Financial sector regulation
Chapman Tripp comments on the changes brought about by the Financial Advisers Act, including implications for AFAs and QFEs.
02 September 2016
The NZX review of its Corporate Governance Code, now in the final stages of what has been a meticulous process, is shaping up as a big event.
NZX received 45 written submissions and interviewed 15 small to medium sized issuers. It has accepted the substance of the responses, giving some issues a shove, some a push, some a gentle nudge and setting some aside for later.
The result is a fairly substantial revision, which will help raise governance standards, sometimes in ways that will be challenging for some organisations, but which will be manageable at boardroom level and positive for ‘NZ Inc’.
09 August 2016
The Financial Markets Authority’s (FMA) survey of corporate governance disclosure shows room for improvement – particularly in relation to listed companies’ remuneration policies. It is also a useful tool for achieving that improvement.
05 August 2016
Listed companies need to be more transparent about remuneration policies, Chapman Tripp says.
04 August 2016
Good conduct in financial markets is a key focus of the Financial Markets Authority (FMA), now that the Financial Markets Conduct Act 2013 (FMCA) is nearly implemented.
The FMA is seeking feedback on its new ‘Guide to the FMA’s View of Conduct’, published following discussions with market participants, which highlighted a need for better understanding of how the FMA expected to approach good conduct issues.
The Guide clarifies key concepts for financial service providers the FMA regulates to focus on when considering whether their businesses are engaging in good conduct. It shows what the FMA will be looking for when it comes to enforce the FMCA’s conduct obligations.
The Guide should be given careful consideration by directors and senior managers of all licensed providers, as part of determining what constitutes good conduct in the context of their particular business and how they demonstrate on an ongoing basis that they meet their obligations under the FMCA.
04 August 2016
Guidelines released by the Financial Markets Authority (FMA) around conduct in financial markets were created without clear relevant statutory basis and are open to subjective interpretation, a Chapman Tripp partner says.
15 July 2016
Changes recommended to the legislation underpinning the financial advisers’ regime should produce a simpler system, easier for the public to understand and more modern to the extent that it will permit robo-advice.
But much will depend on the detail, most of which has yet to be finalised.
We outline the main reform directions.
Any exposure draft of the proposed legislation is expected to be released in the coming months. This will create the next opportunity to provide submissions.
01 July 2016
As New Zealand’s second stock market manipulation case – the civil action by the Financial Markets Authority (FMA) against Mark Warminger – heads to court in September, we provide a detailed analysis of the applicable legislative and regulatory regime and of relevant case law here and internationally.
01 July 2016
A detailed survey by the Financial Markets Authority (FMA) indicates that there is a significant amount of churn in the life insurance industry, to the possible detriment of consumers.
Many people will be unsurprised by the finding, but will appreciate the research to back up their impressions. The empirical evidence provides a helpful measure of the extent of the problem, and should provide a solid foundation for future reforms.
The next challenge for regulators is what to do with the results, particularly as part of the Financial Advisers Act review and the FMA’s on-going focus on improving market conduct.
17 June 2016
From 1 July, the Financial Markets Authority (FMA) will perform its audit quality reviews in-house, using FMA staff and contractors.
Previously the work has been contracted to the New Zealand Institute of Chartered Accountants. The FMA will maintain the same auditor regulation focus as has applied in the past and will aim for the same three year review cycle.
29 February 2016
The Financial Markets Authority (FMA) has proposed various exemptions in relation to overseas issuers.
22 February 2016
We have reviewed the Financial Market Authority's consultation paper concerning a possible class designation of investment company shares to MIPs in MISs (Consultation Paper).
02 February 2016
The Ministry of Business, Innovation and Employment (MBIE) has sought feedback on proposals to reform the registration requirements in the Financial Service Providers (Registration and Dispute Resolution) Act 2008.
01 December 2015
The Financial Markets Authority (FMA) audit quality annual review for the June 2014 to 2015 year finds that there is significant work still to be done. While the number of firms performing at a good standard has risen, the majority are still falling short in some aspects of their performance.
