Law firm says watchdog showing it means business

The Chapman Tripp cited four announcements from the FMA which show the FMA is using enforcement powers available. Photo / Thinkstock

The Financial Markets Authority lifted its enforcement action in May, showing it is "increasingly prepared to flex its regulatory muscles", according to one of the country's biggest law firms.

The FMA made four public enforcement moves last month and Chapman Tripp said this "high level" of activity might become the "new normal" following changes to New Zealand's capital markets regime.

This regime, under the Financial Markets Conduct Act, gives the authority increased powers, including the ability to ban or stop the distribution of material it thinks is misleading.

Chapman Tripp said yesterday: "Issuers should stay vigilant but have little reason to fear, so long as they have robust systems and processes in place to comply with the increased expectations, resources, powers and tools of the regulators under the new regime."

The law firm cited four announcements from the FMA last month:

•Pressing for the removal of 23 overseas forex firms from the Financial Service Providers Register since the start of the year.

•Getting freezing orders over assets of forex services provider Area Capital.

•Two directors of Apple Fields being fined $30,000 for financial reporting breaches.

•It issuing a warning and getting $500,000 in compensation from NZX-listed Pacific Edge for breaches of continous disclosure rules.

Chapman Tripp said: "This activity shows that the FMA is increasingly prepared to ... use the significant enforcement powers available to it."