30 June 2026

Financial Conduct Report sets out FMA’s regulatory priorities for the year ahead 

We have released our second Financial Conduct Report (FCR), providing transparency on our priorities for 2026/27 and outlining progress made over the past year to improve outcomes for consumers, investors, and businesses. 

By publishing this report annually, we aim to provide clarity to industry on our regulatory priorities, as well as the key risks and opportunities on our radar and how we intend to address them, so industry understands what they can expect from us. 

Over the past year, we have delivered a significant amount of work to strengthen and improve New Zealand’s financial markets. This includes improving access to financial advice, supporting innovation through our regulatory sandbox pilot, stepping up our response to scams, and taking strong enforcement action where misconduct has occurred. 

For 2026/27, our priorities span both specific sector focus areas and cross-sector themes – conflicts from remuneration, product design, complaints, and fraud. 

A significant change is the transfer of consumer credit to the FMA from 1 July 2026, creating a single conduct regulator. Bringing consumer credit into our remit strengthens our ability to take a consistent approach and respond effectively where harm occurs. 

The report also highlights the increasing importance of innovation and technology, with a growing focus on how developments such as artificial intelligence are reshaping financial services. 

We have published sector-based videos on our website explaining what we are focused on and why. 

Ngā manaakitanga,   
Samantha Barrass  
Chief Executive 

Credit transfer creates single conduct regulator for financial markets 

From Wednesday 1 July 2026, the FMA becomes the single conduct regulator for New Zealand’s financial markets, taking over responsibility for consumer credit regulation from the Commerce Commission. 

The transfer brings credit regulation into line with the wider financial services sector, simplifying the regulatory landscape for lenders while maintaining core consumer protections and enabling more proportionate and targeted enforcement outcomes. 

Certified lenders will automatically transition to holding an FMA market services licence for acting as a creditor under a consumer credit contract. Many of the Commerce Commission’s credit team will move to the FMA, providing continuity of expertise and relationships.  

While the regulator is changing, core expectations remain the same. Responsible lending obligations, affordability assessments and disclosure requirements remain unchanged, as do existing consumer protections. However, lenders will take on some new obligations as FMA licensees, including requirements to report material breaches and significant changes in circumstances.  

Our focus is on fair conduct and good outcomes for consumers. We take a proactive and risk-based supervisory approach, concentrating our monitoring on areas with the greatest potential for consumer harm. Enforcement action is reserved for the most serious misconduct. We encourage early engagement with us, particularly around issues such as unsuitable lending practices (e.g. affordability failures) and material changes to governance or senior management.  

From the outset, we encourage lenders to ensure governance arrangements, compliance frameworks, and key processes for consumer credit are well documented and fit for purpose, and to stay closely engaged with updates from the FMA. 

We look forward to working constructively with lenders to ensure a fair, efficient, and transparent credit market for all New Zealanders. 

Anti-money laundering responsibilities transfer from the FMA to the Department of Internal Affairs 

The Department of Internal Affairs (DIA) is becoming New Zealand's sole Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) regulator, with financial markets participants – including brokers, fund managers, issuers, and other entities operating in capital markets – moving from FMA to DIA supervision from 1 July.   

FMA’s Executive Director Response and Enforcement Louise Unger, says, “The FMA has had AML/CFT supervision responsibilities for the financial markets for the past sixteen years, and we are hugely proud of our involvement developing and operating within the regime. 

“We support moving from the current three‑supervisor model (DIA, FMA, and RBNZ) to a single supervisor, knowing it will promote consistent expectations and enforcement across all sectors, reduce duplication and compliance burden for reporting entities, and provide a clearer regulatory framework.”  

The FMA has emailed all known entities through listed compliance officers about the move to DIA. Financial markets participants that are unsure about their obligations are encouraged to contact DIA at amlcft@dia.govt.nz

For those participants transferring, if you would like to subscribe to DIA’s In the Know newsletter, please visit their website.

