NZ markets regulator gives qualified tick to NZX for meeting obligations

Friday 29th June 2012

NZX, the stock market operator, has been given a qualified tick for meeting its obligations under securities law by the Financial Markets Authority.

The FMA cited three exceptions to NZX’s compliance, noting that the company says it will adopt all of the regulator’s recommendations by the end of 2012. It is the regulator’s first assessment of NZX’s compliance with the Securities Markets Act and the Authorised Futures Exchange (NZX Limited) Notice 2010.

The regulator said NZX had potential conflicts of interest from its decision to appoint its corporate counsel as head of market supervision. NZX announced yesterday that head of market supervision Robyn Dey will head its regulation team and its corporate counsel will now report direct to the new position of chief financial officer.

The FMA also said the was an “absence of documented criteria for consistent decision making; low number of referrals to the NZ Markets Disciplinary Tribunal” and “slow progress of investigations” which reflected “insufficient resources in the area of Market Supervision set against a significant workload.

“FMA has set out a number of expected actions which NZX is already implementing,” chief executive Sean Hughes said in a statement today. “NZX had been notified of the changes that need to be made to ensure it can fully comply with its obligations in the future.

The changes will create an even better environment for all stakeholders in New Zealand’s listed markets, or people thinking about entering the market.” Pre-empting the report, NZX chief executive Tim Bennett yesterday said it was creating a new markets group and regulatory team to make a clearer distinction between the two roles.

The changes create two new positions – a CFO and a head of cash markets. It named Simon Smith as head of market services. Shares of NZX last traded at $1.36 and have soared 39 percent this year.

BusinessDesk.co.nz

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