New Zealand’s Financial Markets Authority (FMA) made a loss of almost $NZ2.5 million ($2.27 million) in the year to June 30, as implementation of its new regulatory regime pushed up costs.

The result was announced in the FMA’s first annual report since full implementation of the Financial Markets Conduct Act.

CEO Rob Everett says while the new regime is “in its infancy”, he is pleased with progress so far.

“The new licensing framework and our focus on the conduct of the regulated sectors give us a bigger mandate, and with that comes higher expectations,” he said.

“The FMA will be demanding in the standard of conduct we want to see from providers of financial services and products and, in turn, the industry, investors and stakeholders have high expectations for the regulator to achieve results.

“This report shows a gear change in the new regime as the FMA and firms begin to make full use of it.

“Our aim across all our activities is to increase confidence in financial markets and to support economic growth in New Zealand.”

During the year the FMA recovered more than $NZ51 million ($46.4 million) in compensation for investors, and imposed sanctions to address market conduct, integrity and sales practices.

Revenue was down slightly to $NZ30.2 million ($27.48 million), and expenditure was up 11% to $NZ32.68 million ($29.73 million).

The overall loss of $NZ2.48 million ($2.26 million) compares with a profit of $NZ1.78 million ($1.62 million) the previous year.

The FMA says expenditure increased due to the “considerable effort” of implementing the Act, but the deficit has been covered by accumulated funds.

Accumulated funds fell to $NZ6.56 million ($5.97 million) from $NZ9.04 million ($8.22 million).