FMA

The Financial Markets Authority (FMA) is the primary regulatory authority overseeing the financial markets in New Zealand. Established in 2011, FMA has played a crucial role in ensuring the stability and integrity of the country’s financial sector.

FMA History

FMA was created in 2011 as a result of the New Zealand government’s response to the global financial crisis and the collapse of several finance companies in the country. It replaced the Securities Commission and took over some of the functions previously carried out by the Companies Office and the Reserve Bank of New Zealand. The establishment of FMA aimed to streamline financial regulation in New Zealand and provide more comprehensive oversight of the financial markets.

FMA Scope and Supervision

FMA’s primary objective is to maintain the stability and integrity of New Zealand’s financial sector. Its wide-ranging responsibilities include:

1. Regulating and supervising financial service providers: FMA oversees various financial institutions, such as banks, investment firms, insurance companies, and pension funds, ensuring they adhere to strict regulations and maintain market stability.
2. Supervising the securities markets: FMA is responsible for regulating and supervising the securities markets in New Zealand, ensuring proper disclosure, transparency, and fair trading practices.
3. Implementing anti-money laundering and counter-terrorism financing measures: FMA enforces compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) regulations to maintain the integrity of the financial system.
4. Protecting consumers and investors: FMA works to safeguard the interests of consumers and investors by enforcing regulations, promoting transparency, and raising awareness of potential risks.

FMA Investor Compensation Guarantees

While FMA does not directly administer an investor compensation fund, it enforces regulations that require financial service providers to meet specific requirements, including maintaining a dispute resolution scheme. The dispute resolution schemes help resolve disputes between financial service providers and their customers, providing compensation where necessary. The level of compensation depends on the specific dispute resolution scheme and the nature of the claim.

Organization Type

FMA is an independent Crown entity that operates under the jurisdiction of the New Zealand Government, particularly the Ministry of Business, Innovation and Employment (MBIE). Its independent status allows FMA to make impartial decisions in the best interest of the financial markets and investors. FMA is governed by a board of directors, which is responsible for setting the strategic direction and ensuring effective oversight of the organization’s operations. The day-to-day operations of FMA are managed by its CEO, who is supported by a team of specialists and experts.