14 September

First step towards foreign-owned stock exchange

The Green Party is opposing the restructuring of the stock exchange because they are concerned it could be the first step towards the takeover of the exchange by a foreign exchange or exchanges.

Green Party co-leader Rod Donald said today he did not support demutualisation of the exchange, because it would not be in the best interests of the New Zealand investment community for sharebrokers to own the exchange which controls the sharemarket.

"Individualised ownership of the exchange increases the likelihood that a takeover offer by a foreign stock exchange will eventuate," he said.

Mr Donald sat on the select committee looking at the New Zealand Stock Exchange Restructuring Bill, and contributed a minority opinion for the committee report which was tabled in Parliament yesterday.

"We believe the wider investment community, including sharebrokers, advisers, shareholders and listed companies, are best served by the exchange remaining in a mutual structure rather than one interest group, sharebrokers, gaining ownership of the exchange.

"There will be a natural conflict of interest between the brokers desire as owners to see the exchange make as much profit as possible, and their desire as part of the financial network to see the exchange look after the interests of all parties - sharebrokers, advisers, shareholders and listed companies.

"This legislation is premature, as the members of the exchange have not even had an open discussion about whether want the stock exchange to become a publicly owned company with control in the hands of individual sharebrokers. This should have happened before the Bill came to Parliament.

"Our exchange is already unregulated with little accountability or independent scrutiny, and this Bill does little to improve that situation," said Mr Donald.

ENDS

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