FMA lacking ability to fine

The Financial Markets Authority is struggling with the gap between the softer and heavier powers of civil and criminal prosecution, a report from the Economic Development Science and Innovation Committee says.

Tuesday, April 10th 2018, 5:59AM

by Susan Edmunds

In its review of the Financial Markets Authority for the 2016/2017 year, the select committee said the FMA had raised the point that its counterparts in other regimes had the ability to levy fines.

“As well as issuing an infringement notice, fines can be issued without going through a full legal process. The FMA says it will work with the Ministry of Business, Innovation and Employment (MBIE) to address this issue.”

The regulator also told the committee it expected it would have to police advisers who did not notice their new requirements under under the Financial Services Legislation Amendment Bill or who thought they could get away with advising without a license.

“For an organisation with 178 employees as of June 2017, this would be a big challenge. The authority said it will require extra resource to implement this legislation, and is already in contact with MBIE about staffing resources.”

But the committee said the FMA had told it that the new Financial Markets Conduct Act framework was standing up well.

“Other regulators outside New Zealand regard the system as modern and progressive and a flexible piece of legislation.”

The authority’s revenue in 2016/17 was $29.561 million, of which 94% came from the Crown.

The FMA reported a deficit for the year of $3.4 million, against a budgeted deficit of $5.7m. It is budgeting for a surplus of $0.8m in 2017/18, in part thanks to an increase in baseline funding from July 2017 onwards.

The authority said it was in a reasonably good financial position heading into the 2017/18 financial year.

The Auditor-General recommended improvements to the way the FMA measured its progress against its strategic intentions,

Tags: FMA