The Statement of Intent, released by the FMA, signals its expectations when it comes to trust and confidence in the financial markets over the coming four years and addresses the question of what it considers ‘fair’.
Law firm Minter Ellison Rudd Watts’ opinion of the FMA’s 24-page document is that it highlights the regulator’s drive to address areas of risk such as conduct “…and form an action-based response going forward so that a customer-centric culture and robust governance of conduct becomes the norm”.
It says a feature of the FMA’s Statement of Intent is the priority being given to the deterrence of misconduct that will likely manifest itself by way of a “…further ramping up of enforceable action across a broad range of topics”.
“Also notable is the intent to gear up on Financial Market Conduct Act enforcement – particularly Part 2 (fair dealing) and Part 5 (market conduct),” says the firm.
The FMA document shows the regulator’s determination to develop fair, efficient and transparent financial markets.
And when it comes to the definition of ‘fair’ (page 9) the FMA says it considers ‘fair’ to mean “…providers and participants acting fairly, professionally and with integrity, focusing on serving the needs of customers”.
And that, says the FMA, means:
- Treating customers fairly in all interactions
- Recognising and prioritising the interests of customers and effectively managing the conflicts of interest that arise
- Giving customers clear, concise and effective information
- Designing and distributing products that are suitable, work as expected and as represented, and are targeted at appropriate customer groups
- Ensuring adequate after-sales care, including complaints and claims handling, and not imposing unnecessary barriers to switching or exiting a product or service
- Effectively monitoring their own conduct, and where relevant the conduct of suppliers and distributors, to ensure they can identify, rectify and learn from mistakes
“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,” says the FMA in its Statement of Intent.
“Fair, efficient and transparent financial markets will promote high levels of trust and confidence.
“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.”