1 Comment 1 Commentby Susan Edmunds
The Financial Markets Authority, in response to an Official Information Act request, said a number of staff could potentially be tasked with overseeing financial advisers.
“There are 24 members of the supervision team and monitoring of licensed financial market participants is one of its functions,” Joanne Davis-Calvert, head of policy and governance, said.
“The number of staff assigned to monitoring AFAs depends on the risks and harms identified in the market and where the FMA is most required to focus its resources. This is the same approach for every sector we regulate.”
She said, over the past year, the FMA had been focused on implementation of the Financial Markets Conduct Act, and licensing for newly-regulated sectors.
“Therefore, compared to previous years there have been fewer on-site monitoring visits in the AFA sector.”
She said a “handful” of AFAs were visited during the year but the FMA had also assessed the sector by reviewing notifications, reviewing AFA reporting, reviewing QFE annual reports, applications and renewal of status submissions and assessing external inquries regarding AFAs.
“Supervision describes a continuous process of monitoring and interaction. In addition to those listed above, the FMA performs other types of reactive and proactive activities that might not be defined as “monitoring”. These other activities either provide insights into AFAs' compliance or the population more generally, such as responding to a complaint, a breach report, or tip-off. Further, the FMA also undertakes risk assessments of the regulated population, complaints analysis, and conducts thematic reviews – such as the insurance replacement business work which includes monitoring of some AFAs.”
She said the FMA did not have an annual plan to monitor AFAs.
Activities in future could include desk-based reviews of notifications, reviews of annual reports and license applications, on-site monitoring, assessment of inquiries and thematic reviews.
Davis-Calvert said two cases that had been described as close to being taken to the Financial Advisers Disciplinary Committee a year ago were still “at various stages”. “Further investigation has been necessary and appropriate which has produced further material for the FMA to review and consider.”
She would not reveal whether the FMA was preparing any other cases.
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