14 December 2023

FMA Update

This FMA Update is the last of 2023, a year which has been challenging for many New Zealanders. 

It's been a busy year for the FMA, as we work towards our vision where more New Zealanders than ever believe the financial sector is working well for them. 

We’ve made progress in the latter half of the year to move towards outcomes-focused regulation, which will be progressively more apparent in all facets of our work over the coming years. We're looking forward to hearing from the sector and stakeholders in the current consultations - you can read more about this in the item below. 

During the past year we've also bedded in our new structure and I'm delighted to have welcomed many talented team members to the FMA. 

I wish everyone a happy and safe summer break and I look forward to working with you all in a successful 2024. 

Ngā manaakitanga,

Samantha Barrass, Chief Executive

New podcast: Outcomes-focused regulation 

In this special episode of our 5 mins with the FMA podcast, we take a look at outcomes- focused regulation with Liam Mason, FMA Executive Director of Evaluation and Oversight and General Counsel. 

You can listen to the discussion here

The FMA is moving towards an outcomes-focused approach to regulation and part of this change is setting out ideas around fair outcomes for consumers and markets. 

Our new guide: "Fair outcomes for consumers and markets" introduces outcomes-focused regulation and what it means for engagement with industry. It's open for consultation now and describes seven fair outcomes for consumers and markets we consider providers should be working towards. 

We're seeking feedback and asking for submissions, with Consultation closing Friday 1 March, 2024.

Go Financial Solutions censured for breaching licence obligations 

Christchurch-based financial advice provider Go Financial Solutions Limited has been censured for failing to comply with several obligations under its licence.  

Go Financial Solutions provides advice on health, life and business insurance and mortgage lending. Its primary clientele is the Filipino community, including non-residents on working visas.  

During a monitoring review earlier this year, it was found that Go Financial Solutions: 

• Had inadequate record keeping in relation to advice given to its clients 
• Failed to gather sufficient information about a client’s circumstances and was unable to demonstrate that recommendations made to clients were suitable  
• Failed to ensure its clients understood the financial advice they received 
• Failed to exercise care, diligence and skill when providing financial advice to its clients. 

Go Financial Solutions is now required to submit an action plan outlining the steps it will take to remedy the breaches and to ensure it does not breach its licence obligations in the future. The FMA will monitor Go Financial Solution’s compliance and completion of the action plan.  

Medical Assurance Society to pay $2.1m penalty for false and misleading representations

Medical Assurance Society New Zealand Limited (MAS) has been ordered to pay a pecuniary penalty of $2.1 million for making false and/or misleading representations to some customers, following proceedings brought by the FMA.

MAS admitted earlier this year it had breached the Financial Markets Conduct Act 2013 by failing to correctly apply multi-policy discounts and no claims bonus discounts to some customers who were entitled to them, failing to correctly apply inflation adjustments on some customer policies, and miscalculating benefit payments.   

David McEwen - Permanent stop order 

A permanent stop order has been made against David Elgar McEwen and entities associated with him (McEwen and Associates). 

The FMA is satisfied that restricted communications made by McEwen and Associates relating to offers of financial products: 

• Were false or misleading, or likely to mislead or confuse, 
• Contained a material misdescription or material error, 
• Did not comply with the Financial Markets Conduct Act 2013 with respect to unsubstantiated claims made as to the value of the McEwen and Associates financial products offered. 

The stop order revokes and replaces the interim stop order issued to McEwen and Associates in November 2023. The permanent stop order will remain in force until such time the FMA varies, suspends, or revokes it.  

Accredited body reports: CPA Australia and NZICA

The FMA is responsible for ensuring accredited bodies are effective in their role as frontline regulators of domestic licensed auditors and registered audit firms.

Our annual reports on the audit regulatory systems of CPA Australia and the New Zealand Institute of Chartered Accountants (NZICA) have now been published, covering the period 1 July 2022 to 30 June 2023. 

SGX-DT market operator review

SGX-DT is licensed by the FMA as an overseas regulated market. We regularly review and report on how well SGX-DT is meeting its licensed market operator obligations.

We have just published our latest report, for the period 1 July 2022 to 30 June 2023.

Annual report

Our annual report for the year to 30 June 2023 has now been published.

It captures the FMA’s delivery of core activities to monitor and supervise firms for conduct, implement new legislation, publish guidance to industry, enforce the law, and provide resources for investors and consumers.

Class exemptions

The FMA has renewed an existing exemption for ASX-listed issuers with a secondary listing on the NZX.  The Financial Markets Conduct (Same Class Offers ASX/NZX-Quoted Financial Products) Exemption Notice 2023 facilitates offers of financial products of the same class as ASX-quoted financial products on an equivalent basis to the same class exclusion in Schedule 1 of the Financial Markets Conduct Act 2013.

The FMA has also granted a new exemption for climate reporting entities who are listed issuers or registered banks.  The Financial Markets Conduct (Requirement to Include Climate Statements in Annual Report) Exemption Notice 2023 will exempt such entities from the requirement to include a copy of, or link to, their climate statements in their annual report for a period of two years. 

Agreement signed with global standards body FMSB 

The FMA has signed a Consultation Agreement formalising cooperation with the Financial Markets Standards Board (FMSB). 

The FMSB is the leading market-led, global standards body for fair and effective wholesale financial markets and is a not-for-profit, privately-owned company. Its core mission is promoting fair and effective wholesale fixed income, currencies and commodities markets for all participants in those markets.

FMA offices are closed from midday, Friday 22 December, and will reopen 8.30am, Monday 8 January 2024. Complaints and enquiries can still be lodged during this period by emailing [email protected], however they will not be actioned until 8 January.

If you require urgent assistance, please call 0800 434 566 from 3 January 2024.

                        Investor warnings and alerts

• Ocean Trade
• Cato Asset Management – Imposter website
• Bronte FX - Imposter website
• Co-operative Bank – Fake term deposits
• Bank of China - Fake term deposits
• NZ Best Rates
• Cypress Securities and Exchange Commission - Imposter websites update

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