It would also mean more burden for the industry, Everett accepted, but overall progress had been good.
The issue with Milford Asset Management - which involved alleged market manipulation and resulted in a $1.5 million settlement with the Financial Markets Authority last month - was a good example of the reality of a strong regulator being harsher than the theory, he said.
"We've talked a lot about tone from the top. We've talked a lot about governance, we've talked a lot about management oversight but what we saw in Milford told us that there are places where it is just not good enough," he said "We mean what we said, that we would react to bad oversight and poor controls and I think Milford illustrates that we will take vigorous action if we think the controls just aren't good enough."
The message had been clear, Everett said, although the FMA would be working out how to provide more context around that in the near future.
Despite the settlement an individual portfolio manager potentially faces further action from the FMA so the specific details of the case are still currently confidential.
"We're still thinking through what we can and can't say," Everett said. "I think even though we haven't been able to say a great deal ... I think this does demonstrate that the referral process - the surveillance that the NZX do that then gets referred to the FMA - that process is working."
Everett rejected criticism that settlement of the Milford issue and others represented a soft option.
There were cases that would go through the courts but everything had to be weighed against settlement options to assess whether they could provide quicker outcomes or more certainty or even better investor redress.
"With Milford there was a view that waiting two or three years to get to a court sanction that might not deliver the market education outcome we wanted and given we'd already seen Milford on its way to changing what it did internally, we felt we could achieve our objectives by going early."
The year-long probe into Milford generated a great deal of market speculation and prompted critics to suggest the process was taking too long.
"We feel that pressure very acutely," Everett says. "But to get to where we've settled in 12 months isn't bad. If you look at other jurisdictions - Australia, The UK, Hong Kong - that's significantly below the average length of time."
Market issues were enormously complex, he said.
"You have to dig up trading data from all sorts of different sources to reconstruct life as it was at the time of the trading."
Broadly New Zealand was in a good place right now with regard to investor confidence in markets, Everett said.
Although after three years of strong returns on the NZX it was hard to disentangle confidence in the performance of markets from confidence in the regulatory regime.
The real test for the FMA would come when markets dropped and there were people suffering losses in their KiwiSaver funds, he said.
