30 Oct 2018

NZX carries out biggest revamp in 15 years

2:36 pm on 30 October 2018

The stock exchange has given its structure and rules the biggest makeover in more than a decade, in a move to bring new life to the share market.

Stock exchange

The NZX has revamped its rules and prices and is bringing in a single market. Photo: 123RF

The NZX has revamped its rules and prices and is bringing in a single market, in the first top-to-toe revision of its business in 15 years.

The main changes are the scrapping of the small company boards, the NZAX and NXT, with one board to accommodate all listed companies; the simplification of its rule book, and a revised prices to be listed.

NZX general counsel Hamish Macdonald said he was confident the changes will attract new companies as well as retain current listings, and also attract more investors.

"Core to these changes was the aim of making it easier for companies to list, while making it simpler and faster for our current companies to raise more capital," he said.

An example of the simplification is the size of the listing rules which have been cut to a quarter of their previous length.

However, Mr Macdonald said there was no guarantee that the new structure and rules will necessarily result in more listings.

The NZX has lost had two new entrants in the past couple of years while losing more than half a dozen to takeovers, delisting to save money, and failures.

It's also simplified its rules to accommodate smaller companies, revamped its prices to make it cheaper in some instances for companies to list and stay listed.

He said there were many reasons why companies might or might not list on the NZX, including economic and financial conditions, and investor appetite for any particular company.

"We've cut through a lot of complexity and we think that will make it more approachable for companies to consider listing," he said.

Separate wholesale debt and investment fund markets are to be established, and changes have recently been made to encourage more small, retail investors to trade shares, as well as have more shares traded on the market rather than between brokers.

The new rules come into force from 1 January and the market structure from 1 July next year.