New Zealand’s financial benchmark regime has received formal recognition from the European Commission, allowing European institutions to continue using New Zealand‑regulated benchmarks from Jan. 1. The decision has implications for insurers and other financial firms with euro‑denominated exposures referencing New Zealand rates.
The commission has adopted an equivalence decision for New Zealand’s legal and supervisory framework for financial benchmarks, following the Financial Markets Authority’s (FMA) recent licensing of New Zealand Financial Benchmark Facility Limited (NZFBF) as a benchmark administrator.
Taken together, the decisions mean the New Zealand Bank Bill Rate benchmark (BKBM) can continue to be referenced in the European Union once updated third‑country rules under the EU Benchmarks Regulation (BMR) apply from 2026.
FMA general counsel Liam Mason said the decision affects New Zealand entities and offshore counterparties that rely on BKBM in cross‑border contracts. “This is a significant outcome for New Zealand, and for all financial institutions and businesses that trade between New Zealand and the European Union that use the BKBM in their commercial transactions. It means that the more than EUR 50 billion of financial instruments currently in use in the EU that reference the New Zealand Bank Bill Rate benchmark can continue to be used without disruption from January 1, 2026,” he said.
BKBM is used as a base rate in a range of financial instruments, including derivatives such as interest rate swaps that feature in insurers’ asset and liability management strategies. With continued EU recognition, New Zealand and European firms are less likely to need to amend contracts or transition to alternative benchmarks for existing exposures that reference BKBM. “Without this decision, these financial instruments cannot legally reference the BKBM. It means the businesses and organisations would need to find an alternative EU-based benchmark for their transactions, which is not feasible,” Mason said.
New Zealand introduced a licensing regime for benchmark administrators to align its framework with the revised EU BMR. The FMA and the Ministry of Business, Innovation, and Employment (MBIE) worked with NZFBF, New Zealand’s sole benchmark provider, to supply the commission with information on how New Zealand benchmarks are used in EU markets and their overall scale.
Commissioner Maria Luís Albuquerque, responsible for Financial Services and the Savings and Investments Union, said the decision has consequences for benchmark users in both jurisdictions. “[The] decision benefits EU benchmark users and New Zealand benchmark administrators. It proves that the revised BMR continues to be a worldwide reference for the regulation of financial benchmarks. This equivalence decision acknowledges New Zealand’s high regulatory standards and fosters closer cooperation between our jurisdictions,” she said.
New Zealand authorities are now expected to complete arrangements with the European Securities and Markets Authority (ESMA) to enable supervisory information‑sharing on New Zealand benchmarks used in the EU.
As benchmark settings for 2026 and beyond become clearer for New Zealand and EU counterparties, the FMA is also setting out how it expects to perform its own regulatory functions in the next financial year. In July, the FMA released its 2025/26 Statement of Performance Expectations (SPE), setting out how it plans to measure regulatory performance across financial markets, including the insurance sector.
The SPE supports the FMA’s 2024-2028 Statement of Intent and details targets and metrics across investigations, licensing, supervision, and stakeholder engagement. For insurers, the document sets out the standards and timeframes the regulator intends to apply in the coming financial year.
A central group of measures in the SPE relates to how industry participants and consumers perceive the FMA’s role in promoting fair, efficient, and transparent markets. Survey‑based indicators will be used to assess sentiment, with the FMA targeting 90% of industry respondents agreeing that its actions support higher conduct standards and 75% of consumers expressing confidence in market oversight. These perception‑based indicators are described as proxies for how effectively the FMA is meeting its statutory purpose and will be monitored over time.
On enforcement activity, the FMA has set completion targets for its case pipeline. It aims to complete 70% of Category A investigations within 24 months and 70% of Category B investigations within 18 months. Post‑investigation reviews are expected to meet internal quality criteria in 90% of cases. For initial decisions on misconduct case actions, the FMA has set a nine‑working‑day turnaround target in 85% of instances.
For licensing and exemptions, the authority is targeting 100% of fully completed licence applications to be processed within 60 working days. Individual exemption applications are expected to be processed within 30 working days in 85% of cases. A new measure will gauge market satisfaction with licensing systems, with a 70% agreement target in the FMA’s Ease of Doing Business survey.
