FMA Withdraws MIS Manager Licence of Fund Managers Otago

The Financial Markets Authority (FMA) today announced the cancellation of the managed investment scheme(MIS) manager licence of Fund Managers Otago(FMO), effective 5pm, 7 July 2021.

The decision was made because the regulator considered FMO’s material contraventions and determined it was no longer capable of being a fund manager in accordance with section 414(3) of the Financial Markets Conduct Act 2013. 

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The FMA found FMO’s inadequate compliance and governance arrangements had resulted in continued material breaches of its licence obligations. These included:

• Disclosure: Incorrectly calculating and disclosing returns in fund updates

• Related party benefits: entering into prohibited related party transactions

• Compliance with SIPO (Statement of Investment Policy and Objectives): failing to manage certain funds within their SIPO limits for persistent periods of time

• Record keeping: not maintaining appropriate records of key decisions and activities in relation to receiverships

• Financial resources: not calculating net tangible assets in accordance with the standard licence conditions

Back to November 2020, FMA appointed KPMG Restructuring Services NZ Limited as a temporary manager to manage three schemes previously operated by FMO​. As a result, FMO have been removed as Manager, effective as of 2 November 2020. In return, KPMG Restructuring Services has been appointed as a Temporary Manager of the Fund by the FMA, effective as at the same date.