The Financial Markets Authority (FMA) has underlined the importance of good conduct in its annual report.
The report for the financial year ending June 30, highlights a number of key activities that took place, including the launch of the joint FMA/RBNZ Culture and Conduct review of banks and life insurers.
“The conduct-related events of the last year – driven by the Australian Royal Commission – have been extraordinary and are probably unprecedented. The importance of good conduct has been clearly underlined,” says Rob Everett, FMA Chief Executive.
“The FMA is determined to play its part to ensure this opportunity for customer-centric conduct to be permanently embedded in the culture of the financial sector is not lost.”
In addition to the focus on conduct within financial services firms, the report also sets out the FMA’s work in the last year including:
- A series of reports on conflicted conduct in the insurance industry. Practices prevalent in the industry currently do not easily align with promoting customer interests,
- Work on the quality of corporate governance and disclosure,
- The readiness of both organisations and individuals who give financial advice for the planned changes to the regulation of financial advice. The FMA has presented information on the upcoming reforms in a series of nationwide forums,
- 250 supervision monitoring engagements with providers,
- While we found audit quality has improved since 2013, there are still inconsistencies in the quality of individual audits.
“Conduct regulation is no longer a new concept in New Zealand’s financial services sector,” says Mr Everett.
“All market participants should be aware of their licence conditions and obligations. Where we see non-compliance, our response will be proportionate but lack of time or experience is not a valid excuse.”
The period covered also saw the FMA in court on a wide range of matters. This included criminal proceedings related to insider trading and the final case related to the collapse of the finance companies.
Other matters before the courts included filing charges against two companies and their New Zealand based directors for holding out that a business is registered on the FSPR. The FMA also referred three cases to the Financial Advisers Disciplinary Committee.