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FMA reports on NZX’s regulatory framework

Page last updated: 23 Jun 2016

Media release
MR No.2016 – 14
23 June 2016

The Financial Markets Authority has released its latest annual review of NZX and reports that it is meeting its statutory obligations as a market operator and frontline regulator of those markets.

NZX has an important role in helping to achieve fair, orderly and transparent New Zealand financial markets which inspire confident, informed participation from New Zealand investors. 

Garth Stanish, Director Capital Markets says “NZX has significantly developed its regulatory framework since our first annual review in 2012. The FMA has seen a steady improvement in the infrastructure, governance and processes put in place by NZX to perform its regulatory obligations.

“From here, the FMA’s focus is on ensuring that NZX continues to build on what it has established since 2012. We’ll work with NZX leadership to ensure there is continuous development of its regulatory functions, so that they keep up with changes in NZX’s business and its growing markets.”

The review is just one of the ways that the FMA engages with NZX. A Memorandum of Understanding signed in 2015 reflects the two regulators’ shared responsibilities for the regulation of New Zealand’s capital markets. This has enabled many levels of regular engagement, discussion and co-ordination between NZX and the FMA. Over the year we saw clearer regulatory messages being given to issuers and more instances of potential non-compliance being referred to the FMA for investigation.

Complementing the regular interactions and coordination with NZX throughout the year, the FMA also performed an end-of-year review of the market operator. The FMA paid particular attention to how NZX regulates the compliance of participant firms, and how it responded to new developments in its business and the markets, focussing on:

  • The launch of the NXT market and the purchase of SuperLife;
  • Whether governance, operational infrastructure, compliance policies and procedures took into account the changes to NZX’s business; and
  • Reviewing the effectiveness of the participant compliance function to ensure the maintenance of fair, orderly and transparent markets.

A full copy of the report can be seen here.


Editor’s notes:

This year’s review of NZX is the FMA’s first review of NZX’s compliance with the licensed market operator obligations in the Financial Markets Conduct Act 2013. It covers the period from January to December 2015. Previous reviews were done under the Securities Markets Act.

The review is one of several reports the FMA is required to deliver each year to meets its statutory obligations.

The NXT market is a platform for businesses with an expected market capitalisation $10 - $100m.  There are currently three listed companies in this market.

Andrea Birtwistle
09 300 0465 or 021 847 192