Media release
MR No.2016 – 36
1 December 2016
A decade in the making, today marks the beginning of a new era in the regulation of New Zealand’s financial markets. The introduction of a stronger regime overseeing financial markets, based on the good conduct of providers, has been in train since before the establishment of the Capital Markets Development Taskforce in 2008. The Financial Markets Authority has been implementing this regime since the Financial Markets Conduct Act (FMCA) was passed by parliament in late 2013.
The FMA has licensed 190 financial services firms since 2014, when the FMCA was introduced. These firms range from some of NZ’s largest corporates, to SMEs in the fintech sector like equity crowdfunding platforms and peer-to-peer lenders, and also sole trading businesses such as independent trustees. This is in addition to the 1,800 authorised financial advisers who were already licensed by the FMA under the Financial Advisers Act 2008.
Rob Everett, Chief Executive of the FMA said that the FMA wants to acknowledge the efforts of the industry to engage with the FMA, both in meeting the standards of the new regime but also in beginning the transition to a conduct regime.
“We have just completed the heavy lifting to put in place the infrastructure for the new regime. The licensing framework laid out in the FMC Act sets us up for the next phase of transformation in financial services – embedding high standards of conduct in financial service providers that place investors’ interests at the heart of their business models.
“It’s important to recognise that for many sections of the industry this was a major challenge and the work needed to reach the required standards was significant. But we have tried hard to impose burden only where we saw a clear benefit to investors and the markets and to avoid creating unnecessary barriers to entry for new players. The new laws were designed to be both flexible and modern, to accommodate all sizes of business and new forms of services.”
The FMA’s stakeholder surveys show that the industry understands the regulations are designed to serve a purpose beyond compliance, which is to maintain market integrity.
Mr Everett noted that the new laws were put in place by parliament to bring regulation of financial services in New Zealand in line with international standards. “The core objective for the FMA is to have fair, efficient and transparent markets that encourage people to be confident about saving and investing their money. Maintaining the market integrity that will support investor confidence is a joint responsibility between regulators and service providers, so our focus on conduct within the industry and how investors are treated is at the heart of our mission.
“Not only are investors better protected in the new regime, but over time they will start to feel the benefits of the FMA’s focus on good conduct. The FMA’s conduct ‘lens’ means that providers will be evaluated – and responded to by the FMA – on how their customers experience their products and services and the results they get from those products.”
ENDS
Contact:
Andrew Park
Ph: 021 220 6770
[email protected]
