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NZX today announced a number of governance and process initiatives that will improve both its communication of regulatory decisions and processes and its arrangements for handling perceived or potential conflicts.
These initiatives are among several agreed by NZX and the Financial Markets Authority (FMA) as part of FMA’s third annual General Obligations Review of NZX, released in June 2014.
Key initiatives include:
- Establishment of a Conflicts Committee of the Board to oversee NZX’s arrangements for managing conflicts. The committee is responsible for recommending enhancements to policies and procedures that relate to conflicts management, and will undertake an annual review of NZX’s compliance with the arrangements in place. The members of the committee are Simon Power and Therese Walsh, with a third member to be appointed in due course.
- Appointment of Derek Johnston as an independent non-director member and incoming chairman of the Regulatory Governance Committee (RGC) of the Board. This committee was established in August 2013 and is charged with reviewing the adherence of NZX Regulation to its key performance metrics, including the retrospective review of participant and issuer decisions made in discharge of NZX’s regulatory functions. Mr Johnston is a commercial barrister and arbitrator with extensive experience in complex companies, securities, takeovers, commercial and competition law matters. He was a member of the NZ Markets Disciplinary Tribunal from its establishment in 2004 until June 2014, and NZMDT chair for the last three years of his tenure. He will assume the role of chairman in early 2015.
- Expanding the scope of the RGC’s mandate to include reviewing regulatory policy proposals.
- Revising the process for regulatory decision-making in circumstances where NZX’s Head of Market Supervision considers that specific NZX conflicts may arise, or there could be a significant market impact. NZX Regulation will consult with the Chair of the NZ Markets Disciplinary Tribunal in these situations.
- Improved transparency of NZX’s conflict management arrangements, enforcement procedures and regulatory processes. This includes the launch of a revised Regulation section of NZX.com (https://www.nzx.com/regulation), which provides easily accessible and understandable information about NZX’s regulatory activities.
NZX continues to investigate a number of additional initiatives and projects that will continue to contribute to operation of its markets in a fair, orderly and transparent way.
