OMF's Regulatory Environment

Regulations

• Regulatory Oversight

  New Zealand’s financial markets are regulated by one of two authorities. The Financial Markets Authority (“FMA”) enforces securities, financial reporting, and company law. The Reserve Bank of New Zealand is responsible for the prudential supervision of NZ’s banks (including financial companies, building societies and credit unions).

  As a registered financial services provider in NZ, OMF is regulated by the FMA who supervise our compliance with NZ laws, regulation and best practice standards.

  The FMA oversees compliance with a range of financial markets legislation, but some of the key laws that relate to OMF are:

  • Financial Markets Conduct Act 2013
  • Financial Markets Conduct Regulations 2014
  • The Futures Industry (Client Funds) Regulations 1990
  • Financial Advisers Act 2008
  • Financial Service Providers (Registration and Dispute Resolution) Act 2008
  • Anti-Money Laundering and Countering Financing of Terrorism Act 2009
• NZX

  OMF is an NZX Trading & Advising Firm (Derivatives), an NZX Advising Firm (Equities) and a Clearing and Depository Participant (Derivatives), which requires us to comply with the Rules and Procedures determined by NZX for trading and advising on all NZX listed products.

  We believe our participation in both the NZX equities and derivatives markets reflects the value we place in having a strong regard for regulatory compliance. As a result, we are subject to greater supervision than many of our non-NZX competitors.

  Daily reporting is required directly to the NZX on various aspects of our business, including capital adequacy and client funds positions, thereby providing our clients reassurance that their funds held with us are subject to external oversight.

  These reports are audited along with our entire compliance programme during regular onsite visits by the NZX and our external auditors.

• Safeguarding of Client Funds

  One of the most important company values is maintaining the trust we have with our clients and a fundamental part of this is ensuring that our client’s funds and property are safeguarded from improper use.

  OMF holds a Derivatives Issuer Licence in accordance with the Financial Markets Conduct Act 2013 and therefore we must comply with various Client Funds Regulations (“CFRegs”).

  The CFRegs require OMF to comply with strict legal provisions about where and how client funds and property are held.

  All client funds deposited with OMF are held on trust in one of our client bank accounts where OMF acts as a bare trustee. These accounts are kept completely separate from OMF’s own capital (money). Reconciliations of client assets are reported daily to the NZX, which provides proof that OMF is not using client funds to pay its bills or meet any of its proprietary obligations.

  OMF is committed to prioritising the protection of client funds across all of our relationships and we only facilitate our client’s trading with highly rated financial institutions and banks (“Counterparties”).

  In addition to our derivatives trading, OMF offers services for trading NZX equities. This service does not fall under the CFRegs but is governed by the Financial Advisers Act 2008 (“FAA”). Under the FAA, all client money that is identified as funds for NZX equity trading must be transferred to a separate client account, which is again separate from OMF’s own capital.

  To ensure client confidence in our controls and procedures surrounding the safeguarding of client funds and as prescribed by the CFRegs, OMF engages an external auditor to conduct independent reviews. The auditor must report any breaches immediately to the FMA. In addition to these audits, OMF are also subject to regular audits conducted by the FMA and NZX.

  Our current external auditor is PWC.

• Anti-money laundering and counter financing of terrorism framework

  In order to comply with the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AMF/CFT), we have implemented a sound framework to detect suspicious and/or unusual activity.

  Our AML/CFT programme has been designed to comply with NZ legislation, which is based on the internationally recognised recommendations by the Financial Actions Task Force (“FATF”).

  Key areas of our AML/CFT Programme include:

  • Identification and verification of identity of clients, beneficial owners and authorised persons (customer due diligence)
  • On-going client screening against internationally recognised watchlists
  • Ongoing customer due diligence
  • Transaction monitoring and suspicious transaction reporting
  • Employee training and awareness

  We take our obligations as a reporting entity very seriously and we always ensure that we apply the best compliance practices to try and prevent OMF being used to launder money or as a vehicle to finance terrorism.

  Our AML/CFT programme is regularly reviewed and audited to ensure that our policies and procedures are up to date with both domestic and international trends. 

• Corporate Governance

  At OMF we are committed to achieving the highest corporate governance standards to promote transparent and effective markets. We ensure these standards are consistent with regulations and are recognised as best practice.

  Our Board of Directors is comprised of both executive and non-executive personnel who are tasked with monitoring the effectiveness of OMF’s strategies in accordance with our company values. The Board are responsible for fostering a constructive compliance culture and applying appropriate governance principles throughout the company.

  To help with this goal, an Internal Audit Committee has been established to assist in monitoring OMF’s corporate governance programme.

  All OMF personnel are screened during the recruitment process. Police checks, employment history and educational verification are undertaken to ensure only quality trust worthy people are employed.

  We believe that trust, integrity and passion for our clients are of the utmost importance. Our staff have a vested interest in the business and we are all committed to maintaining a culture of professional and ethical behaviour on which our clients can depend.