NZX strengthens oversight of conflicts with new board committee, regulatory scrutiny

NZX will establish a new board committee to oversee the way New Zealand's financial markets operator manages conflicts.

The committee is part of initiatives agreed between NZX and the Financial Markets Authority in the regulator's third annual general obligations review of NZX, published in June. The conflicts committee will be responsible for recommending improvements to the market operator's conflicts management including an annual review of compliance with existing rules.

It named Simon Power and Therese Walsh to sit on the committee, with a third member yet to be appointed.

NZX also named Derek Johnston as an independent non-director member and chairman of the regulatory governance committee, which reviews how well NZX Regulation adheres to its key performance metrics in carrying out its regulatory functions.

Johnston, who will take on the role early next year, was a member of the NZ Markets Disciplinary Tribunal between 2004 and June this year, and was chairman for the past three years.

The role of the regulatory governance committee is to be expanded to include reviewing regulatory policy proposals, improving the process for regulatory decision-making where NZX's head of market supervision sees potential for specific NZX conflicts or significant market impact.

It will also seek to improve the transparency of NZX's conflict management arrangements, enforcement procedures and regulatory processes, NZX said.

NZX's own shares last traded at $1.16, valuing the company at about $297 million.