New powers for financial market super regulator

The Financial Markets Authority will have significant new powers under a bill introduced to Parliament today.

The Financial Markets (Regulators and KiwiSaver) Bill sets out the objective and functions of the new regulator, which consolidates the regulatory functions currently fragmented across the Securities Commission, the Ministry of Economic Development, including the Government Actuary, and the NZX.

It is expected to be passed early next year.

Mr Power has confirmed that under the bill the FMA will be able to publicly enforce duties of issuers, directors, auditors, trustees, and others involved in financial markets, when it’s in the public interest to do so.

“This is a significant new provision which the Securities Commission does not currently have,” Mr Power said

“The new power was specifically requested by the FMA Establishment Board because of a gap it saw in the FMA’s ability to effectively enforce and supervise our financial markets.

“It has become apparent that there have been situations in which misconduct has occurred, but individual investors do not bring civil cases because of the costs and risks involved or because they have limited legal standing.

“This bill will enable the FMA to have the power to exercise a person’s right to bring a civil action against a financial markets participant, where it considers this to be in the public interest.

“The Government will also be able to make regulations preventing products being structured to avoid being supervised by the FMA.”

The FMA will also have increased powers to require that warnings about financial products and providers be included in offer documents and to be published by the people involved.

Mr Power announced in April that the Government was fast-tracking the establishment of the FMA.

“It’s clear New Zealand needs a single market regulator with a culture of visible, proactive, and timely enforcement.

“On too many occasions in finance company collapses we heard of investors' money falling to the floor through gaps between regulators.

“This has undoubtedly damaged mum and dad investor confidence, and the FMA has a critical role in rebuilding that confidence.”

ENDS

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