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Departing FMA CEO Rob Everett warns the big end of town the regulator won't back away from a fight if it believes one is necessary

Departing FMA CEO Rob Everett warns the big end of town the regulator won't back away from a fight if it believes one is necessary
Rob Everett, by Jacky Carpenter.
Rob Everett, by Jacky Carpenter.

Departing Financial Markets Authority (FMA) CEO Rob Everett is warning big financial services firms that the financial markets regulator won't back away from a fight if it believes one is required.

Speaking in a Financial Services Council virtual conference, Everett said he was surprised when arriving at the FMA from the UK in 2014 when "senior people in the industry" told him he didn't need to look at the big end of town. He was told he should instead focus on the operators lurking around the edges.

"Why look at us, we're regulated half to death by ASIC and APRA already, said one big bank CEO to me. Well, you don't get much bigger in the UK than Lloyds Bank, or globally than UBS or Wells Fargo. But the damage done to confidence in financial services by those firms, confidence that markets or customers will be honestly and fairly treated, has been colossal," Everett said.

"And I'm not at all convinced that the industry as a whole, or those in the legal and consulting professions that advise them, paid that much attention to my comments on arrival or the [FMA] conduct guide in early 2017."

Everett emphasized the FMA is prepared to take matters to court when it feels this is necessary.

"We will use the courts where we see fit, we will use public censure and sanctions where we see fit, but it's a complex balance. We're trying to incentivise and encourage the industry to move in the directions we want them to and that requires occasionally some patience, or taking things into account."

"But it is critical that the industry knows, particularly the big end of town which is better resourced and probably more willing to get in a fight, that we won't give up if someone keeps pushing back. I think we've got a track record now of not giving up where we feel we need to keep going. And if expensive, lengthy court time is required, we're up for that," Everett said.

During Everett's tenure the FMA worked with the Reserve Bank on conduct and culture reviews of New Zealand banks and life insurers on the heels of Australia's damaging royal commission on the financial services sector. The local reviews didn't find the depth of problems evident in Australia.

"I'll repeat here what I said then; I do not believe that the egregious misconduct that we saw in Australia under the Royal Commission is endemic or systemic here. But it could be. And even if it isn't, we do see some sloppiness, lack of resource and conflicted behaviour across the industry," Everett said.

"A critical lesson for management and boards of regulated financial services firms is that where we see accidental harm, or even risk of harm to consumers or investors, we will take action. The fact that issues we see are not deliberate is relevant but is in no way sufficient to get you off the hook."

"Investing in good technology, creating and maintaining effective processes and rigorous disciplines is hard work. But it is what is required and it is expected. And similarly going back and scrubbing legacy products and practices to see if they are what they're supposed to be, or whether they no longer work as well perhaps as they once did for customers, that is painful and expensive work but it needs to be done. Where there are issues they need to be ... promptly disclosed to and discussed with regulators," said Everett.

Along with the brickbats he also had some bouquets. 

"We are seeing good signs of progress in almost every corner of the sectors we regulate. Remediation programmes are getting better at identifying and resolving past issues," Everett said. 

Everett is the FMA's second CEO having succeeded Sean Hughes in February 2014. He leaves the FMA at the end of October. Samantha Barrass, the former CEO of Gibraltar's financial regulator, will succeed Everett.

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The local reviews didn't find the depth of problems evident in Australia.

So much ado about nothing... Why put on that sheriff's hat and "warn the big end of town" when there's basically nothing useful has been done?


"...we're regulated half to death by ASIC ..."

That would be the same ASIC that was headed for many years by the same person who oversaw the Securitisation Industry bodies in Australia and the USA - one Greg Medcraft?

The same industry that arguably did more damage to the financial industry that some banks mentioned above?

The answer to both being, yes. And where is he now? Pensioned off to a suitably rewarding "job" at the OECD in Paris.

Rob Everett had ever reason to be suspicious when foxes run the hen houses.



So he's talking tough as he departs???

How many prosecutions did he bring in the 7 years in the job??