The Financial Markets Authority says it will target New Zealand directors of businesses who encourage or facilitate abuse of the Financial Service Providers Register.

Directors are personally liable under the Companies Act for a company’s compliance with a number of obligations.

The Financial Markets Authority’s report on the Financial Service Providers Register (FSPR) sets out its work to prevent the misuse of the FSPR between 2014 and 2017.

The FMA says it will use the full range of its enforcement tools against directors of firms who register under false pretences or in breach of the regulations.

It’s powers range from administrative orders and warnings to criminal charges.

Director of Regulation at the FMA, Liam Mason,  says in their experience, some local directors of businesses on the FSPR provide at most an administrative service with little or no real governance role in the company.

"This report sets out clearly our expectations of these directors, their responsibilities and scenarios where we could look to take further action.The legal action brought by companies challenging deregistration from the FSPR clearly shows the value these businesses place on registration in terms of giving them credibility in the eyes of investors.” he says.