Market infrastructure - New Zealand
Institutions and organisation
Stock Exchanges and related institutions
- NZX Limited (NZX)
The New Zealand Stock Exchange, New Zealand's only stock exchange, was demutualised in 2002. It changed its name to NZX Limited (NZX) and started its public listing (on the NZX's own share market) in 2003.
The NZX lists shares, warrants and debt securities (including New Zealand Government securities) on four separate markets: NZSX (New Zealand Stock Market), NXT (market for small and mid-sized businesses), NZDX (New Zealand Debt Market) and NZAX (New Zealand Alternative Market).
The NZX operates an automated trading platform as well as the NZ Clearing and Depository Corporation Limited, a wholly-owned NZX subsidiary providing central counterparty and settlement services.
CSD
- New Zealand Central Securities Depository Limited (NZCSD)
The Reserve Bank of New Zealand (RBNZ), New Zealand's central bank, owns the New Zealand Central Securities Depository Limited (NZCSD), a central depository for NZX-listed and for eligible unlisted debt and equity instruments. The NZCSD operates an RTGS (real-time gross settlement) platform named NZClear. Securities are transferred on a gross basis between NZCSD accounts throughout the day. The cash component of against payment transactions settles through RBNZ's ESAS (Exchange Settlement Account System) payment platform at the same time as the corresponding securities transfer within the NZCSD. Positions deposited in the NZCSD are dematerialised and automatically registered in NZCSD's name with the underlying registrar. - New Zealand Clearing and Depository Corporation Limited (NZCDC)
NZCDC was launched on 6 September 2010, providing central counterparty, settlement and depository services in direct competition to the NZCSD's NZClear. All trades executed on the NZX are settled in the NZCDC and securities are uplifted to the NZCSD for delivery through NZClear.
Central Bank/Regulators
- The Reserve Bank of New Zealand (RBNZ)
RBNZ operates under the Reserve Bank of New Zealand Act 1989. Although fully owned by the Government of New Zealand, RBNZ is not a conventional Government department or state agency. Pursuant to its statutory powers and obligations RBNZ enjoys a large autonomy in defining the country's monetary policy. RBNZ operates the ESAS real-time gross payment system. - Financial Markets Authority (FMA)
The FMA regulates New Zealand’s financial markets and oversees securities, financial reporting and company law as they apply to financial services and securities markets. - Overseas Investment Office (OIO)
The OIO administers the Government's foreign investment policies. The OIO's core work consists in assessing applications for consent from foreigners who intend to make substantial investments in New Zealand. Applications are decided on by the OIO. However, certain applications involving the acquisition of land property or of fishing quota require a decision by the responsible Government ministers.
Regulatory structure
Regulations
New Zealand's securities laws and regulations are embodied in the following (non-exhaustive list):
- Financial Markets Authority Act 2011;
- Securities Act 1978;
- Securities Markets Act 1988;
- Financial Reporting Act 1993;
- Financial Advisers Act 2008;
- Anti-Money Laundering and Countering Financing of Terrorism Act 2009.
Details of the laws and regulations referred to are available on the website operated by the Parliamentary Counsel Office, New Zealand's law drafting office.
Supervision of Stock Exchanges
The FMA has primary supervisory responsibility, approves market rules and undertakes an annual review of the NZX.
Supervision of broker/dealers
New Zealand brokers require a sharebroker's licence issued by their competent District Court.
Trading banks must register with and are supervised by the RBNZ.
NZX firms must comply with the NZX Participant Rules.
Insider trading legislation
Most of New Zealand's insider trading law is found in Part I of the Securities Amendment Act 1988. The FMA oversees and enforces the investor trading, market manipulation and other dealing misconduct provisions of the Securities Market Act 1988.