Financial Markets Authority funding

This page explains how the Financial Markets Authority (FMA) is funded. It includes information about the 2021, 2019/20 and 2016 funding reviews.

How the FMA is funded

The Financial Markets Authority (FMA) is funded through a combination of Crown funding and a levy charged to financial market participants.

The levies are set in the Financial Markets Authority (Levies) Regulations 2012. These regulations were amended in 2017 following a review of the FMA’s funding and levies.

Financial Markets Authority (Levies) Regulations 2012(external link) — New Zealand Legislation

The FMA also charges fees for certain services that it completes for market participants.

These fees are set in the Financial Markets Authority (Fees) Regulations 2011 and the Financial Markets Conduct (Fees) Regulations 2014.

Financial Markets Authority (Fees) Regulations 2011(external link) — New Zealand Legislation

Financial Markets Conduct (Fees) Regulations 2014(external link) — New Zealand Legislation

2021 funding and levy review

In 2021, MBIE and the FMA initiated a review of the FMA’s funding requirements and the FMA levy. The review was commenced in response to the FMA’s expanding remit under 3 new legislative regimes: Conduct of Financial Institutions (CoFI), Insurance Contract Law (ICL) and Climate-Related Disclosures (CRD).

The objectives of the review are to:

  • review the FMA’s additional funding requirements to ensure that it can meet its new statutory functions under the CoFI, ICL, and CRD regimes, and can operate as a credible and effective financial markets regulator
  • consider the level of Crown and third-party levy funding that is appropriate to reflect the public-private good elements of the FMA’s new role and operations under these regimes and
  • ensure that the FMA levy settings remain appropriate and proportionate to the benefits received.

As part of the funding review, MBIE contracted Deloitte to conduct an independent assessment of the funding options and underlying costings.

More information about the funding and levy review

Consultation on 2021 Financial Markets Authority funding and levy

2019/20 funding and levy review

In 2019, MBIE and the FMA initiated a review of the FMA’s funding requirements and the FMA levy. The review was commenced in response to cost pressures resulting from the FMA’s evolving regulatory environment and remit. The objectives of the review were to:

  • review the FMA’s funding requirements to ensure it can continue to meet its statutory functions under the financial markets legislation it administers (including the new financial advice regime), and can operate as a credible and effective financial markets regulator
  • consider the level of Crown and third-party levy funding that is appropriate to reflect the FMA’s role in serving the public good
  • ensure that the FMA levy settings remain appropriate and proportionate to the benefit levy payers receive from operating in well-regulated financial markets.

In addition, MBIE commissioned an independent report by PwC to assess different funding options for the FMA and the FMA’s efficiency and effectiveness.

Financial Markets Authority: Efficiency, effectiveness and baseline review [PDF, 512 KB]

In early 2020, MBIE and the FMA consulted on changes to the FMA’s funding and the FMA levy. Cabinet has subsequently agreed to increase the FMA’s funding over 3 years up to an increase of $24.805 million per annum and that the majority of this increase is to be met through increases in the FMA levy.

In May 2020 changes were confirmed in the Financial Markets Authority (Levies) Regulations 2012 to implement the new levies for the first year of the FMA’s phased increase in funding (2020/21).

Financial Markets Authority (Levies) Regulations 2012(external link) — New Zealand Legislation 

Cabinet has confirmed the levy amounts for the second and third years of the phased increase, along with the levy amounts for the out-years.  Cabinet has also confirmed the levy amounts for the new financial advice regime, now commencing 15 March 2021 (following a delay from 29 June 2020 due to COVID).

Regulations giving effect to Cabinet’s decisions were made in December 2020.

Financial Markets Authority (Levies) Amendment Regulations (No 2) 2020(external link) — New Zealand Legislation 

More information about the funding and levy review and the confirmed levy amounts is available in the documents below.

2016 funding and levy review

In October 2016, Cabinet approved a number of changes to the funding of the Financial Markets Authority, the External Reporting Board and the Companies Office as follows:

  • additional funding of $9.816 million for the FMA
  • changes to the structure of the FMA levy
  • return historical over-recovery of the existing FMA and External Reporting Board levies and revise levies payable to incorporate new projected volumes of levy payers
  • a number of changes to Companies Office fees.
Last updated: 15 October 2021