Minister's inaction costly for Unlisted/Markets
Minister's inaction costly for Unlisted and for capital markets
Business associations say delays in resolving the regulatory uncertainty around the Unlisted securities trading platform are causing unnecessary costs for Unlisted, its customers, and New Zealand's capital markets.
Roger Kerr of the Business Roundtable and Phil O'Reilly of Business NZ say seven months after previous Minister of Commerce Margaret Wilson issued her notice proposing to require Unlisted to become a registered exchange, and three months after the submission process closed, new Commerce Minister Pete Hodgson has still not made a decision on the matter.
"This regulatory vacuum has occurred despite Unlisted's developers engaging in extensive dialogue with the Ministry of Economic Development before the facility's launch in 2003, and the Ministry closely monitoring the facility during its first full year of operation in 2004," they said.
"Unlisted adds depth and liquidity to New Zealand's capital markets, reducing the cost of capital for small and medium-sized firms as they seek to grow. Instead of encouraging an innovative enterprise that supports the development of other small businesses and overall economic growth in New Zealand, the government appears to be doing its level best to stifle it. This flies in the face of its claim to be business-friendly.
"As a result of Minister Wilson's unexplained change of heart in late 2004, Unlisted has incurred large direct and indirect costs which not only appear to have threatened the financial viability of the business, but also forced it to raise new capital and increase its fees, and no doubt played havoc with its business development and planning. The ministerial vacillation reflects poor regulatory process with no apparent cost/benefit or regulatory impact analysis conducted by officials prior to issuing the notice.
"The odd thing is that Unlisted's real contribution to business in New Zealand has recently been recognised by its selection as a finalist in the Vero Excellence in Business Support awards. Even more poignant, these awards are part-sponsored by the Ministry of Economic Development.
"Clearly the operation of this trading facility is not the threat to New Zealand's capital markets certain detractors have tried to make out. In fact the opposite is true and Unlisted provides choice and tangible benefits, and should be left to run its business with the government's blessing."