Exchange details plan for get-tough regime

By PAUL PANCKHURST

The stock exchange yesterday served up its final proposal for a get-tough regulatory regime that could be in place by September.

The document confirms a three-legged structure that pulls many roles in-house and sweeps away the Market Surveillance Panel.

An internal compliance and enforcement group would be backed by an up to 20-person external disciplinary committee, with a special division of the committee policing the exchange itself as a listed company.

The document also sticks with the idea of creating a broad menu of penalties for errant listed companies, with fines a new option.

While the document does not specify a scale for those fines, chief executive Mark Weldon indicated it could be similar to existing penalties for brokers, of up to $100,000 for an individual or $1 million for a firm.

The exchange hopes that streamlining compliance and enforcement roles previously spread across seven bodies will mean more consistent decisions and a simpler and more open system.

The proposed regime now goes to the Securities Commission to be reviewed and is open for public submissions until June 6.

Under the new set-up, the in-house compliance and enforcement group would handle applications by listed companies for approvals, waivers and rulings, and also enforce the business rules that govern sharebrokers.

Two key principles were that:

* Retrospective waivers would be considered only in "unusual circumstances" or to avoid disproportionate costs for "minor and inadvertent" breaches.

* All waivers or rulings would be published, although temporary terms of confidentiality could sometimes apply.

The roles of the compliance and enforcement group would also include market surveillance, risk assessments of NZSE sharebroking firms, and issuing guidance on the exchange's conduct rules.

The disciplinary committee would be an external body with "highly qualified" members - including up to five from the exchange itself.