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FMA lifts head count to 170 staff as it probes new areas
Thu, 19th Mar 2015
FYI, this story is more than a year old

The Financial Markets Authority has "staffed up" to the tune of 170 people and will invest heavily in technology in coming years to fulfill its role as a regulator, a parliamentary committee has heard.

Chairman Murray Jack told the parliament's commerce committee the organisation was "not yet four years old" and it was now operating under new law that had given it new powers.

Chief executive Rob Everett said about 85 per cent of the authority's costs were salaries or staff-related costs, which felt about right "because we are a very specialist, skills heavy organisation with a lot of highly qualified staff".

Head count had risen to 160 in 2013/14 and had subsequently gone above 170 "to meet the demands of the new populations we are licensing" and to fulfil an education role with industry, particularly with those not previously regulated.

It would be a major exercise for the authority to build an Information and communications technology system from scratch and spending on this in coming years would be significant.

The committee also heard "legacy" prosecutions from the financial company sector were continuing -- the Hanover Finance case would run for a several more years -- and an investigation into Milford Asset Management was significant.

After the committee meeting Everett told media it was significant because New Zealand had not had an investigation into alleged market manipulation of any great size previously.There was no timeline for the investigation, he said.

Irrespective of the outcome it gave the authority an opportunity to guide market participants to the sort of behaviour it expected to see and the sort of controls expected, he said.

"It's a sign of a maturing market that has a regulator that has the powers and the scope to stick its nose in," he said.

Media speculation of that the Milford Asset Management investigation had been expanded in scope was not correct, he said. However, he added that lot of resource was being put into it.

He declined to comment on how many people were the subject of the investigation.

"As part of our ongoing investigation into trading activity at Milford we are seeking information from the market - this includes requests for information from some brokers," an FMA spokesman said in a subsequent email. "the FMA has not broadened the scope of its current investigation."

Milford has said the investigation concerns an individual trader employed by the firm and certain specific trades and Milford and the trader concerned were co-operating fully with the FMA.