The regulator says it will have a greater focus on fair outcomes for consumers and investors
The Financial Markets Authority (FMA) has set out its key priorities and intended work programme for the current financial year in its Annual Corporate Plan (ACP) 2022/23, with its sights set on a fairer financial system.
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FMA’s key priorities include maintaining a steady and consistent focus on building maturity in the sectors it regulates, delivering core functions related to licensing, monitoring, and responding to egregious misconduct, and building capability to implement new legislation and taking on increased responsibilities under its expanding mandate as a conduct regulator.
FMA said that three new legislative regimes will come into effect between 2023 and 2025:
- 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
“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,” FMA Chief Executive Samantha Barrass said. “As our remit grows, the FMA will have a greater focus on fair outcomes for consumers and investors. 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.”
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FMA’s key regulatory priorities for the next 12 months include a thematic review of the wholesale investor classification, a cross-sector thematic review of governance within regulated entities, sector-risk assessments of Managed Investment Scheme (MIS) and Discretionary Investment Management Service (DIMS), and cybersecurity and operational resilience.
“To ensure that we deliver value for New Zealanders, the FMA needs to evolve how we undertake our work as we grow into a significantly larger organisation, and adapt our regulatory approach,” Barrass said. “We will need to elevate our capabilities – introducing new skills in data science, behavioural insights, and economics. This is an opportunity to refresh how we define and deliver our approach based on the outcomes we want to achieve, and to measure our effectiveness and efficiency in fostering a strong and trusted financial sector that treats people fairly.”
