In an action-packed agenda for the next 12 months, the fiscally enhanced Financial Markets Authority (FMA) has penciled-in a raft of industry sector reviews along with a structural makeover set down by new chief, Samantha Barrass.
According the FMA annual corporate plan released last week, the regulator has slated “risk assessments” for both the licenced fund manager and discretionary investment management service (DIMS) sectors in the year ahead while trucking-on with projects targeting wholesale investors, performance fees and ‘value-for-money’ among others.
As well as the sector-specific probes – that have mostly already kicked off – the regulator has also embarked on an industry-wide “thematic review” of governance practices in a joint investigation with the Reserve Bank of NZ.
Following a flurry of FMA edicts in recent years (advertising, greenwashing, value-for-money etc), licensed fund managers will find out the results of a further regulatory risk assessment over the coming 12 months as the string of newly introduced guidelines settle into place.
For example, the corporate plan says the FMA will continue to “focus on value for money and embedding competitive pressures within industry, to ensure that economies of scale are passed on to investors and that fees and charges fairly reflect the level of service received”.
And after a COVID-induced delay, the regulator has earmarked the opaque DIMS market for a long-awaited in-depth scan.
“We will undertake a sector risk assessment of DIMS providers to inform our future planned and thematic monitoring,” the FMA plan says.
The regulator will also be relicensing supervisors in the new reporting period under a statutory process for the sector comprising just five entities: Anchorage; Covenant; Guardian Trust; Public Trust; and, Trustees Executors.
But with at least four new pieces of legislation now under its mandate – covering adviser licensing, financial institution conduct, climate-reporting and financial market infrastructure firms – the FMA needs to scale-up fast.
As reported last month, the regulator is on the hunt for 100 extra staff to cope with the growing workload to be funded by an annual budget on track to hit almost $80 million in a couple of years, more than double its 2019/20 allocation of $36 million: the FMA reported just over 240 full-time employees at the end of last June.
Barrass says in the corporate plan: “To prepare the FMA for this significant expansion and elevate our capabilities, I have initiated a strategic change programme.
“This recognises that the FMA needs to change how it is organised and how it delivers its work, including introducing new capabilities and skillsets.
“I am focused on smoothly implementing this change, while maintaining our current momentum.”
The regulator is in recruitment mode for a few top-level positions in addition to frontline staff with four executives currently doubling up in acting positions, including: capital markets; external communications and investor capability; regulation; and, strategy and stakeholder relations.