The New Zealand Financial Markets Authority (FMA) has published its Financial Conduct Report setting out regulatory priorities for the 2025/26 financial year, which begins on 1 July, under its outcomes-focused approach to fair, efficient and transparent financial markets. Cross-sector priorities include reducing unnecessary regulatory burden through continued use of its pilot regulatory sandbox and progress toward a single conduct licence by streamlining Financial Markets Conduct Act Part 6 licensing processes, standard conditions, supervision activities and subsequent regulatory returns, alongside coordination with the Reserve Bank of New Zealand on delivery of the twin peaks regime. Supervisory focus will also increase on emerging risks in private markets, virtual assets (including tokenisation) and operational resilience. The FMA will assess how well firms make complaints and dispute resolution routes visible and easy to use, and will maintain a remediation focus, particularly for banks, insurers and non-bank deposit takers as the Conduct of Financial Institutions regime beds in. Scam disruption remains a priority, including expanded pilot partnerships with banking and technology sectors to accelerate information sharing and removal of scam content, with reported investment scam losses of NZD 194 million in the year to 30 September 2024. The report also flags continued engagement with the Ministry of Business, Innovation and Employment on custody law reform, drawing on lessons from the Barry Kloogh Ponzi scheme in which clients lost around NZD 18 million, alongside steps to improve the FMA’s visibility of the custodial sector. Sector work programmes include financial advice monitoring and thematic reviews on vulnerable-customer harm (with a focus on mortgages and life and health insurance), disclosure of fees, incentives and commissions, and client asset protection and custody oversight, plus a review of barriers and opportunities to improve access to advice (including KiwiSaver and digital advice). For banks, non-bank deposit takers and insurers, priorities centre on proactive reviews of existing and legacy products, expectations to self-report material contraventions and remediate root causes, and investment in controls and technology, with additional scrutiny of insurer communications ahead of the staged commencement of the Contracts of Insurance Act 2024 and planned publication of data on savings and lending rate changes to support transparency around Official Cash Rate pass-through. In capital markets and investment management, the FMA will tackle misleading disclosure in wholesale offers and advertising, seek a High Court determination on eligible investor certificate settings via a case stated procedure, publish refreshed guidance on ethical investment claims, intensify insider conduct and continuous disclosure work with NZ RegCo, and monitor custody, liquidity risk management and related party transaction controls. The FMA will use the report as the basis for industry engagement over coming months and has invited feedback on future editions.

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