FMA launches discussion on custody to assess if settings remain fit for purpose 

The FMA has released a discussion paper to start a conversation on New Zealand’s custody regime, and we are inviting feedback from industry, investors, consumer groups, and other interested stakeholders on what is working well and where gaps or weaknesses exist. 

The paper explores whether New Zealand’s laws and practices for custody of client assets remain fit for purpose as markets, business models, and technology evolve. It outlines how custody currently operates and highlights key risks and issues, rather than proposing specific reforms. 

Custody services play a critical role in protecting client money and assets and maintaining confidence in financial markets. However, New Zealand’s regime is lighter and less developed than in many comparable overseas jurisdictions, and the current framework is complex and fragmented, leading to confusion, added costs and, at times, poor conduct. 

Growth in investments, including KiwiSaver and managed funds, has increased reliance on custodial arrangements, while emerging risks - including outsourcing, market concentration, cyber threats, and gaps relating to payments and virtual assets - are adding to consumer risk. The custody services framework has not kept pace with these changes or technological developments such as tokenisation and digital assets. 

Strengthening custody oversight was a key priority in our 2025/26 Financial Conduct Report, consistent with the 2017 International Monetary Fund recommendations that custody services should be licensed and supervised. 

Submissions on the discussion paper close at 5pm on Monday 27 July 2026. Feedback will inform the FMA’s future approach and any recommendations we make to MBIE. We are also holding a stakeholder workshop on 19 August – if you are interested in attending, please contact  Events@fma.govt.nz by 10 July. Numbers will be limited. After the workshop, we will publish a summary of feedback and any initial comments from the FMA. 

No action on climate reporting obligations for health and life insurers 

The Government announced recently that health and life insurers will be removed from the climate related disclosures (CRD) regime and will no longer be required to produce annual climate statements.  

Ahead of legislation changes, health and life insurers will no longer be expected to lodge climate statements. We will provide interim relief in the form of taking a ‘no action’ approach to entities who are expecting their climate reporting obligations to cease once legislation is passed. 

Regulatory returns webinar for financial institutions  

Financial institutions are required to submit their annual regulatory return by 30 September 2026.   

As this is the first regulatory return for licensed financial institutions, we will be holding a webinar on 21 July, to provide further information and practical guidance on completing the return.  

The webinar will cover what information needs to be provided and demonstrate how to submit the return. The webinar will be recorded and made available for those unable to attend. 

Save the date in your calendar and keep an eye out for an invitation to register. 

In the meantime, you can review the financial institution regulatory return questions to familiarise yourself with what information you will need to provide. 

FMA engages with industry at Appointed Actuaries Forum 

On 24 June, senior FMA insurance leaders attended the Appointed Actuaries Forum, which focused on the theme Shaping the Future – Regulation, Affordability, and Innovation. 

Head of Insurance Jane Brown shared her perspectives on the Council of Financial Regulators’ (CoFR) Insurance Affordability Review, highlighting strong collaboration across CoFR and valuable engagement from industry, including the Insurance Council of New Zealand (ICNZ). The work is considering international comparisons, insurer profitability, consumer experience, and what data is needed to inform Ministers’ thinking. 

Director of Deposit Taking, Insurance and Advice Michael Hewes joined a panel to share insights from FMA’s recent supervisory work in the insurance sector, including market dynamics such as market share and barriers to entry, and ongoing engagement with industry and consumer groups. 

“It was great to attend the forum again this year. Actuaries play a critical role in managing risk and product design - making it important for the FMA to stay closely engaged with this profession,” says Michael Hewes. 

Joining Michael on the panel were NZ Chief Executive Kris Faafoi, Financial Services Council Chief Executive Kirk Hope, and NZ Society of Actuaries Council member Cath Robertson-Hodder. 

FCR engagements underway next month 

The FMA is planning a series of engagements on a sector by sector basis to discuss the FCR, why these are our priorities and to take any questions.

