Enforcement action by regulators has two purposes. Firstly, to hold to account and impose penalties on professionals or entities that breach their legal obligations. Secondly, to deter others from doing the same.
Enforcement and deterrence is a critical part of the work that the FMA undertakes. It plays a key role in raising standards and responding to conduct that presents the greatest risk of harm to our financial markets.
We do not have a ‘litigation by default’ approach to our enforcement response. Rather we use a range of tools to achieve appropriate, proactive and targeted enforcement action.
In some cases we issue warnings or settle proceedings, particularly where this is in the best interest of the public and investors. In other cases we engage with businesses and individuals at the compliance end of the regulatory spectrum to assist them to comply and to meet the standards that we expect.
Our enforcement policy guides our decision making on the actions to be taken and is also a guide for businesses and individuals. It is not an exhaustive or legally binding document and will be revised from time to time as our regulatory objectives and priorities change.
We will not pursue every act of misbehaviour or insignificant breach, but will focus primarily on those areas of misconduct that present the greatest harm to the market.
That includes where the failings or breaches are intentional or reckless or involve other serious unlawful conduct, and where the perpetrator set out to intentionally mislead or deceive investors or third parties.
View our annual investigations and enforcement reports
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