Sharechat Logo

FMA leans against 'market knows best' view in new code of conduct

Thursday 2nd February 2017

Text too small?

The Financial Markets Authority brushed off claims the market was the best arbiter of fixing any problems in the sector in settling on a new code of conduct designed at making sure firms have the customer at the forefront of their minds. 

The market watchdog today released its final guide on how it views conduct and what it sees underpinning good practices, which had its genesis from talks with firms wanting a better understanding of how the FMA expected to approach certain issues.

Among submissions was a claim the market was "a better determinant of whether products and services meet customer need", something the FMA said was "worryingly complacent about the amount of harm that can be caused to customers before the market eventually ‘solves’ the issue" and that regulation and signalling a view on conduct was "appropriate". 

"There is such an imbalance of power and information between those who provide the products and services and those who consume, that we feel in the context of this guide, that it is worthwhile pointing out the need to have a focus on customer outcomes, which is possibly more self-evident than in areas of industry where there's less of an imbalance between buy and sell," Liam Mason, FMA director of regulation, told BusinessDesk. 

The new code will start informing the way FMA monitors conduct and be incorporated into its risk-assessment, and Mason said the regulator hopes to be having conversations with firms this year. 

Some financial services firms have already started thinking about how to meet the code, particularly those companies with international connections, he said. 

The FMA finished the introduction of the licensing regime in November with fund managers the last group of firms going through this part of the overhaul of securities legislation, and will now have a greater role monitoring the sector with the government signing off on extra funding via an increased industry levy late last year. 

BusinessDesk.co.nz

General Finance Advertising  

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.
Bookmark and Share   Printable version
Related News

MARKET CLOSE: NZ shares rise as Restaurant Brands, A2 gain; Xero, Scales drop
NZ dollar pares CPI gains as greenback rises, wait for govt continues
Fisher Funds says new Xero holding amounts to 3% of Kingfish fund
Reduced viewpoints in media merger not ComCom's concern, lawyer says
NZ Super Fund, govt cash cow, paid 60 times more tax than Fonterra last year
Infratil, flush with funds, won't offer reinvestment option for Nov. 2017 bond holders
NZ frozen beef exports to Japan slump after tariff hike
Mondelez pulls pin on finding local manufacturer for Kiwi candy
ASX-listed HRL Holdings expands Kiwi footprint with $30M Analytica Laboratories acquisition
Ebos forecasts 10% lift in 2018 earnings after strong first quarter for healthcare, animal products

IRG See IRG research reports