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FMA chief executive Samantha Barrass made it clear, in a scene setting speech in Auckland this week, that under her watch outcomes was the focus for the regulator.
Her predecessor, Rob Everrit, was focussed on conduct from day one of his reign as head regulator.
Barrass acknowledged financial services face “a series of significant milestones, through a period in which central banks around the world are having to take actions, unseen for a long while, to reduce inflation.”
But 2023 was the year three important pieces of regulation get implemented in New Zealand. These are the full financial advice regime, the conduct regime for banks and insurers and the Climate Related Disclosure regime.
Barrass surprised many people when she made it clear that outcomes is what it will measure the sector on and regulations come in behind that.
“An outcomes-focused approach does not start at what the legislation says, or a rule book says, it starts with what is the right outcome for a strong sector that works well for all.
“This approach ensures regulations and rules are a means to an end, rather than an end in themselves. The real end is fair outcomes.”
As for what outcomes means to her, she said:
“An outcomes-based approach is about the regulator and regulated working together to deliver the right outcomes for all New Zealanders when they interact with financial service firms. It’s about working together to ensure customers get the right products, at the right time, and these meet their expectations.”
While she said a couple of times that the regulator and the sector were working well together, FMA executive director for regulatory response, Paul Gregory told the audience there needed to be tension between the sector and the regulator.
"Our role inevitably involves tension with industry, because to achieve the purpose we have been given and the vision we have chosen, we impose on private firms. Mostly, on their latitude to pursue short-term economic interests."
"If any regulatory matter does not involve tension with industry to satisfactorily resolve, it probably didn’t require regulation in the first place."
Gregory also said the FMA is prepared to take enforcement action even if it loses.
"Even if we don’t win, a case can help clarify the law and provide certainty for the market and consumers," he said.
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does it concern any of you that the regulator will bet money from the fees collected on a dead horse?