FMA reports on NZX’s regulatory framework

23 June 2016

FMA reports on NZX’s regulatory framework

The Financial Markets Authority has released its latest annual review of NZX and reports that it is meeting its statutory obligations as a market operator and frontline regulator of those markets.

NZX has an important role in helping to achieve fair, orderly and transparent New Zealand financial markets which inspire confident, informed participation from New Zealand investors.

Garth Stanish, Director Capital Markets says “NZX has significantly developed its regulatory framework since our first annual review in 2012. The FMA has seen a steady improvement in the infrastructure, governance and processes put in place by NZX to perform its regulatory obligations.

“From here, the FMA’s focus is on ensuring that NZX continues to build on what it has established since 2012. We’ll work with NZX leadership to ensure there is continuous development of its regulatory functions, so that they keep up with changes in NZX’s business and its growing markets.”

The review is just one of the ways that the FMA engages with NZX. A Memorandum of Understanding signed in 2015 reflects the two regulators’ shared responsibilities for the regulation of New Zealand’s capital markets. This has enabled many levels of regular engagement, discussion and co-ordination between NZX and the FMA. Over the year we saw clearer regulatory messages being given to issuers and more instances of potential non-compliance being referred to the FMA for investigation.

Complementing the regular interactions and coordination with NZX throughout the year, the FMA also performed an end-of-year review of the market operator. The FMA paid particular attention to how NZX regulates the compliance of participant firms, and how it responded to new developments in its business and the markets, focussing on:
· The launch of the NXT market and the purchase of SuperLife;
· Whether governance, operational infrastructure, compliance policies and procedures took into account the changes to NZX’s business; and
· Reviewing the effectiveness of the participant compliance function to ensure the maintenance of fair, orderly and transparent markets.

A full copy of the report can be seen here.

ENDS

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