Call for decision over unregulated trader

Business Groups are urging the Government to "front up" and come to a decision over the future of unregulated share trading site Unlisted.

In a strongly worded joint statement, Business New Zealand chief executive Phil O'Reilly and Business Roundtable executive director Roger Kerr said the delay in resolving the issue was causing regulatory uncertainty and proving costly for Unlisted.

The Government first announced in December that it was looking at regulating Unlisted. The formal public consultation period closed on March 18.

Mr O'Reilly said it was time the Government "fronted up" and came to a decision.

"We think it's very sad and quite destructive of the Government to just leave this (matter) in limbo and thereby hang this company out to dry."

Both business groups said they supported Unlisted, which added depth and liquidity to New Zealand's capital markets and reduced capital costs for smaller companies wanting to expand.

Unlisted manager Bruce Cossill confirmed that the company had recently been back to shareholders for about $300,000 in new capital to keep the balance sheet "in some semblance of health".

"But I am fairly sure we will be reporting a loss this year."

So far, the review had cost Unlisted about $100,000 in legal and other direct costs and probably the same again in management time, Mr Cossill said.

The company has also raised its annual listing fee from $5000 to $9750, and introduced a $15,000 fee for companies with a market capitalisation over $30 million.

A spokesman for Commerce Minister Pete Hodgson said the Government was still waiting for official advice from the Economic Development Ministry, which was looking into the matter.

"As you would expect, they are being very thorough," he said.

A ministry spokeswoman said it was a complex case. Asked when a decision was likely, she said "soon... definitely by the end of this year".

The review was launched to determine whether Unlisted should come under the remit of the Securities Markets Act.

Since the review started last December, only one company, Syft Technologies, has listed but one of its biggest customers, Aquiline, has left.

Mr Cossill said the lack of certainty about Unlisted's future had caused many interested companies to hold back from joining.

If anything, the seven-month delay was proving Unlisted was not a threat to the integrity of capital markets because there had been no problems in that time, he said.

- nzpa