NZX to require local director

All companies listed on New Zealand's capital markets will require at least one local director under a raft of new rules proposed by market operator NZX.

At the moment, companies that only have listed debt securities are not required to have a New Zealand resident director. That is in contrast to companies with listed equities which are required to have at least two New Zealand resident directors.

The proposed change is one of nearly 40 contained in an NZX consultation document published late last month.

NZX said most of the proposals came from external sources. They include:

* Reducing the number of listing rules required in companies' constitutions.

* The adoption of alternative methods of determining the effective liquidity of a company's stock.

* Allowing a greater choice in proxy voting.

NZX was criticised when it last reviewed its conduct rules for not making it clear what it was hoping to achieve with the changes and also for what was seen as an unrealistic time frame for comment.

Submissions on the proposed changes this year close on November 4. After that the rule changes will go to the Commerce Minister who will receive advice on them from the Securities Commission. The minister will have the power of veto over the changes for 40 business days.

Meanwhile, although the NZX's benchmark index continued to hit fresh highs, trade on the sharemarket cooled last month after a flurry of activity in August.

NZX said yesterday there were 51,170 transactions on the NZSX main board last month, up 2 per cent on the same month last year but down nearly 15 per cent on August's 59,961 transactions. Turnover for the month was $2.88 billion, up 5 per cent on the same month a year earlier but down 5.3 per cent on August.

The number and value of trades on the NZSX was boosted in August by the long-awaited Vector initial public offer, Graeme Hart's purchase of a controlling stake in Carter Holt Harvey and the corporate reporting season.

Nevertheless, the benchmark NZSX 50 index closed the month on an all-time high of 3452.79 points - up 12.7 per cent on the start of 2005 and 22 per cent higher than the same day a year earlier.