Wednesday 13 July 2016 12:07 PM
NZX proposes changes to flagging price-sensitive announcements
By Paul McBeth
July 13 (BusinessDesk) - NZX wants to change the way it flags price-sensitive announcements which attract brief trading halts, putting the onus on issuers to identify what's material.
The Wellington-based stock market operator is seeking more feedback on a proposal to change the way it uses administrative halts after initial submissions were divided on whether to drop the practice altogether. NZX now plans to rely on an issuer's assessment of whether an announcement is material, which would then be flagged to the market and attract a short trading halt, it said in a statement.
NZX asked for submissions last August on a plan to stop flagging some announcements as price sensitive, which was supported by law firms Chapman Tripp and Russell McVeagh, as well as ANZ Bank New Zealand, and the Listed Companies Association. However, the New Zealand Shareholders Association and Securities Industry Association "indicated that investors do rely on the identification of price sensitive information" and dropping the practice "would have a disproportionate impact on retail investors," NZX said in its response paper.
The local stock market operator is working with its Australian counterpart to try and align practices, but doesn't plan on waiting for the ASX to complete its own review.