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New Zealand Exchange's increased diversification has resulted in its passive investment fund arm Smartshares being slapped with a $10,000 fine by another of the company's limbs, the "Special Division" of NZX Discipline.
Market operator NZX is listed on its own sharemarket but remains the market's front-line regulator through its NZX Regulation and NZX Discipline divisions. In order to address the potential conflict of interest created by that situation NZX created the independent Special Division which fulfils NZX Regulation's role in matters related to NZX itself.
Meanwhile, in its strategy to diversify revenue sources in recent years NZX has established, among other things, the Smartshares index tracking fund subsidiary.
Smartshares' Australian index fund smartOZZY had failed to provide an interim report for September last year within the required timeframe.
SmartOZZY at the time had only recently been acquired by Smartshares and its balance date differed from Smartshares' other funds - a fact which had not been picked up.
Smartshares must pay the fine to an approved market education organisation and also meet Special Division and NZX Discipline's costs.
