New Zealand’s Financial Markets Authority (FMA) will step up its surveillance efforts to combat weak governance in companies.

It follows a series of cases involving lax enforcement of internal policies and sloppy control systems last financial year.

“The most notable issues in our enforcement activities continue to be in governance, culture and conflicted conduct,” the financial markets regulator says in its 2014/15 report.

“We also noted
 a lack of awareness of basic regulatory requirements, particularly for disclosure in both primary and secondary markets.

“The main focus of our supervisory and monitoring work will continue to be in these areas, and we will continue to seek higher standards of conduct.”

The FMA secured $NZ51.14 million ($47 million) in compensation for investors and imposed $NZ1.71 million ($1.56 million) in fines and penalties in the year.

About 63% of its 51 inquiries and investigations concerned disclosure obligations, insider trading and market manipulation in primary and secondary markets.

“Our focus on these areas is likely to continue to increase as our broader regulatory remit takes hold.”

Of the 28 litigation matters the FMA investigated, about 39% led to prosecutions over non-filing of financial statements and civil proceedings on secondary market matters.

About 77% of completed investigations resulted in sanctions that did not involve court actions, and 28 businesses were removed from the Financial Service Providers Register (FSPR).

The regulator says most FSPR cases are challenging, because they involve offshore companies.

“Many of the FSPR issues raised with us have involved firms not licensed or otherwise regulated in New Zealand and therefore not subject to our oversight.

“Nevertheless, we have used considerable resources dealing with them, and responding to complaints and queries.”