FMA information requests will probably increase going forward. Here are a top firm’s tips on how to manage them
MinterEllisonRuddWatts has published five tips to manage information requests from New Zealand’s Financial Markets Authority (FMA).
Under section 25 of the FMA Act 2011, the FMA can compel any person or entity to provide information to examine possible violations of financial services and securities markets laws. The information may be from documents, emails, and other electronic records, or be given as evidence in-person interview.
The top firm expects an increase in the use of section 25 notices as the FMA becomes more proactive and intensifies supervision of markets conduct. Failure to comply with these requests is a criminal offence and could net organisations or individuals a penalty of up to $300,000. Anyone involved in financial services and the securities markets – including financial advisers, brokers, auditors, trustees, and issuers – can be subject to these requests.
Minters advised recipients of section 25 notices to engage with the FMA early to understand what the agency is requesting. Individuals and organisations should also negotiate the scope of the information to be provided and the timeframe for the delivery of the information, the firm said.
You can also seek clarification about who the notice is intended for. Section 25 notices may be for an individual in their personal capacity or as an officer of an organisation. Individuals and entities should also be very careful about “line calls” related to the scope of the notice precisely because compliance failure is a criminal offence.
The top firm also advises recipients of section 25 notices to be cautious about divulging privileged information. It said that privileged documents, such as legal advice, can be withheld, but these may be inadvertently leaked with a lack of vigilance.
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Under section 25 of the FMA Act 2011, the FMA can compel any person or entity to provide information to examine possible violations of financial services and securities markets laws. The information may be from documents, emails, and other electronic records, or be given as evidence in-person interview.
The top firm expects an increase in the use of section 25 notices as the FMA becomes more proactive and intensifies supervision of markets conduct. Failure to comply with these requests is a criminal offence and could net organisations or individuals a penalty of up to $300,000. Anyone involved in financial services and the securities markets – including financial advisers, brokers, auditors, trustees, and issuers – can be subject to these requests.
Minters advised recipients of section 25 notices to engage with the FMA early to understand what the agency is requesting. Individuals and organisations should also negotiate the scope of the information to be provided and the timeframe for the delivery of the information, the firm said.
You can also seek clarification about who the notice is intended for. Section 25 notices may be for an individual in their personal capacity or as an officer of an organisation. Individuals and entities should also be very careful about “line calls” related to the scope of the notice precisely because compliance failure is a criminal offence.
The top firm also advises recipients of section 25 notices to be cautious about divulging privileged information. It said that privileged documents, such as legal advice, can be withheld, but these may be inadvertently leaked with a lack of vigilance.
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