FMA COVID-19 Update 20 March 2020

The Financial Markets Authority is closely monitoring the impact of the coronavirus situation on New Zealand’s financial markets and considering all necessary actions to ensure markets continue to function well and to support participants, customers and investors.

This special update is intended to keep you informed on our latest thinking.  Please keep checking our website and social media channels for updated information.

We are working closely with the Council of Financial Regulators (CoFR), which includes Treasury, the Reserve Bank, Commerce Commission and MBIE, as well as frontline regulators NZX, supervisors and audit bodies to ensure a co-ordinated response for the industry.

Financial reporting

In collaboration with the NZX, we announced yesterday that NZX-listed firms, FMC reporting entities and auditors will be given more time to publish their audited annual financial statements.

It is essential that firms continue to provide timely updates to the market on their financial position and meet their continuous disclosure requirements.  We have seen a strong commitment to this but we recognise that the rapidly unfolding situation around COVID-19 presents significant challenges for firms and auditors trying to finalise their accounts and forecasts. 

With this in mind, we are extending financial reporting deadlines by two months.

NZX lift in capital-raising capacity

The NZX has just announced a lift in equity capital raising capacity to help listed companies cope with the impacts of COVID-19, along with other measures to allow greater flexibility in timeframes for financial reporting.

Given current market conditions, we are supportive of regulatory agencies such as the NZX considering where relief can be provided and how capital raising can be supported in times of stress.

Issuers should remember that investors will need sufficient information and detail to be able to participate in such share placements and that investors should be vigilant in assessing the opportunities.

Read NZX announcement

KiwiSaver providers and advice

This is a very uncertain time for KiwiSaver members, with many seeing a significant drop in their balances.

The industry is responding appropriately and many KiwiSaver members are taking heed of the advice to stick with their long term investment strategy. However, supervisors are reporting a significant increase in switching activity – mostly from growth or high-growth funds into conservative funds. 

We have been concerned in the past at reports from KiwiSaver members about being referred to an Authorised Financial Adviser after inquiring about switches like this.  In these uncertain times, a much better customer outcome is to provide simple, focused advice on switching funds.

KiwiSaver providers should be providing general (class) advice to members at this time.

FMA Regulatory work

We are considering deferring some of our regulatory work to ease pressure on market participants. 

We have delayed our planned thematic review on liquidity for managed investment schemes and are also considering deferring other monitoring activity, including some audit quality reviews for audit firms and the NZX’s Obligations Review.

We are inviting industry to suggest any other ways we can support them at this time.

FMA engagement with industry

We are limiting face-to-face meetings in line with direction from the government, we emphasise that we really want to hear from the industry about any challenges they face and areas where we can assist.
Please keep checking our COVID-19 webpage and follow our social media channels for updates and information.