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FMA publishes annual review of NZX regulatory obligations; 11 agreed actions

Page last updated: 30 Jun 2014

News release
MR No. 2014 – 021
30 June 2014

The Financial Markets Authority (FMA) today published its annual General Obligations Review of NZX.

The FMA’s report confirms that NZX met its obligations, under the Securities Markets Act 1988, to ensure that its markets were fair, orderly, and transparent. The review covered the period January – December 2013.

The report lists 11 actions that NZX will take, in order to achieve further improvements in its arrangements for operating the markets.

NZX is New Zealand’s only registered exchange and the front line regulator for its markets. The 2013 report is the third General Obligations Review of NZX by the FMA.

The Chief Executive of the FMA, Rob Everett, said the review process had been rigorous, involving in-depth reviews of NZX’s resources, policies, and practices. This is notwithstanding FMA’s close involvement with, and monitoring of, NZX day-to-day.

Mr Everett said that the FMA and NZX have agreed that NZX will undertake a number of actions, some of which are already underway. This will address issues discussed during the review about NZX’s arrangements for managing conflicts, monitoring conduct, and enforcing compliance.

“NZX has given top priority to its regulatory obligations, and the FMA has seen substantial improvements from the previous report,” Mr Everett said. “I’m pleased we have been able to agree a schedule of tangible and actionable improvements this year.

“Along with the improvements that NZX has already implemented, I believe we have the appropriate degree of reassurance - on regulatory compliance - that investors, firms, and the Government expect of New Zealand’s only registered exchange.”


Read the NZX General Obligations Review report here.

Andrew Park
09 967 1215
021 220 6770


Agreed actions:

Arrangements for handling conflicts

NZX will:

  • revise the process for regulatory decision-making in circumstances where particular conflicts may arise, or there could be a significant market impact
  • establish a Conflicts Committee of the Board to oversee NZX’s arrangements for managing conflicts
  • appoint independent members to the Board’s Regulatory Governance Committee (RGC)
  • expand the scope of the RGC to include reviewing regulatory policy changes
  • improve visibility of its conflict management arrangements
  • revise its communications policy in relation to public comment, for greater transparency.

Arrangements for monitoring conduct

NZX will:

  • amend the guidance note on amendments to NZX’s rules.

Arrangements for enforcing compliance

NZX will:

  • enhance visibility of regulatory matters and enforcement activities
  • amend internal service levels to reflect the nature and complexity of different investigations, and the variety of possible outcomes
  • improve communication with complainants
  • review the penalty structure for minor and unambiguous breaches of its rule.