A Dunedin fund manager has become the first ever to lose its license after the Financial Markets Authority (FMA) announced the cancellation this afternoon.
Fund Managers Otago (FMO) had previously been removed as the manager of three mortgage trusts in November 2020, which was also the first time such an action had happened.
Now FMO has lost its managed investment scheme manager license as of 5pm today.
FMA director of supervision James Grieg said it was the first time a license had been cancelled proactively, and it would effectively stop FMO from being able to operate in the retail investment sector.
‘‘Cancelling a license is one of the strongest regulatory actions we can take and it’s not a decision we take lightly.’’
The FMA found that the fund manager’s compliance and governance arrangements were inadequate which led to ‘‘continued material breaches of its license conditions’’.
At the time of FMO’s removal as the manager of the three funds, two had been in the process of being wound up, and the third was worth more than $13 million with over 600 investors.
It too was now being wound up with accounting firm KPMG appointed as temporary manager for the three funds.
