Members will convene on 16 October 2002 at the Special & Annual Meeting, where they will be asked to vote on the Restructuring proposal that will, if adopted, facilitate the demutualization of NZSE.
All voting Members will be entitled to vote on the Restructuring Proposal, and the proposal will be approved if 75% or more of all Voting Members vote in favour. Demutualisation will in essence, change the nature of the rights and obligations of individual Members and Member firms, and convert NZSE into a limited liability company.
Chairman Simon Allen said that while market infrastructure has been continuously improved, the NZSE Board now recognizes that new technology and competition in global securities markets are driving a need for continued change and investment.
"The NZSE Board has given detailed consideration to the governance, operating and ownership structure which will bes suit NZSE for the future, and for these reasons has concluded that a corporate structure will best provide the incentives and flexibility NZSE needs to grow, develop and support the New Zealand capital markets."
If the vote is approved, from the Restructuring Day the current link between ownership of the entity operating the stock exchange and stockbroker membership will no longer exist. Entitlement to use the stock exchange operated by NZSE Limited will not derive from the ownership of shares in NZSE Limited.
Existing Member firms will become "NZSE Firms" and the business relationships between NZSE Limited and NZSE Firms will be governed by the proposed new Business Rules.
Chief Executive Mark Weldon says that demutualization of the NZSE does not fundamentally change the NZSE's dual purposes of running a successful business, while effectively carrying out a regulatory and, with the Securities Commission, co-regulatory role in relation to the New Zealand Capital Markets.
"Restructuring in essence means NZSE will benefit from improved management effectiveness, be in a better position to accelerate the changes already underway, and set NZSE on the path towards a growth oriented business, at the core of the New Zealand capital markets.
