accordance with the reasonable expectations of its customers;
  3. taking into account the interests of its customers when designing financial services and the methods of delivery;
  4. ensuring that its financial services are not designed to unfairly exploit the behaviours, habits, preferences or biases of customers leading to customer detriment;
  5. resolving any complaints received from customers efficiently, fairly and in a timely manner;
  6. resolving errors and mistakes affecting customers efficiently, fairly and in a timely manner, and disclosing errors and mistakes to customers affected in a timely manner;
  7. ensuring errors and mistakes identified for one customer that may reasonably have affected other customers are resolved for all affected customers efficiently, fairly and in a timely manner;
  8. clearly distinguishing for customers between the entity’s regulated activities and its unregulated activities including by taking all appropriate steps to mitigate the risk that a customer will understand an activity to be, or to carry the protections of, a regulated activity where this is not the case;
  9. delivering fair outcomes for customers.

6. Acting with honesty and integrity

Without prejudice to the generality of Regulation 4(1)(b), a regulated entity shall act honestly and with integrity, including by:

  1. operating without bias and preventing, or identifying and appropriately managing, conflicts of interest;
  2. not exerting pressure or influence on a customer so as to limit his or her ability to make an informed choice in relation to any financial service;
  3. not misusing or misappropriating any assets or information of the regulated entity or its customers.

7. Acting with due skill, care and diligence

Without prejudice to the generality of Regulation 4(1)(c), a regulated entity shall act with due skill, care and diligence, including by:

  1. ensuring that persons who are responsible for managing the activities of the regulated entity have appropriate knowledge of the activities and associated risks that apply in the conduct of its affairs;
  2. complying with all financial services legislation applicable to the conduct of its affairs;
  3. operating in compliance with standards of market conduct and trading venue rules to which the regulated entity is subject by law and any market codes that apply to the affairs of the regulated entity.

8. Acting in the best interests of customers and treating them fairly and professionally

Without prejudice to the generality of Regulation 4(1)(d) a regulated entity shall act in the best interests of customers and treat them fairly and professionally, including by:

  1. ensuring that customers are informed in a clear manner of relevant information of which they ought to be aware;
  2. communicating relevant information to customers in a timely manner having regard to the urgency of any matter and the time required by the customer to consider that relevant information;
  3. seeking from customers information relevant to the financial services requested;
  4. assessing the needs and circumstances of customers, including their level of knowledge and experience of financial services, their financial circumstances and the range of options that the regulated entity is able to make available to them;
  5. ensuring that customers are not misled as to the advantages or disadvantages of any financial service;
  6. ensuring that any advice or recommendation provided to customers is appropriate and tailored to meet their financial services needs and circumstances;
  7. not acting in a manner that is unfair to customers;
  8. without prejudice to the pursuit of its legitimate commercial aims, not unreasonably preventing access by a customer to financial services.

9. Informing effectively (G)

G: GEN (PDF 1.33MB), G: GEN (PDF 1.33MB), G: SCI (PDF 1.05MB)

Without prejudice to the generality of Regulation 4(1)(e), a regulated entity shall inform its customers effectively, including by:

  1. ensuring that information is provided to a customer in such a way that the material features of the financial service in question can reasonably be understood by the customer;
  2. ensuring that all information that it provides to a customer is clear, accurate, up to date, and written in plain language;
  3. avoiding the unnecessary use of technical terms;
  4. providing information to a customer on a timely basis;
  5. bringing key information to the attention of the customer.

10. Financial abuse (G)

G: GEN (PDF 1.33MB), G: GEN (PDF 1.33MB)

Without prejudice to the generality of Regulation 4(1)(f), a regulated entity shall control and manage it affairs and systems to counter the risks of financial abuse to customers to whom it is providing financial services within the scope of its regulated activities, including by:

  1. putting reasonable systems and controls in place in the context of the provision of its financial services, to mitigate the risk to its customers of financial abuse;
  2. appropriately monitoring financial abuse trends relevant to its customers or the sector more generally;
  3. carrying out ongoing monitoring in respect of potential vulnerabilities in the services and distribution channels, and ensuring appropriate escalation processes where there is increased risk to its customers of financial abuse;
  4. notifying its customers through clear and timely communication of any digital frauds or deception connected to its affairs, or

    5. specifically relevant to the sector in which the regulated entity is operating, and of which it is aware;

  5. communicating the supports available to its customers, and the actions that customers can take in the event of financial abuse, directly connected to the regulated entity’s affairs.