26 November 2015
The Options Paper released yesterday for the review of the financial advisers regime provides three scenarios for change ranging from modest to sweeping.
However the “no commissions bullet” seems to have been dodged – for now.
We outline the reform proposals.
18 November 2015
The Financial Markets Authority (FMA) report for the June 2014-2015 year on Authorised Financial Advisers (AFAs) and salespeople finds that - while compliance with the expectations of the Financial Markets Conduct Act (FMCA) and the Financial Advisers Act (FAA) is good - there is room for improvement.
01 October 2015
The first appeal against deregistration by a financial services provider has succeeded after the High Court found that the Financial Markets Authority (FMA) failed to observe principles of natural justice.
31 August 2015
The Financial Markets Authority (FMA) investigations and enforcement report for the financial year ended 30 June 2015 shows a regulator moving from a “scrutinise and prosecute” model to a more sophisticated use of early engagement and intervention, focussed on preventing harm rather than cleaning up the mess afterwards.
16 July 2015
The Financial Markets Authority (FMA) has reached for an imaginative solution to protect the New Zealand public against a New Zealand couple who are already subject to banning orders in Australia.
14 July 2015
The Financial Markets Authority (FMA) has made imaginative use of its power to accept enforceable undertakings to achieve the equivalent of a banning order against a New Zealand couple for breaches which occurred in Australia.
03 July 2015
Over the last couple of years, we have developed the habit of periodically pushing up the periscope to try to determine the ‘big five’ insolvency issues on the horizon.
Below is a retrospective assessment of how we did last time and our best guess as to what will dominate the next 12 months.
08 June 2015
The high level of enforcement activity by the Financial Markets Authority (FMA) last month may become the new normal as we transition fully into the Financial Markets Conduct Act (FMCA).
04 March 2015
The Terms of Reference for the much-anticipated review of the Financial Advisers Act 2008 (FAA) and the Financial Service Providers Act 2008 (FSPA) are now out - and seem to offer a prospect for genuine reform.
The Ministry of Business, Innovation and Employment (MBIE) will lead the review, which will run over 18 months. A discussion document will be released in May.
03 February 2015
The Financial Markets Authority (FMA) and the OECD are updating their corporate governance guidelines from 2004.
The FMA’s revised guidance, released before Christmas, is a stop gap measure as FMA will conduct a second review to incorporate changes from the OECD update, which is scheduled to be completed later this year.
31 October 2014
A key area where the Financial Markets Conduct Act (FMCA) improves on its predecessor legislation is in the liability regime.
17 October 2014
The Financial Advisers Act 2008 (FAA) had a difficult birth, requiring several Supplementary Order Papers and a highly unusual eleventh hour “Pre-Implementation Adjustments Bill”. Partly in acknowledgement of the risks implicit in such a process, a clause was inserted into the Act promising a review by the Ministry of Business, Innovation and Employment (MBIE) within five years of the Act’s commencement. MBIE plans to initiate public consultation on this next year for completion before 1 July 2016. This is an important chance to drive change in those parts of the FAA regime which have caused confusion or frustration. We will be engaging fully in the review and urge you to do likewise.
07 October 2014
The Financial Markets Authority (FMA) has laid out its expectations for how issuers of debt securities and the managers and supervisors of managed investment schemes should approach their governance responsibilities. The 18-page Guidance Note, released last week, relates to the obligations under Part 4 of the Financial Markets Conduct Act (FMCA). It follows a consultation in June 2014.
01 October 2014
There’s a lot to read but not much new in the 623 page draft regulations for phase 2 implementation of the Financial Markets Conduct Act (FMCA) on 1 December this year. They extend the unsolicited offer regime to crowd funding and peer-to-peer lending and reflect some further thinking in relation to disclosure, governance and the transitional provisions but the changes are largely technical.
06 August 2014
In our FMCA update of 24 July, we indicated that further Cabinet decisions were to be made on the final policy decisions for FMC Regulations.
The Cabinet decisions have now been released and are available here.
