The Financial Markets Authority is preparing to take action against two unnamed KiwiSaver issuers for making misleading statements in their offer documents as it puts the state-sponsored retirement schemes under greater scrutiny.
After reviewing 15 schemes, representing 40 per cent of the market with $5 billion under management, the market watchdog contacted "a number of issuers" seeking clarity on some disclosure matters, leading to the reassessment and voluntary improvement of some offer documents, according to its June 17 report on 'monitoring of KiwiSaver offer documents'.
"FMA is currently in the process of taking action against two issuers due to non-compliance with securities legislation relating to potentially misleading statements in their offer documents," the report said. The regulator didn't name the issuers or identify what was potentially in breach.
The market watchdog is reviewing scheme disclosure to help set out the rules for issuers preparing for a new disclosure regime which seeks to standardise reporting of investment returns and fees. Under the regulations, KiwiSaver providers would have to publish one comprehensive disclosure statement every year, and four smaller, quarterly reports.
The FMA found investment returns are shown using a range of methods, and don't necessarily have internal consistency with the offer documents.