These will take place through late July and August. A series of webinars and in person events are planned, targeted across the different sectors. Some will be through industry bodies, others are being directly organised by the FMA.

Further details and invitations will be sent on a sector-by-sector basis in the coming weeks.  

Financial advice provider forums - sessions available 

Email invitations went out to financial advice providers in early June. We have had a great response, with many signing up early. There are still in-person sessions available, so join us as we share case studies, discuss access to advice and report on key learnings. The sessions will provide insights into our focus for the year ahead, and practical value you can take back to your financial advice business. 

These sessions may qualify as Continuing Professional Development in accordance with your provider’s policy or professional body.     

We encourage you to register and use this opportunity to meet the FMA team, gain valuable insights, network with peers, and stay ahead in navigating the regulatory landscape. 

If you are unable to attend an in-person session, there are also two online sessions for you to choose from. 

If you have any questions or comments regarding this event, please email us on questions@fma.govt.nz 

Insurer benefits and campaigns insights 

We have published our observations on the approach insurers are taking to ensure consumers are treated fairly in relation to incentives. The review focused specifically on non-monetary benefits and short-duration sales campaigns offered to employees, agents and/or intermediaries – often referred to as soft commissions – and what these mean for fair consumer outcomes. 

Under the Conduct of Financial Institutions (CoFI) regime, insurers are required to treat consumers fairly and maintain an effective fair conduct programme (FCP). Insurers’ FCPs must include effective policies, processes, systems and controls for designing and managing incentives to mitigate or avoid actual or potential adverse effects of incentives on the interests of consumers, so far as reasonably practicable. This requires insurers to consider the potential impact of their incentives, including benefits and campaigns, on consumers. 

Insurers’ boards are ultimately accountable for ensuring their FCP is effective, and for complying with incentives regulations. 

Annual review of NZX’s market operator obligations 

We have published our annual review of NZX Limited’s performance as a licensed market operator. The review found NZX is effectively meeting its obligations, demonstrating continued strong governance, disciplined prioritisation and ongoing investment in market resilience and capability.  

Statement of Performance Expectations  

We have published our Statement of Performance Expectations (SPE) for the 2026/27 year.  

The SPE describes how we intend to perform the services we receive funding for through our government appropriation. It outlines our short-term (annual) performance targets, and our planned budget. It should be read in conjunction with our current  Statement of Intent, which sets out our medium-term strategic objectives. 

FMA files 61 mortgage fraud charges against six individuals 

The FMA has filed 61 charges against six individuals under the Crimes Act 1961, the Secret Commissions Act 1910 and the Financial Markets Authority Act 2011.   

The charges relate to an alleged mortgage fraud and were filed at the Manukau District Court.  

BNZ admits misleading conduct and pays $2.6 million 

Bank of New Zealand has admitted breaching fair dealing rules by misleading customers on how interest was calculated on some non-profit accounts. They have agreed to pay $2.6 million to the Crown through an enforceable undertaking.   

Scammers are increasingly using artificial intelligence to create deepfake videos, audio or images mimicking real people’s faces, voices and mannerisms to promote fake investment opportunities. These deepfakes often feature well-known and trusted public figures to make the scam appear legitimate and they can be difficult to spot.   
  
Remind your clients if they are engaging with financial content online to watch out for:  

• unnatural facial expressions 
• mismatched lip movements 
• content they cannot verify through official channels.  

If something feels off, pause and check before acting.   

To learn more about how deepfake scams work and what other red flags to look out for, read our article or watch our latest Inside a Scam video below.

Recent deepfake scam warnings we published:  

• Fake Political Endorsements: Deepfakes & Trading Platform Scams
• Fake Celebrity Investment Scam – Multiple trading platforms  
• Imposter Facebook pages used to promote WhatsApp investment scam  

We regularly publish warnings containing the names of businesses or individuals you should be wary of if you are planning to invest. 

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