FMA publishes 2020 annual report

The Financial Markets Authority (FMA) has published its annual report for the year to June 2020.

The market conduct regulator said in the first half of the year it was operating in a period of relative economic stability and focusing on regular monitoring, enforcement activity, and preparing for expansion to its regulatory remit. However, COVID-19 undermined economic stability and tested the FMA's agility, as planned work was put on hold so the regulator could manage its role in the crisis, and support the industry and consumers through the situation.

FMA Chief Executive Rob Everett said the FMA increased its engagement with the industry throughout COVID-19, collaborated closely with other government agencies, and provided regulatory relief, guidance and leadership where it could. Despite the disruption, the FMA continued to prepare for upcoming changes to its remit, which includes the conduct regulation of banks, insurers and non-bank deposit takers and, more immediately, the implementation of the financial advice regime on 15 March 2021.

The FMA also continued its momentum in enforcement and deterrence activity, most notably by issuing two sets of civil proceedings against CBL Corporation and its executives. The FMA used a wide range of enforcement tools during the year, including public warnings, a stop order, an enforceable undertaking and court prosecutions.

Mr Everett said it was also an important year for KiwiSaver, with the scheme experiencing significant market volatility, investors seeing in their annual statements a projection of how much they may receive in retirement, and a spotlight being put on the fees that providers charge.

​Mr Everett said the new regime for climate risk disclosures, and – more broadly – the implications for the finance sector of a shift towards creating a sustainable economy, will require significant focus from regulators.

Mr Everett said the economic disruption caused by COVID-19 is expected to negatively impact economic growth, employment, and inflation, leading to increased vulnerability in certain areas. And while the regulatory changes on the horizon may seem significant, they essentially formalise the expectations that the FMA has for the industry, Mr Everett said.