The Financial Markets Authority (FMA) is New Zealand’s main financial regulator, playing a critical role in overseeing the country’s financial markets. For traders and investors, understanding the FMA’s purpose, responsibilities, and regulatory approach is essential. This comprehensive guide examines the FMA’s structure, objectives, regulatory powers, key initiatives, and impact on traders operating in New Zealand.


The FMA is a government entity tasked with regulating New Zealand’s financial markets. It was established in 2011 to replace the former Securities Commission and some functions of the Ministry of Economic Development.

The FMA’s overarching purpose is to promote the development of fair, efficient, and transparent financial markets. It aims to instill confidence in New Zealand’s financial system and facilitate productive investment.

For traders and retail investors, the FMA’s regulatory approach aims to promote financial services that are trustworthy, understandable, and dependable. By enhancing market integrity and consumer protection, the regulator seeks to encourage responsible investment and deter misconduct.

This guide will provide forex traders with crucial insights into the FMA’s operations. It will cover the FMA’s organizational structure, objectives, enforcement powers, key projects, and impact on brokers, advisors, and traders. Understanding the regulator’s role allows traders to make informed decisions and meet compliance obligations when operating in New Zealand.

Organizational Structure

The FMA consists of a board and staff led by a Chief Executive. The governance board provides strategic direction and oversight, comprising between 5-9 members appointed by the Minister of Commerce and Consumer Affairs. Board members possess experience in fields like financial markets, law, economics, accounting, and corporate governance.

Meanwhile, the Chief Executive oversees the FMA’s daily operations and directs its staff. The regulator employs specialists across multiple functions including supervision, enforcement, policy, legal, and corporate services.

In addition to the board and staff, the FMA maintains close ties with New Zealand’s other financial regulators. It collaborates with the Reserve Bank of New Zealand (RBNZ) and the Commerce Commission to promote consistent market regulation. Information sharing and coordinated oversight strengthen New Zealand’s overall regulatory framework.

Regulatory Objectives and Principles

The Financial Markets Authority Act 2011 outlines the FMA’s main objectives and guiding principles.

The regulator’s overarching statutory objective is to promote and facilitate the development of fair, efficient, and transparent financial markets.

To achieve this, the FMA aims to:

  • Promote confident and informed participation in financial markets
  • Promote and facilitate the development of fair, efficient, and transparent financial markets
  • Reduce systemic risks arising from financial markets
  • Enforce securities, financial reporting, and company law
  • Co-operate with domestic and international counterparts

In fulfilling these goals, the FMA adheres to principles of investor protection, market facilitation, frontline regulation, proportionality, durability, and openness. This provides a balanced framework focused on fostering market integrity and confidence.

Notably, the FMA considers retail investor protection vital for fair and transparent markets. Its regulatory approach emphasizes enabling consumers to make informed financial decisions.

Powers and Responsibilities

The FMA possesses broad powers and oversight capabilities reflecting its expansive remit. The regulator’s core responsibilities include:

Registering Financial Services Providers

The FMA oversees the registration of financial services providers under the Financial Service Providers (Registration and Dispute Resolution) Act 2008. It maintains a public register of authorized providers like forex brokers, investment advisors, and managers. Registration promotes professional conduct and enables oversight of key industry participants.

Licensing Market Infrastructures

The FMA reviews and licenses certain financial market infrastructures like exchanges, clearinghouses, and settlement systems. Rigorous licensing requirements aim to maintain infrastructure integrity and minimize systemic risks.

Overseeing Securities Trading

Under the Financial Markets Conduct Act 2013, the FMA supervises securities trading on licensed exchanges like the NZX. It monitors trading activity and can take action to combat market manipulation and insider trading.

Regulating Financial Reporting

All issuers of securities in New Zealand must comply with financial reporting standards regulated by the FMA. It reviews financial statements of listed companies, managed funds, and other entities to ensure transparency.

