FMA funding and levies decisions
Summary of policy decisions
In October 2016, Cabinet approved a number of changes to the funding of the Financial Markets Authority (FMA), the External Reporting Board (XRB) and the Companies Office. These changes are:
- $9.816 million in additional funding for the FMA
- changes to the structure of the FMA levy
- return historical over-recovery of the existing FMA and XRB levies and revise levies payable to incorporate new projected volumes of levy payers
- a number of changes to Companies Office fees.
MBIE and the FMA publically consulted on these proposed changes throughout July and August. The consultation process asked for feedback following MBIE’s own reviews of the FMA’s funding and levy, the XRB levy and the Companies Office fees. The objectives of the reviews were to:
- Review the FMA’s expenditure and funding requirements to ensure that the FMA can adequately carry out its statutory responsibilities and maintain confidence in New Zealand’s financial markets. Since the FMA’s budget was approved in 2011, the overhaul of New Zealand’s securities legislation has increased the scope of the FMA’s regulatory remit and responsibilities.
- Ensure that levy and fee settings remain appropriate:
- For the structure of the FMA levy, align the levy for each stakeholder with the benefits they receive from well-regulated financial markets. Not dis-incentivising the supply of financial products or services was another key goal.
- For both the FMA and XRB levies, administrative simplicity, ease of implementation and collection and the avoidance of large over and under-collection were key objectives.
- For the Companies Office fees, ensuring the fees for services reflected the cost of providing those services.
- Ensure that these regulatory entities are funded sustainably while ensuring third-parties meet an appropriate proportion of the cost given the benefits they receive.
We received 42 submissions through the consultation process.