The Financial Markets Authority has given the NZX a black mark in an annual review of the market operator.
The regulator said the NZX broadly met its obligations to regulate the capital markets, but lacked the expertise necessary to monitor the conduct of participants and in relation to its markets.
"While NZX disagrees with our conclusion, to resolve this issue NZX has committed to recruit additional resource into this function, which both the FMA and NZX consider will benefit market integrity," the FMA said in its annual review published this morning.
"We did not find any other systemic issues in relation to NZX's compliance with its market operator obligations," the report read.
"Apart from in market surveillance we consider NZX has made improvements in other areas of regulation and enforcement."
The FMA said the annual review highlighted high turnover in the NZX surveillance team with vacancies filled with less experienced personnel.
"For this reason, the FMA focused its review on market surveillance."
While NZX disagreed with the conclusion of the report, it said regulators continued to collaborate on the oversight of trading conduct to ensure the regulation of the capital markets was fair, orderly and transparent.