Broker battle looms over proposed NZSE merger

By Nick Stride

Friday 1st September 2000

The New Zealand Stock Exchange's 279 individual members stand to gain $200,000 each if a proposal to merge with the Australian Stock Exchange goes ahead.

The proposed merger is in the early stages of investigation but members have already begun eyeing the division of spoils.

The exchange's founding legislation does not specify who owns it but legal advice is understood to indicate the full members are the owners.

But there is plenty of potential for squabbling and the issue is shaping up to be a major scrap.

The 1998 demutualisation of the Australian exchange saw a bid by institutional investors, who account for a large proportion of share trading, to receive share allocations. They were unsuccessful.

The ASX was also threatened with legal action by sharebrokers denied membership shortly before demutualisation was approved and had to thrash out an allocation basis that squared big and small brokers' conflicting interests.

Sharebrokers are predicting similar difficulties here if the merger goes ahead. The New Zealand exchange has already closed the door to new memberships.

The proposed merger and ownership issues are expected to be discussed at the exchange's annual meeting in two weeks.

Comments from our readers

No comments yet