The report shows that in the first half of the year the FMA was operating in a period of relative economic stability and focusing on regular monitoring, enforcement activity, and preparing for expansion to its regulatory remit.

However, Covid-19 undermined economic stability and tested the FMA’s agility, with planned work being put on hold so the regulator could manage its role in the crisis, and support the industry and consumers through the situation.

FMA chief executive Rob Everett said, “While the situation was extreme, our expectations for conduct throughout the crisis were very much business as usual.”

Despite the disruption, the FMA continued to prepare for upcoming changes to its remit, which includes the conduct regulation of banks, insurers and non-bank deposit takers and, more immediately, the implementation of the financial advice regime on March 15, 2021.

On a specific note the report pointed out that the FMA have been disappointed by the slow reactions in the life insurance industry to the 2019 Life Insurer Conduct and Culture review. Everett said that “While we’re disappointed, we’re not surprised as the [life insurers’] responses confirm what we found in our original review. It’s clear that progress has been slow and not as far-reaching as required.”

As well as this 2020 has also seen a rise in the number of warnings issued regarding scams, business impersonations, and frauds in progress. In a previous story for Good Returns the FMA’s director of regulation, Liam Mason said that “We have seen identity theft and online scams ramp up over the covid period, and there is no sign that they are going down in future.”

The FMA also continued its momentum in enforcement and deterrence activity, most notably by issuing two sets of civil proceedings against CBL Corporation and its executives. The FMA used a wide range of enforcement tools during the year, including public warnings, a stop order, an enforceable undertaking and court prosecutions.

Everett said it was also an important year for KiwiSaver. The scheme experienced significant market volatility, investors received projections in their annual statements of how much they may receive in retirement, and a spotlight was put on the fees that providers charge.

“We will continue our work in this space in the coming year, and challenge providers to demonstrate how they are delivering value for money. Sustainability and so-called ‘green’ investments are in the mix, with investors wanting assurance that if they’re paying a premium for a responsible investment, it operates as promised,” he said.

Everett has said the new regime for climate risk disclosures, and – more broadly – the implications for the finance sector of a shift towards creating a sustainable economy, will require significant focus from regulators.

While the regulatory changes on the horizon may seem significant, Everett has said that they essentially formalise the expectations that the FMA has for the industry.