Speaking at the annual FSC conference, FMA CEO Samantha Barrass said the theme of this year’s show – Consumer Resilience and Prosperity – is an important one for her organisation.
“Once responsibility for the CCCFA is transferred to us, we will have a role in overseeing the financial products that touch most New Zealanders’ lives,” she told a capacity audience at the Corbis hotel, Auckland, Wednesday 4 September.
“Whether it is securing a loan for a car, getting professional financial advice, buying your first home and insuring it, insuring yourself and your livelihood, or saving and investing for your retirement and other financial goals, the FMA will have a key role in making sure New Zealanders have trust and confidence in the financial services sector.”
Barrass said the industry response to its consultation on outcomes-focused regulation shows the regulator needs take a step back, take stock, and pause to consider the right way forward.
“One of the things the FSC told us in its feedback was that they were worried we were introducing new rules,” said Barrass.
“To be clear, we are not setting out new rules. It is about the FMA, ensuring we remain an effective modern, forward-looking regulator and communicating what we believe that looks like. We will have more to say in due course.”
…the FMA will have a key role in making sure New Zealanders have trust and confidence in the financial services sector…
Barrass said enforcement is a bottom line for any regulator.
“It is the bare minimum any regulator needs to do to ensure credibility and create a credible deterrent that encourages compliance,” she said.
“But enforcement is sometimes rightly characterised as the ambulance at the bottom of the cliff. Something has to have gone wrong or be at a real risk of going wrong. Ideally, the bulk of regulatory activity is focused on making sure harm is prevented.
“So it’s in our supervision work that we mainly want to be experienced. Sometimes with pointy elbows, but mainly collaboratively, educative and engaged.
“Strong regulator-firm relationships benefit all New Zealanders. As we and the industry have acknowledged in the past, this requires the FMA to be properly resourced.
“Our view remains the same as it has in recent years; that an engagement led approach from a regulator, that can retain good staff and institutional knowledge, offers the right regulation for New Zealand.
“It delivers a meaningful, proactive supervision approach, supporting firms and customers alike.”
Turning to the new CoFI regime, Barrass said the FMA is continuing to engage with firms ahead of the end of the licensing window in March 2025. She also said the FMA has its eye on transparency in mortgage advice.
“The Minister and the Commerce Commission have clearly expressed concerns about practices in this space,” she said.
Click here to read the full speech.