2008 NZX Discipline Annual Report & Policy Guidelines
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NZX Regulation (NZXR) | 12:47 pm, Monday 23 June 2008
NZX has received a copy of the NZX Discipline Annual Report for the period
May 2007 - April 2008.
A copy of the NZX Discipline Annual Report is available on the NZX website
www.nzx.com in the Market Supervision section.
NZX Discipline has also prepared a Policy Guideline on The Naming of
Respondents, following recommendation by the Securities Commission at the
conclusion of the 2006 Oversight Review of NZX.
A copy of the Policy Guideline is available on the NZX website www.nzx.com in
the Market Supervision section.
NZX DISCIPLINE
POLICY GUIDELINE ON THE NAMING OF RESPONDENTS
Introduction
The disciplinary process should be transparent. An important part of that
process is making public the name of the Respondent subject to adjudication
by NZX Discipline.
In some circumstances, however, the harm arising from the naming of the
Respondent, will exceed any benefits to the public from knowing the name of
the party that has been subject to adjudication, and it is appropriate in
these circumstances that the Respondent should not be named.
The excess of harm over benefit is more likely to arise when the Respondent
is a Market Participant. The purpose of this paper, therefore, is to provide
guidelines to members of NZX Discipline on the naming of Respondents when
members are involved in a preparing a determination, or are involved in
deciding whether to approve a proposed settlement, and the Respondent is a
Market Participant.
NZX Discipline to exercise discretion
For each hearing, or review of a proposed settlement, the decision on whether
the Respondent is to be named will be wholly at the discretion of the
Division of NZX Discipline that has been involved in the hearing, or the
review, of the circumstances of the particular case.
Except in exceptional circumstances, the discretion of the Division of NZX
Discipline should be exercised in conformity with the guidelines that follow.
In the event that there are exceptional circumstances, and the guidelines
are not followed, these exceptional circumstances should be explained in the
publication of the decision.
Circumstances when the name of the Respondent will not be published
The name of the Respondent will not be published when:
- The Respondent has established grounds for maintaining confidentiality of
the Division's decision and that Division has ordered that the decision not
be published, or that publication should be delayed for a specified time
period.
Circumstances when the name of the Respondent is not likely to be published
The name of the Respondent is not likely to be published when:
- None of the findings of the Division have been adverse to the Respondent.
- The penalty for the Respondent falls within Penalty Bands 1, 2 or 3 of the
NZX Discipline Rules Penalty Band Guidance Notes for breaches of the NZX
Participant Rules, and where the breach can be considered to be of minor
importance and not systemic.
Circumstances when the name of the Respondent is most likely to be published
The name of the Respondent is most likely to be published when:
- The public has been harmed, or public confidence in the sector has been
damaged.
- The Respondent has been involved in repeated offences, and shown disregard
for the NZX Participant Rules.
- The penalty for the Respondent falls within Penalty Bands 4 to 8 of the NZX
Discipline Rules Penalty Band Guidance Notes for breaches of the NZX
Participant Rules.
Further guidance on the exercise of discretion
The foregoing guidelines should be applied in a manner that recognises the
following:
- The self reporting by Market Participants of breaches of the NZX
Participant Rules is to be encouraged.
- There will be a balance maintained between the regulatory outcome and the
costs incurred by NZX Discipline.
- If a proposed settlement between NZX and the Respondent includes a
provision that the Respondent is not to be named, and that provision falls
outside the terms of these guidelines, then the Division of NZX Discipline
that is reviewing the settlement should not approve the settlement that is
proposed.
September 2007
