About NZ RegCo - NZX, New Zealand’s Exchange (2024)

Operating and governance model
Our people
NZ RegCo teams
Market conduct
Conflicts Management
External stakeholders

NZX Limited operates licensed securities and derivatives markets under a legislative framework established under the Financial Markets Conduct Act 2013. Those markets operated under a “self regulating organisation” (SRO) model. That means NZX is both an operator and a regulator of markets.

The International Organisation of Securities Commissions (IOSCO) identifies substantial benefits for securities exchanges, such as NZX, that operate under a SRO model:

SROs may impose ethical and business conduct standards which go beyond government regulations
SROs may have broader powers to compel the production of information than government regulators
SROs are likely to have considerable depth and expertise regarding market operations and practices, and may be able to respond more quickly and flexibly than the government authority to changing market conditions
SROs often build and maintain technology infrastructure to undertake their own, and the regulator's regulatory functions, with this infrastructure being funded entirely by regulated persons, not taxpayers.

Operating and governance model

The exchange’s regulatory functions are performed by NZX Regulation Limited (NZ RegCo), a separate, independently governed entity. All regulatory decision-making has been delegated to the NZ RegCo Board and NZ RegCo management.

NZ RegCo does not regulate NZX as a listed issuer, or any related entities of NZX that are subject to the exchange’s market rules. This means NZ RegCo also does not regulate Smartshares (as the listed issuer of the Smartshares ETFs) or NZX Wealth Technologies Limited (as an accredited NZX Participant) NZX and its related entities are regulated by the Special Division of the NZ Markets Disciplinary Tribunal.

NZ RegCo's functions in relation to regulation of operations on NZX’s markets include:

monitoring and enforcing compliance with NZX’s market rules by issuers listed on NZX’s markets
monitoring and enforcing compliance with the NZX Participant Rules and the NZX Derivatives Market Rules by participants operating on NZX’s markets, such as NZX Firms, NZX Advisors and Trading Participants
working with FMA as a co-regulator under the FMCA in relation to continuous disclosure, market manipulation and insider trading.

NZ RegCo is subject to a charter, which sets out the objectives, responsibilities and framework for the operation of NZ RegCo management and the NZ RegCo Board. The charter can be accessed here.

Our people

The NZ RegCo Board provides strategic and governance support to NZ RegCo management on the delivery of regulatory decision-making and oversight of NZX’s markets, and in pursuing NZ RegCo’s principal objectives. The NZ RegCo Board also ensures the adequacy of the arrangements within the NZX Group for managing any conflicts between regulatory activity and the commercial interests of NZX.

The majority of the NZ RegCo Board, including the chair, comprise directors independent of the NZX Group.

Trevor Janes - BCA, FCA
Trevor’s early career was in Investment Banking and Financial Analysis. More recently he has been a Director and Chairman of a number of listed and unlisted companies.
He is a Fellow of both Chartered Accountants of Australia and New Zealand and of the Institute of Financial Professionals of NZ.

NZ RegCo teams

NZ RegCo comprises four functional teams:

Issuer Regulation
Participant Compliance
Surveillance
Market Conduct

NZ RegCo is lead by Joost van Amelsfort as Chief Executive Officer, who reports directly to the NZ RegCo Board.

The Issuer Regulation team administers the NZX Listing Rules and FSM Listing Rules.

Principal activities undertaken by the Issuer Regulation team include:

Conflicts management

NZX considers that conflicts management is an integral part of its operating model, and has put in place a Conflicts Management Policy. The policy sets out NZX's arrangements for dealing with potential conflicts, and ensuring that any other potential conflicts are identified and managed in a timely and robust manner.

A copy of the Conflicts Management Policy can be obtained here.

NZX's conflict management arrangements are based on the following principles:

it is fundamental to NZX that the markets operate and are seen to operate in a fair, orderly and transparent way and that there is no credible suggestion of unmanaged conflict
a credible perception of conflict may be as damaging as an actual conflict and must be managed accordingly
commercial areas of the business and commercial interests will not be allowed to influence regulatory decision-making
regulatory activity and information is quarantined from commercial activity and
regulatory activity and decision-making must be consistent and transparent and free from undue influence.

External stakeholders

Financial Markets Authority
Takeovers Panel
NZ Markets Disciplinary Tribunal

Financial Markets Authority

The FMA has responsibility for oversight of NZX as a licensed market operator. Under the FMCA, NZX is required to have adequate arrangements for operating its markets, including arrangements:

to ensure that the markets NZX operates are fair, orderly and transparent
for notifying disclosures made to NZX as market operator, and continuing to make these disclosures available
for monitoring the conduct of participants
for enforcing compliance with NZX's market rules
for handling conflicts between the commercial interests of NZX
to ensure that NZX has a sufficiently independent adjudicative body to adjudicate on contraventions of market rules that are referred to it and
have sufficient resources (including financial, technological, and human resources) to operate licensed markets

These are collectively called NZX's “General Obligations".

The FMA is required to undertake a review, at least annually, of NZX's compliance with the General Obligations. As part of this process, NZX provides FMA with an annual “market assessment" report on NZX's compliance with these General Obligations for the preceding financial year. This report must be provided to FMA and Minister of Commerce no later than 31 March each year.

NZ RegCo and the FMA have adopted a memorandum of understanding (MoU) that established various operational and governance arrangements in support of their mutual regulatory objectives and to facilitate open discussion and flow of information. The MoU provides protocols between the NZX and FMA to deal with external communications and matters on which they frequently engage. The MoU can be accessed [here]

Takeovers Panel

NZX and the Takeovers Panel have adopted a memorandum of understanding (MoU) to support their mutual regulatory objectives and to facilitate open discussion and flow of information.

Under the MoU, NZX and the Takeovers Panel:

have agreed a framework for the exchange of information and provision of assistance in order to facilitate them carrying out their regulatory functions
will collaborate on matters of mutual interest, such as law reform and policy development
have agreed to meet regularly to discuss other matters relevant to their respective regulatory responsibilities.

NZ Markets Disciplinary Tribunal

The NZ Markets Disciplinary Tribunal (Tribunal) contributes to the operation of the markets as an independent disciplinary body. The Tribunal makes determinations on enforcement matters referred to it by NZ RegCo.

The Tribunal can impose financial penalties and censures for breaches of NZX's market rules. Any monetary penalties imposed by the Tribunal are paid into a discipline fund which is used for prescribed purposes, including the costs of enforcement and to fund education initiatives relating to regulation of NZX's markets.

To provide further transparency of NZX's enforcement activities, NZX provides annual reporting to the Tribunal. That information includes details of breaches and complaints that have arisen in the preceding year, the enforcement action taken by NZ RegCo in each case, if any, and explanations on the choice of a particular enforcement action. The information is included by the Tribunal in its annual report.

The Special Division is a separate division of the Tribunal, established under the Tribunal Rules. The Special Division has the same powers and functions as NZ RegCo under NZX's market rules, and acts as regulator in respect of NZX and “Related Entities” of NZX as listed issuers or participants in NZX markets. NZ RegCo does not regulate NZX or its Related Entities. The objective of the Special Division is to ensure that NZX's market rules are applied to NZX and Related Entities in an impartial and independent manner.

Further information on the Tribunal can be found here