FMA sheds further light on end results focus
Those subject to FMA regulation will need to look to the regulator’s annual Financial Conduct Report for clues to its shifting priorities as it focuses its efforts on end results.
Tuesday, March 25th 2025, 6:05AM
by Kim Savage
Those subject to FMA regulation will need to look to the regulator’s annual Financial Conduct Report for clues to its shifting priorities as it focuses its efforts on end results.
The commitment to deliver a yearly explainer is contained within the FMA’s latest update on its approach to outcomes-focused regulation, after its consultation last year on fair outcomes for markets and consumers received more than 50 submissions from the sector, many wanting to see more clarity around how the idea of “fair outcomes” would translate through into the FMA’s approach to regulation.
“The approach focuses on the most significant risks and opportunities for New Zealand businesses, investors, and consumers, helps reduce unnecessary regulatory burden on the industry, and provides market participants with greater flexibility in meeting regulatory obligations,” says Clare Bolingford, FMA Executive Director, Regulatory Delivery.
“In this document we have reframed the outcomes in response to the feedback we received, to clarify them and to better show how they link to the FMA’s main statutory objective and the purposes of our legislation.”
The annual Financial Conduct Report will serve as a heads-up to the sector about what risks to outcomes the FMA has identified and in light of those risks, how it intends to regulate. The 2025 report is due to be published in June.
The latest update also outlines how the FMA will approach supervision in 2025, with the regulator saying it will be more forward-looking and wants to better understand and influence how firms manage risk.
Decisions on frequency and nature of supervision will be driven by the impact firms have on the market and the regulator plans to continue with a mix of on-site, in-person and desk-based supervision, as well as carrying out thematic reviews.
Not surprisingly, the FMA has signalled it will prioritise enforcement action against behaviours it sees as likely to have poor outcomes for consumers or the market, over other misdemeanors.
And it has products on the fringes of its regulatory boundaries in its sights.
“This includes wholesale products and services, custody, funds administration and crypto-asset services. These areas account for many of the complaints we receive,” outlines the FMA in its update.
“We will look at perimeter conduct through the same lens we apply to our supervised entities, seeking to understand where conduct may pose risks to consumer and market outcomes.
“We will use informal tools to influence perimeter conduct where this is feasible. We will also take action under our fair dealing powers where we see misleading or deceptive conduct.”
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