NZX likely to consolidate equity markets

Today NZX has announced that it is reviewing its current equity market structure, and has indicated that a likely outcome of this review will be to consolidate NZX’s three equity markets onto a single board.  Currently, the three equity markets (being NZSX (the ‘Main Board’), NZAX (the ‘Alternative Market’ aimed at smaller companies) and NXT (the newest market, intended to replace the NZAX)) are operated separately.

NZX are looking to simplify the structure and operation of the equity markets to ensure the needs of all companies are met, including considering whether differential requirements for smaller companies should be part of the solution. The review comes after criticism that the current structure does not effectively meet the needs of smaller listed companies.

NZX intends to undertake a formal consultation process on the structure of its market, and a review of its Main Board listing rules, later this year.

Our view

We welcome the review of the current equity market structure, and consider that any changes to simplify the structure and operation of the markets for existing issuers, and encourage more New Zealand listed issuers (both large and small), will be well received by issuers and advisers alike.

If you have any questions on this NZX proposal or have any other related issues or queries, please contact one of our experts.