FMA’s Hughes proposes single trans-Tasman markets regulator

Sean Hughes: Potential benefits are high

BUSINESSDESK: A single regulator for financial markets in Australia and New Zealand would help market participants and investors in both countries, Financial Markets Authority chief executive Sean Hughes says.

"The potential benefits of integration for market participants are high, through reduction of complexity, increased certainty and lower costs of compliance," he says in a submission to the Australian and New Zealand Productivity Commissions.

A worthy goal would be to achieve a single licensing and product disclosure regime for the two countries, "bringing total portability for services, products and providers".

"Ideally, this would be supported by a single trans-Tasman business registry, giving one-stop access for market participants and the public."

In the submission, entitled Strengthening Economic Relations between Australia and New Zealand, Hughes says he appreciates a single regulatory approach straddling the two countries "can raise issues of sovereignty and political accountability, or at least the perception of such".

But the benefits include providing a system that businesses and investors find familiar and cost-effective.

Australia has consolidated its registration functions, corporate regulation, consumer credit, financial literacy and financial crime investigation within the Australian Securities and Investments Commission.

In New Zealand, there is less consolidation.

The FMA is the principal regulator of investments and investment markets but shares responsibility for registries and enforcement with the registrar of Companies and the Serious Fraud Office, while the Commerce Commission has oversight of consumer credit contract regulation.

Mr Hughes says despite these differences, "the appetite and potential for harmonisation is high".

 

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About time we had more of this thinking.

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Trouble is - they're a toothless tiger asleep at the wheel.

Where was the FMA oversight during the leadup to and during the GFC?

Once domiciled in Aussie - should anything anywhere near as "bad" as the GFC happens again - you can bet the poor cousins here in NZ will be the "last cab off the rank" for the Aussie's when their local entities need more attention than Kiwi entities.

Maybe the FMA should eat a few NZ apples in Aussie to get the idea...

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The FMA was only established in 2011 ...

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Hey, why stop there, why not one currency, a central bank and then we could be the Greece of Australasia.

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FMA didn't exist then.

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You only need to look at the mess in Europe for reasons why this is a bad idea. Best to run our own ship and currency. Australia is all about Australia. I know as I have worked for a Australin company here in New Zealand and they swept all profits back home with no tax paid here. I think Mr. Hughes would rather like to be back in Australia. There were rumours in the press that he was leaving the FMA to go back to ASIC.

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Australia is a rich country that seemingly can afford inefficient, over-the-top, in-your-face, we-know-best regulators and regulation. I am thinking in particular of APRA. NZ does not want a bar of this.

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