The Financial Markets Authority (FMA) of New Zealand has published its annual report for the fiscal year ending June 30, encompassing the FMA's key activities, including monitoring and supervising firms for conduct, implementing new legislation, publishing industry guidance, enforcing the law, and providing resources for investors and consumers.
The report indicates that the FMA has met all its performance targets for the year. Key developments noted in the report include a thematic review of the wholesale investment sector and subsequent regulatory actions. Notably, the FMA issued a stop order against Validus and successfully defended an appeal against this order in court.
The authority utilised various tools such as warnings, licence suspensions, infringement notices, a censure, and another stop order. Significant enforcement actions included imposing the largest penalties to date for market manipulation and a record civil penalty of $3.5 million under fair dealing provisions. The year also saw the filing of three similar proceedings.
The new financial advice regime, which became fully operational in March, was highlighted as a major development. The FMA also published sector risk assessments for managed investment schemes and discretionary investment management services, along with a range of guidance for the Climate Related Disclosure regime.
A focus area for the FMA has been addressing customer overcharging and other disadvantages resulting from providers’ inadequate practices and systems. Since the Conduct and Culture reviews of banks and life insurers, efforts to improve these practices have been ongoing. In October 2022, a significant milestone was reached with over $150 million returned to customers by banks and insurers from remediation activities, instigated by the FMA.
FMA chief executive Samantha Barrass also commented on the successful implementation of the new advice regime and the FMA's progress in fulfilling its established and new mandates. She emphasised the FMA's commitment to strong industry collaboration and an outcomes-focused approach to regulation.
“Our commitment to strong industry collaboration and engagement has been at the heart of our work this year. We have recently been talking to industry about embedding an outcomes-focused approach to regulation. This overarching strategy will be progressively more apparent in all facets of our work in the years ahead. We will be encouraging entities to see this approach as an opportunity, engage with us openly in constructive discussions about outcomes for consumers, investors, and markets,” Barrass said.
In conjunction with the annual report, the FMA also released its “Ease of Doing Business” report, surveying stakeholders and industry participants on their interactions with the FMA and its effectiveness in delivering its mandate. The key findings from the survey are summarized as follows:
In other news, the FMA has entered into a consultation agreement with the Financial Markets Standards Board, signifying a formal commitment to bolstering the integrity and efficiency of global wholesale financial markets.
What are your thoughts on this story? Please feel free to share your comments below.