Market Participant Roles

Under the new structure Market Participants are classified as one or more of the participant types listed below.

1. NZX Trading and Advising Firms
2. NZX Advising Firms
3. Bank Only Participants
4. Principal Book Only Dealers
5. Post Trade Participants
6. FASTER Participants
7. NZX Sponsors
8. Distribution and Underwriting Sponsors

1. NZX Trading and Advising Firm

An NZX Trading and Advising Firm is one of three participant types who can trade in any of the markets provided by NZX, and have the ability to:

• Advise clients
• Bring and/or underwrite and distribute new issues of securities in any of the markets provided by NZX
• Trade on behalf of a client or as principal in any of the markets provided by NZX
• Hold client assets
• Become an accredited Delivery and Settlement Participant for no extra fixed charges
• Access the Direct Market Access (DMA) facilities, enabling richer services to be offered to clients

2. NZX Advising Firm

An NZX Advising Firm's primary role is to advise clients on any of the markets provided by NZX. However an NZX Advising Firm cannot trade.

An NZX Advising Firm has the ability to:

• Advise clients about securities listed on any of the markets provided by NZX
• Hold client assets (although this is not compulsory)
• Bring and/or underwrite and distribute new issues of securities in any of the markets provided by NZX

3. Bank Only Participant

A Bank Only Participant can trade solely in the debt market provided by NZX (NZDX Market). A Bank Only Participant can trade on behalf of clients or trade as a principal. Submitting orders into the NZDX Market is the main role undertaken by a Bank Only Participant. Bank Only Participants have the ability to:

• Advise clients about the NZDX Market
• Bring and/or underwrite and distribute new issues of Securities to the NZDX Market
• Trade on behalf of a client or as principal in the NZDX Market
• Hold client assets
• Become an accredited Delivery and Settlement Participant for no extra fixed charges
• Access the Direct Market Access (DMA) facilities, enabling richer services to be offered to clients

4. Principal Book Only Dealers

A Principal Book Only Dealer is one of three participant types which can trade in any of the markets provided by NZX but can only trade as principal in those markets. Principal Book Only Dealers have the ability to:

• Trade as a principal in any markets provided by NZX
• Become an accredited Delivery and Settlement Participant

5. Post Trade Participants

A Post Trade Participant is the only type of participant which can deliver and settle trades for NZX Trading and Advising Firms, Principle Only Book Dealers and Bank Only Participants (Trading Participants). The delivery and settlement of trades on behalf of Trading Participants is governed by a Post Trade Agreement. Post Trade Participants have the ability to:

• Deliver and settle trades on behalf of Trading Participants
• Use FASTER to settle, transfer and make enquiries
• Register the transfer of securities
• Become an accredited Trading Participant

Note: Post Trade Participants cannot also be NZX Advising Frims

6. FASTER Participants

A FASTER Participant uses FASTER to transfer securities and register the transfer of securities on behalf of clients. FASTER Participants have the ability to:

• Use FASTER to settle, transfer and make enquiries
• Register the transfer of securities

Note: FASTER Participant cannot also be an NZX Advising Firm

7. NZX Sponsor

An NZX Sponsor can bring, but not distribute, any new issue of securities to any of the markets provided by NZX. This enables organisations such as law firms and accountants to continue to service their existing clients in a new way. NZX Sponsors have the ability to:

• Advise issuers when they are raising capital and bring, but not distribute, that new issue to any of the markets provided by NZX

8. Distribution and Underwriting Sponsor

A Distribution and Underwriting Sponsor can distribute and/or underwrite a new issue of security brought to any of the markets provided by NZX. Distribution and Underwriting Sponsors have the ability to:

• Underwrite and distribute any new issue of security in any of the markets provided by NZX.