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Reserve Bank and NZX reach agreement

The Reserve Bank and NZX have signed an agreement on the provision of clearing and settlement services to New Zealand's capital markets.

The move comes after the Capital Markets Development Taskforce recommended the two work together to ensure an efficie

NBR staff
Mon, 11 Oct 2010

The Reserve Bank and NZX have signed an agreement on the provision of clearing and settlement services to New Zealand’s capital markets.



The move comes after the Capital Markets Development Taskforce recommended the two work together to ensure an efficient clearing and settlement infrastructure that supports the development of capital markets in New Zealand.

The central bank and the stock exchange operator have signed a memorandum of understanding (MOU) cementing the relationship.

The Reserve Bank and NZX run New Zealand's two principal securities settlement systems: NZClear and New Zealand Clearing Limited, respectively.

NZX chief executive Mark Weldon said the MOU was a vote of confidence in the cooperative approach to clearing and settlement in New Zealand.

“We have been working with the Reserve Bank over an eight-month period, have focused on the details and we are confident we have an outcome that is good for both institutions, and good for the efficiency, effectiveness and soundness of our markets.”

Reserve Bank deputy governor Grant Spencer said New Zealand Clearing Limited will be eligible for backup liquidity support from the Reserve Bank in its standard overnight facility.



Further, the Bank and NZX agree to establish a joint settlements advisory council to create a unified approach to dealing with industry issues.





Mr Spencer said the RBNZ and NZX consider agreement on these issues will help to ensure an efficient and competitive securities settlement infrastructure which will in turn support the development of New Zealand's capital markets.

 

NBR staff
Mon, 11 Oct 2010
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Reserve Bank and NZX reach agreement
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