FMA boss defends new regulatory regime

by Maryvonne Gray 18 Jun 2014

FMA boss defends new regulatory regime

The Financial Markets Authority (FMA) CEO Rob Everett has defended the regulatory load in New Zealand as perfectly manageable, justifiable and necessary.

Everett called on Trans-Tasman business leaders at a session in Auckland yesterday to support New Zealand’s new regulatory regime – in financial services and in business generally – so that New Zealand enjoys more sustained, stronger economic growth.

“The current level of regulation in New Zealand is necessary if we want to build confidence in the operation of our markets and the players in it, and for the New Zealand economy to continue to grow at a sustainable rate,” he said.

“And it’s necessary if we want to provide more choice – that’s more choice for firms that are raising capital.”

The FMA’s role in the growth agenda is to help promote fair, efficient and transparent markets and encourage informed participation in the markets, he said.

“Where people have confidence in the markets and trust in the conduct of finance industry professionals they are far more likely to participate and invest in productive assets,” said Everett.

But he urged businesses not to forget the lessons of the pre-2008 boom in New Zealand, including the collapse of the so-called finance companies and the losses suffered by individual investors and the economy. These losses – among other factors – demanded a major overhaul of the legislation governing financial markets and service providers.

He said many of the provisions in the newly-revised and comprehensive regulatory regime – including the Financial Markets Conduct Act 2013 – were designed to ensure the benefits of an improving economy were directed into more productive uses.

“The FMA is not only tasked with monitoring compliance, enforcing rules and punishing wrongdoing, we have a big job in helping to expand New Zealand capital markets.”

Everett said he didn’t accept arguments that regulation necessarily reduced productivity or profitability.

“The regulations that are coming into effect throughout 2014 are designed to promote greater protection for investors and consumers, and also to provide greater choice and opportunity for investors and businesses. We want to work together with the industry and businesses to help rebalance the economy in favour of productive investments and commercial enterprise.”