FMA : Everything you need to know

The FMA is New Zealand’s government agency responsible for financial regulation. It is in charge of enforcing securities, financial reporting and company law, as well as applying company law to financial services and securities markets.

The FMA also regulates securities, exchanges, financial advice, brokers, auditors, trustees and issuers, including the issuers of KiwiSaver and other superannuation schemes. It is a member of New Zealand’s Council of Financial Regulators along with the Reserve Bank of New Zealand (RBNZ), New Zealand Treasury and MBIE.

The FMA was established on May 01, 2011, as part of the Financial Markets (Regulators and KiwiSaver) Bill, passed by New Zealand parliament on April 07, 2011. It was introduced as a “super regulator” to restore investor confidence following the global financial crisis, and in response to a slew of criticism of the previous financial regulatory regime, which failed to prevent massive investor losses between 2006 and 2010.

The FMA is also responsible for maintaining public trust and confidence in New Zealand’s financial markets. It is one of New Zealand’s four main regulators, the other three being the Reserve Bank of New Zealand, the Commerce Commission and the Commission for Financial Capability.

There are a number of areas which the FMA specifically doesn’t cover, and that are dealt with by other regulators, dispute resolution services or advice bureaus. These include any advice on financial service providers, investment decisions, property transactions and scams, and the prudential supervision of banks and insurers.

The FMA is controlled by a board appointed by the Minister of Commerce, currently Hon Kris Faafoi.

FMA in the news

2011 – The FMA is established through the Financial Markets (Regulators and KiwiSaver) Bill, hires a new head of enforcement and head of strategic intelligence, moves to file civil proceedings against the directors of Hanover group.

2013 – CEO Sean Hughes announces that he will not seek re-appointment. Rob Everett is appointed the new chief executive.

2014 – The FMA issues its first peer-to-peer lending service license to Harmoney, an Auckland-based company.

2015 – The FMA welcomes the review of legislation governing financial advisers, announced by the then-Minister of Commerce and Consumer Affairs, Paul Goldsmith. The release of the terms of reference signal the start of an 18-month review process.

2016 – The FMA releases its first report into sales practices within the life insurance sector, calling attention to the potentially damaging effects of replacement business.

2017 – The FMA decides to grant exemptions to enable companies to provide personalised robo-advice, aiming to begin the process in early 2018.

2018 – The FMA and the Reserve Bank initiate a joint conduct and culture review into New Zealand’s banks and life insurers, following the misconduct uncovered as a result of the Australian Royal Commission. The review into banks is completed in November, revealing a ‘small’ amount of issues in relation to conduct.

2019 – The FMA and Reserve Bank complete their review into life insurers, stating that the results portrayed the sector in a ‘poor light.’ They release their findings on life insurer responses in September, expressing disappointment with the ‘lack of urgency’ in those responses.

Key people (as of 2019)

Rob Everett – Chief Executive
Everett was appointed CEO of the FMA in 2013. He was previously a director with Promontory Financial Group, a regulatory consultancy, and spent 17 years at Bank of America Merrill Lynch. His career journey has spanned Europe, Asia and North America, and he is originally from the UK.

Brad Edley – Chief Operating Officer
Edley has a long breadth of experience as a senior finance executive, both in New Zealand and overseas. His most recent role was as group SFC for Finzsoft Solutions, and he previously spent time at Mondelez International and Merck. Edley currently leads the FMA’s day-to-day finance, technology and project management functions.

Liam Mason – Director of Regulation
Mason is an expert in securities law and corporate governance, and currently oversees the licensing and supervision of all financial markets participants. He is also in charge of the FMA’s compliance frameworks, contacts and intelligence functions.