New Zealand’s Financial Markets Authority (FMA) believes it may take five years before the full benefits of its new regulatory regime are felt.

CEO Rob Everett told last week’s Banking & Financial Services Law Association annual conference in Brisbane that New Zealand is shifting from securities law to modern conduct regulation, following implementation of the Financial Markets Conduct Act 2013.

But he believes the full range of economic and business benefits will flow only after a sustained period of adaptation.

“Overall, I anticipate the trajectory of change in New Zealand – the entire duration of adjustment – could easily be five years,” he said. “That’s how long it will take before we see the full depth and range of benefits of the new regime, for the economy and for firms, professionals and investors.”

Mr Everett says good progress has been made, with extensive consultation on finer details taking place between companies, professionals and the FMA.

However, companies are yet to embrace the full extent of cultural change required.

The true test of the new regulatory regime will be its ability to withstand a sustained slowdown, Mr Everett says.

“My hope is that the New Zealand system will emerge from any crisis without the need for another major overhaul… and hopefully without the need for a new regulator, and with businesses recognising that regulation mitigates and moderates the harm in a crisis, and that it allows for recovery – for firms and investors – where that’s possible.”