The Financial Markets Authority officially opened for business yesterday, almost a year to the day after Commerce Minister Simon Power announced its formation.
The FMA takes over the functions of the Securities Commission and the government Actuary which are being disestablished, and will have much stronger powers.
"I'm confident that the FMA will lift the bar in terms of market behaviour and will have the tools it needs to help restore mum and dad investor confidence in our financial markets, which has taken a battering in recent years," Power said.
"It's clear that if we are to broaden and deepen our financial markets to benefit companies looking to raise capital, our financial sector must be subject to clear rules, and visible, proactive, and timely enforcement."
The FMA has powers, functions, and duties that its predecessors did not, and can exercise an investor's right to take civil action against a financial market participant when it's considered to be in the public interest to do so. The individual can opt out of the action.
Its new head - Sean Hughes - told AMP Business last week that things will be different for the financial sector.
"We're going to be setting standards, we're going to be much tougher, much more aggressive and we're going to be faster in taking action," Hughes said.
The watchdog will also keep an eye on products being structured to avoid being supervised.
And it comes with enhanced powers to deal with low-ball unsolicited offers. Businessman Bernard Whimp has made a series of such offers over the last six months and Power says anyone with a history of making them will now be made to display a prominent warning to that effect when they send documents to investors.
Unsolicited offers can also be required to include minimum-offer periods and show the current market price.
The watchdog will have a new oversight for registered exchanges, including the ability to undertake real-time surveillance of market activity.
The board is comprised of chief executive Hughes, Simon Allen as chair, and boardmembers Shelley Cave, Colin Giffney, Mary Holm, Murray Jack, James Miller, Justine Smyth, Michael Webb and Mark Verbiest. Associate members are Bruce Sheppard, Rebecca Eele and Arthur Grimes.
Power says he will be closely watching the outcome of cases the FMA has inherited and which are still before the courts.
http://tvnz.co.nz/business-news/new-watchdog-opens-4148412