DLA Piper submits against proposed FMA powers in FMC Amendment Bill

We recently made a submission to Parliament’s Finance and Expenditure Committee on the Financial Markets Conduct Amendment Bill (the Bill).

Amongst other matters, the Bill would grant the Financial Markets Authority (FMA) two significant new powers:

• A requirement for any significant transactions or changes in control of licensed firms to have FMA approval before proceeding.
• The authority for the FMA to carry out warrantless and without-notice on-site inspections (effectively allowing the regulator to “raid” private property).

We do not support these proposals. In our view:

• there is no evidence that the additional powers are necessary;
• mandatory regulatory approval for changes in control would create a drag on efficiency and discourage investment; and
• the existing requirement for Courts to issue search warrants is a fundamental constitutional control on the exercise of executive power.

Our full reasoning is set out in our submission, which can be found here.

Please contact us if you would like to discuss the Bill and its implications for your business.