The FMA has released its latest Annual Corporate Plan signalling more changes for both the financial services industry and the regulator itself.
The organisation’s CEO Samantha Barrass says the regulator has built a solid track record for implementing new legislative requirements for financial services in New Zealand.
“Conduct regulation is no longer a novel or foreign concept for firms,” she says. “With the introduction of FMA licensing for banks, insurers, and non-bank deposit takers, conduct obligations will be firmly at the heart of a fair financial system.
“The financial sector is an enabler in people’s lives and it’s important it works well for all. In turn, this will shape how the FMA operates and organises itself as we step up and deepen our understanding of consumers and how they interact with financial markets and services.”
The FMA’s 2022/23 plan lists a set of priorities for the current financial year, covering three key areas:
- Maintaining a steady and consistent focus on building conduct maturity in the sectors the FMA already licenses and oversees
- Delivery of core functions related to licensing, monitoring, and responding to egregious misconduct – particularly in relation to consumer harm; and
- Building capability to implement new legislation and taking on increased responsibilities under its expanding mandate as a conduct regulator
There are three new legislative regimes coming into effect between 2023 and 2025, namely:
- Financial advice regime (FSLAA) – full licensing in effect from March 2023
- Climate-related Disclosures (CRD) – developing standards and consultation through 2023, and the first climate-related statements due in 2024
- Conduct of Financial Institutions (CoFI) – conduct licensing opening in 2023, with fair conduct programmes and obligations in effect from 2025
…I am focused on smoothly implementing this change, while maintaining our current momentum…
The FMA’s annual plan also details its key regulatory priorities for the next 12 months. These include:
- A thematic review of the wholesale investor classification
- A cross-sector thematic review of governance within regulated entities – jointly with the Reserve Bank of New Zealand
- Managed Investment Scheme (MIS) and Discretionary Investment Management Service (DIMS) sector risk assessments
- Supervisor relicensing
- Cyber security and operational resilience
Barrass says the FMA needs to elevate its capabilities “…introducing new skills in data science, behavioural insights, and economics”.
“I am focused on smoothly implementing this change, while maintaining our current momentum,” says Barrass. “We will also respond to emerging regulatory risks and opportunities, and target our interventions accordingly.
“To that end, we are prioritising areas such as cyber security and operational resilience, reviewing use of the wholesale investor classification, consumer research and insights, and innovation.”