By Paul McBeth
June 20 (BusinessDesk) - Investors will be able to buy fractionalised shares on the NZX through micro-investment platform Sharesies, which has been accredited by the stock market operator.
The Wellington-based start-up already caters for investments of as little as $5 in managed funds and exchange-traded funds and has been toying with expanding out its product offering. NZX today accredited Sharesies as a cash market trading and clearing participant.
Sharesies said investors will be able to access all listed companies on the NZX main board from mid-July, and will be the only avenue for investors to buy a fraction of a share. That means people can invest as little as 1 cent per trade.
"We’ve spent the last six months working with NZX to become a market participant so we can give Kiwis even more access to the benefits of the share market, something we think is hugely important now more than ever given New Zealand’s current low-interest environment," co-founder Leighton Roberts said in a statement.
"We know current pricing models make it more difficult for people purchasing small bundles of shares, so we’ll be looking to disrupt that when we launch in a few weeks’ time."
Sharesies provides an online platform for people to make regular small investments in a range of funds. It has attracted 47,000 users who have collectively invested more than $57 million through the platform, through a variety of exchange-traded funds and managed funds.
The company came out of the Kiwibank-sponsored 2017 fintech accelerator. It doesn't charge on portfolios of $50 or less. Portfolios between $50 and $3,000 attract a $1.50 monthly charge and those over $3,000 have a $3 monthly fee. Investors can access 26 funds offered by AMP Capital, Pathfinder Asset Management and NZX's Smartshares exchange-traded funds.
Last year, Sharesies attracted a $4 million investment from Trade Me Group, which took a 16 percent stake.
The start-up foreshadowed the accreditation in May when it amended its constitution to ensure the company would be bound by NZX Market Participant rules.
Sharesies is NZX's second new market participant to join the local exchange in the past year, with Hobson Wealth Management being accredited for cash market trading and clearing in June 2018. More recently, BNP Paribas expanded its local credentials as a custodian, joining NZX Clearing Depository in April.
NZX shifted its focus to the core market under chief executive Mark Peterson's watch, rolling out new listing rules, a simplified market and more attractive pricing schedule.
"Sharesies, through its innovation, is opening up market access to a wider range of New Zealand retail investors. This supports NZX’s strategy of growing market access and investment, and that the share market is a place for investors of all sizes," NZX executive director of markets development & clearing Benjamin Phillips said in a statement.