No financial services advisers have yet been brought before New Zealand’s Financial Advisers Disciplinary Committee, according to the NZ Financial Markets Authority (FMA).

In its first enforcement report for the year to June 30, the FMA says the focus has been on educating advisers about the new legislative regime.

“But the pendulum is now swinging towards testing compliance and enforcing the law,” it added.

“The FMA has made it clear to advisers and their industry bodies our expectations will continue to rise and that we expect to see more proactive and willing compliance.”  

During its first year of operation the FMA received more than 4000 complaints against the financial services industry. The majority were about financial advice, securities issuers and failed finance companies.

The regulator refused one application for a licence during the year because the applicant “did not meet the threshold of the good character requirement” under the Financial Advisers Act. The applicant launched a legal challenge to the decision.

“The grounds for the appeal were [that] the FMA gave disproportionate weight to the appellant’s convictions and inadequate weight to the applicant’s explanations,” the report said.

The District Court dismissed the appeal. “The judge noted the FMA had proceeded fairly and the factors considered… in reaching its decision to assessing good character were appropriate,” the report said.