Enforcing Relevant Legislation

The regulator enforces securities, financial reporting, and company law. This includes investigating misconduct and taking prosecutions and civil actions under various Acts. Significant enforcement powers support the FMA’s compliance efforts.

Drafting Industry Guidance

The FMA publishes handbooks, guides, and reports providing regulatory guidance across different sectors. These inform industry participants of legal obligations and assist compliance.

Overall, the FMA’s extensive powers enable oversight across all areas of the financial system. Its multifaceted approach promotes market integrity, financial stability, and investor interests.

Key Initiatives and Priorities

The FMA focuses its resources on priority initiatives targeting specific regulatory challenges and issues. Its strategic priorities aim to maximize long-term benefits for financial consumers and markets.

Current key projects include:

Conduct and Culture Investigations

Misconduct issues have prompted the FMA to prioritize reviews of conduct risk and culture within financial institutions. It aims to identify governance weaknesses and incentivize ethical business practices.

Market Surveillance Enhancements

Upgrading market surveillance capabilities allows the FMA to better detect unfair trading and enforce securities laws. Development of automated surveillance tools is underway.

Anti-Money Laundering (AML) Supervision

The FMA now oversees compliance with AML legislation across certain sectors like broking and virtual asset service providers.

Environment, Social and Governance (ESG) Reporting

Introducing mandatory climate-related disclosures will enhance ESG transparency. The FMA is consulting on implementing relevant international standards.

Investment Platforms Oversight

With the growth of robo-advisors and investment platforms, the FMA plans to review services’ marketing practices and conflict management. This will address emerging consumer risks.

Through prioritizing initiatives strategically, the regulator can deliver impactful market improvements and respond to evolving conditions. The FMA publicly consults on its plans and reporting to maintain openness.

Impact on Financial Traders and Brokers

The FMA’s extensive regulatory remit directly impacts financial traders and brokers operating in New Zealand. The following explains key implications across areas like registration, conduct expectations, and reporting obligations:

Registration Requirements

Under the Financial Service Providers (Registration and Dispute Resolution) Act 2008, all financial services providers must register on the public FSPR. This includes forex and CFD providers, brokers, and advisors. Registration demonstrates providers meet standards like capital adequacy, dispute resolution, and disclosure.

Conduct and Culture Expectations

The FMA emphasizes conduct risk management across registered providers. Robust governance, incentives structures, and controls must be in place to minimize misconduct. Conflicts of interest also require careful management. Expectations are heightened under the new conduct licensing regime.

Compliance with NZ Financial Laws

Brokers must comply with relevant financial legislation including insider trading prohibitions under the FMC Act. The FMA strictly enforces breaches, so legal obligations must be well understood.

Financial Reporting Requirements

Certain brokers must file audited financial statements and meet accounting standards. This upholds transparency and allows monitoring for issues like undercapitalization.

Responsible Borrowing Requirements

Registered providers must comply with lender responsibility principles on appropriate advertising, disclosure, affordability assessments, and risk warnings. This protects retail investors from excess leverage risks with CFDs and forex.

Fair Dealing Expectations

All financial services providers must deal with clients fairly, reasonably, and transparently. FMA guidance explains managing conflicts of interest, acting ethically, and undertaking proper due diligence.

By internalizing the FMA’s expectations, traders and brokers can implement governance and compliance best practices. This enables sustainable market participation and positive engagement with the regulator. Proactive compliance also helps avoid significant enforcement actions.


New Zealand’s Financial Markets Authority plays an integral role in governing the country’s financial system. By promoting market integrity, financial stability, and investor interests, the FMA fosters productive market participation.

Traders and brokers operating in New Zealand must engage closely with the regulator. Registration, licensing, conduct requirements, and enforcement powers require informed compliance and cooperation.

Overall, the FMA’s regulatory regime creates an environment where traders and consumers can transact confidently in fair and orderly markets. Engaging constructively with the regulator enables sustainable and responsible market practices for all participants.