Commerce Minister looks to regulate Unlisted

Online securities trader Unlisted has grown to such an extent it may need to be covered by the Securities Markets Act, Commerce Minister Margaret Wilson said today.

Unlisted is not a registered securities exchange and is not subject to the disclosure, insider trading and oversight provisions of the Act. But eight brokers are registered to trade shares via the system, and Unlisted trades shares in 21 companies, one more than the regulated NZX Alternative Exchange (NZAX). Ms Wilson said Unlisted's capitalisation was more than twice that of the NZAX.

Ms Wilson said Unlisted had grown to the point where it should afford its investors some protection under the Act.

"It has marketed itself as a facility for small and medium-sized businesses but I believe it is being used by larger organisations," she said in a statement.

"Unlisted should offer its investors the protection of securities law so that they are kept fully informed about their investments and are protected from the likes of insider trading," she said.

Ms Wilson has given Unlisted and other interested parties, including the companies trading on Unlisted and the Securities Commission, three months to send their views before a final decision is made.

Unlisted is a joint venture between M-Co, which runs the wholesale electricity market, and a group of people including former NZ Stock Exchange chief executive Bill Foster. It opened a year ago and has a market value of about $1 billion and trading averages of about $130,000 a day.

- NZPA