Financial reporting


We have regulatory powers to grant financial reporting exemptions and vary financial reporting public accountability designations.

We use these powers to support the purposes of the Financial Markets Conduct Act 2013 (FMC Act). Our aim is to find a balance between ensuring the provision of appropriate financial information for those who need it and, minimising undue costs for those providing it.

What’s changing for financial reporting under the FMC Act?

Our financial reporting exemptions policy

Our general regulatory policy for financial reporting exemptions under the FMC Act is outlined in our January 2014 consultation paper which was approved by FMA’s Board.

Below is an overview of our key policies.

  • the entity is required to prepare high quality financial reporting
  • the entity is subject to appropriate financial reporting regulation
  • we can get co-operation from their overseas regulator if we need to.
Specified GAAP Specified jurisdictions
  • Australian IFRS
  • Canadian IFRS
  • IFRS (unmodified international standards)
  • Singapore Financial Reporting Standards
  • Hong Kong FRS
  • Australia
  • United States of America
  • Ontario, Canada
  • United Kingdom
  • Republic of Ireland
  • France
  • Germany
  • The Netherlands
  • Switzerland
  • Singapore
  • South Africa

Other exemptions for New Zealand and overseas entities

Recipients of funds from conduit issuers

Sometimes entities make regulated offers through special purpose vehicles or finance subsidiaries known as ‘conduit issuers.’ These conduit issuers loan most of the funds to related parties. In these situations, the related parties are considered ‘recipients of the funds from a conduit issuer’ and become FMC reporting entities in their own right. The cost of complying with the FMC reporting requirements for all the related parties can be extensive and unnecessary, when more relevant information for investors can be provided or is already available.

Exemptions to extending lodgement deadlines

Our powers of exemption allow us to extend the deadline for lodging financial statements. However thresholds are high and exemptions are rare.

Lodgement deadlines are shorter under the FMC Act. But you’ll need to have a compelling reason why you can’t comply with the four-month period, or specific circumstances that make it inappropriate. While overseas entities may have longer timeframes to prepare financial statements under overseas law, we don’t consider this sufficient reason on its own to grant exemptions.

Exemptions are not available if you haven’t made arrangements to comply with the timeframes in the FMC Act.

Partial and technical exemptions

  • technical difficulties complying with the requirements
  • difficulties with specific aspects of the requirements.

Class FMC Act exemptions in place

Financial Markets Conduct (Dual-listed FMC Reporting Entities) Exemption Notice 2015

Financial Markets Conduct (Overseas Registered Banks and Licensed Insurers) Exemption Notice 2015

This exemption permits certain overseas banks and insurers that are registered / licensed in New Zealand to use their overseas financial reporting to comply with the financial reporting requirements of the FMC Act. The exemption does not remove any obligation to prepare and have audited separate branch financial statements for their New Zealand business.  The auditor may be an overseas auditor or a New Zealand auditor.

Financial Markets Conduct (Financial Reporting: Balance Dates of Managers and Registered Schemes) Exemption Notice 2015

The FMC Act requires managers to register scheme financial statements within four months of their balance date. Where a manager's balance date is not the same as its various schemes’ balance dates, this makes compliance difficult or impossible. This exemption permits managers to register scheme financial statements within four months of the balance date of the scheme.

Class FMC Act exemptions being considered

A summary of the financial reporting exemptions that are being considered is included in our Update: Development of legislative tools to support the FMC Act regime. This updates also summaries the circumstances where we have determined that an exemption is not necessary, including in relation to the timing requirement for ‘wind-up’ financial statements.

FMC public accountability designations

Public accountability at a glance

Higher public accountability
Based on XRB Accounting Standards Framework full accounting standards will apply

Full NZ IFRS for for-profit entities, or full PBE standards for public benefit entities

  • Equity issuers who make a regulated offer (and have more than 50 shareholders)
  • Debt issuers who make a regulated
  • Licensed derivative issuers*
  • Licensed MIS managers (in respect of the financial statements of the MIS they manage)
  • Listed issuers
  • Recipients of money from a conduit issuer*
  • Registered banks
  • Licensed insurers
  • Credit unions
  • Building societies

Lower public accountability
Based on XRB Accounting Standards Framework reduced accounting standards will apply

NZ IFRS RDR for for-profit entities, or PBE standards RDR for most public benefit entities

  • Licensed MIS managers (in respect of the manager’s own
  • financial statements)
  • Licensed providers of DIMS (under the FMC Act)
  • Licensed peer-to-peer lending service providers
  • Licensed crowd funding service providers
  • Licensed supervisors
  • Licensed market operators (domestic)

 *FMA has issued a notice to re-designate recipients of funds from conduit issuers and licensed derivative issuers to having higher public accountability. See page 4 on our Update: FMA legislative notices supporting the FMC Act regime for more.

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