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Annual review shows NZX meeting regulatory obligations

Page last updated: 26 May 2015

Media Release
MR No. 2015 – 20
26 May 2015

The Financial Markets Authority (FMA) today confirmed that NZX has complied with its statutory obligations to ensure that its markets are fair, orderly, and transparent.

This year’s General Obligations Review of NZX is the FMA’s fourth annual review. It covers the period from January to December 2014 and reports on NZX’s compliance with its obligations under the Securities Markets Act 1988.

During last year’s review, NZX agreed to 11 actions relating to arrangements for managing conflicts of interest, monitoring conduct, and enforcing compliance.

The FMA is satisfied that NZX has completed all but one of the agreed actions and is carrying out its role as a frontline regulator effectively.

The final agreed action from last year’s report, to review the penalty structure within the Tribunal Rules for minor and unambiguous breaches of the market rules, is underway.

Since last year’s review, processes have been implemented to improve dialogue and co-operation between the FMA and NZX. This includes the signing of a Memorandum of Understanding (MoU) reinforcing the framework for engagement and co-operation between the two organisations. The MoU takes into account the complementary regulatory responsibilities for New Zealand’s capital markets shared by NZX and the FMA. The MoU also confirmed the structure for ongoing dialogue to ensure NZX is meetings its day-to-day regulatory functions.

“We are confident that this closer working relationship and the actions taken by NZX since the last review have further strengthened its arrangements for handling conflicts, monitoring conduct and enforcing compliance.  NZX has also shown a commitment to continuous improvement in its regulatory functions and capabilities,” said the FMA’s head of markets oversight, Garth Stanish.

“We believe these improvements, along with the new framework set up between ourselves and NZX will help increase market confidence in NZX’s effectiveness.”

The FMA’s 2014 General Obligations Review was completed under the Securities Markets Act 1988 and includes reporting on the NZSX, NZDX, NZAX and FSM. The next review will be completed under the Financial Markets Conduct Act 2013, which fully came into force in December 2014, and will include the NZX’s new NXT market.

Full report here.



The FMA is required under the Financial Markets Conduct Act to carry out a review of NZX, at least annually, to monitor how well the NZX is meeting its licensed market obligations. The NZX General Obligations Review is one of several reports the FMA is required to deliver each year to meets its statutory obligations. The FMA will undertake another NZX statutory review in 2016 based on calendar year from January – December 2015.

Shae Skellern
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