Bennett oversees NZX clean-out

Tim Bennett

NZX boss Tim Bennett says he wants to work more closely with listed companies to improve their customer and investor relations.

The sharemarket operator announced the resignation of market services’ head Simon Smith, who will leave at the end of the year.

Mr Smith, a chartered accountant, has been with NZX for eight years, in a number of roles, including head of finance.

In recent months, he has helped to establish the market services division and was appointed its manager in July.

Since then he has been responsible for market and issuer services.

Accountant Mandy Simpson will replace Mr Smith from mid-November. She is currently the cfo and technology solutions general manager at software company Fronde.

Mr Bennett told NBR ONLINE he is planning to work alongside Ms Simpson to provide a better "customer relations management" service to listed companies. He says they will be working with smaller listed companies to better engage with and understand their investors.

Mr Bennett says companies are more interested in knowing the analytics of their shareholder base, such as who is on their register and who is trading their stock.

It is the latest in a number of changes for the NZX which saw Mr Bennett take over from former boss Mark Weldon in May and the subsequent departure of former head of market supervision Caroline Leckie.

In June, Mr Bennett announced a reorganisation of NZX, creating a new markets group and a regulatory team to create a clearer distinction between the two roles.

The move followed criticism by the Financial Markets Authority of potential conflicts of interest when the NZX appointed its corporate counsel as head of market supervision.

The reorganisation has established a new chief financial officer position, which will be filled in mid-December by Bevan Miller.

Mr Bennett says he is shortlisting candidates for the Auckland-based head of cash markets – another new position. He expects to announce the successful candidate in the next fortnight.

He denies Mr Smith is leaving because he is disillusioned with recent changes and says it was simply a "good opportunity" for him to leave.

Mr Smith wants to spend more time with family and wants to take a break after helping to set up such a “credible bit of infrastructure for us”.

Mr Bennett says Mr Miller’s arrival as cfo will then allow him him focus on helping foster those investor relations. He is adamant there will be no further structural changes or reorganisation at the top once Mr Miller has arrived.

NZX was trading down one cent to $1.14 when the market opened today.

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2 Comments & Questions

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In today's Press, Chalkie pointed to what the new broom has to do:

"Chalkie blames former NZX boss Mark Weldon for the shortage of [company] listings. He was a great chief executive from a shareholder point of view but during his tenure the cachet of listings declined due to increasing compliance and rising costs."

... That is, instead of attacking the companies wanting to list on his exchange, like Weldon did, Bennett must attack the actual enemy of business, government agencies, namely FMA, that would seek to bind companies in regulation once listed. That is, he has to understand that by the time you regulate the last element of risk off the NZX, you will have regulated off the last company to invest in.

The one way to create a vibrant exchange (and economy) will be to treat shareholders as adults, and not as babies that saw the inception of the FMA from the finance company fiasco.

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Mark Hubbard's post above is absolutely on the money ! The FMA remains in a "nanny state" mentality that risks stopping any growth in the stock market and as a direct consequence is holding back the wider NZ economic growth. The relevance of the FMA and their current approach is about as useful as Foreign Exchange Control was to NZ business up until 1995 - it held NZ back in terms of Economic performance for decades.

The future for New Zealand is to buck the global trends and make our market a "low regulation" listing friendly market before the rest of the world does. If the NZX becomes a market where companies can list without the horrendous costs of listing that offshore jurisdictions impose, and has pragmatic regulation and regulators whose compensations and KPI's are to assist and encourage listings rather than the current focus of prevention and hurdles, NZ could see 15 - 20 new companies list in 2013, instead of the likely 3 this year. Companies need to have the ability to promote the underlying business stories without the constant red tape and hurdles that exist currently in bringing a company to market. They need the ability to put long term forecasts into prospectuses even though the long term maybe relatively uncertain, without the directors having to put their personal reputation and financial wealth at risk for uncertain future outcomes. They need the ability to use photos, to use all sorts of different media to ensure that there is an appropriate understanding of the company and its objectives.

Investors need to start taking responsibility for their actions. How hard is it to diversify a portfolio, or to seek advice ? 99.9% of New Zealanders have the brains to be able to tell what is a good investment and what isnt. They should be given the benefit of doubt in managing their own money, rather than being forced in to an environment where regulation builds 100 page prospectuses that nobody reads. Isn't that the ultimate evidence of the when regulaton has gone too far.

The pendulum of regulation always swings too far in each direction. It is now time to get ahead of the global trend that will start with a catalyst such as the USA electing a Republican President and benefit as a country from accepting that it is time to start de-regulating the market and making a corporate friendly market. With this one change we could add perhaps upto 2 - 3% to our GDP within a very short time as the NZ market becomes the listing market of choice for capital seeking growth companies. This might finally assist in buiilding tax revenues for the government and reducing our growing debt crisis.

Tim Bennett is doing wonders for the NZX. I commend his approach, which is both refreshing and sound. I encourage him to start with a blank piece of paper - increase trading hours, reduce regulation, enourage greater participation in markets, offer free NZX listings for MSCI index members (so as to allow longer hours of trading), replace the last of the Weldon "yes men and woman" and move the market forward from a dark period of NZX history 2002 - early 2012.

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