NZX makes distinction between regulatory, market roles
BUSINESSDESK: Stock market operator NZX is creating a new markets group and regulatory team to make a clearer distinction between the two roles, new chief executive Tim Bennett says.
As a result of the changes, NZX has created two new positions – a chief financial officer and a head of cash markets.
It named Simon Smith as head of market services, while current head of market supervision Robyn Dey will lead “a more tightly focused regulation team”, Mr Bennett said.
“The time is right to build on the solid base that has been developed to ensure we’re structured, skilled and resourced to deliver for our markets in this new phase of development.”
Among developments are the “technology, operations and regulatory infrastructure for Fonterra’s Trading Amongst Farmers Market”, a wider range of trading and risk management tools and an expanded offering of agricultural information, the company said today.
The markets services group will be responsible for issuer services, market surveillance, clearing operations and risk functions, derivative operations, indices and data operations, it said.
The regulation team will be responsible for issuer regulation, compliance, enforcement and markets policy development.
The changes will “make the distinction between our regulatory and commercial roles more explicit”, Ms Dey said. “This will remove any perception of conflict between those roles.”
Shares of NZX last traded at $1.37 and have climbed 39% this year amid optimism the Fonterra shareholders’ fund and sell-down and listing of state-owned companies will stoke activity on the exchange.
The stock is rated a "hold" based on three recommendations compiled by Reuters.
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Comments and questions8
Too little, too late for the capital markets - NZX, Mark Weldon and John Key allowed the integrity and independence of the capital markets to be questioned and confirmed as lacking. Hence, NZ's dire economic future with limited savings, controlled from overseas financial markets but some very happy wealthy individuals like Mr Mark Weldon and his sponsors in Wellington.
NZ loses, his sponsors and he win.
Karma will get him eventually though - just as it has already taken care of some of the sponsors.
Talk to the many ex-CFOs and ex-executives of NZX, Mr Bennett, if you are genuine and intent on making the NZX an organisation and company which will truly make the NZ capital market a better place for all and contribute to NZ's future.
Talk to the many compliance and regulatory staff who have left over the years and ask them about the conflicts they have seen. Ask them about how NZX profited from its regulatory and compliance enforcement and how the big boys were allowed off while the smaller players were penalised.
Ask them if it went against their moral principles to see the NZX failing in the very areas it extracts penalties from other players - eg. monitoring unusual price movements of finance companies securities and enforcing disclosures. But it's ok as it's the NZX, right?
Then, you can really move forward and get rid of the tag under your name of yet another watch reader.
Alternatively, just continue milking the monopoly until the inevitable happens.
Not a hard decision then, is it?
how the hell is market sureveillance not part of "regulation"??? - if I read their announcement correctly? Isn't this the part that catches insider trading?
Methinks there is some confusion within NZX around how you ensure compliance. You do this by surveilling the market to ensure the players are complying. Its actually one and the same thing.they are NOT mutually exclusive.
Tim Bennett is right to make some changes to the structure - they are sorely needed. Worringly however there is little evidence of seeking the right people, instead he has gone for 'Weldons men', who proved wholly ineffective to stand up and be counted against the former Tsar.
Mr Bennett however must be given some room to move, a honeymoon, has to be given time to assess the internal dynamics and the board dynamics (all of which need changes) and the quality of the senior staff he has - which in time he will find isnt encouraging.
To get capital markets moving again in NZ requires a major thought process change. All around the world regulatory authorities have killed capital markets by regulation that is ensuring that while there is reduced risk in markets, there is almost no activity. This has to change, but at the moment the popular opinion seems to be the opposite and a whole bunch of bureaucrats are out there trying to enforce and toughen up regulation - for their own job preservation reasons.
The pendulum has swung too far in the wrong direction with regulation killing activity and until markets are lossened up the new head of cash markets is going to be a very frustrated person.
If the NZX is serious about restoring confidence and life back to the equity markets, it will voluntarily allow the regulatory function to be handed over to the FMA. It will not do so for obvious reasons - it likes the free reign that being regulator and enforcer give it.
So like Telecom, it will take the next PM to go overseas and look at the pathetic state of NZ's capital markets and how NZX has been gouging monopoly profits, without doing anything in return, to regulate.
NZX shareholders and NZX - you have been warned.
In response to Broker, you are quite correct in saying these are Weldon's "men". Any other was forced out, usually with great acrimony.
thank god for the NZX that Weldon is finally gone so proper changes can be made, which everyone knows are long overdue. Its a shame NZX lost so many good people who fell foul of that bully leaving the sycophants and yes-men.