Helping investors to make sense of financial information

The first of these pieces of work is our Improving financial statements monitoring report. This summarises the findings from our thematic review looking at the presentation of financial statements and provides suggestions to further improve their effectiveness. We will continue to monitor efforts made in this area, engage with stakeholders, and promote improvements in the quality and value of financial statements.

We also released an information sheet focusing on the disclosure of significant accounting estimates. This was in response to recent market engagements where our view was that disclosure in this area was disappointing. The information sheet is a timely reminder to preparers of financial statements, their advisers and auditors, of the disclosure requirements for significant accounting estimates. When there are high levels of uncertainty, or assumptions based on future events that give rise to a risk of material misstatement, entities must clearly state these risks within their financial statements.

Constructive engagement

As a final point, if we are raising matters with you, it may reflect a genuine concern on our part or we may just wish to understand more. We place considerable value on constructive engagement but please note that reluctant or defensive engagement with us makes the process of enhancing transparency in the market more difficult for both the FMA and those we regulate.

Garth Stanish

Director of Capital Markets, FMA

23 July

Consultation closes: Proposed exemption from requirement to name assets. More >
 

31 August 

Consultation closes: Exemptions, other legislative notices, and unnecessary compliance costs. More >

Annual AML/CFT reports - reporting entities supervised by us must submit their annual AML/CFT report through our online system between 3 July and 31 August 2018. More >

Crowdfunding and peer-to-peer lending providers annual regulatory return – licensees must submit their annual regulatory return between 2 July and 31 August 2018. More >

13 August - 30 September

AFA information returns – Submissions open on Monday 13 August until 30 September 2018. More>

Disclosure of significant accounting estimates

We have published an information sheet to explain our expectations on disclosure of significant accounting estimates. It is part of our work on improving the overall quality of information being disclosed in financial statements. More >

Improving the quality of financial reporting

This monitoring report summarises the findings from our review of improvements in the presentation of financial statements, and include suggestions for further improvement. More >

We’re aware of overseas companies cold calling New Zealand residents and offering UK pension transfers when it may not be in their best interests. Often, people are offered different ways to invest, special ‘deals’ or opportunities to access their money before 55.

We’ve refreshed our online content – giving investors 5 things to ask before they transfer and strongly recommending they get help from an authorised financial adviser first. We’ve been sharing this content through our investor Facebook page.

Dual-language product disclosure statements in te reo Māori and English

Following a recent consultation, we have decided to grant an exemption to enable dual-language product disclosure statements provided in both te reo Māori and English. We will be carrying out a targeted consultation on the draft exemption notice, including the scope of the conditions and aim to finalise the exemption in the coming months.  Please email consultation@fma.govt.nz if you are interested in producing a dual-language PDS in te reo Māori and English.

AML/CFT guidance on the managing intermediaries class exemption

This month we expect to issue updated guidance on how the FMA’s AML/CFT reporting entities may rely on the managing intermediaries class exemption. The exemption was renewed by the Associate Minister for Justice before it was due to expire on 30 June. Reporting entities may now rely on the exemption when dealing with the customers of the managing intermediary, subject to conditions.

MIS market index exemption/guidance

We have granted an exemption for managed investment scheme managers. It will take effect on 17 July. MIS Managers will no longer have to publish a market index in their quarterly fund updates if there is no appropriate broad-based securities index. The exemption has conditions attached – one of which is that managers use a peer group index instead, if this is useful to investors. The exemption and an accompanying guide will be available on our website shortly.

Class legislative notices summary

Read our latest update that summarises all of our class legislative notices, including exemptions, designations, frameworks or methodologies, and public accountability notices granted. The summary is a good resource for those interested in a brief overview and scope of the different types of notices we grant.

QFE insurance providers’ replacement business practices

This month we'll release a thematic review focused on QFE insurance providers’ replacement business practices. It will look at how these providers’ policies and procedures are ensuring consumer protection. This work is part of a suite of reviews of conflicted conduct in the financial services sector. We will follow up later this year with a report on the structure of bank incentives.

Upcoming consultation

We intend to consult on guidance on how to determine whether a business has been acquired (or is to be acquired). Under the FMC Regulations, prescribed financial information about business acquisitions must be included in the PDS for an offer of debt or equity.  It is sometimes not clear what is a business acquisition for these purposes.

In August, we plan to consult on a proposal to exempt certain restricted schemes from custodial assurance engagement requirements where the scheme is administered by an administration manager. It is proposed that instead that administration manager will obtain an assurance engagement.

Market Misconduct Risks: A guide for MIS managers

We are in the process of updating a guidance note for MIS managers to clarify how the law prohibiting market manipulation is applied. The guide also outlines the type of controls managers should be considering to minimise the risks of inappropriate trading conduct within their organisations. 

MIS manager valuation and pricing practices

Following our review of the valuation and pricing practices of Managed Investment Scheme (MIS) interests, we will shortly release an information sheet on our findings and recommendations. 

Annual Corporate Plan

Next month we’ll publish our Annual Corporate Plan, which outlines our priorities for 2018/19.

Ease of doing business survey
 

We will soon be completing our annual 'ease of doing business survey' with a wide sample of participants and stakeholders. Some of you will be invited to take part through an email from our research partner in the next fortnight. 

Email us at communications@fma.govt.nz