NZ FMA Censures Firma NZ for Beaches of Derivatives Issuer Licence Obligations - BrokersView
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NZ FMA Censures Firma NZ for Beaches of Derivatives Issuer Licence Obligations

Oct 12, 2021
Fazzaco


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The Financial Markets Authority (FMA), New Zealand's watchdog agency, has censured Firma Foreign Exchange Corporation (NZ) Limited ("Firma NZ") for breaching a number of its obligations as a licensed derivatives issuer (DI).

According to the official press release, the watchdog was satisfied that Firma NZ materially contravened its licence obligations because it:

  • Failed to conduct product suitability tests for clients

  • Repeatedly failed to meet net tangible asset requirements (DI’s must have net tangible assets of at least $1 million)

  • Did not regularly provide statements to derivative investors regarding their investments (i.e. a list of a customer’s derivatives, their value, the amount of investor money held, and any amount allocated to margins)

  • Failed to have adequate and effective systems, policies, procedures and controls

Auckland-based Firma NZ provides foreign currency exchange forward contracts to retail clients in New Zealand. It has been licensed as a DI since 2015 and is a fully owned subsidiary of Firma Foreign Exchange Corporation, based in Canada.

According to James Greig, FMA Director of Supervision, Firma is publicly held to account and must provide them an action plan to remedy the issues and ensure future compliance.