05 August 2014
It’s official: New Zealand crowd funding platforms PledgeMe and Snowball Effect have become the first to receive equity crowd funding licences under the Financial Markets Conduct Act 2013 (FMCA). The Financial Markets Authority (FMA) made the announcement in a media release on 31 July 2014, putting New Zealand at the forefront of a worldwide equity crowd funding movement. Entrepreneurs and regulators worldwide will be paying close attention to our initial experiences.
02 June 2014
Public confidence in New Zealand’s capital markets is rising, according to a poll last month by the Financial Markets Authority (FMA), and part of the reason may be a better legal framework.
20 May 2014
Now the big one for market participants – draft point of sale and on-going disclosure regulations under the Financial Markets Conduct Act (FMCA) to cover the core product types.
07 February 2014
The Financial Markets Authority (FMA) wants feedback on how to exercise its regulatory designation and exemption powers for reporting entities under the Financial Markets Conduct Act.
Submissions on the consultation paper close on 28 February 2014.
07 August 2013
A recent High Court of Australia decision has held that conduct with a dominant purpose of maintaining a price level of public securities constitutes unlawful manipulation. It sheds potential light on how the New Zealand courts may interpret market manipulation prohibitions as they apply to on-market trades.
That guidance may be timely as the Financial Markets Authority has just filed its first market manipulation case.
05 August 2013
Lucky timing, and a policy commitment to promote innovation in capital markets, are about to put New Zealand among the early adopters in legislating for crowd funding as a source of equity raising.
The US did it in the Jumpstart Our Business Startups (JOBS)Act, which was passed last year but has yet to come into force. Now our Government has seized the opportunity created by the Financial Markets Conduct Bill (FMCB) to make similar provision here.
25 March 2013
The Financial Markets Authority (FMA) is to be given a bigger tool kit in relation to the financial service providers’ registration regime.
The Government announced the move last week.
08 June 2012
The final guidance note issued today by the Financial Markets Authority will make a useful contribution to the smooth operation of the securities market and reflects well on the FMA and on the consultation process.
The FMA put out a revised draft note in April and called for further feedback after it became clear from the first submission round that there were a number of issues of substance to be addressed.
The result is a much better and more workable document.
05 April 2012
The revised draft guidance note on effective disclosure, released today by the Financial Markets Authority, shows that the FMA has taken on board the criticisms made of its first effort. FMA has also released a detailed summary of its response to submissions. The changes the FMA has made are welcome and address many of the concerns submitters, including Chapman Tripp, raised.
12 March 2012
Chapman Tripp made detailed submissions on the proposed Guidance Note on effective disclosure issued in January for consultation by the Financial Markets Authority.
22 November 2011
The Financial Markets Authority (FMA) has issued draft guidelines to give KiwiSaver managers and trustees a basis for determining that performance fees meet the “not unreasonable” requirement under the KiwiSaver Scheme Rules.
The FMA is seeking comments before finalising and formally publishing the Guidance Note.
The consultation window is tight, with submissions due by Friday 2 December 2011.
16 September 2011
The Financial Markets Authority has released an Enforcement Policy setting out its enforcement priorities and the approach it will take toward the use of its powers.
This is a useful initiative which will provide welcome clarity and transparency. We summarise the main points of the Policy and provide a brief commentary.
12 July 2011
New Zealand’s new “super regulator”, the Financial Markets Authority (FMA), opened for business on 1 May 2011. The FMA’s main purpose, as defined in the establishment legislation, is to promote fair, efficient and transparent financial markets.
Compared to its predecessor agencies, the FMA has been equipped with extensive enforcement powers and capabilities in the service of this objective. This paper explores these powers, their genesis and likely manner of application.
21 June 2011
The Ministry of Economic Development has released a discussion document on the fees and levies to fund the Financial Markets Authority, External Reporting Board, Companies Office and Insolvency and Trustee Service.
The amounts involved are significant, and the basis for calculation is contestable, so we recommend that you take the opportunity to have your say. Submissions are due by 5pm, 8 July.
04 June 2011
The interim freezing orders made against Mark Hotchin’s New Zealand assets in December and the subsequent application by Mr Hotchin and two family trusts associated with him to have those orders overturned have drawn the courts into new territory.
