NZX's 2016 regulatory programme includes more risk assessment of market participants

Wednesday 20th April 2016

NZX, the stock market operator, will increase risk assessment of market participants and clarify what practices by brokers and fund managers it regards as market misconduct, according to its 2016 regulatory programme.

The agenda covers three areas - market infrastructure, orderly markets, and market engagement.

It has already begun the market infrastructure work, which includes the rules, technology and processes of the market, having sought feedback in November for a proposal to broaden corporate governance rules for main board-listed companies including a more specific code of ethics for senior managers, a charter setting out responsibilities of directors and rules to cover whistleblowers.

NZX expects to put out specific rule change proposals between July and September, with the aim of putting amended reporting requirements in place by the end of the year. It also plans to embark on a broader review of NZX Main Board/Debt Market rules this year, with the aim of simplifying its processes and responding to domestic and international changes in the regulatory environment, it said. A separate review is looking at market participant rules.

Under the orderly markets heading, NZX says it will publish a revised guide on market manipulation and is working with participants to ensure they understand the parameters of permissible trading conduct. In a refinement of risk management procedures, it will transition to "real-time" risk assessment in addition to existing annual and on-site or desk-based inspections, it said.

NZX will also look at how it interacts with the Financial Markets Authority to reduce duplication given both bodies have regulatory roles in relation to brokers.

Market engagement includes more focus on the quality of issuer disclosures and practices relating to the timing of announcements to the market. NZX said it aims to increase broker engagement this year and take a more risk-based approach to its review of offer documents to ensure they are compliant.

BusinessDesk.co.nz

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