NZX out to reassure investors over rules

Tim Bennett said in the past 18 months the exchange had increased staff in the regulatory and market surveillance department. Photo / Greg Bowker

Stock exchange operator NZX says it will ramp up its efforts to help investors understand how it regulates the market this year in a bid to allay concerns around its handling of investigations.

Chief executive Tim Bennett said it would never be able to provide transparency on individual cases but hoped to build trust in the process by explaining it better and ensuring improved communication with those who complained.

"We need to communicate what we do and we need to do it more effectively with investors."

Last year the NZX undertook 145 formal investigations of which nine were sent to its market disciplinary tribunal - an increase on five in the year before.

It also slashed its referral time in half from eight months to four and completed 90 per cent of its investigations within four months.

"We are on a journey of improving regulation."

Last year the NZX publicised its enforcement policy after criticism surrounding the opaqueness of its regulatory process.

It also set up a regulatory governance committee which reports directly into its board as well as undertaking its annual check-up with the Financial Markets Authority.

Bennett said in the past 18 months the exchange had increased staff in the regulatory and market surveillance department and was now in the process of hiring a new head of compliance.

The markets entered a new era this week with the introduction of the Financial Markets Conduct Act.

Bennett said regulation had to be responsive to change and what worked two years ago might not work now or two years down the track.

The NZX has already announced plans to adopt a new case management tool from Wynyard Group which will provide more data on when cases are resolved and what stage they are at.

Bennett said it would also work with the FMA on educating investors on how it worked with the regulator and planned to be more proactive with complainants.

He said regulation was not just about stopping the "bad boys", it was also about putting in place infrastructure, compliance and education. The NZX wanted to ensure investors had all the information they needed.