The Securities Commission rejects a claim by the head of the Business Round Table that it could have done more to prevent the failures of finance companies.
Round Table chairman Roger Partridge says the commission 'nodded off' when it came to monitoring companies that later collapsed.
He made his comments to Parliament's Commerce Select Committee, which is hearing submissions on the creation of a new Financial Markets Authority.
The FMA will take over some of the Securities Commission's role.
Commission chair Jane Diplock says its powers over finance companies have been limited and it was not able to act on investors' behalf.
She says she hopes the new agency is empowered to intervene early if there are signs of financial mismanagement.
