The FMA has released its report into the key issues and themes emerging from its investigations and enforcement activities from 1 July 2012 to 31 May 2013.
During this period the FMA received 1273 complaints and 2923 enquiries. The majority of the complaints and enquiries related to the provision of financial advice, securities issuers and foreign exchange dealers, with the largest areas of concern relating to the following three issues:
- Holding of client money by financial advisers
- People or entities operating without the necessary authorisation or registration
- Alleged fraud by foreign currency changers.
A priority for the FMA has been completing the finance company investigations which the FMA had inherited. However, matters associated with failed finance companies only accounted for 15 percent of the FMA's inquiries and investigations, with other matters including financial advisers, secondary markets, financial reporting, illegal offers to the public and issues arising on the perimeter of regulation. This reflects the change in the FMA's enforcement focus from issues of the past, such as the failed finance company proceedings and investigations, to current issues impacting the market.
The FMA has noted that a theme which runs through all the investigation and enforcement activities discussed in its report is the "failure of certain market participants to meet the standards of behaviour which we consider New Zealanders ought to be able to expect from financial markets participants." The FMA's enforcement activities have identified the need for market participants to act professionally and diligently, to be accountable for their actions and to put investors' interests first. The FMA has stated that it believes its role in carrying out enforcement activity is not only to deter unlawful conduct, but also to lift market standards. A copy of the report can be found here.