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NZX Releases Summary Of Submissions On Central Clearing House Proposal

Date 19/08/2004

New Zealand Exchange Limited (NZX) has today released a summary of the submissions it received from listed companies, market participants and other interested parties regarding its Central Clearing House (CCH Facility) proposal which was published earlier this year.

NZX proposed the CCH Facility as a potential solution to the market integrity issues that have resulted in outages over the last 12 months.

“The objective of any solution is threefold,” said Elaine Campbell, Head of Regulatory & Public Policy. “First is to better protect the robustness and integrity of New Zealand's securities markets, secondly to ensure that these markets are shielded from failures and outages in other parts of the securities landscape, and finally to protect New Zealand's reputation as a destination for international capital. These three things are critical to the health and future wellbeing of any securities markets and most exchanges around the world employ standard practices to achieve them.”

NZX received a wide number of submissions from various sectors of the securities market landscape, and is grateful for the obvious time and effort spent in preparing those submissions. They highlight the wide variety of views from the industry and the raise issues around the definition of acceptable ‘uptime' for the system, and the need for the CCH Facility to ensure continuous trading. The submissions have been summarised into one document which can be downloaded at www.nzx.com/aboutus/reports.

NZX has proposed two solutions and is also considering an ‘opt-in' model whereby listed companies can chose to whether or not to utilize the CCH Facility and, in doing so, ensure their particular shares are tradeable where a third party connection to NZX goes down.

To ensure an appropriate and workable solution is developed for all parties concerned, NZX is hosting a workshop later in the month. The workshop is designed to help clarify points of contention and reach consensus on key concepts.

The workshop will be held in Wellington on Tuesday 31 August and all those who made submissions on the initial proposal will be invited to attend. For further details, please contact Bridgit Vivian at bridgit.vivian@nzx.com.