Mayhew resigns, disappointed to miss FMA chair role

Commissioner for Financial Advisers David Mayhew has tendered his resignation to Commerce Minister Simon Power, saying, "I was personally disappointed not to be appointed to the chair of the FMA."

Tuesday, February 22nd 2011, 5:58AM 3 Comments

by Benn Bathgate

He said he was disappointed to miss out on the role, awarded to Simon Allen, as he believed it would have "allowed me to continue to serve the New Zealand public in a way that I believed made best use of my skills and experience."

Mayhew said he would step down from his role on April 30 or earlier, depending on the establishment of the Financial Markets Authority (FMA).

Mayhew said that in his judgement, "the substantive work of the Commissioner will be completed by April and the remaining work can be subsumed by the FMA as soon as it is established."

Power said, "I'd like to thank him for the significant contribution he has made to the financial services industry and in helping pave the way for the introduction of the FMA."

In his resignation letter Mayhew said the implementation of the Financial Advisers Act (FAA) regime was well under way.

"By the end of March, the Commission will have granted Qualifying Financial Entity (QFE) status to those financial service firms who have applied; and the licensing regime for AFAs will be in full swing," he said.

"What will remain will be essentially executive functions that will fall to the CEO of the FMA to take forward with the support of the current Securities Commission FAA team."

He said the Disciplinary Committee would be unlikely to have to hear any complaints before the end of the year as none had been received to date.

Considerable lead time is required to develop a disciplinary load case, and in the meantime, "rules to regulate the procedure of the Disciplinary Committee will be approved by the Committee in the next month or so."

Mayhew was appointed to the role back in January 2010 to oversee the drafting, approval and implementation of the Code of Professional Conduct for Authorised Financial Advisers (AFA).

The Code outlines the minimum standards of competence, knowledge and skills, ethical behaviour, client care and professional training requirements that AFAs must comply with and came into effect on December 1, 2010.

He said it has been a privilege to hold the role of Commissioner for Financial Advisers during the challenging time of designing the new regulatory framework and that he intended to return to London to seek consultancy work.

"I will continue to follow developments in New Zealand and, should an opportunity arise in the future where you think I might be able to assist in that capacity, I would be happy to consider it."

Benn Bathgate is a business reporter for ASSET and Good Returns, email story ideas to benn@goodreturns.co.nz

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Comments from our readers

On 22 February 2011 at 8:00 am Peter Lee said:

In my dealings with David I found him to be knowledgeable, insightful and genuinely committed to the creation of a more professional financial services profession. He came across as personable and down-to-earth, which has been so valuable given all that is happening.

On 22 February 2011 at 9:13 am btw said:

A real lost opportunity. Govt. had a golden chance to demonstrate to the investing public that they were going to turn over a new leaf. Instead they reappoint the people that oversaw the current mess. Shame. I guess funds will just continue to stay invested in property and overseas.

On 25 February 2011 at 12:06 am Consumer Eyes said:

It was coming - Treasury runs NZ and Simon A is a free-market supporter. Instead David said -

"When I make a comment that the free marketeers have had too much sway, it's not because I come from a 'clamp down the market' theory - quite the opposite. Regulation works best when it works with the market, but you need it. Markets without regulation deliver bad results, and we've seen that."

But someone, he says, needs to tell Treasury and the Business Roundtable that the Chicago school of economics, and its belief in the efficient market, no longer holds sway.

"I'm not here to fail and I'm not here to be a whipping boy ... If I don't get the [chairman's] job because I speak out too much, then that's fine too. Someone else can make that call."

:....who says influence in high places does not exist in NZ (otherwise known as ...I wont say it)