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Annual Report

Page last updated: 16 December 2020

FMA 2020 RIPOATA-A-TAU

2020 Snapshot

Information relates to the FMA’s annual report for the year ended 30 June 2020.

Download a PDF version of this snapshot, or you can download a full copy of the annual report here.

Funds under the microscope

In 2020 we looked into the following areas of KiwiSaver to make sure Kiwis are getting a fair deal:

  • Are investments are true to label?
  • Are Kiwi's getting value for money?
  • Active and passive investment strategy and how this relates to fees

Financial Action Taskforce mutual evaluation (FATF)

This year FATF tested the effectiveness of New Zealand’s Anti Money Laundering/Countering Finance of Terrorism compliance regime. The outcome of the 18-month review has been delayed by COVID-19.

Influencing market conduct

The FMA influences market conduct in a number of ways, including engagement with and monitoring of industry. During the year, we talked to thousands of financial advisers through our engagement programme. We published a number of reports and guidance outlining our expectations on industry conduct, including the Good Practice Guide on Liquidity for Managed Funds, Thematic Review of Managed Investment Scheme Custody Arrangements and Cyber-resilience in FMA-regulated financial services.

Enforcing the law

The FMA is responsible for enforcing financial markets law. The following highlights cover some of the outcomes from enforcement activity in the past year.  

Eight Financial Service Provider Registration reviews

One prison sentence  

Four sets of proceedings launched in the High Court  

One private censure (FMCAct)

Convictions in two cases

Successful application for Interim liquidators

Two enforceable undertakings

10 formal Anti-Money Laundering warnings

One payment in lieu of penalty

One suspension of a market participant

Issued one stop order to prevent a company from offering or accepting money for financial products

One cancellation of authorisation as a financial adviser
 
Two referrals to NZICA, the audit oversight body, relating to audit conduct 
 

Increasing New Zealanders’ access to quality financial advice

The introduction of new regulation of financial advice brings new standards of professionalism that inspire confidence and build trust. The new regime introduces licensing of providers starting from March 2021. The FMA will receive additional funding to manage this regime. In 2020 we launched transitional licensing and designed the full licensing programme.

Helping people understand KiwiSaver

2020 was the first time many investors had seen a drop in their KiwiSaver balances, due to COVID-19 volatility. We published information to help people understand market volatility and ‘stay the course’ to avoid locking in losses.

This year was also the first time retirement projections appeared on annual statements. We ran a campaign to encourage Kiwis to ‘take a looksee’ at their KiwiSaver statements to see how much they’d have at retirement.

Promoting te reo Māori

In collaboration with the Institute of Directors, we released Ngā mea waiwai o te tūranga whakataka, a te reo Māori translation of our guide ‘The Essentials of being a Director’.

Download the Ngā mea waiwai o te tūranga whakataka PDF.

Responding to COVID-19

Covid-19 impacted all of us in 2020, and financial markets were no exception. We:

  • Worked with other government agencies and the Council of Financial Regulators to coordinate our COVID-19 response
  • Eased the regulatory burden where possible while still ensuring protection for investors
  • Wrote to the chief executives of licensed firms and insurers setting out our conduct expectations in response to COVID-19
  • Ensured market participants were set up to respond to the crisis
  • Issued guidance on financial reporting and auditing during COVID-19
  • Responded to potential frauds and scams seeking to exploit the pandemic
  • Set out our expectations for how entities should respond to vulnerable customers.

Protecting New Zealanders

In 2020:

Continuing to do our job well

A PWC Effectiveness and Efficiency Review concluded the FMA is a ‘high performing organisation’. In 2020, the Government confirmed additional funding, which will be an increase of $24.8m over 3 years.

2020 FMA Annual Report

FMA Annual Report 2020The report highlights our key work from the 2019/2020 financial year, including our response to the COVID-19 crisis, and a range of enforcement activity.  

Download the FMA Annual Report 2020 PDF.