2 Dec 2010

New FMA power seen as too much

8:04 am on 2 December 2010

Critics say powers being given to the new Financial Markets Authority are draconian.

A Commerce Sub-Committee has been hearing submissions on the Financial Markets Bill, which will gives the agency its powers.

The FMA will take over work currently carried out by the Securities Commission, the Ministry of Economic Development and the NZX.

The Business Roundtable said it's worried the FMA is being saddled with some ill-thought-through powers.

The NZX says that while it's supportive of the FMA, the bill is fundamentally flawed and the legislative process which set the regulatory framework for capital markets has misfired.

Chief executive Mark Weldon says there's a risk that the proposed regulation will favour international operators.

Capital Markets Development Taskforce chairman Rob Cameron agrees.

He says he's concerned more protection for investors will come at the expense of companies prepared to list on the exchange.

Both Mr Cameron and the NZX say more consultation is needed and the regulatory framework should fall under a review of the Securities Act and Security Markets Act which is currently underway.

The Financial Markets Authority is to begin operations in April.