INFINZ Comments on the establishment of the FMA
Financial Markets Authority
There has been media coverage given to dissatisfaction in some quarters with the provisions of the Financial Markets (Regulators and Kiwisaver) Bill. INFINZ made a submission on 9 November last week which has now been posted to our website and can be found here.
In general INFINZ is supportive of the creation of the Financial Markets Authority (FMA) and is receptive to the moves to amalgamate many of the regulatory arms of government that oversee the financial markets. That said there are aspects of the Bill with which we are not happy such as the use of the word "fair" in defining the main objective of the FMA as being to promote "fair, efficient and transparent financial markets" as it is a term that is virutally impossible to define in the circumstances. Similarly INFINZ feels that the proposed changes in the vetting of prospectuses and investment statements is just not practical and won't have the desired outcome of ensuring all offers to the public are not false or misleading. We particularly do not support the vetting and potential commenting on offer documents once they are already in the public domain.
With regard to the exercising of a person's civil right of action we support this where there is a very discernable and overarching public benefit however we would not want the use to become pervasive. The right is a positive addition to the toolbox available to the regulator in controlling, influencing and limiting the misuse of the markets but a measurable public benefit must accrue from the use of the right. To simply punish poor behaviour is not enough when other powers are available to the regulator.
Finally, INFINZ also sees the imposition of still further controls over the NZX as being somewhat counterintuitive when so much work has been undertaken to make the capital markets more effective, reflecting the important position that capital markets play in the economic performance of the country.
eNewsletter