FMA has published its compliance focus for 2013 which outlines its priority areas for monitoring and surveillance over the next year.
The document details four major themes which will influence FMA's priorities:
- Building customer trust – FMA expects market participants to put customer interests first when designing, marketing or selling new products and in relation to their financial market activities more generally.
- Raising standards in existing regimes – FMA expects participants to demonstrate behaviour above the bare minimum required, with a focus on good conduct, ethics and integrity. For issuers and their directors this will mean focussing more on the handling and disclosure of conflicts of interest and disclosure of business changes – particularly in offer documents. FMA will also focus on those issuers currently offering securities where there are trading or financing difficulties.
- Embedding new regimes – participants need to adapt to new regulatory regimes so as to realise the intended benefits for markets and customers. FMA is responsible for regulating and monitoring securities trustees, statutory supervisors, fund managers, issuer auditors and accredited bodies who all have new and important roles to play in New Zealand's financial markets. From 30 June 2013, FMA will also monitor how entities assess and manage anti-money laundering and countering financing of terrorism risks, with a focus on customer due diligence. The next major change to New Zealand's financial markets regulatory regime will be the implementation of the Financial Markets Conduct Bill.
KiwiSaver – participants involved in the management, distribution and oversight of KiwiSaver must ensure they meet regulatory standards and act with customer interests in mind. FMA will:
- complete its review of how KiwiSaver trustees monitor the investment activities of managers, with a focus on processes and controls;
- consider how KiwiSaver scheme trustees monitor managers' pricing activities;
- review KiwiSaver scheme offer documents in conjunction with the statement of investment policy and objectives to test whether: investment strategies are appropriately disclosed, and disclosure documents are understandable to investors;
- work to clarify its expectations of trustees in respect of KiwiSaver schemes; and
- monitor compliance with the new fees requirements (once implemented), which include quarterly reporting on fees to members and fee disclosure in trustee annual reports.