The Securities Markets Act and its regulations regulate trading in listed and unlisted securities.
The Financial Markets Authority has supervisory and enforcement powers under the Act, which allow us to monitor whether those involved with the trading of securities comply with the Act's various disclosure and conduct requirements and to undertake investigations and enforcement action.
FMA also supervises registered securities exchanges and the market rules of those exchanges. We have the power to veto or request new market rules, or give a registered exchange a binding enforcement order. Currently, the only registered exchange in New Zealand is NZX.
The Act and associated regulations:
- regulate 'insider trading' and market manipulation involving securities listed on an exchange
- prohibit misleading or deceptive conduct involving dealings in listed and unlisted securities
- specify what information listed issuers must provide to allow investors to make informed decisions
- require those with control over substantial holdings of voting securities of listed entities to disclose that control, or any change in that control
- require certain persons with relevant interests in listed securities to disclose those interests
- encourage good corporate governance of public issuers
- specify how unsolicited offers to buy securities can be made and how information is to be disclosed, and give FMA the power to restrict dealings in securities in relation to unsolicited offers made in breach of the law.
- provide for the authorisation of dealers in futures contracts.
The regulations made under the Securities Markets Act are the:
- Securities Act (NZX-NZAX Market) Exemption Notice 2011
- Securities Markets Act (Citigroup) Exemption Notice 2003
- Securities Markets (Disclosure of Relevant Interests by Directors and Officers) Regulations 2003, which specify the way in which directors and officers of an issuer must disclose any relevant interests they hold in securities of that issuer
- Securities Markets Act (NZCDC Settlement System) Exemption Notice 2010
- Securities Markets Act (Telecom Corporation of New Zealand Limited) Exemption Notice 2008
- Securities Markets (Fees) Regulations 2003, which prescribe the fees payable under the Securities Market Act
- Securities Markets Act (Insider Trading Exemption-Fonterra Co-operative Group Limited) Regulations 2012
- Securities Markets (Insider Trading Exemption-Futures Contracts) Reulations 2010
- Securities Markets (Substantial Security Holders) Regulations 2007, which specify when and how those with control over substantial holdings of voting securities of an issuer must disclose their holding
- Securities Markets (Market Manipulation) Regulations 2007, which specify a process for stabilising the market for securities under an initial public offer, and provide a limited exemption from the market manipulation prohibition
- Securities Markets (NZAX Conduct Rules Approval) Order 2003
- Future Industry (Client Funds) Regulations 1990, which regulate the way client funds are handled by futures dealers and members of authorised futures exchanges
- Securities Markets (Unsolicited Offers) Regulations 2012.