THE FMA VIEW­POINT ON TECH­NO­LOG­I­CAL CHANGE IN FI­NAN­CIAL MAR­KETS

NZ Business - - SPECIAL FEATURE -

Rob Everett, chief ex­ec­u­tive of the Fi­nan­cial Mar­kets Author­ity says it is in­evitable that tech­nol­ogy will change the way fi­nan­cial prod­ucts are of­fered to con­sumers and prob­a­bly in­tro­duce new prod­ucts in the years ahead.

“Our fo­cus is en­sur­ing that fi­nan­cial in­sti­tu­tions are putting the in­ter­ests of cus­tomers first when it comes to the prod­ucts and ser­vices they of­fer- this fo­cus re­mains the same what­ever changes tech­nol­ogy may bring,” he says.

One of the pur­poses of the Fi­nan­cial Mar­kets Con­duct Act is to pro­mote in­no­va­tion and growth and to al­low new en­trants to come to the mar­ket. Everett says the FMCA pro­vides the FMA with a ro­bust, mod­ern and flex­i­ble set of reg­u­la­tory tools to deal with is­sues in the mar­ket now and to ac­com­mo­date fu­ture change.

“Tech­nol­ogy can also have a pos­i­tive im­pact on the way con­sumers in­ter­act with fi­nan­cial ser­vice providers and their prod­ucts. Eq­uity crowd fund­ing and peer-to-peer lend­ing were two of the new in­no­va­tive fi­nan­cial prod­ucts that were specif­i­cally en­abled through the FMCA.

“Our role, no mat­ter what changes take place within the mar­ket­place, is to be con­sis­tent in the way we im­ple­ment the new con­duct reg­u­la­tion and to re­main ef­fi­cient and ef­fec­tive in su­per­vis­ing and mon­i­tor­ing all the li­censed or­gan­i­sa­tions. Through our in­creased li­cens­ing pow­ers, the new reg­u­la­tions also al­low us to get closer to the peo­ple and busi­nesses we reg­u­late.”

Everett says the FMA’s strate­gic out­look iden­ti­fied new busi­ness mod­els, ad­vances in tech­nol­ogy and more com­plex prod­ucts as is­sues that would re­quire greater at­ten­tion from the reg­u­la­tor and also greater at­ten­tion from in­vestors to en­sure they were tak­ing re­spon­si­bil­ity for their de­ci­sions.

“In­vestor de­ci­sion-making and in­creas­ing in­vestor ca­pa­bil­ity is a key part of well­func­tion­ing fi­nan­cial mar­kets and part of our role is to help build this ca­pa­bil­ity. As much as in­vestors need to be cau­tious around any in­vest­ment – no mat­ter what tech­nol­ogy is in­volved or how it is served – it’s crit­i­cal they understand the risks and the ben­e­fits as­so­ci­ated with prod­ucts when they are hand­ing over their hard-earned money.”

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