Change to NZSE qualifying date

By Phil Boeyen, ShareChat Business News Editor

Friday 14th September 2001

More brokers will benefit from the demutualisation of the New Zealand Stock Exchange after the qualifying date was put forward by six months.

NZSE chairman, Simon Allen, says the Finance and Expenditure Select Committee reported the bill back to the house today with four key amendments, including changing the qualifying date from 16 August 2000 to 15 February 2001.

The change in date means around seven more brokers will be able to stake a claim to the exchange when it is demutualised.

Other amendments to the bill include provision for a control cap to be set by Order in Council rather than the NZSE, and the exchange rules be subject to approval by Order in Council, based on a public interest test.

The government will also have the ability to veto any subsequent rule changes.

Mr Allen says the changes support the fundamental objective of the bill to enable the NZSE to demutualise and become a public company.

"Operating as a listed company under the new regulatory structure will provide certainty for the exchange as well as greater flexibility in the range and nature of services that the exchange can provide.

The annual meeting of the NZSE in October was due to have considered the demutualisation proposal but Mr Allen says it is now anticipated that the legislation will be passed in November, after which an extraordinary meeting will be scheduled.

That means demutualisation is now likely to happen in the first half of next year.

Meanwhile the Green Party has expressed it's opposition to the restructuring, fearing a foreign exchange could take over the New Zealand bourse.

Green Party co-leader Rod Donald says it would not be in the best interests of the New Zealand investment community for sharebrokers to own the exchange which controls the sharemarket.

"Individualised ownership of the exchange increases the likelihood that a takeover offer by a foreign stock exchange will eventuate," he said.

Mr Donald believes there will be a natural conflict of interest between the brokers desire as owners to see the exchange make as much profit as possible, and their desire as part of the financial network to see the exchange look after the interests of all parties - sharebrokers, advisers, shareholders and listed companies.

"Our exchange is already unregulated with little accountability or independent scrutiny, and this Bill does little to improve that situation."

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