Formal Opposition to

Summary of Position

I submit this formal opposition to the Financial Markets Conduct Amendment Bill (Government Bill 135–1). While the bill is framed as a technical modernisation, it introduces sweeping powers for the Financial Markets Authority (FMA), strips essential legal protections, and opens the door to foreign and corporate influence under weak regulatory scrutiny.

This is deregulation by stealth — eroding consumer protection, legal enforcement, and public oversight in favour of market actors.

1. Introduces Warrantless On-Site Intrusion

Sections 28A–28D allow the FMA to enter financial premises without notice, interrogate staff, and collect information — without a warrant, suspicion, or judicial approval.

• “Understanding risks” becomes a blanket justification for surveillance,
• No safeguards exist against selective or political targeting,
• This undermines civil liberties and sets a dangerous enforcement precedent.

2. Enables Deregulation by Regulation

Sections 546(1)(fa) and 556 empower Ministers or the FMA to exempt firms from key legal requirements, including:

• Significant ownership approvals,
• Amalgamations and structural changes,
• Long-term exemption renewals without transparency.

This hands core legislative functions to unelected officials, without checks or public input.

3. Undermines Legal Enforcement

Section 421F allows firms to restructure or amalgamate without required FMA approval — with no impact on legal validity.

• This invites post-facto justification and circumvention,
• It removes deterrence for high-risk corporate restructuring,
• It sets a precedent that undermines the rule of law in financial regulation.

4. Weakens Fair Conduct Requirements

Section 446J dilutes mandatory conduct obligations for financial agents and insurers. Training, oversight, and complaint handling are reworded into vague, subjective duties.

• Consumer protections are made discretionary,
• Compliance obligations become open to interpretation,
• This weakens safeguards for vulnerable consumers.

5. Grants Foreign Capital Quiet Access

Multiple pathways are introduced for offshore entities to gain control of NZ-licensed firms with limited or no pre-approval:

• 25% voting rights or 50% board seats may trigger only notification, not review,
• Complex ownership chains can obscure true control,
• This exposes our financial system to hidden foreign influence and risk.

6. Shifts Key Protections to Secondary Law

Conduct standards, exemption criteria, and approval conditions are shifted from legislation to regulation and FMA-issued notices.

• Parliament loses direct oversight of critical legal functions,
• Future governments can rewrite protections without public debate,
• This undermines democratic process and policy transparency.

Conclusion and Recommendations

This bill poses unacceptable risks to legal clarity, regulatory accountability, and consumer rights. It enables deregulation by stealth and invites unchecked corporate and foreign influence.

• Remove Sections 28A–28D (warrantless FMA powers),
• Eliminate Section 421F and enforce legal invalidation for unauthorised changes,
• Restrict exemption powers and restore full parliamentary oversight,
• Restore strong, mandatory fair conduct rules,
• Apply full approval requirements to all foreign influence and control acquisitions.

Markets must serve the people — not quietly escape the laws designed to protect them.

Respectfully submitted,

Ukes Baha

Public Health Advocate | Counsellor | Policy Analyst

ukesbaha.com