FMA releases damning review on NZX technology issues

A review of NZX by the Financial Markets Authority, has found it failed to meet its licensed market operator obligations due to insufficient technology resources.

As a licensed market operator, NZX is required to meet certain obligations under the Financial Markets Conduct Act. One of those obligations is to have sufficient technology resources to operate its licensed markets properly, including arrangements to ensure market disclosures are made available.

The FMA had already been reviewing the technological capabilities of the NZX after it suffered trading volume related system outages in April 2020. After the DDoS attacks took down the NZX for a number of days in August 2020, the scope of the review was expanded.

The key findings of the report read, “Overall, the FMA review found NZX did not have adequate technology capability across its people, processes and platform to comply with market operator obligations and especially in the context of its systemic importance. Additionally, the performance of NZX’s systems did not meet regulatory requirements or expectations for fair, orderly and transparent markets.”