In addition, NZX has resubmitted to the Minister the NZX Participant Rules, as a consequence of ongoing feedback received since the initial submission. This feedback resulted in a number of changes to the Rules, which are now posted on the NZX website.
A summary of the main changes to each set of Rules, as a consequence of feedback during the consultation period, is outlined below.
- NZX Discipline Rules
Goal: To create one simple, consistent, fair and transparent structure for both Listed Issuers and all market participants. The NZX Discipline Rules govern this new framework.
Key changes: the opportunity for appeal to an independently constituted body with its members (people who are not active in the markets) appointed by the Securities Commission from a pool put forward by NZX; the establishment of a fund for educational and regulatory reform purposes where any penalties payable to NZX would be directed; and an annual regulatory report detailing process, decisions and costs. - Miscellaneous NZX Listing Rules changes
Goal: The proposed changes to the Listing Rules are designed to further enhance market efficiency, balance investor protection with the cost of compliance, and bring the rules into line with both current practices and overseas standards.
Key changes: provisions for existing retirement arrangements to be “grandfathered” and deletion of two year cap on payments to directors on retirement; a new change has been included in rule 7.3.4 to allow listed issuers to raise up to $5000 each from existing shareholders; and an amendment to the threshold for “Material Transactions” to a single threshold determined from the basis of the Issuer's Average Market Capitalisation limiting the scope of the Material transaction with Related Parties in so far as it applies to employment contracts. - NZX Participant Rules
Goal: The NZX Participant Rules have been designed to better reflect the current structure of the marketplace and the differing relationships various participants have with NZX. They will allow greater flexibility and potential cost benefits for participants based on how they choose to operate in the market.
Key changes : the monetary limit to the one off sale by a natural person has been removed on the basis that identification (2 forms) for that natural person is obtained and that no on going relationship is created by the Client Advising Participant and the client (Rule 9.8 One Off Sales); the rules in relation to the Debt Market have been amended so that trading can take place outside the quotes (including trading during the normal trading hours and after the close of trading) pending a review of the rules to the debt market by the Debt Advisory Team (Section 10; Part E); a $50,000 (or 1% of the securities on issue) threshold interest has been included in relation to the disclosure of interest in relation to prescribed persons (Listing Rule 4. 11.10); Risk based reduction calculations in relation to current assets comprising of debt securities in foreign currencies have been amended as originally calculated incorrectly (Listing Rule 5. 15.6 (c)(ii)); and the risk-based reduction for futures contracts has been amended from 15% to 10% (Listing Rule 6. 15.6(d)).
It is anticipated that all Rule changes will commence on Monday, 3 May 2004 subject to Ministerial review. NZX will be holding Compliance Seminars in Auckland (11-12 May), Wellington (18-19 May) and Christchurch (27-28 April) to assist NZX Issuers and market participants understand these changes in the regulatory environment and to ensure compliance. To pre-register for the NZX Compliance Seminars, please email Sara Velasquez on sara.velasquez@nzx.com.
The final changes to the Rules can be viewed on the NZX website at www.nzx.com/regulation. In addition, a full table of both the process and key changes can be found on the NZX website.