The Financial Markets Authority has issued an infringement notice to building society Pacific Eagle Capital for failing to file financial statements on time.
PEC was required to file financial statements for a March 31 balance date by the end of July. As of today, it had yet to file its financial statements, the FMA said.
This notice is the first of its type under the Financial Markets Conduct Act. The fee payable for the offence is $7,500.
In September 2014, the FMA issued a public warning about PEC, advising the public to exercise “extreme caution before obtaining any financial services, or acquiring any financial products” from the company. This warning is required to be displayed on PEC’s website and is still in force.
Pacific Eagle Capital was also removed from the New Zealand Financial Services Providers Register in February 2016 at the direction of the FMA.
Although PEC is a New Zealand-based building society, it operates solely offshore. It was previously known as General Equity Building Society and General Equity. Because it doesn’t offer financial services at home, the only oversight the FMA has is around PEC’s financial reporting obligations.
The Ministry of Business, Innovation and Employment is looking into the role of building societies that operate entirely offshore with little or no oversight by a New Zealand regulator. “These societies pose a risk to New Zealand’s reputation as a well-regulated jurisdiction,” the FMA said.
There is a targeted consultation underway on proposed changes to the Building Societies Act 1965 to address this problem.