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17 March 2022
FMA Update
The year ahead for the FMA: Samantha Barrass
New FMA chief executive Samantha Barrass spoke to the Financial Services Council this week about some of the big issues facing the financial services industry.
She also spoke about the FMA's purpose and aspirations for a healthy financial sector, along with remit expansion and key priorities for the year ahead.
Simplicity KiwiSaver direction - misleading advertising
KiwiSaver provider Simplicity NZ Ltd has been directed to remove advertising materials that breached fair dealing provisions, and ensure future advertising is compliant.
It comes after a campaign which included the statement: “Get out of the game when you want to, retire with up to 20% more than the average KiwiSaver plan”, and encouraged people to switch to Simplicity. This considered to be unsubstantiated and likely to mislead or deceive under the Financial Markets Conduct Act 2013.
Profile - Christine Hay's path to licensing
Congratulations to Christine Hay, sole adviser for, and Managing Director of financial advice provider Financial Sense Ltd, for receiving her Class 1 Financial Advice Provider Licence.
We talked to Christine about how she prepared her business to become a fully licensed financial advice provider and some tips for others starting the process.
No action relief for financial reporting obligations
With the current Omicron outbreak, FMC reporting entities and their auditors may face difficulties preparing and filing audited financial statements within the statutory timelines under the FMC Act.
If your business is affected, then contact the FMA as soon as possible.
The FMA has discretion to take an individual or class ‘no-action’ approach and this could provide affected businesses with additional time to meet their financial reporting or other related obligations.
Class exemptions review
We have started a project to review five existing class exemptions due to expire this year:
• Multiple-participant Schemes - Participation Agreements exemption notice 2017, expires 22.10.22
• Disclosure Using Overseas GAAP exemption notice 2021, expires 3.11.22
• Financial Statements for Schemes Consisting Only of Separate Funds exemption notice 2017, expires 17.12.22
• Irrigation Companies exemption notice 2018, expires 31.12.22
• Small Co-operatives exemption notice 2021, expires 31.12.22
Please get in touch with us if you would like to be kept updated with the review of any particular notice, or have feedback. We will also be directly contacting relevant stakeholders to seek their views about these notices.
Derivatives issuer licence breaches: CTRL Investments
The FMA has censured CTRL Investments for materially contravening the conditions of its licence. These related to failing to comply with requirements for certain outsourcing arrangements and allowing clients who did not understand derivatives and associated risks, to trade.
Derivatives are high-risk financial products and trading them isn’t suitable for most retail investors.
This is an area we have previously expressed concern about and it was named as a medium-high risk area in the FMA's 2020 derivatives sector risk assessment.
Latest scam warnings:
• Capital Cycles Limited
• Blackrock-newzealand.com
• EcoMarkets
• primeFirm Trade
• Leumi-vest.com
• venusfundslimited.com
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