• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to secondary sidebar
  • Skip to footer

  • Subscribe
  • Twitter
  • RSS Feed

Investment News NZ

Investment News provides financial advisers news stories from the financial industry in New Zealand. Subscribe to our free weekly newsletter.

  • Home
  • News
  • Kiwisaver
  • Subscribe
  • About
  • Advertise
  • Contact
You are here: Home / Investment News / FMA rules out playground for fintechs, plans cross-border patrols

FMA rules out playground for fintechs, plans cross-border patrols

February 19, 2017

Rob Everett: FMA chief

Counter to global trends, NZ fintech firms won’t be offered a regulation-lite play zone, Rob Everett, Financial Markets Authority (FMA) chief, told media last week.

Launching the FMA’s updated ‘Strategic risk outlook’ (SRO), Everett said he was not convinced about the value of the fintech ‘sandbox’ or accelerator hub models recently adopted by offshore regulators – including in the UK and Australia.

Under ‘sandbox’ rules, fintech firms, for example, can secure an easier passage to licensing or operate under less stringent corporate standards for a period of time.

“I’m a little skeptical about the fintech sandbox or hub approach,” Everett said. “The FMA has, or is developing, an innovative culture across the organisation that is encouraging to new business models. We have no plans to build a sandbox.”

He said creating a specialised fintech unit within the FMA was also hard to justify given the relatively small size of the organisation.

The latest SRO, which updates the inaugural 2015 document, notes that on balance the benefits of fintech are “worth pursuing, provided the risks are managed well”.

“We support and encourage technological innovation in financial services, and our regulatory settings are flexible enough to embrace innovation,” the SRO says, citing the regulator’s early adoption of peer-to-peer and crowd-funding licensing.

“… Balancing the reduction of risk with innovation and improved efficiency in the sector is the challenge that we and other international regulators currently face.”

As well as the fintech conundrum, the new SRO – while sticking to the seven risk factors identified in the previous version – highlights three other areas of special interest currently in the FMA spotlight: helping investors make better decisions in changing market conditions; the growth of “complex and risky products” in the retail market; and, activities beyond the legislative border.

According to the SRO, the “perimeter issues”, which lie outside the FMA’s full ambit but still represent a risk to those inside the fence, include: “the core product areas of banks and insurers, FX trading, and certain services offered by overseas entities are outside our scope of control.”

“We also do not license all financial advisers, although it is likely that this area will see some change in the near future,” the SRO says.

Liam Mason, FMA director regulation, said the regulator had some oversight of the wholesale sector via ‘fair dealing’ provisions in the Financial Markets Conduct Act (FMC).

The SRO says: “We are keen to initiate debate about the extent to which our regulatory powers should address market conduct beyond the FMC Act Fair Dealing provisions.

“The International Monetary Fund Financial Sector Assessment Programme (FSAP) review findings, published later in 2017, may also include recommendations on this topic.”

Mason said the FMA would take a closer look at wholesale market activities – that is, business-to-business dealings at the institutional level – where there was likely to be a knock-on effect for retail consumers.

He said that could include initial public offerings, off-market trading (which the NZX also will be formally reviewing this year) and wholesale funds managers.

“Fund management at the wholesale level is a significant business,” Mason said. “We don’t have good visibility there at the moment and we need to find out more.”

He said the FMA “owes it” to those firms that have stumped up significant fees to operate under the retail licensing regime to better police those “blurring” the borderline.

“We have focused our attention there and we will take action where necessary,” Mason said.

The SRO is one of a library of FMA documents outlining its purpose and operations that also includes: the annual report; the statement of intent; statement of performance expectations; the good conduct guide; and, the conduct outcome report (previously known as the enforcement report.

This year the regulator will also publish for the first time its ‘annual corporate plan’, a document used in previous years solely for internal purposes.

