A recent survey by the Financial Markets Authority
(FMA) showed that 61% of New Zealanders had not heard of
The FMA is an independent Crown entity in charge of ensuring
public confidence in our financial markets and supporting the
growth of our capital base in New Zealand.
The FMA is one of three main regulatory bodies working to
regulate our economy together with the Reserve Bank of New Zealand
and the Commerce Commission. The FMA regulates financial product
providers including KiwiSaver providers and superannuation schemes,
intermediaries (e.g. financial advisers), qualifying financial
entities, issuers, and those who monitor financial providers (e.g.
auditors and statutory supervisors).
The functions of the FMA include monitoring and supervising
conduct in the market and investigating where there are potential
financial harms to the market. The FMA website provides policy,
guidance notes to assist firms and professionals to comply with the
law and educational tools to help investors make better investment
One enactment the FMA ensures compliance with is the Financial
Markets Conduct Act 2013 ("FMC Act"). The FMC Act
regulates persons offering, reporting or governing financial
products and dealing in financial products from a financial product
market (e.g. the NZX market).
Under the FMC Act financial products are categorised into four
- Debt securities;
- Equity securities;
- Managed investment products; and
The FMC Act also provides a regime for licensed
providers of discretionary investment management services or
Recently, Milford Asset Management Limited ("Milford") settled
$1.5 million with the FMA over certain trading conduct of a
portfolio manager at Milford, which received considerable media
coverage. The settlement serves as a timely reminder that the FMA
is out there investigating alleged false or misleading conduct in
our financial markets.
Under the FMC Act there are large penalties for persons who
contravene or are involved in the contravention of the FMC Act. If
you are a person looking at offering financial products or have
issued financial products in the past it is imperative that you
understand your obligations under the FMC Act.
For further information about the Financial Markets Authority