Unlisted platform granted exemption from FMCA licencing requirements

Paul Goldsmith
25 August, 2015

Minister of Commerce and Consumer Affairs Paul Goldsmith today announced that the share trading platform Unlisted will be granted an exemption from the licensing requirements of the Financial Markets Conduct Act.

“In making this decision, I have considered the risks and benefits of allowing Unlisted to operate as an unlicensed market,” Mr Goldsmith says.

“Unlisted will be allowed to continue as a trading platform with a number of conditions in place to help reduce the risks of it operating as an unlicensed market.

“For example, its website must clearly state that it is unlicensed, and investors will need to sign a declaration acknowledging the risks involved. By applying these conditions to this exemption we aim to ensure investors are aware of the risks, as well as the benefits, of using this platform.

“Unlisted has been operating as an alternative market for investors since December 2003, and makes up a small portion of New Zealand’s market capitalisation. Without this exemption, it was likely that Unlisted would be forced to shut down, or materially change its operating structure.”

This decision is in line with the purposes and intent of the Financial Market Conduct Act which recognises that one size doesn’t fit all when it comes to financial markets.

“We want to ensure that businesses can access a range of options for trading their shares while also opening up more investment opportunities for New Zealanders,” Mr Goldsmith says.

“This supports the Government’s work to help create a spectrum of financial markets to respond to the different capital raising or share trading needs of companies. Allowing for markets with varying degrees of regulation allows issuers to select the best balance between the cost and benefits for them.”