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NZX welcomes the Financial Markets Authority’s (FMA) third annual General Obligations Review, released today, which concluded that during the 2013 review period NZX complied with all of its statutory obligations.
Annually FMA assesses and reports on NZX’s compliance with its obligations under the Securities Markets Act and the Authorised Futures Exchange (NZX Limited) Notice. FMA concludes that in 2013 NZX met its obligations to ensure that each of our registered markets and the derivatives market were fair, orderly and transparent.
NZX has made significant investment in and improvements to its operational and regulatory functions in the past two years, including the establishment by the NZX Board of a Regulatory Governance Committee in mid-2013 to assist the Board in fulfilling its governance responsibilities relating to NZX's regulatory function.
NZX also put in place further improvements to the structure of the regulation team including the creation of a new Head of Market Supervision role, which reflects a split of the current Head of Regulation role in two. The new role will report directly to NZX’s Board, and has responsibility for NZX’s regulation of Issuers and Market Participants. This addition of another senior resource to the regulation team reflects NZX’s continued investment in this area.
NZX CEO Tim Bennett commented: “Maintaining trust in the integrity of the markets we operate is core to NZX. We continue to make investments in this area in response to changes in the market to ensure we run well-regulated, fair, orderly and transparent markets. It is also critical in a vibrant market environment where we are seeing a record number of new listings and renewed interest in the market from retail investors and the public, that we clearly communicate to investors how NZX and FMA regulates the markets.”
For the first time in the annual review process, NZX and FMA this year have agreed a set of actions to make further improvements in NZX’s operation of the markets, to ensure confidence is maintained in a changing market environment.
These agreed actions, which are underway, include:
- Establishing a Conflicts Committee of the Board to oversee NZX’s arrangements for managing conflicts, and revising the process for regulatory decision-making in circumstances where conflicts may arise or there could be a significant market impact
- Expanding the scope and membership of the Board’s Regulatory Governance Committee to include reviewing regulatory policy changes and appointing independent members
- Improving communication with complainants and the public to ensure they are aware of the progress of complaints, and clearly understand NZX’s conflict management arrangements and regulatory processes
“We have developed a positive and robust working relationship with FMA and look forward to continuing to work together to run well regulated markets that continue to strengthen the public’s confidence in New Zealand’s financial markets,” Bennett said
