MR No. 2015 – 02
28 January 2015
The Financial Markets Authority (FMA) and NZX have this week signed a Memorandum of Understanding (MoU). The MoU sets out the framework for engagement and co-operation between the FMA and NZX, taking into account their complementary regulatory responsibilities for New Zealand’s capital markets.
The FMA and NZX have developed a cooperative operational relationship to help deliver the most effective regulation of New Zealand’s capital markets, and this MoU formalises and enhances that collaboration.
In addition to the FMA’s statutory requirement to undertake and publish a review of NZX’s performance of its regulatory functions on an annual basis (under the Financial Markets Conduct Act 2013), the MoU confirms the structure for the ongoing dialogue between the FMA and NZX in respect of NZX’s day-to-day regulatory functions. The MoU also points to the mutual commitment to the wider development of New Zealand’s capital markets and to contributing to the protection of shareholders and investors’ interests.
The MoU focuses on four key areas and formalises protocols and structures to enable greater collaboration. These areas are:
(a) relationship governance
(b) oversight review process
(c) operational interaction between NZX and the FMA
(d) public statements.
The MoU also confirms the inauguration of two important joint NZX/FMA committees, one for oversight matters and the other for operational functions.
The MoU demonstrates the ongoing commitment from both the FMA and NZX to ensure that effective frontline regulation of New Zealand’s capital markets remains a priority for both organisations. Particular areas of focus to ensure the markets remain fair, orderly and transparent are:
(a) live market issues
(b) continuous disclosure (investigations and waiver/rulings)
(c) insider trading and market manipulation surveillance and investigation
(d) investigations and complaints concerning market participants
(e) market rules approval
(f) review of offer documents.
The MoU has been published on the FMA and NZX websites.