New regime to modernise and add confidence
Today marks the end of the two year period for the financial markets industry to transition to the Financial Markets Conduct Act 2013 (the FMC Act) regime, says Commerce and Consumer Affairs Minister Paul Goldsmith.
Mr Goldsmith says all offers of financial products to retail investors must now be made under the FMC Act.
“The purpose of the reforms is to increase public confidence in our financial markets and give businesses better access to capital to grow. Both aspects are vital to support New Zealand’s growing economy.
“A challenge for many would-be investors has been making sense of a prospectus laden with financial jargon and legalese. From today, that same financial information must be stated in plain English in the new product disclosure statements,” says Mr Goldsmith.
The FMC Act also introduces new requirements to strengthen the governance of financial products, such as requiring managed investment schemes to have a licensed manager and an external supervisor.
“During the transition period, 190 financial services firms have become licensed. Investors can be assured this means the FMA has reviewed the providers’ governance, conduct, systems and controls, and whether they have the necessary capability to deliver the service.
“It is a comprehensive piece of legislation and I am confident it will ensure robust and transparent financial markets and accommodate future developments in this area,” says Mr Goldsmith.