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Growth Leads NZSE's Agenda For Equities Market Restructure

Date 13/12/2002

At a presentation in Auckland this morning, the NZSE outlined a proposal for the restructuring of New Zealand's Equities Markets. The primary goal of the revised plan is to fuel growth in the market, by supporting and developing New Zealand's unique business infrastructure.

The revised recommendations are an evolution of the proposal circulated earlier in the year by the NZSE, to fold the existing NCM and Unlisted Facilities into a new Board, tentatively labeled 'AX'.

The proposal introduced significant concepts, entirely new to the New Zealand market. These concepts have been designed to cater for the unique needs of small and developing companies in New Zealand.

Represented as Four Market Pillars, the NZSE introduced the following key ideas on which the new market would be based:

  1. Primary Market - Open Access
    • Break the bottleneck for companies seeking listing, by opening up who can sponsor a company through the float process.
  2. Secondary Market - Strong Structure
    • Fuel market liquidity by developing a tailored market microstructure and trading environment to increase trading and interest in companies on the AX board.
  3. Quality Companies
    • Without setting minimum or maximum size criteria, the NZSE will work with company sponsors to ensure only quality companies come to market, protecting investors' interests.
  4. Cost Efficient Process Management
    • Streamlining the regulatory compliance process for companies, the NZSE will deliver lower costs and a simplified methodology to navigate NZSE and the Securities Commission rules.
The proposal was presented to a large group from the capital markets, including representatives from companies, brokers, banks and other financial service firms. The presentation by the NZSE was supported with commentary from Joseph Healy of ANZ Banking Group, Adrian Dewey from KPMG Corporate Finance and Don Turkington from Forsyth Barr Frater Williams Stockbrokers.

Commenting on the new market structure, NZSE Chief Executive Officer, Mark Weldon said "New Zealand needs and deserves a unique market infrastructure. We believe this proposal goes a long way to delivering against these needs.

"Our job is to develop the best market structure and make it maximally attractive. We alone, however, cannot guarantee the success of the new market. To create a virtuous circle of growth, we need contribution from the whole economy.

"We are sending out a rally call today to members of the marketplace, to rethink the way our market acts on behalf of all businesses in New Zealand. Collectively, I believe we have the power to catapult the market forward benefiting not only the participants, but the New Zealand economy as a whole."

The NZSE is inviting interested participants to register and participate in the further refinement of the proposed new market infrastructure. The NZSE will be forming specialist User-Groups in 2003 to finalise the market design and welcome participation from every sector.

Individuals wishing to register should email growth@nzse.co.nz

For a copy of the Revised AX Proposal, please visit http://www.nzse.co.nz