FDR
Updated:
FDR is a New Zealand dispute resolution scheme brokers must belong to — useful, but not a licence or a compensation fund. The brokers below are FDR members.
Brokers regulated by FDR
PF DerivativesRead review- No specific advantages identified from available information
Financial Dispute Resolution is one of New Zealand's approved external dispute resolution schemes. Every financial service provider registered in New Zealand must belong to one of the approved schemes, and FDR is among them — which is why it appears alongside regulatory claims on broker pages.
What it is
An independent service that investigates and resolves complaints between clients and financial service providers, free to the client, funded by member firms. If a complaint cannot be settled directly with the firm, a client can escalate it to the scheme, which can make decisions binding on the member.
That is a genuine benefit. Most offshore jurisdictions offer no complaints mechanism at all, and having somewhere independent to escalate to is worth more than a broker's own internal process.
What it is not
Not a regulator. Scheme membership involves no assessment of a firm's capital, no supervision of its trading conduct, and no authorisation to offer any product. A firm can belong to FDR while holding no licence to act as a derivatives counterparty.
Not a compensation fund either. The scheme can order a solvent member to pay a client; it cannot pay out for an insolvent one. If a broker fails, the dispute resolution scheme does not return your money.
How it sits alongside the real requirements
In New Zealand the licence that matters is the Financial Markets Authority's Derivatives Issuer Licence, which brings assessment of directors, financial resource requirements and — the substantive protection — client money held in a statutory trust account with a New Zealand registered bank.
Dispute scheme membership is compulsory for registered providers regardless. So a broker citing FDR membership has told you it is on the register and belongs to a scheme, which is the minimum, not the licence.
How to check
Look up the firm on the FMA's licensed derivatives issuers list first. Treat dispute scheme membership as a useful addition once the licence is confirmed, and as an incomplete answer when it is quoted instead of one.