An NZX and Financial Markets Authority-commissioned report aims to supercharge New Zealand's capital markets which have struggled to get new listings and bypassed smaller players.
The report, which pushes for broader participation in more vibrant markets by New Zealanders, said KiwiSaver would become the main pool of retirement savings over time.
The report, Capital Markets 2029, is designed to deliver a 10-year vision and growth agenda for the sector.
"We believe our KiwiSaver recommendations will retain direct personal participation in the capital markets, open access to alternative investments and, more importantly, act as a catalyst for greater innovation from existing and new KiwiSaver providers," it said.
"Incentives for KiwiSaver entrants to make an active choice on the type of KiwiSaver fund to join and our recommendations on financial literacy should promote better long-term outcomes for New Zealand."
For the users of capital, the report envisioned a greater availability of capital across the spectrum of investment stages.
This would give companies choice within a "New Zealand-centric" system to meet their capital needs.
The NZX and the Financial Markets Authority (FMA) engaged with a range of capital market participants to find out what changes were needed.
The report comes as the number new-equity, capital-raising listings on the NZX has slowed to a trickle.
Matt Goodson, managing director at Salt Funds Management, said there was "clearly some concern" over the relative lack of IPOs in New Zealand, with cost being the biggest hurdle for most.
"If you are a $30-$40 million company, the costs of legal and audit compliance are high, relative to your profitability," he said.
"Given the small size of New Zealand, that's always going to be a factor, unless you can grind all the other costs down," he said.
Goodson said more saver-friendly changes to the tax regime, as advocated in the report, could have a significant impact on KiwiSaver and the capital markets.
The report said most other countries make extensive use of tax concessions to boost investment into capital markets and to assist with retirement.
At present New Zealand taxes savings more heavily than other OECD countries.
"We recommend a review of the need for tax concessions for saving in order to boost the pool of investment capital and improve wellbeing in retirement," it said.
The chair of the Capital Markets 2029 steering committee, Martin Stearne, said the private markets — including private equity — had grown while the public markets had slowed.
"Certainly, there are fewer listed companies globally than there were 20 to 25 years ago, when they peaked." At the same time, the publicly listed companies a generally a lot bigger, Stearne said.
"We are keen to see more engagement from more investors in New Zealand, greater pools of capital available for investment in New Zealand, and greater choice for New Zealand investors," he told the Herald.
"To date, KiwiSaver managers have very much focused on public assets that are listed and liquid and the need for liquidity and daily pricing has driven them there, but over the long term we would like to see more KiwiSaver managers invest in private market assets."
Stearne said the actual cost of listing on the NZX was small, relative to the accounting, legal, investment banking and broking fees.
"They are great and some of them are not scalable, so that cost does fall heavily on the smaller companies."
For users of capital, the report envisioned a greater availability of capital across the spectrum of investment stages.
"We believe this report is a mandate from the industry for the recommendations which are aimed at seeing more capital flowing more efficiently to New Zealand enterprises, as well as providing more investment opportunities for a greater number of Kiwi investors," Stearne said.
Next steps will include formal responses from NZX and FMA, as well as from other parties to whom recommendations have been made, he said.
The NZX has offered to report on the progress made by all parties in implementing the recommendations, with a first assessment in 18 months.
The report was produced by international professional services firm EY.