The FMA identifies and deals with conduct in the financial markets when it poses a risk to investors or customers - it is a critical part of our work.
Our response and enforcement function is made up of the teams who assess and address conduct that poses harm to New Zealanders at the more significant end of the spectrum (Perimeter & Response, Evidence & Investigations and Enforcement), as well as our Specialist Supervision teams who supervise, monitor and deal with conduct that applies across different sectors (Investor Information, Operational Resilience, Anti-Money Laundering and Intensive Supervision).
Over the next few months, we will introduce the teams involved in our response and enforcement function, sharing more about the work that they do as well as the impact they hope their work will have. This month we are introducing the Investor Information team, who are focused on all things related to financial product offer disclosure.
The team look at a wide variety of financial products, from highly regulated sectors such as managed investment schemes and derivatives, through to publicly traded shares and bonds and shares in private companies, employee share schemes and offers to wholesale investors. They look at formal disclosure documentation, such as Product Disclosure Statements, Statements of Investment Policy and Objectives and other material information through to less formal means of disclosure such as advertising, websites, investor seminars and media statements.
For regulated offers they conduct reviews of formal disclosure documentation to ensure it complies with financial markets legislation, both before and after registration. For regulated and unregulated offers they assess whether documents and statements by issuers of financial products could be misleading or deceptive. If the team identify issues from their work they address these in a number of different ways, depending on the objective of the work and the materiality of the issue – from working with an issuer to make improvements through to referring to other FMA teams for an appropriate regulatory response.
The Investor Information team wants to ensure that investors are not misled.
New Zealand’s financial product regime is built on the premise that issuers should disclose the characteristics of their products in a clear, concise and effective manner that does not mislead investors. Products can be complex, and issuers need to not just think about what they want to say, but also what the average but not expert investor may understand that to mean. Many of the issues the Investor Information team sees are not deliberate attempts to mislead but may stem from the issuer assuming their audience has the same level of technical understanding as they do.
If you have any questions about the work of the Investor Information team you can contact their manager Marcus McMillan on [email protected]
