FMA boss Rob Everett says complacency is his biggest regulatory fear

By Gareth Vaughan

"Plenty" of regulatory issues interrupt Financial Markets Authority CEO Rob Everett's sleep with complacency his key sleep disturber.

That's what Everett told interest.co.nz in a Double Shot interview when asked if there were any regulatory issues that keep him awake at night.

"The main one is complacency," Everett said. "We're in a relatively benign and stable economic environment and I think it's incumbent on the regulator occasionally to remind people of some of the issues that have gone wrong in the past, (and) some of the issues that have gone wrong in other jurisdictions."

"So whether that's the providers of financial services, whether it's the users, the investors, reminding people that what goes up doesn't always stay up, reminding the providers that just because it hasn't happened in New Zealand doesn't mean it doesn't exist here, and also reminding us, the regulators, that actually just because we're not finding things that have gone wrong doesn't mean that we need to stop looking," Everett said.

"So that's the thing that worries me most, people beginning to take their foot of the pedal of financial services reform and taking the view that everything's alright just because their prices are up."

Everett succeeded the FMA's inaugural CEO, Sean Hughes, in February. A Brit, Everett's married to a New Zealander and his background includes 17 years at Bank of America Merrill Lynch.

The FMA launched in May 2011 after a government revamp of financial markets regulation following the meltdown of the finance company sector. At the time of its launch then-Commerce Minister Simon Power said the FMA was tasked with restoring "ma and pa" retail investors' confidence in the capital markets. In terms of where retail investors' confidence is at today, Everett said it appears to have improved.

"In terms of breeding confidence in investors that they can participate in the markets, it can be hard to distinguish that from a benign economic environment where the markets are up, KiwiSaver's up, the stock exchange is up," said Everett.

"Our surveys tell us that people are more confident than they were, (but) again distinguishing between general market confidence and confidence in the regulator is tough. But we think we've made big strides enforcing against some of the misconduct pre the FMA, and also some of the work we're doing to try and make them (retail investors) more confident about the decisions they have to make. So far so good, I think."

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