The head of the Securities Comission, Jane Diplock, says tougher rules are needed to regulate the Government's proposed creation of a global hub for the funds management industry.
Speaking on TVNZ's Q+A programme, Ms Diplock said the current rules would not reassure those interested in investing their money in managed funds here.
"At the moment investors in Hong Kong and in Singapore have better regulatory framework of managed funds than we do, and they won't recognise our managed fund framework," she said.
Ms Diplock said the review of the Securities Act should address this.
The Government is considering creating a single regulator by merging parts of the Companies Office, the Securities Commission and NZX.
Ms Diplock admits regulation failed investors. She says the Securities Commission is under-resourced.