By ELLEN READ markets writer
Some Stock Exchange members locked out of demutualisation benefits will now be eligible, after the exchange backtracked on a cut-off date.
The NZSE had proposed an eligibility date of August 2000 for members' entitlement to shares in the demutualised bourse. Those becoming members after that date would
lose out.
But the exchange has bowed to pressure and is likely to move its cut-off date to February this year. The change means members who qualified between those dates will now be eligible for shares, estimated to be worth about $30,000.
One of those members, Macquarie Equities, which gained membership in December, had complained that the August 16 cut-off date was arbitrary. Several of the potential beneficiaries moved from associate to full membership during that period.
NZSE chairman Simon Allen yesterday explained the policy shift.
"The original date of August, which was suggested in the bill, was set at a time when it was envisaged the bill would go through a lot earlier than it is going through," he said.
"We're quite open to changing that date and I think the approach will be more along the lines of the date of introduction into the House."
Parliament's finance and expenditure committee is due to report back on the NZ Stock Exchange Restructuring Bill by mid-September. The committee has received eight submissions from people unhappy with the August date.
Mr Allen said the exchange would ensure that two members who had left between August and February would not be disadvantaged
Restrictions on foreign ownership were also still under discussion, he said. The NZSE favoured a 10 per cent cap on foreign ownership, but planned to include this in its constitution rather than have it fixed in the legislation.
Once approved by Parliament, exchange demutualisation is dependent on 75 per cent approval from NZSE members.
Mr Allen said no formal polling had been conducted but he believed most members were behind the move. The vote was likely to take place before Christmas.
The NZSE's annual report, released yesterday, shows record turnover of $30.2 billion for the year to June 30, up 13 per cent.
Mr Allen said private investors appeared to be returning to the market after a period of preferring to invest indirectly.
