CoFI change would give FMA power of onsite inspection without warning

The discussion document issued by the Ministry of Business, Innovation and Employment (MBIE) notes that the Reserve Bank already was recently granted such powers over deposit takers under the Deposit Takers Act 2023 and argues that both regulators should have similar powers.

“The power would not function as a 'search and seizure' power,” the discussion paper says. “All search powers must be proportionate to their objectives and all searches must be carried out by properly authorised and trained officers,” it says.

MBIE says that the FMA's predecessor, the Securities Commission, had such a power and it had been throught that the FMA Act included that power “but court decisions have subsequently clarified that this is not the case.”

Examples MBIE gives of when such powers could be used include when a firm registered on the Financial Services Provider Register is suspected of not having a real place of business in New Zealand.