FMA denies step-up in information, confidentiality orders

The Financial Markets Authority says it hasn't significantly increased its use of its powers to demand information in recent years.

Section 25 of the Financial Markets Authority Act gives the regulator the power to require a person to supply it with specific information or documents, while under section 44 of the Act, the FMA can also make confidentiality orders preventing that person from disclosing the information, or even the fact of the confidentiality order itself, to anyone other than their own lawyer or the FMA.

According to law firm DLA Piper, “we are seeing an increase in the number of clients receiving notices from the FMA under section 25,” and these notices are “almost invariably” accompanied by a confidentiality order.

“The penalties for breach are severe and can include a criminal conviction and fine of up to $300,000,” DLA Piper says.