Joanna Trezise says a Court of Appeal ruling in an FMA vs ANZ case gives useful clarification of the FMA’s step-in powers under the Financial Markets Authority Act

Joanna Trezise says a Court of Appeal ruling in an FMA vs ANZ case gives useful clarification of the FMA’s step-in powers under the Financial Markets Authority Act

By Joanna Trezise*

The Court of Appeal has upheld a decision by the Financial Markets Authority (FMA) to disclose to third parties documents it acquires in the course of an investigation.

The ruling, Financial Markets Authority v ANZ Bank New Zealand Limited [2018] NZCA 590, gives useful clarification of the FMA’s unique step-in powers under the Financial Markets Authority Act 2011.

It also serves as a reminder of the importance of carefully considering which information must be provided in response to an information request, and what may justifiably be withheld.

How it unfolded

The FMA had received complaints from investors in “company X”. It began an inquiry and identified ANZ as the company’s bankers. It issued ANZ with several information requests under section 25 of the Act.

Initially, the FMA’s purpose in seeking information from ANZ was to determine the location of the investors’ funds and assess what could be done to protect them.

When company X was put into liquidation, the focus of the inquiry turned to ANZ itself. Further information requests were made.

The FMA formed the view that the investors had potential claims against ANZ. It began to consider whether to exercise its powers under section 34 of the Act, enabling it to bring claims on their behalf.

Section 34 provides that those powers must be exercised in the public interest, having regard to factors such as the likelihood of the investors themselves commencing and continuing proceedings, and whether the exercise would be an efficient and effective use of FMA resources. 

The FMA decided to disclose some of the information obtained via its section 25 notices to company X’s investors.

The purpose of the proposed disclosure was threefold: to obtain additional information, to enable the investors to consider their potential claims against ANZ, and to enable the FMA to determine whether to use its section 34 powers.

The FMA considered that disclosure was permitted under section 59, on the basis that it was for the purposes of, or in connection with, the performance or exercise of its statutory functions, powers or duties, or that the disclosure would be to people who had a “proper interest” in receiving it.

In the first instance, it proposed to disclose the information on a counsel-only basis and subject to confidentiality agreements.

ANZ denied there was any basis for a claim against it, or for the contemplated disclosure. It sought judicial review of the FMA’s decision.

The rulings

In the High Court, Fitzgerald J determined that the proposed disclosure was not permitted by section 59.

The FMA’s decision was quashed and release of the information prohibited.

The Court of Appeal disagreed.

It held that:

♦The purpose of the proposed disclosure fell squarely within the purposes of the Act: assisting the FMA and investors to decide whether to bring claims against a financial market participant. Disclosure was permitted by section 59(3)(c).

♦The investors were a category of people with a “proper interest” in disclosure, given they were seeking redress in matters under investigation by the FMA. Disclosure was therefore also permitted by section 59(3)(f).

♦Parliament had contemplated the FMA working closely with parties whose claims it may adopt via section 34. This was to enable investors to properly assess whether to bring proceedings themselves, and the FMA to gauge whether its own pursuit of such claims would meet the section 34 requirements.

Disclosure may increase the likelihood of investors bringing proceedings themselves. However, it is in the public interest that claims be brought, both to give private investors redress,and to “facilitate the development of fair, efficient and transparent financial markets”. Those objectives would be met regardless of whether the investors, or the FMA, brought the claim.

ANZ has sought leave to appeal the decision to the Supreme Court (including in relation to the redactions contained in the current public version of the judgment).


Three observations of broader application can be made:

♦Receiving an information request should carefully consider which information falls within the scope of that request, and which information may justifiably be withheld (for example, on the grounds of privilege). That assessment should be informed by the fact; and anything provided may later be shared by the regulator with third parties, including claimants and other regulators.

♦A recipient may (and should) explicitly request that the regulator inform it if any of the information is to be provided to other parties, including under the Official Information Act 1982.

♦Potential claimants may wish to consider taking advantage of the regulator’s broad information gathering powers by making their own requests to assist their decision-making.

*Joanna Trezise is an Auckland-based litigator specialising in competition and regulatory law. She can be contacted at
This article was first published in Laws News and is used with permission.

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