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 responsible to account. These pages provide you more information on our regulatory and enforcement approach.

 

Compliance overseen by the FMA

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.

Read more about our conduct 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

Yuen Pok (Paul) Loo pleads guilty to forgery and financial markets legislation offences
The FMA can confirm that Yuen Pok (Paul) Loo has pleaded guilty to several criminal charges at the Manukau District Court on Friday.
FMA acknowledges guilty verdict in Pushpay insider trading case
FMA acknowledges today’s guilty verdict in the criminal trial of an individual accused of insider conduct in relation to the sale of shares in Pushp ...
FMA issues warning to Enprise Group Limited
The Financial Markets Authority (FMA) – has issued Enprise Group Limited (Enprise) a warning for failing to keep proper accounting records.
Highest penalties to date for market manipulation ordered for Oceania Natural Limited defendants
The penalty hearing for the first and second defendants in the Oceania Natural Limited (ONL) proceeding brought by the FMA was heard at the Auckland H ...
Forestlands sole director, Rowan Kearns, sentenced for making false statements and financial reporting offences
Rowan Kearns, the founder and sole director of the Forestlands group of companies, was sentenced yesterday to four months’ community detention and 1 ...
FMA makes permanent stop order against Validus after appeal is dismissed in the High Court
The FMA has made a permanent stop order (Order) that applies to Validus International LLC (Validus), Validus-FZCO, and associated persons of Validus.