Page last updated: 21 July 2022

Regulatory approach

We supervise and monitor market participants in line with our statutory objectives. Where we see misconduct in financial markets, we seek to hold those resp

We supervise and monitor market participants in line with our statutory objectives. Where we see misconduct in financial markets, we seek to hold those responsible to account. These pages provide you more information on our regulatory and enforcement approach.

 

Enforcment activity

The following principles underpin our regulatory approach and guide our regulatory decisions.

  • Intelligence-led and harm-based. We are a risk-based regulator which means we identify and focus our efforts on areas of greatest harm for consumers and financial markets.
  • Outcome-focused. We focus our resources on where we have the greatest opportunity of achieving desired outcomes and reducing harm. We consider the most appropriate action for each situation, recognising the limits of our powers, and considering regulatory burden.
  • Effective and efficient. We regularly review the use of our resources to enhance our effectiveness and efficiency.
  • Consistent and transparent. We clearly communicate our intentions and expectations to market participants, and explain our actions.
  • Flexible and responsive. We have an operating model that enables us to adapt and respond quickly to changing market conditions. We seek and act on feedback, and learn from our experiences.
  • A systems view. We promote an integrated and coordinated approach to financial markets regulation in New Zealand. The FMA is a member of the Council of Financial Regulators (CoFR), together with the RBNZ, MBIE, Treasury and the Commerce Commission. CoFR provides a forum for a continuous, forward-looking focus on system risks and regulatory coordination by members.

 

Below is information about the types of financial services and products we regulate.

 Direct regulatory relationship

Other level of regulation/oversight

Issuers

Brokers

Trading venues (eg financial product markets such as NZX)

Wholesale funds

Alternative capital raising (eg peer-to-peer and crowdfunding)

Custodians

Audit

Retail platforms and aggregators

Market infrastructure (eg settlement systems)

Life insurance

Retail funds, KiwiSaver, superannuation etc

Non-life insurance

Supervisors and licensed independent trustees

Banking:

  • Deposit taking
  • Payment services
  • Mortgages
  • Overdrafts
  • Credit cards
  • Personal loans

Discretionary investment management services (DIMS)

Financial Advice Providers (FAPs)

Derivatives issuers

When interpreting our statutory objectives we consider:

  • Fair to mean providers and participants acting fairly, professionally and with integrity, focusing on (see below).
  • Efficient to mean dynamic and accessible markets that facilitate growth and innovation.
  • Transparent to mean investors and customers get the clear, concise and effective information they need to make informed decisions.

We also want to see capable and engaged investors and customers operating in those markets.

We expect all market participants to act fairly and professionally, and be committed to pursuing the objectives and spirit of regulation rather than just the letter of the law. We expect financial service providers to engage openly, honestly and proactively with us.

Fair, efficient and transparent financial markets will promote high levels of trust and confidence. Markets will be effective in matching investors with those that need capital and New Zealanders will be able to access quality advice, investment management and other financial services they need.

Effective financial markets are central to supporting the four capitals of the Treasury’s living standards framework and to the broader Government’s economic strategy of improving the wellbeing and living standards of New Zealanders through sustainable and inclusive growth.

Conduct: read more about our expectations for market participants

We supervise and monitor licensed market participants in line with the FMA’s overarching statutory objective to promote and facilitate the development of fair, efficient and transparent markets.  Our supervision activity – where we monitor adherence to regulatory and legislative requirements by financial market participants – is integral to this outcome.

Supervision

The FMA’s supervision activities include the following:

  • Licensing – assessing applications from new and existing market participants seeking to obtain or vary a licence or other regulatory authorisation.
  • Monitoring – reviewing and assessing the compliance, competency and conduct of financial market participants.
  • Market engagement – maintaining close relationships with financial market participants through our stakeholder relationship management programme, participation in operational meetings with market participants and representing FMA at external forums and conferences.
  • Other activities – issuing guidance to the market, taking regulatory action in relation to non-compliance, work to support the introduction of new legislation, and interacting with other regulators in New Zealand and overseas.

Monitoring

We take a risk-based approach to monitoring so we focus our activity where we have the greatest opportunity of reducing harm to investors. This means we actively monitor only a portion of our regulated population in any given year.

We share key findings from our monitoring with the entire sector, highlighting areas where we have seen conduct and compliance that falls short of our expectations, and provide guidance on how all entities can improve in these areas. 

Learn more about our compliance approach and monitoring activity

Where the FMA sees misconduct in financial markets, we seek to hold those responsible to account, and to deter others from engaging in misconduct.

Read more about our policy and practice

Enforcement activity

FMA formally warns wholesale property investment firms after discovering non-compliant practices
FMA has issued seven formal warnings following concerns in the wholesale property investment sector.
FMA warns InvestNow for AML/CFT deficiencies and failures
FMA has issued a formal warning to InvestNow Saving and Investment Service Limited for failing to comply with anti-money laundering requirements.
FMA files proceedings against Vero for allegedly misleading customers about multi-policy discounts
FMA has filed High Court proceedings against Vero Insurance for failing to apply multi-policy discounts, which led to customers being overcharged.
AIA to pay $700,000 penalty for false and misleading representations to customers
The Auckland High Court has ordered life insurer AIA to pay a pecuniary penalty of $700,000 for making false and/or misleading representations to some ...
FMA makes permanent stop order to Wisdom House Investment Partners Limited and Yuen Pok Loo
FMA has made a permanent stop order that applies to Wisdom House Investment Partners Limited and Yuen Pok (Paul) Loo after they engaged in misleading ...
FMA directs Kalkine to stop making outgoing sales calls to New Zealanders after misleading marketing conduct
FMA has directed Kalkine New Zealand Limited to stop making outgoing sales calls to people in New Zealand.