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FMA review of fund managers’ quarterly fund updates

Page last updated: 18 Apr 2018

Media release
MR No. 2018 – 12
18 April 2018

The FMA today published the findings of a review of quarterly fund updates which looked at whether fund managers are meeting their legal requirements to produce updates that are both easy to find and easy to read for investors.

Fund updates provide important information to investors including how the fund is performing, the fees paid by investors and the assets the fund is invested in. These updates are legally required to be published every quarter and made publically available, following a standard format.

At least one quarterly fund update from each licensed Managed Investment Scheme (MIS) manager was considered as part of the review.

MIS managers are complying with the general obligation to produce fund updates and most updates did not raise significant concerns.

The review did find some areas where disclosure could be improved or instances of potential non-compliance. In a handful of cases, the fund update could not be found on an issuer’s website. In other cases, it was not sufficiently prominent.

A comprehensive definition of how the updates should ‘publicly available’ is set out in the Financial Market Conduct Act regulations and the FMA has a clear expectation that fund managers should get this right.

While the majority of fund updates did not report fund charges significantly higher than estimates provided in the product disclosure statement, four funds had a significant difference in fund charges when compared to the estimate in the PDS.

The FMA is committed to further work and engaging with MIS managers to address these issues.

The planned review of quarterly fund updates was set out in our Annual Corporate Plan and the review formed part of the FMA’s strategic priorities for the year.

Edwin Mitson
Senior Adviser, Media Relations
021 702 036