A quorum of three is needed. The board is made up of 12 part-time non-executive directors, drawn from the industry.

New Zealand’s Productivity Commission is conducting a review of the country’s regulatory regimes.

It says there are as many as 200 regulatory regimes operating in this country. “Yet there is surprisingly little information about regulation and its effects or about the wider regulatory system and its performance.”

The risk of conflicts of interest due to having industry participants in governance roles on regulatory bodies was stark in the case of the FMA, the report said. It said the 12 board members were active participants in the business world.

It recommended the effectiveness of this type of board be reviewed before the format was applied to other sectors.

Another issue identified was regulatory creep. About half of those who submitted to an earlier issues paper said they thought regulators rarely or never worked together to reduce the burden on those being regulated.

In the financial markets, there were complaints of a large number of organisations being involved in regulation, with unclear boundaries between them.

ANZ submitted: “An example is the overlap between the NZX and the FMA. NZX firms are regulated under the NZX participant rules. The same firms are also brokers for the purposes of the FAA and must comply with the broking requirements in the legislation. Currently the rule sets (and each regulator’s interpretation) conflict with each other so that compliance with one set of rules could potentially be in breach of the other.”

Bell Gully said there was the potential for the Serious Fraud Office and FMA to impose undue cost by running concurrent investigations in the same set of circumstances.

The Insurance Council said there should be more consideration of a single market conduct regulator. It said financial advisers’ misleading and deceptive conduct could potentially come under three different regimes – the Financial Markets Conduct Act, Financial Advisers Act and Consumer Law Reform Bill.

The FMA said amalgamation of agencies would be economically efficient and more likely to generate consistent regulatory outcomes. It said it had looked at opportunities to combine regulatory activities under one umbrella but none had been implemented because of an absence of provable economic benefit or diffuse levels of support.

The report also identified concerns with regulators’ fees. Only 9% of those surveyed said fees were fair and reasonable.

The New Zealand Bankers Association said the then-Ministry of Economic Development (MED) had imposed fees to fund the FMA without considering industry concerns and did not address feedback.

The commission said its report would help design new regulatory regimes and improve the existing ones. Submissions on the draft report close May 8.