18 May 2011
Bernard Whimp has provided the Financial Markets Authority (FMA) with an easy first scalp in Financial Markets Authority v Carrington Securities LP and in the exercise of its new powers to deal with predatory low ball offers. This is a good result for the FMA as it seeks to win public confidence in the new regulatory regime.
14 April 2011
The regulatory waters will lap higher and colder from 1 May when the new Financial Markets Authority (FMA) is established and related legislative reforms affecting the operation of capital markets commence. This Brief Counsel provides a quick overview of the new landscape and looks at some of the practical implications for financial services.
14 February 2011
The Government must make access to companies securities registers more difficult, prescribe minimum disclosure requirements for unsolicited offers and force those making unsolicited offers to keep them open for a reasonable length of time if low ball offers to unsophisticated investors from the likes of Bernard Whimp are to be thwarted.
So says Chapman Tripp partner Roger Wallis in a submission to Parliament's Commerce Select Committee on the Financial Markets (Regulators and KiwiSaver) Bill.
01 December 2010
The proposed legislation to set up the Financial Markets Authority would create a new right for the "super-regulator" to initiate or take over legal proceedings against financial markets participants on behalf of investors. This article compares the New Zealand approach with the Australian model and looks at the lessons to be drawn from the Australian experience.
06 November 2010
The Government has always been clear that to restore public confidence in New Zealand’s capital markets will require both law change and tougher enforcement of the new framework.
21 September 2010
The legislation to set up the Financial Markets Authority (FMA) creates a new right for the regulator to initiate or take over legal proceedings against financial market participants on behalf of investors. The provision is modelled on Australian law. This Brief Counsel compares the New Zealand approach with the Australian model and looks at the lessons to be drawn from the Australian experience.
17 September 2010
The sweep of powers proposed for the new Super Regulator – the Financial Markets Authority - is spelt out in the Financial Markets (Regulators and KiwiSaver) Bill introduced to Parliament during last week. The Bill reflects key policy decisions on the shape of the FMA, described in our July Brief Counsel, with a few surprises. This Brief Counsel is one of a series that Chapman Tripp is producing on the reform of the legislative and regulatory framework governing New Zealand’s capital markets.
15 September 2010
Roger Wallis, a partner at Chapman Tripp, warns new powers allowing the Financial Markets Authority to prosecute company directors and other market participants, may not be in investors' best interests. The Financial Markets Authority Bill has been tabled in Parliament.
15 September 2010
Securities lawyer Roger Wallis says the Financial Markets Authority Bill, which creates a new super regulator, should result in an effective enforcement system.
09 August 2010
If recent securities law reform proposals are adopted, the new Financial Markets Authority will have the power to enforce core directors’ duties and to initiate civil actions on behalf of investors.
22 July 2010
New detail about the shape of the proposed Financial Markets Authority is contained in a just released Cabinet paper seeking Cabinet’s approval to fast-track the FMA’s implementation ahead of the broader securities law review. This Brief Counsel summarises the new information and evaluates the decision to bring the FMA into being before important decisions have been made regarding the regulatory regime which it will be tasked with enforcing.
02 July 2010
The long-anticipated review of New Zealand’s securities law is now underway with the launch of a 200-page discussion document seeking input on the scale, scope and direction of change. Major reform is on the cards with the replacement of the Securities Act 1978 and the Securities Markets Act 1988 as well as significant amendment to other legislation. Submissions to the Ministry of Economic Development (MED) close on 20 August 2010.
26 May 2010
Chapman Tripp Partner Frank McLaughlin has been appointed to the Establishment Board of the new integrated market conduct regulator, the Financial Markets Authority. The Board members were announced by Commerce Minister Simon Power today.
29 April 2010
A tradition is developing that the Commerce Minister comes to the annual INFINZ awards dinner with something significant to say – and Simon Power didn’t disappoint last night. He confirmed the Government’s intention to move to a ‘Super Regulator’ for the financial markets, signalled that the concerns raised by Chapman Tripp and others regarding the new financial advisers regime will be addressed and outlined proposed changes to the KiwiSaver regime.