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2019/20 funding and levy review

In 2019, MBIE and the FMA initiated a review of the FMA’s funding requirements and the FMA levy. The review was commenced in response to cost pressures resulting from the FMA’s evolving regulatory environment and remit.

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The objectives of the review were to:

  • review the FMA’s funding requirements to ensure it can continue to meet its statutory functions under the financial markets legislation it administers (including the new financial advice regime), and can operate as a credible and effective financial markets regulator
  • consider the level of Crown and third-party levy funding that is appropriate to reflect the FMA’s role in serving the public good
  • ensure that the FMA levy settings remain appropriate and proportionate to the benefit levy payers receive from operating in well-regulated financial markets.

In addition, MBIE commissioned an independent report by PwC to assess different funding options for the FMA and the FMA’s efficiency and effectiveness.

Financial Markets Authority: Efficiency, effectiveness and baseline review [PDF, 512 KB]

In early 2020, MBIE and the FMA consulted on changes to the FMA’s funding and the FMA levy. Cabinet has subsequently agreed to increase the FMA’s funding over 3 years up to an increase of $24.805 million per annum and that the majority of this increase is to be met through increases in the FMA levy.

In May 2020 changes were confirmed in the Financial Markets Authority (Levies) Regulations 2012 to implement the new levies for the first year of the FMA’s phased increase in funding (2020/21).

Financial Markets Authority (Levies) Regulations 2012(external link) — New Zealand Legislation 

Cabinet has confirmed the levy amounts for the second and third years of the phased increase, along with the levy amounts for the out-years.  Cabinet has also confirmed the levy amounts for the new financial advice regime, now commencing 15 March 2021 (following a delay from 29 June 2020 due to COVID).

Regulations giving effect to Cabinet’s decisions were made in December 2020.

Financial Markets Authority (Levies) Amendment Regulations (No 2) 2020(external link) — New Zealand Legislation 

More information about the funding and levy review and the confirmed levy amounts is available in the documents below.

Last updated: 15 October 2021

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https://www.mbie.govt.nz/business-and-employment/business/financial-markets-conduct-regulation/crown-entities-we-monitor/financial-markets-authority-funding/201920-funding-and-levy-review
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