MR No. 2015 – 24
16 June 2015
The Financial Markets Authority (FMA) says the first listing this week on the NXT market sparks a new era of innovative capital raising in New Zealand.
The NXT market provides an alternative platform for smaller and mid-sized New Zealand companies to raise capital. The NXT market allows for reduced complexity with a set of simplified listing rules and a new approach to disclosure.
“Providing high performing capital markets that support investment, growth and jobs is a key initiative proposed in the government’s business growth agenda. The new NXT market is an innovative step that helps to meet the dynamics of the New Zealand economy, which has a significant proportion of small and medium-sized businesses,” said Rob Everett, FMA chief executive.
NXT is a market for small to mid-sized businesses with an expected market capitalisation of $10-100M and a minimum capital-raising of $5M for those seeking additional capital.
Mr Everett said there are now effectively three tiers of capital-raising platforms in New Zealand.
“Enabling equity crowd funding and the NXT growth market, to complement the NZX Main Board, recognises the different levels of business development and sizes of enterprise within our economy. We will be working with the industry to ensure investors understand the different disclosure rules for each of these markets.”
The NXT market has been established under the Securities Markets Act 1988 as a response to the recommendations from the Capital Markets Taskforce. This taskforce noted that New Zealand has limited capital raising opportunities for small and medium-sized businesses.
Key features of the NXT market include:
Companies that will list on the NXT are required to make clear and effective disclosure to potential investors that the risks of investing in companies listed on NXT may be higher than investing in other companies.
The NXT market was registered under the Securities Markets Act rather than the Financial Markets Conduct (FMC) Act as NZX applied for approval before the relevant part of the FMC Act came into effect last year. The recommendations on capital-raising in the Capital Markets Development Taskforce report were reflected in this exemption and the FMC Act.
The NXT market will launch on Thursday 18 June with the listing of G3 Group.
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