NZX settlement system costs believed to be cost neutral
Wellington broking firm McDouall Stuart says inadequate future returns and a trend towards increased capital requirements for clearing house participants are behind its decision to resign as a trading and settlement member of NZX.
Managing director Andrew McDouall said media reports, including in BusinessWire, had interpreted an earlier statement from the firm as meaning that "the costs of the new settlement system will increase costs and had been the predominant issue in coming to the decision".
"While the proposed new charging is still being finalised, McDouall Stuart believes that the proposed ongoing operating costs would have been cost neutral to its business," McDouall said.
NZX is close to announcing the implementation of a new clearing and settlement system in which it intends to invest around $10 million. This will allow it to offer derivatives products, initially in the dairy and electricity sectors, and in single stock and local sharemarket indices. NZX member firms have seen proposed pricing on those services in the last few weeks.
In announcing its resignation as a trading and settlement member of NZX on March 15, McDouall said: "The upcoming introduction olf the proposed central clearing system will have a number of capital and operational consequences that, in our opinion, will be likely to reduce the number of clearing participants operating and will commoditise the back office."
In its latest statement, McDouall Stuart says the factors behind its decision included "the inadequate return on the capital required for McDouall Stuart to be a clearing house participant; the trend for capital requirements for clearing house participants (particularly in reference to ASX requirements and the likelihood of New Zealand following this trend); and potential cost saving benefits to the firm".
McDouall Stuart must apply and be accepted by NZX for status as an NZX Advisory Firm.
Businesswire.co.nz
Comments from our readers
No comments yet Add your comment:
Related News
Fonterra hires NZX to design share trading platform
ACC lifts stake in NZX
NZX finally puts date on dairy futures trading
Flat first half for NZX as Clearing House sets to launch
Second month of weak trading for NZX
NZX trading lacklustre in June as value and volume tumbles
NZX says shares undervalued
NZX backs partial privatisation call
NZX's dairy derivative plans intact: Weldon
Electricity generators shun NZX for ASX
NZX Annoucements for NZX
|
|
NZX Limited Ordinary Shares
Current quote:
NZX $1.40 +1
Quotes delayed 20 minutes
Price when article published: $1.98
Previous News
Sharemarket News By Email
Stock Quote
At a Glance
| NZX 50 Index |
3092.07 |
 |
9.60 |
| S&P/ASX 200 |
4532.70 |
 |
0.00 |
| Dow Jones Industrials |
10320.10 |
|
50.60 |
Comment & Analysis
|
“
Now, the government has an economic story to tell.
By reframing as a national savings issue the sterile debates about superannuation, privatisation, private foreign debt levels and the sale of farmland to foreigners, the potential is there to de-fang several political bugbears at once.
There is a compelling simplicity, too, to the [...]
”
Pattrick Smellie More »
|
 |
|
|
NZX 15 Index
NZX Announcements
|
