The Financial Markets Authority has released a key report designed to provide clarity to the financial sector on what to expect from the regulator.
It says the Financial Conduct Report will be an annual publication for the financial industry, including financial advisers, insurers, banks, investment managers and capital markets.
FMA chief executive Samantha Barrass says in a statement the regulator is “…responding to the clear desire for transparency, certainty and improved engagement with the sector, by setting out our priorities and the drivers behind what we’re doing.”
Within the report itself the priorities around financial advice include:
- Conduct impacting consumers in vulnerable circumstances
- Consumers and investors understand fees, incentives, and commissions
- Effective protection of client assets
- Challenges and opportunities to improve accessibility of advice
In her statement Barrass explains the report “…provides context and reasoning for these priorities by outlining key conduct risks and opportunities on the FMA’s radar over the next 12 months and how we plan to address them.”
She says the authority is publishing this FCR in the context “…of an uncertain economic outlook, geopolitical changes, financial pressure on households and businesses, and an expanding regulatory remit for the FMA. This underscores the importance of engaging with the industry and stakeholders, to identify and respond to emerging risks.”
Barrass encourages boards, executives and leaders to use the FCR to understand the FMA’s regulatory priorities for the coming year and consider how these insights can help their business ensure better outcomes for consumers and markets.
She says the FMA has a number of priorities across the sectors it regulates.
“Examples of our priorities as a regulator, providing licensing, monitoring and guidance to the industry and enforcing current laws to bolster confidence in our financial sector include:
- We want to ensure consumers know how to complain and we’d like industry to take swift action to stop further harm and provide timely remediation when issues arise
- We are actively working with other agencies and business to disrupt scam activity that originates within New Zealand to protect consumers from investment scams, which are increasingly affecting New Zealand consumers, and are growing in complexity and volume
- In addition, safekeeping of client money and property is fundamental for confidence in financial markets. So we’ll be working with the Ministry of Business, Innovation and Employment to improve protections for assets held in custody. Strong custody is not just important to protect against fraud. Robust client asset protection provides confidence in our regulatory environment
Barrass says examples of its aim to support innovation and growth in financial markets – include:
- Implementing a single conduct licence
- Supporting market access through its regulatory sandbox pilot for a small group of fintech companies.
The report also demonstrates how the authority is readying itself for emerging risks and opportunities such as virtual assets, tokenisation, and industry readiness for operational resilience.
Barrass anticipates the FCR will become an annual go-to reference point for the FMA, stakeholders and media to understand where it is focused, and what it aims to achieve for the year ahead.
“Overall, this report is a roadmap that sets out over the next 12 months why, and how, we are working towards achieving our statutory objective: to promote and facilitate the development of fair, efficient and transparent financial markets, and to promote the confident and informed participation of businesses, investors and consumer in financial markets,” she says.
