20 December 2023 • 3 minute read
FMA Publishes 2023 Annual Report
The Financial Markets Authority – Te Mana Tātai Hokohoko (FMA) has published its annual report for the year ended 30 June 2023 (Annual Report). The Annual Report discusses the FMA's key areas of work throughout the year, including new regulatory regimes and enforcement activity, as well as its performance and responsibilities.
Some of the key takeaways from the Annual Report are:
- The FMA: The 2022/23 year was the first full year for the FMA with Samantha Barrass as Chief Executive. Notably, there was a restructuring of the FMA which resulted in changes to senior leadership personnel and organisational roles.
- Enforcement: The upward trend of FMA enforcement action continued, from formal warnings through to stop orders, licence cancellations and court proceedings. Prominent examples included court proceedings against insurers for failing to honour product terms, warnings against wholesale property scheme managers in relation to eligible investor certificates and censures for alleged breaches of anti-money laundering and countering the financing of terrorism rules.
- New regulatory regimes: The FMA has done work on several new regulatory regimes. Preparations were made for licensing under the new conduct of financial institutions regime (CoFI), guidance was issued for the first year of mandatory climate-related disclosures (CRD), and the entity-based licensing regime for financial advisers (also known as FSLAA) was bedded down.
- Reviews and reports: The FMA conducted reviews and issued a number of reports during the year such as the cross-sector thematic review on governance in conjunction with the Reserve Bank (examining policies, processes, and operational practices of boards of financial institutions), the review of "ethical" managed fund disclosures , and a review of wholesale offers into property-related investments.
- Guidance: In addition to its reviews and reports, the FMA issued a volume of new guidance setting expectations for the regulated population. The topics included cyber and operational resilience, liquidity risk management, climate related disclosures, intermediated distribution of bank and insurance products and financial audits.
- Fair Outcomes Consultation: during the year the FMA made preparations for its pivot to "outcomes focused" regulation, including the guide it is currently consulting on. This evolution of the FMA's previous "conduct" based regulatory approach signals an intended change, the nature and implications of which remain to be seen.
If you have any questions regarding the FMA's Annual Report or would like any further information, please get in touch.
