The number of firms kicked off the register of Financial Services Providers fell sharply in the second half of last year as the power of the regulatory boot was tested in the courts.
One case is heading to the Court of Appeal this morning, with the Financial Markets Authority challenging a ruling that it had breached one firm's rights to natural justice.
That regulator went on the offensive in 2015, booting more than 50 offshore firms off the Financial Services Providers Register (FSPR) amid concerns some were taking advantage of the country's reputation of "being a well-regulated jurisdiction and a good place to do business".
The FSPR is a list of people, businesses, and organisations that offer financial services. While all in the sector must be registered, this does not mean the entity in question is officially sanctioned by authorities.
Although the register is main-tained by the Companies Office, the FMA has powers to direct that companies be removed from it where it is likely that it is providing a misleading impression about the extent to which it is regulated in New Zealand.
The market watchdog announced in May that it had removed 23 entities from the register since the start of 2015 and prevented a further 20 firms from completing registration.
By July, a further 21 companies had been removed from the register and another seven had been prevented from registering.
Since then, only 13 firms have been kicked off by the FMA, during a time when two appeals against deregistration went to the High Court.
In one case, Vivier and Company successfully appealed its expulsion, with Justice Timothy Brewer saying the FMA breached the firm's "natural justice rights" in failing to furnish it with more evidence and information about why the deregistration was sought.
The FMA is now challenging the decision, with the regulator and the company due in the Court of Appeal this morning.
Vivier is directed by Luigi Wewege, one of the central protagonists in the Len Brown infidelity scandal.
In the second case, Justice Gerald Nation found in the FMA's favour.
The judge upheld the FMA's decision to remove foreign exchange firm Excelsior Markets from the register, saying if the firm kept its registration people could be mislead into thinking it was regulated by New Zealand law.
The FMA said last month it would continue take action against those it considered should not be on the FSPR.