New Zealand’s Financial Markets Authority (FMA) will focus its resources on seven strategic priorities including governance and culture over the next four years.

Its other six key targets are conflicted conduct, capital market growth and integrity, sales and advice, investor decision-making, effective frontline regulation and FMA effectiveness and efficiency.

It says strong oversight of the seven areas is critical if New Zealand’s economy is to reap the benefits of a transparent and efficient financial market.

“A reflection of well-functioning financial markets is an environment where risk is understood, innovation flourishes, integrity prevails and investors are confident and active participants,” the FMA says in its statement of intent for 2015-19.

“Within each of our priorities we have identified specific areas where we think we can most effectively minimise conduct risks, improve behaviour within our markets, benefit participants and investors, and help strengthen New Zealand’s economy.”

The FMA expects boards to consider client interests their top priority in every company strategy, to protect shareholders’ interests and set the tone for corporate culture.

Businesses must deal firmly with conflicts of interest – both actual and potential – because these are often prevalent in small markets such as New Zealand.

The FMA says it will not hesitate to use new powers under the Financial Markets Conduct Act, which took effect in stages last year, to crack down on any wrongdoing.

“Good governance plays a critical role in contributing to markets that are fair, efficient and transparent. It also contributes to better outcomes for investors, shareholders and the economy.

“We will focus on timely and visible action against misconduct to protect the integrity and reputation of our markets.”

The FMA will join forces with the stock exchange to act swiftly against possible market misconduct such as manipulation and insider trading.