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FMA pleased with NZX's market operations

NZN 29/06/2017 Paul McBeth

The Financial Markets Authority is very happy with the way NZX is tracking as the country's only licensed market operator, which has lifted its game under the market watchdog's regulatory regime.

In its annual review of the Wellington-based stock market operator, FMA gave a favourable report.

It said NZX met its obligations by ensuring the market works in a fair, orderly and transparent manner, there are adequate systems to ensure participants' disclosures, it manages commercial conflicts of interest effectively, monitors conduct and enforces compliance and was appropriately resourced.

"From when I first started doing these reports, and when at NZX myself, there has been a definite improvement in terms of the overall framework under which the NZX carries out its operations," FMA director of capital markets Garth Stanish told BusinessDesk.

"Things like the regulatory governance committee and conflicts committee are clear improvements from what's come before."

Mr Stanish was head of issuer regulation and an acting head of regulation at NZX before joining the FMA.

NZX got its first clean bill of health from the FMA in its 2015 review, which covered the prior year, and a subsequent memorandum of understanding between the two entities had led to the desired alignment.

Mr Stanish said there had been "isolated instances" of concern but that the stock market operator was tracking well.

"We're very, very happy with the framework within they exercise their discretions," he said.

The FMA review encouraged NZX to ensure all regulatory decisions be reviewed by the regulatory governance committee, and that the committee shouldn't rely solely on summaries and responses provided by management.

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