“It's part of our job as New Zealand 's registered markets operator and co-regulator to advocate for, and on behalf of, credible, competitive markets,” said NZX Board Chairman Simon Allen.
“In that respect we share the same objectives as the Government. At the investor level the aim is purely to ensure that shareholders have access to all the information they need to make informed investment decisions.
“NZX listed companies have chosen to be on a registered exchange because they support the rights of their shareholders to have this information. There are some very, very big companies that have chosen to be on Unlisted precisely so they don't have to make that information available,” said Allen.
NZX notes that, in releasing his decision, the Minster of Commerce makes the following observations:
- That Unlisted's claim to be a market for small to medium-sized companies is false
- That Unlisted's claim that it is innovative is false, and
- That Unlisted's claim to be a feeder market is also false.
The Minister's decision also notes that there exists the potential for confusion amongst investors as to whether they are trading on a regulated or an unregulated exchange. Therefore they are at risk of making their investment decisions assuming they are protected from such possibilities as insider trading or irrational pricing of shares. He notes further that were Unlisted operating in other mature markets such as Australia , it would be required to be regulated.
“However, the Minister has also noted that the number of trades on the Unlisted facility is negligible, so it is, in effect, too small to warrant further attention. Were the volume of trades to rise substantially, the Minister has clearly stated he will consider the issue again,” said Allen.
“NZX is committed to investor protection. In this respect the co-regulatory environment in New Zealand works well, and is the right way to go for a market of growing size and complexity such as ours. However, we recognise that the Minister and policymakers have come under increasing pressure from the Unlisted lobby to allow them to continue operating outside that environment. Whilst we're naturally disappointed with their decision, it won't deter us from advocating as we have done,” said Allen.
Allen said that NZX is fulfilling its function appropriately by adopting rational positions on matters of international credibility in a competitive global economy. “If we ignored these critical issues we wouldn't be doing our job, so people can expect to hear from us again. We look forward to working with the Government on these critical issues in future,” said Allen.
NZX recommends that all New Zealanders interested in understanding the issues the Minister of Commerce was required to consider should read the advice to the Minister on Unlisted posted on the Ministry for Economic Development's website.
