4 November 2016
The FMA has acknowledged the announcement by Commerce and Consumer Affairs Minister Paul Goldsmith of government approval to increase FMA funding. See Ministers announcement here.
This is the first review of the FMA’s funding since its establishment in 2011 and since the passing of the FMC Act in 2013. The Government has approved an increase in funding of $9.8 million. While the Crown and levy payers will continue to share the costs of funding the FMA, this increase has been made possible by the Government approving an increase in the portion of funding sourced from levies paid by the financial services industry. This will take effect from the 2017-18 financial year (1 July 2017).
This gives the FMA certainty about our funding for the future, beyond the next financial year and allows us to develop medium-term planning for how we respond to risks to financial markets and potential investor harm. It is well-timed given that the transition to the FMC Act is now largely complete and the last major piece of the licensing framework (the licensing of managed investment schemes) will be in place on December 1st.
By utilising the cash reserves built up in the FMA’s early years to take us through the implementation of the FMC Act, we are currently able to operate at a level above our funding. Those reserves are forecast to be utilised by the end of this financial year (June 2017), when the new funding begins.
The FMA also acknowledges the many industry stakeholders who provided valuable input to the consultation process.