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The NZSE will extend their trading hours to 9am-4pm
and introduce Market Depth from 1/11/01. Full story from the NZ
Herald:
NZSE targets reputation
revival
26.07.2001
The Stock Exchange is going ahead with moves aimed at bolstering its position
and improving customer confidence.
Yesterday it issued a detailed set of regulations governing relationships
between brokers and clients.
The exchange has also decided to expand its trading hours from the present
9.30 am-3.30 pm to 9 am-4 pm from September 1.
And from November 1, it will meet the longstanding pressure to provide
market-depth information.
The exchange's managing director, Bill Foster, last night confirmed the
decisions on hours and market-depth information and said full details would be
given within a few days.
The three measures were part of a process to ensure the exchange was up with
international best practice, he said.
Chairman Simon Allen said the regulations on customer-client relations
essentially put into a written code what was already normal practice.
"There is already a requirement that brokers are not allowed to do anything
that is in conflict with the interests of clients," he said.
"What we have done is to put in writing what amounts to a best practice
guideline for complying with that rule."
Mr Allen said the procedures outlined were already followed by most of the
large member firms, as a result of in-house rules or linkages with other markets
where such regulations already existed.
The desire was to ensure uniformly high standards across the broking
industry.
"The aim is to afford maximum protection to both investors and members . . .
and ensure that high ethical standards are present and adhered to."
The regulations include:
* Employees are not allowed to sell shares within 10 days of buying them.
* Where members (or relatives) have a beneficial, indirect or professional
interest in a security or company, they may not advise or deal in a transaction
without fairly disclosing their interest.
* Members must disclose if they are acting for both parties in a transaction.
* Members must ensure that advice is properly researched, should not initiate
rumours and should refrain from commenting in the media without properly
identifying themselves.
* Transactions must be carried out in order of precedence and, in particular,
transactions on behalf of members should not be filled ahead of unexecuted
orders on behalf of clients.
* Senior persons or compliance officers must supervise discretionary accounts
to ensure excessive trading or unsuitable investment selection is avoided.
* Members who suspect unusual trading is taking place should advise the
exchange.
* The use of voice-recording systems to confirm telephone orders is
encouraged.
* Employees of member firms who deal in securities must receive written
authority to do so.
* Members must give clients details of their allocation policies in relation
to pooling of orders and the allocation of securities to buy and sell orders.
The regulations also urge brokers to familiarise themselves with the
circumstances of clients - including employment, taxation, investment, family
structure and other relevant personal information - so as to be able to provide
the best advice.
But Mr Foster said that if clients did not wish to provide that information
it was entirely up to them. The exchange was firmly committed to enforcing these
rules.
"We are well aware that there is no point having these regulations if we
don't enforce them.
"We are going to maintain the confidence of investors only if we observe and
are seen to observe the highest standards."
Compliance with the rules would be supervised by a firm's compliance
officers, the exchange's inspectors, customers and by the exchange's monitoring
of any unusual market activity, Mr Foster said.
"When we believe there is cause for action, we already have a disciplinary
process."
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