NZX's new market gets ministerial go-ahead
By Suze Metherell
July 7 (BusinessDesk) - Commerce Minister Craig Foss has given the go-ahead on alternative disclosure requirements for
the New Zealand stock market operator's proposed "new market".
The exemption will let the NZX's proposed market to skirt continuous disclosure requirements for listed companies, with
less onerous disclosure obligations reducing costs for issuers in a bid to attract small to medium sized businesses to
list. NZX must now satisfy the Financial Markets Authority that the market's rules will support the alternative
disclosure requirements, before launching the new board.
The exemption will apply under the Securities Act until December, when the Financial Markets Conduct Act comes into
effect. Cabinet has agreed to enact regulations to allow the exemption under the new law.
“An alternative disclosure regime will make it easier for firms to manage their disclosure obligations internally,” Foss
said in a statement.“This could lower the cost of capital-raising for New Zealand’s smaller and high-growth businesses.”
“The new market may also give New Zealanders, who have the right risk appetite, a greater number of firms to invest in,"
he said.
Companies will be able to use key operating metrics to outline their business performance instead of more onerous
prospective financial information requirements in their projections, and will be required to disclose information to
investors periodically rather than continuously, according to draft rules released in March. The new market, which will
ultimately replace the NZ Alternative Market, will have a different website with distinct branding from the NZX and a
risk warning where investors acknowledge difference between the new market and other NZX markets.
The exemption is recommended by Ministry of Business, Innovation and Employment and supported by Financial Markets
Authority.
Shares in NZX fell 1.5 percent to $1.32 today.
(BusinessDesk)