FMA promises to park at top of cliff

The Financial Markets Authority won’t be spending all its time “scratching through the remains of dead bodies,” its regulatory boss Sue Brown says.

Thursday, September 29th 2011, 10:58AM 4 Comments

by Niko Kloeten

Brown, the FMA's head of primary regulatory operations, spoke at a Workplace Savings NZ and Women in Super breakfast in Auckland this morning, where she outlined what providers should expect from the new regime.

Compared to its predecessor the Securities Commission, the FMA is "much more focused on the top of the cliff," she said, although she acknowledged the FMA couldn't, and shouldn't, stop every failure,

"One of the things that does keep me awake at night is where the next thing is going to come from."

She said a big part of this focus would be compliance monitoring, which would be about "looking at the providers themselves, not only the providers but QFEs and auditors and statutory supervisors and the NZX.

"These are effectively front-line regulators so the interest we have in these people is different to those who go straight to the retail market."

Brown said there were a number of models being used to sell KiwiSaver and it was important to strike the right balance in order to maintain innovation.

"We will talk to some market participants to see how their distribution model works in practice," she said, adding that the FMA would be focusing on "information-only" sales.

However, she said there was no clear line separating information-only advice from personalised advice.

"Context is vital; the definition of personalised advice points towards context."

Niko Kloeten can be contacted at niko@goodreturns.co.nz

« FMA's targets identified

FMA preparing guidance for share recommendations »

Comments from our readers

On 29 September 2011 at 3:05 pm Amused said:

So, whilst the FMA parks at the top of the cliff and busies itself with compliance monitoring of adviser businesses, providers and QFE's (the vast majority of which will no doubt be operating correctly) at the bottom of the cliff consumers dealing with unregistered loan sharks will continue to be lead down the garden path. Great to see that the regulators have got their priorities in order. Window dressing for the politicians can come later quite frankly. How about focusing instead on the key areas of concern that face the industry at present. Is that too much to ask?

On 29 September 2011 at 7:57 pm Curious said:

Lets not forget the bottom dwelling property spruikers and the leveraged gold and silver promoters as well!

On 30 September 2011 at 12:13 pm Paul said:

And lets not forget the "secure your future! control your destiny! Open an FX trading account today and learn to trade like a pro"

On 22 October 2011 at 5:00 pm Pat said:

So, the FMA are effectively washing their hands of any responsibility for the sharks who slipped through the Securities Commission's net. Nice one.

Add your comment:

Your name:
Your email:	Not displayed to the public
Comment:
Comments to Good Returns go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Printable version

Email to a friend