Jurisdiction New Zealand | Website FMA New Zealand | |
Formed May 1, 2011 (2011-May-01) Preceding agency Securities Commission of New Zealand Headquarters Wellington, New Zealand Agency executives Murray Jack, Chairman
Rob Everett, Chief executive | ||
The Financial Markets Authority (FMA) is the New Zealand government agency responsible for enforcing securities, financial reporting and company law as they apply to financial services and securities markets. It also regulates securities exchanges, financial advisers and brokers, auditors, trustees and issuers - including issuers of KiwiSaver and superannuation schemes.
Contents
The FMA is a member of New Zealand’s Council of Financial Regulators, alongside the Reserve Bank of New Zealand, New Zealand Treasury and the Ministry of Business, Innovation and Employment. It is also a member of IOSCO - the International Organisation of Securities Commissions.
History
Between March 2006 and August 2012, 65 New Zealand finance companies failed. An estimated NZ$3.1 billion was lost and around NZ$8.6 billion was at risk, affecting 205,000 New Zealanders.
In 2008, in the wake of criticism over the failure of the previous regulatory regime to halt the finance company failures and stem investor losses, the New Zealand Government released a number of discussion papers. In April 2010 the Government announced it would establish the Financial Markets Authority.
The FMA was established on 1 May 2011 as part of the Financial Markets (Regulators and KiwiSaver) Bill which was passed by the New Zealand parliament on 7 April 2011.
The FMA was introduced by Commerce Minister Simon Power as a "super regulator" whose purpose was to restore investor confidence battered by the finance company meltdown and global financial crisis. "This move is at the centre of the Government's drive to restore the confidence of mum and dad investors in our financial markets," he said.[1]
The Authority took over the functions of the Securities Commission of New Zealand and Government Actuary which were disestablished, and consolidates other regulatory functions which were fragmented across the Ministry of Economic Development (New Zealand) the Companies Office and its National Enforcement Unit.[2]
The transition to the Financial Markets Conduct Act 2013 (FMC Act) was the last major step of Government reform. The FMC Act responds to recommendations from the Capital Markets Taskforce, the effects of the global financial crisis, and the failure of finance companies. It is the largest statutory change in New Zealand’s financial markets in at least 30 years.
The final phase of the transition to the FMC Act was completed on 1 December 2016.
Structure
The FMA is controlled by a board appointed by the Minister of Commerce, and is managed by chief executive Rob Everett. The board comprises chairman Murray Jack and members Arthur Grimes, Campbell Stuart, Mark Todd, Mary Holm, Shelley Cave, Vanessa Stoddart, Ainsley McLaren and William Stevens.
Priorities
The FMA's official website says its key statutory objective is "to promote and facilitate the development of fair, efficient, and transparent financial markets" and that it is "committed to taking strong action and holding individuals and entities accountable when they break the law and fail to meet the standards that are expected of them."[3]
The FMA publishes its key operational priorities in a Strategic Risk Outlook. In the 2015 edition the FMA lists seven priorities:
Governance and culture
Aim: Board and directors lead their organisation’s strategy, culture and values.
Conflicted conduct
Aim: Market participants effectively manage conflicts of interest.
Capital market growth and integrity
Aim: Regulatory activities facilitate capital market growth and support market integrity.
Sales and advice
Aim: Sales processes and advisory services reflect the best interests of investors and consumers.
Investor decision making
Aim: Investors have access to resources that help them make informed financial decisions.
Effective frontline regulators
Aim: Frontline regulators are effective in their role.
FMA effectiveness and efficiency
Aim: The FMA is an effective and efficient regulator.
Since it was established in 2011, the FMA has been involved in regulatory action against Bridgecorp, KA Trustee Ltd, Perpetual, Hanover Finance, Lombard Finance, Sean Wood, Nathans Finance, Bernard Whimp, David Ross and Milford Asset Management.