KEY POINTS:
The New Zealand Shareholders Association will use any change to the Australian Securities Exchange's (ASX) regulatory functions in the wake of a financial scandal to push for change in regulation of New Zealand shares.
The ASX's dual role as a market participant and market regulator is being slammed after margin lenders like Opes and Lift Capital collapsed.
Margin lending, where investors borrow to buy stocks, had boomed in Australia in recent years as global share markets rallied. It is not common in New Zealand.
It has been alleged that the ASX failed to act and even encouraged Opes staff to avoid market rules by shifting liabilities into a company outside the ASX's regulatory reach.
The ASX has a profit motive and is listed, which conflicts with its role as market regulator, say critics.
"I don't believe the ASX can be a market participant and a regulator," Commonwealth Bank of Australia chief executive Ralph Norris said in the Australian Financial Review.
The Shareholders' Association has long argued there is a conflict between NZX's regulator role and the fact that it is listed on the exchange it regulates.
"Our line has consistently been that you can't be the judge, jury and executioner," said association chairman Bruce Sheppard. "If they find in Australia they don't like it [the regulation model], we will use it as precedent for adopting change here."
The association did not think the NZX could successfully regulate itself and it has recently accused NZX of being in breach of its own reporting rules for not fully disclosing contingent liabilities to the collapsed Access Brokerage.
- NZPA
