Tamsyn Parker

Tamsyn Parker is the NZ Herald's Money Editor

Rules eased for proposed new stock market

Companies will not have to give financial forecasts but investors must register.

Tim Bennett said excluding the prospective financial information from offer documents could cut adviser fees in half for new listings.
Tim Bennett said excluding the prospective financial information from offer documents could cut adviser fees in half for new listings.

Companies that want to list and raise money on a new market proposed by the stock exchange won't have to provide investors with prospective financial information, according to its consultation document.

The NZX yesterday released draft listing rules, procedures and templates and trading rules for its growth market as part of a public consultation.

The exchange has asked for feedback on whether the new market should be subject to periodic disclosure or continuous disclosure as is used by the markets it currently operates.

See the consultation memorandum here:


The new market is designed to provider a cheaper and lower compliance market for small to medium sized businesses to raise capital.
"What we don't want is someone approaching retirement putting all of their money into this market."
NZX chief executive Tim Bennett

It will have a separate website to the current NZX site and investors who want to take part will have to certify they have read and accepted a risk warning before investing there.

Instead of a full prospectus, companies will be required to prepare a listing document which includes projections against key operating milestones but will not have to forecast financial information.

NZX chief executive Tim Bennett said fast growing companies often found it hard to settle on an exact figure when it came to forecasting financials.

"Operating metrics are a much better way of helping investors understand the business rather than profit and loss statements."

Once listed, companies will have to provide quarterly business updates and half-year and full-year financial reports.

Bennett said excluding the prospective financial information from offer documents could cut adviser fees in half for new listings.

The move to periodic disclosure reporting will also have to receive approval from the Minister of Commerce and the Financial Markets Authority which Bennett expects to take up to four months.

To help protect investors all new market listing documents will have to include a "health warning" at the beginning of the document.

Bennett said it did not want to exclude investors based on their assets or income but wanted to ensure the investments were suitable.

"What we don't want is someone approaching retirement putting all of their money into this market."

Submissions on the disclosure framework are due by March 27 while April 4 is the deadline for submissions on the market rules.

New market

Companies:
*Will have to have a market capitalisation of at least $10 million and be raising at least $5 million if they raise capital through an initial public offer.
*Must have at least 50 shareholders.
*25% free float.
*At least three directors and at least half the board must be independent directors.
*Must have an insider trading policy.
*Will have research done on them.
Investors:
*Will have to be certified and complete a risk check.
*Must read a market "risk warning''.
*Must register on the new market website.

See the proposed new listing rules here:

- NZ Herald

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