Regulation of financial services promotes greater choice

Regulation of financial services promotes greater choice and boosts productivity

The Financial Markets Authority (FMA) CEO Rob Everett has called on business to support New Zealand’s new regulatory regime - in financial services and in business generally - so that New Zealand enjoys more sustained, stronger economic growth.

Mr Everett told Trans-Tasman business leaders, at a session in Auckland today, that the New Zealand economy was recovering steadily from the post-GFC recession. He also noted the important role the regulator plays in contributing to the government’s priorities to build a more productive economy.

The FMA’s role in the growth agenda is to help promote fair, efficient and transparent markets and encourage informed participation in the markets. “Where people have confidence in the markets and trust in the conduct of finance industry professionals they are far more likely to participate and invest in productive assets,” said Mr Everett.

But he urged businesses not to forget the lessons of the pre-2008 boom in New Zealand, including the collapse of the so-called finance companies and the losses suffered by individual investors and the economy. These losses – among other factors - demanded a major overhaul of the legislation governing financial markets and service providers.

He said many of the provisions in the newly-revised and comprehensive regulatory regime - including the Financial Markets Conduct Act 2013 – were designed to ensure the benefits of an improving economy were directed into more productive uses.

“The FMA is not only tasked with monitoring compliance, enforcing rules and punishing wrongdoing, we have a big job in helping to expand New Zealand capital markets.”

Mr Everett said he didn’t accept arguments that regulation necessarily reduced productivity or profitability.

“The regulations that are coming into effect throughout 2014 are designed to promote greater protection for investors and consumers, and also to provide greater choice and opportunity for investors and businesses. We want to work together with the industry and businesses to help rebalance the economy in favour of productive investments and commercial enterprise.”

Full Speech available here

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