The focus of regulation by the Financial Markets Authority is not just on compliance but also on what it is trying to achieve, the regulatory agency's chief executive Ms Samantha Barrass.
In an address at the Financial Services Council 2024 Conference last week, Ms Barrass said, “That is the ultimate way in which we will deliver well-focused regulation, keep costs down, and make sure we are not unnecessarily cutting across innovation.”
She said that it is important the FMA’s regulatory approach is clear and understood, particularly during a period of regulatory change. The FMA has been designated to take over responsibility for the the Credit Contracts and Consumer Finance Act (CCCFA) from the Commerce Commission.
“We will have a role in overseeing the financial products that touch most New Zealanders’ lives,” she said, adding, “Whether it is securing a loan for a car, getting professional financial advice, buying your first home and insuring it, insuring yourself and your livelihood, or saving and investing for your retirement and other financial goals, the FMA will have a key role in making sure New Zealanders have trust and confidence in the financial services sector.”
Regulatory costs
Ms Barrass said that the FMA would keep an eye on unnecessary regulatory burdens. She added, “It’s why, for example, we have provided the Government with a list of proposals where both our time and yours, can be used more valuably — while still ensuring consumers and investors are protected.”
Giving an example, she said that the FMA was considering a class exemption for green, social, sustainability, and sustainability-linked bonds, which offer investors an additional non-financial benefit. The sector has told the FMA that there should be a more efficient route to market for these bonds.
“This has the potential to avoid unnecessary compliance costs, as well as incentivise the development of this market. When we hear fair arguments like these, we are prepared to reflect on them and consider changes accordingly,” she said.
Guidance
Ms Barrass said that FMA guidance raises awareness, promotes discussion, and endeavours to lift standards across a sector. She added, “We do not expect firms to simply leave this guidance to their legal and compliance departments. The audience for this guidance, and in fact any guidance we publish, should be senior leaders within your organisations, so they can take a strategic view of what is needed. We are not looking for tick box compliance to our guidance. Our guidance is just that, a guide to help inform how you work.”
She ended her address by saying, “As the conduct regulator for New Zealand’s financial markets, our vision is more New Zealanders than ever believing that the financial services sector is working well for them.”