Minister welcomes changes to NZX listing rules

Commerce Minister Simon Power welcomes proposed changes to the NZSX/NZDX and NZAX listing rules, announced today.

NZX has proposed a number of changes in response to the financial crisis and recommendations of the Capital Market Development Taskforce. These changes aim to help listed issuers raise capital, and come at a time when cash-constrained companies need further channels to access capital.

Mr Power says he has decided not to disallow any of the proposed changes, according to his statutory obligation under the Securities Markets Act 1988.

He says he gave weight to considerations of the integrity and international competitiveness of New Zealand's markets, as well as the maintenance of an appropriate level of protections for investors.

"The rule changes include relaxation of some rules around transactions between related parties, and I am satisfied an adequate level of protection for investors is still in place.

"Investor protection is a key consideration of mine in deciding whether or not to disallow any rules changes, and I am reassured by the additional protections put in place by NZX and the Securities Commission."

The protections include a review by NZX after 12 months of the rules changes, and a rule that will require compulsory disclosure of any related-party transaction over the threshold of 5 per cent of the average market capitalisation of the issuer.

"The review will be an opportunity for the market to respond to the changes, and for regulators to reassess them and benchmark them against data and analysis gathered from the market.

"In times of financial strain, related parties are often the fastest and easiest way to access capital, particularly for smaller companies," Mr Power says.

"Allowing increased capital-raising via this route is a means of achieving better access to capital for cash-constrained companies, and can strengthen the position of existing shareholders.

"The changes must be considered in the context of the economic conditions facing issuers who have diminishing access to capital. In light of this, I commend the taskforce, NZX, and officials for their rapid response to the needs of businesses and investors at this time."