The Financial Markets Authority (FMA) has outlined its priority areas and overall regulatory approach for monitoring and surveillance for 2013, in its Compliance Focus Document. The Document provides four key themes, as follows:
- Building consumer trust: placing consumer interests first and ensuring investors are able to take responsibility for their financial decisions.
- Raising standards in existing regimes: raising standards of ethics and integrity within markets that have been regulated for some time, including securities exchanges, futures markets and financial advisers.
- Embedding new regimes: educating new participants and setting clear expectations for compliance, for example in relation to the Financial Markets Conduct Bill.
- KiwiSaver: continuing to enable informed decision-making and completing an initial review of how KiwiSaver trustees monitor the investment decisions of managers.
In addition to the four themes, the FMA outlines that assisting and supporting participants and investors in Christchurch remains important. This is because the rebuild environment generates a potential for poor conduct to impact heavily on an already vulnerable community.
The FMA emphasises that its regulatory approach is a "top of the cliff" strategy. That is, it aims to lift standards of market participants by fostering a culture of willing compliance and information sharing. Monitoring and surveillance is performed on a risk-basis and focuses on whether or not the desired outcomes for customers are delivered.
In addition to the FMA Document, Commerce Minister Craig Foss has announced further changes to the financial service provider regime. The changes include granting new powers to the FMA to investigate financial providers and prevent or remove registration. In particular, persons with overseas criminal convictions for theft, fraud, or money laundering (within the past five years) will be unable to register. These changes will likely require new legislation to be introduced to Parliament. For further information, see here.