GENERAL: NZXR: Notice - NZMDT Rule Amendment

25 Jun 2010 5:51 pm

NZXR 25/06/2010 GENERAL

REL: 1751 HRS NZX Regulation

GENERAL: NZXR: Notice - NZMDT Rule Amendment

25 June 2010

NZX Market Supervision ("NZXMS") gives notice of amendment to the NZ Markets Disciplinary Tribunal Rules ("NZMDT Rules").

The amendments relate to the introduction of NZX's new clearing and settlement system ("Settlement System"), and the introduction of a new derivatives market in New Zealand ("Derivatives Market"), and will come into effect on the Go-Live Date.

As the Go-Live Date is dependant on the receipt of necessary regulatory approvals, NZX will advise the market of the Go-Live Date, provided that the Go-Live Date shall not be earlier than 26 July 2010.

By implementing the Settlement System, NZX seeks to align New Zealand's clearing and settlement infrastructure with international best practise, in order to promote confidence and participation in New Zealand's capital markets. The Settlement System comprises a central counterparty clearing house ("Clearing House") (operated by New Zealand Clearing Limited) and a central securities depository ("Depository") (operated by New Zealand Depository Limited).

Marked copies of the NZMDT Rules and Procedures showing changes from the existing NZMDT Rules and Procedures, can be found at http://www.nzx.com/market-supervision/rules/nz-markets-disciplinary-tribunal- rules. As the Rules are subject to regulatory approval, including for the purpose of the Securities Markets Act 1988, any changes required to obtain regulatory approval will be made available prior to the Go Live Date.

Broadly, the amendments are as follows: 1. Jurisdiction Amendments to provide the NZ Markets Disciplinary Tribunal ("Tribunal") with jurisdiction over Clearing Participants, in respect of the C&S Rules, and Derivatives Participants, in respect of the Derivatives Market Rules, in a similar way that the Tribunal currently has jurisdiction in respect of Market Participants and the NZX Participant Rules.

The amendments also provide the ability for Clearing Participants and Lending Clearing participants to apply to the Tribunal for a determination as to whether New Zealand Clearing Limited has failed to determine in good faith a claim for compensation made under the C&S Rules.

2. Composition of Tribunal/ Divisions To ensure that the Tribunal is appropriately qualified to deal with its increased mandate, amendments have been made so that the membership of the Tribunal shall consist of at least one person who has, or has had, relevant experience with a Clearing Participant, former Clearing Participant or a Delivery and Settlement Participant, and, at least one current, or former, Derivatives Participant or Futures and Options Participant.

The amendments also require that the Appeal Panel consist of up to two persons who have had relevant experience with Clearing Participants or Delivery and Settlement Participants.

3. General A number of minor amendments have also been made to reflect amendments made to the NZX Participant Rules and NZX Listing Rules and cross references to specific provisions in each of those rule sets.

These amendments do not affect the obligations of NZX Issuers or NZX Participants, nor the jurisdiction of the Tribunal in respect of Issuers or NZX Participants.

Further background information about the amendments can be found in the document entitled Consultation Memorandum - NZ Markets Disciplinary Tribunal Rules - August 2009, which is available at http://www.nzx.com/market-supervision/rules-consultation/.

ENDS. End CA:00196576 For:NZXR Type:GENERAL Time:2010-06-25:17:51:36

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