The Financial Markets Authority (FMA) on Thursday published its annual report for the year ended June 30, 2018. In particular, the report focuses on the regulator’s initiatives to improve the conduct of financial firms, as well as educate New Zealand residents on cryptocurrency investment products.
During the year, the FMA worked together with the Australian Royal Commission to improve the conduct of financial firms. While this was more focused on banks and life insurers, which have not had the best reputation in Australia in recent years, it did also extend to other market participants, such as foreign exchange (forex) brokers.
In the statement attached to the report, the FMA highlights the importance of good conduct within the financial sector, calling the conduct-related events hosted during the year “probably unprecedented.” As a result, the regulator isn’t taking excuses – particularly in regards to licenses.
Commenting on the initiatives, Rob Everett, the Chief Executive of FMA said: “conduct regulation is no longer a new concept in New Zealand’s financial services sector. All market participants should be aware of their licence conditions and obligations. Where we see non-compliance, our response will be proportionate but lack of time or experience is not a valid excuse.”
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FMA Remains Focused on Cryptocurrency Education
During the year, the financial regulator also prioritized educating New Zealand residents on the use of cryptocurrencies, much like its neighbor. This is mainly due to the spike of interest of the digital assets in the country.
In the report, Everett said: “Areas we have focused on in the past year include pursuing legal action related to misuse of the Financial Service Providers Register, and issuing guidance about cryptocurrencies for consumers and prospective issuers, to coincide with the sudden spike in interest.”
In addition, the education initiatives are also the result of an increase in complaints from residents in regards to cryptocurrency services and providers. The majority of the complaints related to scams or issues with providers not returning funds.
So what was the overall tone of the regulator in regards to digital assets? Well, the regulator did state that it encourages innovation within the financial markets, which does seem pro-crypto, adding that providers should approach the regulator for guidance. However, the increased misuse of cryptocurrencies in New Zealand is not to be ignored.