NZ RegCo Publishes 2023 Oversight Report

NZ RegCo publishes 2023 Oversight Report 29 February 2024 - NZ RegCo today published its Oversight Report for the year ended 31 December 2023. The report highlights the: - investigation, market monitoring, engagement and enforcement work undertaken during 2023, including in response to complaints received by NZ RegCo - key learnings coming out of matters referred by NZ RegCo to the NZ Markets Disciplinary Tribunal - delivery by NZ RegCo against its key 2023 corporate plan initiatives - NZ RegCo areas of strategic focus for 2024. NZ RegCo Chief Executive Joost van Amelsfort reiterated NZ RegCo's purpose to ensure investors, issuers, and market participants have confidence in the integrity and regulatory oversight of NZX's markets. Mr van Amelsfort noted the increase in enforcement activity in 2023, with several issuers referred to the Tribunal for corporate governance breaches and failures in disclosure against the recommendations of the NZX Corporate Governance Code. "Issuers operating in the public listed markets - acting by and through their boards and management teams - are expected to have sufficient working knowledge of the Listing Rules and operate accordingly. The extent and duration of some of the breaches that resulted in enforcement action in 2023 was disappointing, particularly given those requirements are long-standing. The launch of our issuer training framework and the "authorised issuer representative" regime later this year, are designed to reinforce those expectations." Seven matters were referred to the Tribunal in 2023, with an additional four infringement notices issued. All matters determined by the Tribunal during the year were subject to the revised two-stage penalty assessment regime implemented in late 2022. Mr van Amelsfort said while NZ RegCo would continue to refer matters to the Tribunal in line with NZ RegCo's enforcement policy, NZ RegCo's strategy also focused on providing tools and support to underpin compliance practices. In May 2023, NZ RegCo formalised MOU arrangements with the FMA covering relationship, strategic and operational engagement. Particular areas of priority under the arrangements include issuers' continuous disclosure obligations, and oversight and enforcement of the prohibitions on insider trading and market manipulation. A record 49 matters were referred to the FMA for investigation last year by NZ RegCo's Surveillance team, 32 referrals related to potential insider trading (up from 19 in 2022) and six related to potential market manipulation. This represents a continued increase in the number of referrals over recent years - up from 40 in 2022 and 28 in 2021. "Effective market surveillance is a critical part of confidence in the integrity of on-market trading. There will be continued vigilance of our monitoring of trading on NZX. That work is supported by ongoing investment in our surveillance infrastructure and domestic and international network connections, including our participation in the global Intermarket Surveillance Group," Mr van Amelsfort says. In line with NZ RegCo's risk-based approach, core activity will continue to focus on issuers' financial reporting, and continuous disclosure and corporate governance practices, and the oversight of brokers' trading conduct, capital requirements, and management of client assets. Mr van Amelsfort noted NZ RegCo was pursuing a range of initiatives in 2024, aligned with its strategic objectives and in recognition of the ongoing and developing market trends relevant to the regulation of NZX's markets. ENDS For further information, please contact: Joost van Amelsfort NZ RegCo, Chief Executive T: 04 498 2278 E: joost.vanamelsfort@nzregco.com About NZ RegCo NZ RegCo is an independently governed entity, responsible for monitoring and enforcing compliance by listed issuers and accredited market participants with NZX's market rules. To learn more about NZ RegCo please visit: www.nzregco.com End CA:00427115 For:REGCO Type:GENERAL Time:2024-02-29 09:41:21