NZX backs off listing fee revamp

Director Neil Paviour-Smith (left), Mark Weldon, chairman Simon Allen and director Nigel Williams. Picture / Mark Mitchell

NZX is deferring its controversial listing fee revamp and has admitted to listed companies that it had kept them poorly informed about its plans.

In a letter to issuers seen by the Business Herald, NZX chief executive Mark Weldon said the new listing fees due to be introduced from next month would now be phased in over two years.

Meanwhile, listing fees would not be reviewed again until 2009.

In a frank admission, Weldon wrote: "NZX acknowledges it did a substandard job at consulting the issuer client base as regards to the nature and timing of the fee changes, as well as communicating the value (real or perceived) of the upcoming changes in service levels and service provision."

The new fee structure, which would help boost NZX's listing revenues by 15 per cent this year to around $7.6 million, aligned fees with an issuer's market value.

They were designed to reflect issuers' demand for NZX services. For some, fees would have dropped. But for many, fee increases of more than 100 per cent were too great.

The Listed Companies Association said the increases did not match the services they were getting in return.

It said the fees were relatively small beer compared with company revenues. However, it said the fee increases could have sparked allegations that NZX was abusing its monopoly position and attract the (unwelcome) interest of the Commerce Commission.

Association chairman Linda Cox said she was pleased by the back-down: "NZX was open to discussion on the issues and we had the opportunity to provide constructive feedback."

The backdown was not disclosed to the wider market, nor was it discussed at NZX's annual meeting in Wellington yesterday.

Weldon said last night that NZX had not disclosed the new fees because they did not have a material impact on NZX's long-term profitability. The effect of the change was to delay by six months revenue, which over the long term, would be collected.

"There was no requirement to put it into the market. It is clearly not material under the rules," Weldon said.

As part of the changes disclosed yesterday, NZX will consider separating and pricing certain services to issuers. For instance, issuers may be able to pay separately for the disclosure service, where issuers outline material developments to the wider market.

In overseas markets, companies pay each time they use disclosure services instead of paying for the service as part of their listing fees.

Backdown

* NZX is delaying the introduction of its controversial listing fee structure.

* The changes will be phased in instead of being introduced in July.

* The new fees align fees with an issuer's market value.

* They are designed to reflect issuers' specific demand for NZX services.