11. Controlling and managing its affairs (G)

G: GEN (PDF 1.33MB)

Without prejudice to the generality of Regulation 4(1)(g), a regulated entity shall control and manage its affairs and systems sustainably, responsibly and in a sound and prudent manner, including by:

  1. having and employing appropriate resources and implementing effective governance of policies and procedures, systems and control checks, including compliance checks, to ensure that the regulated entity complies with its obligations under financial services legislation;
  2. providing appropriate staff training on the legal and regulatory framework relevant to the performance of those functions, including any legal obligations or standards that are imposed by or under financial services legislation;
  3. ensuring that if delegating tasks, that those tasks are assigned to an appropriate person with effective oversight within the regulated entity;
  4. managing its outsourced activities effectively to identify, monitor and manage its outsourcing risk;
  5. arranging adequate protection for assets held by the regulated entity on behalf of a customer.

12. Adequate financial resources

Without prejudice to the generality of Regulation 4(1)(h), a regulated entity shall maintain adequate financial resources, including by:

  1. complying with its obligations under financial services legislation;
  2. establishing and implementing systems and controls, processes, policies and procedures for the purpose of ensuring that it maintains adequate financial resources.

13. Disclosure and cooperation

Without prejudice to the generality of Regulation 4(1)(i), a regulated entity shall engage and cooperate with the Bank and comparable competent authorities in good faith and without delay, including by:

  1. disclosing to the Bank promptly, and in a manner appropriate to the circumstances, any matter relating to the regulated entity of which the Bank would reasonably expect notice including information relevant to, or giving rise to, a suspicion or expectation of any of the following:
    1. commission of an offence by the regulated entity or a person performing a controlled function in relation to it;
    2. commission of a prescribed contravention or any other breach of obligations under financial services legislation by the entity or a person performing a controlled function in relation to it;
    3. concealment or deliberate destruction of evidence relating to a matter referred to in subparagraph (i) or (ii);
    4. provision of false or misleading information to the Bank relating to a matter referred to in subparagraph (i) or (ii);
    5. obstruction or impeding of an investigation relating to a matter referred to in subparagraph (i) or (ii);
    6. commencement of legal proceedings by or against the regulated entity arising from its obligations under financial services legislation;
    7. commencement of legal proceedings against the regulated entity which may impact on its ability to continue to trade;
    8. anything that may otherwise interfere significantly with the operation of the regulated entity or its compliance with its obligations under financial services legislation;
    9. a decision by the regulated entity to cease to provide financial services of a particular description;
  2. facilitating appropriate reporting to the management of the regulated entity and to the Bank, including:
    1. reporting of information relevant to, or giving rise to a suspicion of, the commission of a prescribed contravention or contravention of any other obligation or standard imposed on the regulated entity by or under financial services legislation;
    2. any matter otherwise adversely affecting the activities or interests of customers, the regulated entity, its related undertakings, or the financial services system;
    3. any information of which the Bank would reasonably expect notice in respect of the affairs of the regulated entity;
  3. responding to requests and requirements under financial services legislation in an open and timely manner;
  4. disclosing information or records when required to do so under financial services legislation;
  5. ensuring that persons performing functions for the regulated entity attend meetings and interviews when required to do so under financial services legislation;
  6. not providing false, inaccurate or misleading information, records or explanations;
  7. not destroying, hiding or putting beyond reach information or records that it is reasonable for the person to expect to be required to be disclosed under financial services legislation;
  8. not engaging in evasive, misleading or obstructive conduct.

14. Systems and controls.

A regulated entity shall establish and implement systems and controls, processes, policies and procedures for the purpose of ensuring that it, and any agent acting on its behalf on the basis of an outsourcing arrangement, complies with these Regulations.

Explanatory Note

(This note is not part of the Instrument and does not purport to be a legal interpretation.)

These Regulations give effect to Section 17A of the Central Bank Reform Act 2010 by prescribing Standards for Business for the purpose of ensuring that in the conduct of its affairs a financial service provider:

  1. acts in the best interests of customers and of the integrity of the market,
  2. acts honestly, fairly and professionally, and
  3. acts with due skill, care and diligence.