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Investor News Wrap: September 2021

Page last updated: 30 September 2021

News from the month that Kiwi investors should know, including new financial regulations, fraud and scams, research, reports and offshore developments.

MPs inundated with crypto-pinions

Parliament’s Finance & Expenditure Committee has received 269 submissions to its inquiry into the current and future nature, impact, and risks of cryptocurrencies – including from the FMA.

The FMA does not regulate cryptocurrencies but some activities can fall within our regulatory remit, and some conduct relating to cryptocurrencies can have an impact on the financial markets.

Our submission noted that a recent FMA survey had found 27.5% of investors held cryptocurrencies, but reiterated our main messages to investors about cryptocurrencies, including that they are high risk and highly volatile, not regulated in NZ, and often the target of hacking, fraud and scams.

KiwiSaver has strong year despite COVID

The average balance for all KiwiSaver members stood at $26,410 as at 31 March 2021, according to the latest KiwiSaver Annual Report, while the average for contributing members was $35,480.

Returns from providers show total funds stood at $81.6 billion, up 32%, while overall membership had increased 2.1% to 3.09 million, of whom 1.88 million were contributing, or almost 61%.

Member withdrawals topped more than $3 billion, including $1.4 billion for first homes (up 18.8%), $1.2 billion for over-65s (down 8.3%) and $159.3 million for significant hardship (up 42.8%).

Survey shows 28% growth in responsible investment

The amount Kiwis have in 'responsible' investments rose 28% in 2020, to $142 billion, according to research by the Responsible Investment Association of Australasia (RIAA) with KPMG.

The RIAA report said that amounted to 43% of all professionally managed investments, up from 38% in 2019, with growth twice as fast as the wider market. 

LVR home loan restrictions from November 

The Reserve Bank is proceeding with its proposal to tighten Loan-to-Value Ratio (LVR) restrictions on lending to home owner-occupiers, to reduce risky mortgage lending. 

From 1 November, the amount banks can lend with an LVR of 80% or more (ie the loan is worth 80% or more than the home), will decrease from 20 to 10 percent of all new loans to owner-occupiers. 

The RBNZ’s regulatory impact statement noted “LVR restrictions may impede access to credit for some creditworthy high income borrowers [with] a low deposit” including “some first home buyers”.