New Zealand’s Financial Markets Authority (FMA) has warned the industry to improve governance practices and root out misconduct and conflicts of interest.

In his annual corporate plan, CEO Rob Everett says the regulator is “increasingly impatient” with companies disregarding customer outcomes and strong conduct frameworks.

Misconduct in trading, inadequate or ineffective disclosure, poor auditor work and dishonest engagement with the regulator are areas of concern.

The FMA expects to investigate and enforce compliance in these areas, and in terrorism financing and money laundering, according to the corporate plan. 

The regulator says it has identified concerns including “lack of appreciation of the presence of conflicts of interest, lack of appropriate disclosure, insufficient record-keeping and lack of appropriate communication with clients”.

Mr Everett said: “The FMA expects companies to be able to provide concrete evidence of progress they’ve made in putting good conduct outcomes at the heart of their business.”

Boards and senior managers must develop a strong governance culture with customers at the centre, the FMA says. It wants to see incentive structures and practices, sales and advice designed and implemented with a focus on customer needs and outcomes.