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NZX's new market gets ministerial go-ahead

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 [NZX] 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 on Monday.


Comments and questions

Bringing forth (with ministerial approval and duplicity) a new wave of stocks like the finance companies and Plus SMS.

Continuing the NZX's outstanding monopoly mantra of 'profit, profit, no accountability, no care'.

Why bother with the FMA?

If you want to see the wild west look at crowdfunding. That is going to be fun.

The Great Leap Backwards - NZX, FMA and Craig Foss version.

If the problem is liquidity, then disclosure is not the solution.

First Simon Power (before he resigned from his position as Commerce Minister) granted the NZX self-regulation. Now Craig Foss grants the NZX alternate market companies self-disclosure. Going backwards at a great pace.

Is this an alternative to and just as well "managed" as the slot machines?

"An alternative disclosure regime will make it easier for firms to manage their disclosure obligations internally"

READ: This now makes it easier for small and medium size companies to list (and cash out shares) by not having to disclose why investors shouldnt be buying them.

Here come all the tulip faeces

Brown clouds raining down soon

Must be just about due for another Knowledge Wave, Tsunami of biotechs etc

The only protection is less ma and pas & more funds run by people who want bonus's not lemons. Sad thats NZ's regulation

I can feel my pockets getting heavier as I read this article ;))