NZX Market Closure - An Explanation

Today NZX determined that the electronic messages originating from RMLT, one of the three New Zealand share registries that manage the transfer of shares between brokers accounts and clients accounts, were faulty. The faults were due to a RMLT software upgrade. NZX management accordingly decided to halt trading in the market. NZX has kept the market closed until it confirmed conclusively that (i) all shareholder balances within the RMLT registry are correct and all client positions accurate; and that (ii) the message uplift had been restored to NZX's satisfaction.

The messaging failure meant that NZX was unable to confirm that transfers of shares were being properly recorded. The real time inability to confirm trades against holdings compromised the integrity of the market. NZX has a zero risk tolerance policy and determined the appropriate action was market suspension until market integrity had been restored.

Today's closure was not the result of a failure of any NZX technology. Under the current system of share transfer, NZX is dependent upon the efficient and consistent operation of New Zealand share registries. Conversely, in Australia the ASX controls the entire chain of events and information required to ensure that trades can be internally matched against holdings. P> NZX is absolutely committed to complete market integrity and is assessing all of its relationships in this context.