Some newly-regulated firms are suffering from "culture shock" and can't understand why they need oversight, says Financial Markets Authority boss Rob Everett.
And more areas of the market could soon be feeling this shock, with the FMA still working out how far its powers can stretch.
Five years on from when the market watchdog was set up, Everett made a speech in front of the trans-Tasman Business Circle on where the organisation was headed.
Since its inception the FMA had overseen an overhaul of capital markets law and Everett said the regulator had "matured rapidly".
"I'd say we are only just off the ground. That's not unreasonable given that we are barely two years into our new regime. So, overall, we remain in build phase. But we are in the final stages. As a proud Englishman, who grew up in a village bearing the great man's name, I'm always willing to paraphrase Sir Winston Churchill.
So let me say that this is the end of the beginning," Everett said.
In his five-year report card on the FMA, Everett gave the regulator a "pass".
The watchdog was pleased with its clean up of the finance company collapses, the transparency of its policy work, its engagement with newly-regulated sectors and the relationships it had built with its fellow regulators, he said.
However, there had been some challenges, including what Everett described as a switch in "enforcement focus from post-mortems on dead bodies to treating live ones".
There was a balancing act, he said, between speed and thoroughness and between openness and secrecy.
"There is an element of culture shock for firms that have not been regulated before and indeed those that are regulated elsewhere but can't grasp why the same needs to happen here in New Zealand...we still see defensive and adversarial positions taken in scenarios where a grown-up - and early - conversation would be infinitely preferable," he said.
Part of the FMA's focus was on "deepening and broadening" its perimeter, he said.
"What's inside our remit, what's outside and are those the right settings? You might think I am talking here about - FX trading, overseas entities, FSPR, scams etc. - and for sure there has been plenty of that," he said.
"But our anxiety about where our perimeter lies actually reflects that the biggest pieces of financial services in New Zealand sit outside it - by which I mean the banks and insurers. We don't license them, but their sales practices are covered by the fair dealing provisions of the FMC [Financial Market Conduct] Act. There is an issue of how far our conduct remit under the FMC Act can be stretched to cover what goes on at banks and insurers and how that can harm customers."