New Financial Watchdog Operational By 1 May 2011
New Laws advises that the new Financial Markets Authority (FMA) will be up and running and fully operational by the first of May. The bill which will establish the FMA was recently passedby a unanimous vote is known as the Financial Markets (Regulators and KiwiSaver) Bill
The new market regulator will supersede the functions of the Securities Commission and Government Actuary which are being disestablished.
“I’m proud that the FMA will be up and running almost a year to the day after the Government announced it would be picking up the recommendation from the Capital Market Development Taskforce,” Mr Power said.
“I’m confident it will have the tools it needs to help restore mum and dad investor confidence in our financial markets, after issues were raised following the global financial crisis, and the failure of a number of finance companies.
“If we are to develop the kind of vibrant capital markets needed to lift New Zealand’s economic performance, and benefit companies looking to raise capital, our financial sector must be subject to clear rules, and visible, and proactive enforcement.”
New laws understands that the FMA will have a broad range of powers including :
- The ability to bring a civil action against a participant in the financial markets in exercise of the investors right to do so even though the investor can elect to opt out of the proceedings. The power is expected to be exercised when it is deemed in the public interest to do so.
- The power to use its regulatory power to prevent a particular product being structured in such a way as to purport to have it outside the scope of supervision by the FMA.
Minister, Simon Power also confirmed the makeup of the FMA board for the benefit of new laws. The board is to be chaired by Simon Allen. Other board members are to include Shelley Cave, Colin Giffney, Mary Holm, Murray Jack, James Miller, Justine Smyth, Michael Webb, and Mark Verbiest and there will be three associate board members who are Bruce Sheppard, Rebecca Eele, and Arthur Grimes. The FMA will be headed by new chief executive Sean Hughes
“These people bring exactly the right mix of expertise of governance experience that the FMA needs to get its job done.
“I would like to thank the members of the establishment board who have done an outstanding job in putting the FMA into place. Their work ensures that from 1 May the FMA will provide a seamless delivery of services”
The Financial Markets (Regulators and KiwiSaver) Bill also addresses issues on KiwiSaver governance and disclosure of fund performance. The proposal is that the fund manager rather than the trustees will henceforth carry primary responsibility for the accuracy of investment statements, prospectus and advertising.
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