Tamsyn Parker

Tamsyn Parker is the NZ Herald's Money Editor

Regulation not a cure all - FMA chief

Sean Hughes.
Sean Hughes.

Departing Financial Markets Authority boss Sean Hughes says regulation should not be a panacea for all ills but an inducement and encouragement for willing investors to participate.

Speaking to key stakeholders at the regulator's last quarterly update for the year, Hughes took the opportunity to thank his predecessor Simon Botherway - chairman of the FMA establishment board - media and the industry for its support over his three-year tenure.

Hughes joined the FMA in October 2010, before its May 2011 official launch, and is to depart on December 17 after deciding not to apply for a second term as chief executive.

He said his decision to leave the organisation was driven by the wisdom of knowing when to step away and move on.

"I didn't seek a second term. For me the job was laid out in front of me in 2010."

That job was to lay the foundation stones and set the framework through which the regulator would deliver its mandate.

Those goals had now been achieved and the organisation was moving into a second phase of bringing in the new Financial Markets Conduct Act - the biggest rewrite of securities law in 30 years.

Hughes said the future of the FMA now rested in the hands of the next generation of leaders at the authority and he was confident they would continue to raise the bar.

However, he said a regulator should not always use a "hard stick" to punish those who broke the rules but a "firm stick".

FMA chairman Simon Allen said as the first chief executive of the new regulator Hughes had built a strong culture and the organisation's engagement with the market stood out as a key factor in its success so far.

Its predecessor the Securities Commission was heavily criticised for its lack of engagement and communication with stakeholders.

Allen said the FMA had achieved a huge amount in the past year and its focus for 2014 would be the introduction of the new Financial Markets Conduct Act. It was well prepared for the introduction of the new law and had been actively engaging with the industry ahead of it coming into force.

The organisation was also looking forward to the start of its new chief executive Rob Everett in February.

Allen said Everett had a similar resume to Hughes and he expected the FMA's strong activity to continue under the new leadership.

- NZ Herald

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