NZX encouraging firms to market

NZX is making changes to its rules that it hopes will improve the flow of IPOs coming to market.

Wednesday, October 31st 2018, 5:59AM

Fund managers have raised concerns about the low levels of new listings and the lack of opportunities in the New Zealand market.

The stock exchange operator said it had updated its market structure and listing rules to promote market development and help to bring a broader range of financial products to New Zealanders.

It will move to one equity board instead of three from July.

The settings for smaller issuers have also been reconsidered to ensure listing is an option, by focusing on keeping costs down.

General council and head of policy Hamish Macdonald said careful thought had gone into making sure the settings were attractive to the smaller end of the market. “We recognised that quality is also important but companies start small and develop and they can do that in the public market by accessing capital.”

The rules review was something that had been worked on for the past 12 months.

He said, while there was more to whether a company listed or not than the rules, it was part of a broader range of factors that affected the market.

“We clearly would like to see more equity listings.”

NZX’s issuer relationships team was working with companies considering a future listing to help encourage that activity, as well as holding events.

“There’s a range of initiatives the NZX is pursuing to play its role within the broader ecosystem.”

It has also refined its rules for managed funds. Macdonald said these would allow managers to leverage off what was currently required under the Financial Markets Conduct Act to comply with listing rules.

“That lays out a framework for the licensing of managed funds.”

The NZX did not need to duplicate the mechanisms and rules put in place by the Financial Markets Conduct Act and licensing regime, he said. The new rules would create a lighter-touch framework which would reduce the cost of listing for those funds.

Tags: NZX