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BUDGET: No additional funding for FSLAA implementation

The Financial Markets Authority has had no increase in its funding to assist with a transitioning all financial advisers to a new licensing regime.

Thursday, May 30th 2019, 2:27PM 2 Comments

It is allocated $36 million for operating costs and another $2 million for its litigation fund and this is unchanged from last year.

“The single overarching purpose of this ($36 mill) appropriation is to support well-functioning financial markets through the activities of the Financial Markets Authority,” Budget documents say.

Of this $36 million, $16.07 million is earmarked for “Performance of Licensing and Compliance Monitoring Functions”.

This category is limited to statutory functions relating to licensing of market participants and risk-based monitoring of compliance, including with disclosure requirements under financial markets legislation.

The next biggest allocation is for “Performance of Market Analysis and Guidance, Investor Awareness, and Regulatory Engagement Functions”.

This relates to market intelligence, guidance, investor education, and regulatory and government co-operation and advice.

Finally $6.2 million is for “Performance of Investigation and Enforcement Functions”.
This category is limited to statutory functions relating to the investigation and enforcement of financial markets legislation, including the assessment of complaints, tips, and referrals.

Just over $43 million is being allocated to the Commerce Commission (excluding those related to telecommunications), and just under $15 million to the Commission for Financial Capability, the External Reporting Board, and the Takeovers Panel to perform their statutory functions.

NZ SUPER FUND CONTRIBUTIONS BELOW TARGET
Contributions to the NZ Superannuation Fund will continue under the current government but at a lower rate than prescribed.

Over the next five years it plans to invest $9.6 billion into the NZ Super Fund, compared to the $11.6 billion which is prescribed to be contributed.

However, the government defends the lowering contribution, saying the previous National government cost the fund $24.1 billion in lost contributions and investment returns by stopping contributions between 2010 and 2017.

The Budget says contributions are expected to increase the size of NZ Super to $64 billion by 2022/23.

Lower contributions in the short term will reduce the government’s borrowing requirements and consequently debt, which supports the Government’s ability to meet the future fiscal fiscal pressures of an ageing population.

“Contributions below those prescribed by the formula will lead to the legislated formula calculating higher contributions in future years.”

 

Tags: FMA

« Staff: It was all Kloogh's responsibilityBUDGET: Govt says National cost Super Fund $24.1 billion »

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Comments from our readers

On 30 May 2019 at 9:18 pm Winka said:
Regulation (or excessive regulation) is the proven killer of progress. The financial industry is suffering from the "conditioning" of accepting the over-regulation we experience in recent years. EG: Regulation existed prior to the GFC in the form of a prospectus, and the GFC began in the largest economy in the world and spread through the world.

A prospectus tended to provide an often false feeling of security, however there was an obvious breakdown in how they operated, ending with management and directors carrying the can and the all-overseeing Trustees walking away without even a smack over their hand with a proverbial wet bus ticket?

Providing tens of millions of dollars from tax payers is an absolute overkill, and 10% of that amount would suffice?
On 31 May 2019 at 8:58 am Pragmatic said:
Be careful of the butterfly effect: new regs in Australia with see the departure of 50% of advisers within the next 2 years, meaning that many mums and dads will no longer be eligible or able to afford bespoke financial advice.

The systemic pressures and regulatory oversight will be significantly more challenging than it is today

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Last updated: 24 June 2019 8:57am

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