Announcement
GENERAL: NZX: Proposal to structurally separate regulatory function
10:09am
NZX
31/03/2020 10:09
GENERAL
NOT PRICE SENSITIVE
REL: 1009 HRS NZX Limited
GENERAL: NZX: Proposal to structurally separate regulatory function
Proposal to structurally separate regulatory function
31 MARCH 2020 - NZX today announced a proposal to structurally separate the
Exchange's commercial and regulatory roles.
NZX Chairman, James Miller, says the proposal is ground-breaking in the
150-year history of New Zealand's capital markets, and aligned with global
best practice - in terms of the structure, governance and the operating model
for NZX Regulation.
The NZX Board is proposing to adopt a new regulatory operating and governance
model, similar to models used by other international exchanges such as the
Singapore Stock Exchange (SGX).
Mr Miller says a wholly-owned operating subsidiary of the Exchange will
perform all frontline regulatory functions in support of NZX's obligations as
a market operator and as operator of the designated settlement system.
The proposed entity will be:
o Structurally separate from the NZX's commercial and operational activities
o Governed by a separate board, with an independent Chair (and the majority
of members independent of the NZX Group)
o Targeting to operate on a cost-neutral basis. It will not be expected to
generate profit for the Exchange.
As part of the announcement today, NZX named an Establishment Board chaired
by Trevor Janes, along with Elaine Campbell and Mike Heron QC - with a fourth
member still to be confirmed. The entity will be led by Joost van Amelsfort
as CEO, who has served as NZX Head of Market Supervision since 2014.
"Regulation is a central tenet of a healthy and well-functioning capital
market. We believe this proposal and the calibre of the Establishment Board
will give a good sense of the significance of this change, as a positive
evolution of NZX and our role in New Zealand's capital markets."
The recommendations come out of a full review of NZX's regulatory operating
model completed in 2019, which was prompted by the increasing complexity of
governance arrangements.
Mr Miller says the structural separation of the proposed model also provides
the NZX Board increased capacity to focus on NZX's commercial mandate and
initiatives, to deliver shareholder value.
Implementation of the proposed model requires amendments to be made to NZX's
market rules, as well as to the designation order in place for the NZX
Clearing settlement system.
Mr Miller says implementation was planned within the 2020 calendar year.
However, consideration would be given to the delay of several months,
respecting the additional pressures on listed companies and broader market
participants along with the NZX Regulation team - due to the current market
volatility, along with the proactive steps being taken to support customers
in the context of COVID-19.
During this time, NZX Regulation will continue to provide full regulatory
services in support of NZX's listed markets.
For further information, please contact:
Media - Hamish Macdonald 027 704 6377
NZX Regulation - Joost van Amelsfort 021 918 427
End CA:00350975 For:NZX Type:GENERAL Time:2020-03-31 10:09:37
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