Charges laid against contributory mortgage brokers

News release
19 February 2014

The Financial Markets Authority (FMA) has charged two contributory mortgage brokers with failing to deliver annual reports.

Prudential Mortgage Limited has been charged with failing to deliver an annual report to the Registrar of Companies for the period 1 April 2012 to 31 March 2013 by 30 June 2013. Prudential is due to appear in the Christchurch District Court on 5 March 2014.

Another company, First Mortgage Investments Limited has been charged with failing to deliver an annual report to the Registrar of Companies for the period 1 April 2012 to 31 March 2013 by 30 June 2013. First Mortgage appeared in the Auckland District Court on 30 January 2014 and will reappear on 20 March 2014.

The charges have been laid under the Securities Act (Contributory Mortgage) Regulations and carry a maximum fine of $5000.

FMA Head of Enforcement, Belinda Moffat, said when companies fail to file annual reports it limits the ability of investors to make informed investment decisions.

“Non-filing of annual reports and financial statements is an issue which FMA takes seriously and we are considering a number of other cases where these key documents have not been filed,” said Ms Moffat.

“Ensuring accurate and timely disclosure to investors and promoting compliance with reporting obligations is a key priority for FMA.”

Ends

Contact:
Tony Reid
021 739 052 
tony.reid@fma.govt.nz

Background
Regulation 12 of the Securities Act (Contributory Mortgage) Regulations (the Regulations) requires contributory mortgage brokers to deliver an annual report to the Registrar of Companies. The annual report must comply with the Regulations and must include audited financial statements.

In the case of individuals the annual report must be delivered not later than the 31st day of May each year. In the case of contributory mortgage brokers who are not individuals the annual report must be delivered not later than 3 months after the end of the contributory mortgage broker’s financial year.

Regulation 41 provides that a contributory mortgage broker or the director of a contributory mortgage broker commits an offence if they fail to comply with the Regulations. This offence carries a maximum penalty of a $5000 fine.

The implementation of the Financial Markets Conduct Act does not affect the requirement for contributory mortgage brokers to deliver annual reports under the Regulations. The filing obligations on contributory mortgage brokers remain unchanged.