As well as a being a chartered accountant, Ross was licensed by the FMA as an authorised financial adviser - a designation that investors took confidence from.
To get authorisation as an adviser, an applicant needs to provide proof of competence and pass a "good character" test.
According to the FMA, if an applicant satisfies the relevant criteria, the regulator must authorise them.
It only has discretion over the "good character" test and over whether any criminal convictions an applicant may have would be relevant to their fitness as a financial adviser.
In Ross' case, he relied on a testimonial from the Institute of Finance Professionals and a letter from a client to satisfy these good character requirements.
After the Ross collapse, Commerce Minister Craig Foss wrote to the FMA requesting an assurance "regarding the robustness and appropriateness of the FMA's processes for authorising" advisers.
Foss also asked what improvements would enhance the adviser regime.
In his reply, FMA chief executive Sean Hughes said he was satisfied the market regulator's authorisation of advisers was consistent with the existing regime but said improvements to the rules could "significantly reduce the possibility of this type of case arising again".
In this letter, released to the Herald under the Official Information Act, Hughes suggested a number of regulatory improvements the Government could make.
These included setting "significantly higher entry requirement hurdles" for adviser applicants, including making them submit detailed business records and client files.
Another option Hughes put forward was making applicants satisfy "a fit and proper" test like those when an application for a trustee or statutory supervisor licence is made.
Other suggestions from Hughes included placing more auditing, reporting and accounting requirements on providers running a discretionary investment management service such as Ross.
Another was reviewing the definition of a "wholesale client", which a number of Ross investors were classified as and who receive less protection than retail investors.
While Foss says he took the "key" suggestions on board and added them into the tabled Financial Markets Conduct Bill, tighter licensing rules for advisers will not come into force with this proposed law.
Rather, Foss says the law will "open the door" for future changes to the licensing regime if necessary.
Part of the reason not to include tighter licensing requirements in this law was that it would take time, he said. "I said: 'We've got to get a move on with this bill.' To go through the full licensing, that would involve a whole lot more consultation, redrafting and basically time eaten up," said Foss, who is the minister responsible for the Financial Markets Conduct Bill.
"It doesn't mean it's totally off the table, but as far as this is concerned right now, yes it is. It's got to be seen in partnership with the other changes [that have been made]."
Foss said he also wanted to balance the need for regulation with the desire not put extra costs on those who work within the rules.
The Financial Markets Conduct Bill is expected to be passed into law this year.
