FMA pragmatic, not pedantic, boss says
The boss of the Financial Markets Authority (FMA) wants to guide businesses rather than "parade a bag full of scalps".
Chief executive Rob Everett also told a trans-Tasman business circle lunch in Auckland today that he wanted to limit regulatory costs.
Regulation frequently topped the list of business bugbears, with a wave of new rules around tax reporting, money-laundering and market conduct coming into force.
But Everett said the regulatory load in New Zealand was "perfectly manageable" and justifiable.
The former Merrill Lynch executive said he was unsympathetic to the "whining" of international banks, especially with many turning in record profits.
However, Everett said he did understand the short-term pain that local banks and fund managers were going through.
He said the FMA was "going out of [its] way" to keep the transaction cost of regulation to a minimum.
The market watchdog's core role was primarily about support and guidance, he said.
'We'd rather help the industry achieve good outcomes than just parade a belt full of scalps," he said.
"We must always be alert to the detail, but not unrelentingly pedantic."
"Where businesses are a few degrees off the mark, we'd prefer to help you get it 100 per cent right, provided you are acting in good faith, rather than head straight into enforcement territory."
However, Everett also promised the FMA would take action against any misconduct or people finding "cute ways" to get around the law.
Some local businesses have accused New Zealand authorities of being too ambitious in trying to lead global best practice, rather than being cautious fast followers.
"We do what's right for us," Everett said.
"Frankly, whether that's before or after the rest of the world ought to be irrelevant."
He said the framework of international laws were not always well fitted to New Zealand's small business culture and often had a disproportionate impact.
Independent lawyers, accountants, financial advisers, trustees and others have all complained about the compliance costs associated with new regulations.
"That's obviously a segment of the market we're spending a lot of time with," Everett said.
"Part of our engagement is about calibrating whether you can really apply the same rules across a one or two-person adviser firm right up to a very large, effectively international bank."
He also said the FMA was focused on the greatest risks, "rather than go off box-checking in areas where there's no evidence of harm being done".
"Broadly speaking, I think we've actually got a good amount of discretion here for regulators to be thoughtful in how they apply [the law]," Everett said.
While the FMA could always use more resources, he was comfortable with the present level of funding.
Everett was appointed last November, replacing foundation chief executive Sean Hughes.