1 Comment 1 Commentby Susan Edmunds
The Productivity Commission was asked to make recommendations to improve the operation of regulation.
It has issued its final report, which found regulation quality checks were under strain, the country’s regulation struggled to keep up with change, more attention should be paid to the skills of regulatory staff, and that monitoring of regulators was not up to scratch.
The report found only 23% of the 1526 businesses surveyed agreed “regulatory staff are skilled and knowledgeable” and 25% agreed “regulators understand the issues facing your organisation”.
“Business surveys showed low levels of confidence in the skills and knowledge of regulatory staff. Regulatory agencies face challenges in attracting, training and retaining key staff to meet these challenges. This is particularly the case in the finance sector, where the Reserve Bank of New Zealand and the Financial Markets Authority referred respectively to their vulnerability to losing specialist staff and difficulty in attracting people from overseas,” the report said.
In the financial sector, submitters were concerned with the level of overlap in regulation.
They lamented the large number of organisations involved, unclear boundaries between many of them, and the lack of guidance on how they would work together.
The report cited the overlap between the NZX and the FMA. NZX firms are regulated under the NZX Participant Rules. The same firms are also brokers under the Financial Advisers Act.
An ANZ submission said the rule sets and each regulator’s interpretation conflicted so compliance with one set of rules could be a breach of another. It was unclear which regulator’s views would prevail in the event of conflict, an ANZ submission said.
The second issue identified was two organisations - the Commerce Commission and FMA - having responsibility for preventing and prosecuting misleading and deceptive conduct in the financial markets. In the case of advisers, the Insurance Council of New Zealand argued such conduct could be covered by three different regimes – the Financial Markets Conduct Act, the Financial Advisers Act, and the Consumer Law Reform Bill.
The FMA said: “We think the amalgamation of agencies operating in the same part of the market with similar or overlapping responsibilities, is not only more economically efficient but also more likely to generate consistent regulatory outcomes.”
It said there had been opportunities explored to combine regulatory activities across agencies but none had been implemented either due to an absence of provable economic benefit or diffuse levels of political support.
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May i suggest a training for the regulators, be an adviser for a year without your fix-income and be remunerated on commission or fee only.