Sometimes its takes a crisis to bring meaningful change.

New Zealand's housing market, for example, is overdue the kind of painful crash needed to force some serious policy shifts in how we treat housing as an investment.

The mish-mash of solutions we see in that sector is a symptom of that. Deeper fundamental change is more often born of necessity.

In stark contrast, the capital markets have seen their regulatory framework rebuilt from the ground up over the past several years.


It is almost a decade since the first finance companies started to collapse in this country.

It was monumental meltdown that saw more than 60 companies fail and destroyed some $3 billion of investor savings. The collapses were exacerbated by the global financial crisis, but stood outside it as a uniquely Kiwi crisis.

Following the meltdown, our policy makers had no choice but to accept the financial market's regulatory regime was not up to scratch.

In fact, the Capital Markets Taskforce was put together in 2008 - even before the collapse of Lehman Brothers - to rewrite the New Zealand rule book.

What emerged was the Financial Markets Conduct Act, passed into legislation in 2013, but only now approaching its final deadlines for full implementation.

The deadline for managed funds to apply for full accreditation is August 30

"Once that piece of the puzzle is in place then pretty much everything we're going to have will be in place," says Financial Markets Authority chief Rob Everett.

The final deadline for the act is December 1, at which point it will be fully effective.

"This the end of the beginning," Everett says.

He says he is confident we now have a robust framework that could avoid the kind of full-scale meltdown we saw with the finance companies.

Investors should know that the licensing and regulation of financial providers was better and more thorough, so those providers should be better behaved.

"And the disclosures they are given when they invest are simpler shorter and easier to read."

But the industry was always changing, so the work will not end with the final implementation.

"If you squeeze in one place, then bubbles appear somewhere else, so you've got to be able to adapt to that," he says.

Everett says new investment categories like crowdfunding and the growth of exclusively online financial advisers as challenges to watch.

"One of the complexities is making sure that, as that stuff develops, we're not left behind in an old fashioned banking model where people walk in off the street. That's the next big piece."

The challenge now for the FMA is to ensure the Financial Markets Conducts Act is the success it ought to be.

"The next bit, which is actually what we think we were designed for, is the supervision, the monitoring, the influence and the leaning on the industry to make sure they're doing what we think they're doing for consumers.

"So in many ways, the hard yards are still to come."