 

Print Friendly, PDF & Email
Twitter0
LinkedIn0
Google+0
Facebook0

Read More » Investment News

Recent articles

  • Vale Brian Gaynor May 16, 2022
  • COFI passes second after lukewarm session May 15, 2022
  • Kōura drives for special KiwiSaver niche; Aurora hits $50m May 15, 2022
  • NZ Super tops-up top ranks, buys low as market tanks May 15, 2022
  • Master trusts sink as sector condenses May 15, 2022
  • Holding pattern: custody licensing stalled but not forgotten May 15, 2022
  • Responsible man makes NZ landfall; Magellan tidies up top table May 15, 2022
  • Prescriptive proposals see BlackRock back-track on proxy support May 15, 2022
  • Apostle sees deep green future in NZ May 15, 2022
Finished reading? Why not subscribe? To receive a weekly email enter your email address here.

Primary Sidebar

WEEKLY NEWSLETTER

Sign up here to receive our weekly newsletter.
Learn More »

Investment News

  • Vale Brian Gaynor May 16, 2022
  • COFI passes second after lukewarm session May 15, 2022
  • Kōura drives for special KiwiSaver niche; Aurora hits $50m May 15, 2022
  • NZ Super tops-up top ranks, buys low as market tanks May 15, 2022
  • Master trusts sink as sector condenses May 15, 2022
  • Holding pattern: custody licensing stalled but not forgotten May 15, 2022
  • Responsible man makes NZ landfall; Magellan tidies up top table May 15, 2022
  • Prescriptive proposals see BlackRock back-track on proxy support May 15, 2022
  • Apostle sees deep green future in NZ May 15, 2022
  • No flares but investors need to brace for belt-tightening May 15, 2022

Search by Keyword

Most Recent Investment News

Vale Brian Gaynor

May 16, 2022

COFI passes second after lukewarm session

May 15, 2022

Kōura drives for special KiwiSaver niche; Aurora hits $50m

May 15, 2022

NZ Super tops-up top ranks, buys low as market tanks

May 15, 2022

Master trusts sink as sector condenses

May 15, 2022

Investment News Archive

Most Popular Articles

  • NZ share-trading splurge could trigger tax alarms… posted on October 5, 2020
  • Flint set to spark platform competition posted on August 17, 2020
  • Westpac NZ flags retail advice sale to Forsyth Barr posted on October 19, 2020
  • The horror year in technicolour: free KiwiSaver 13 report released posted on September 30, 2020
  • Four to the core: Smartshares to expand, rearrange and reprice ETFs posted on June 22, 2020
  • Government dumps five defaults adds two in major overhaul posted on May 14, 2021
  • Kiwi Wealth hits the bigger time posted on November 26, 2017
  • NZ Funds directors back on board posted on April 24, 2016

Sponosored Content

Why timing the market is a fool’s game

An active investment manager’s lockdown toolkit: impacts, learnings and benefits

Mint chief executive, Rebecca Thomas

Join the club: financial wellbeing for women

Ensuring good customer outcomes

Quick-links to Popular News

  • FAP Compliance
  • Coronavirus
  • New Appointments
  • Financial Markets Authority (FMA)
  • Kiwisaver
  • Climate Change
  • Crypto Currency
  • Blockchain
  • Insurance

Secondary Sidebar

Recent News

  • Vale Brian Gaynor May 16, 2022
  • COFI passes second after lukewarm session May 15, 2022
  • Kōura drives for special KiwiSaver niche; Aurora hits $50m May 15, 2022
  • NZ Super tops-up top ranks, buys low as market tanks May 15, 2022
  • Master trusts sink as sector condenses May 15, 2022
  • Holding pattern: custody licensing stalled but not forgotten May 15, 2022
  • Responsible man makes NZ landfall; Magellan tidies up top table May 15, 2022
  • Prescriptive proposals see BlackRock back-track on proxy support May 15, 2022
  • Apostle sees deep green future in NZ May 15, 2022
  • No flares but investors need to brace for belt-tightening May 15, 2022

Footer

Copyright ©2022 InvestmentNews.co.nz — All Rights Reserved — Terms & Conditions