ob体育 has today released its assessment report on the listing standards of the National Stock Exchange of Australia Limited (NSX).
The report concludes that NSX should make a number of changes to improve compliance with its statutory obligations.
NSX, and its parent company National Stock Exchange Limited, have agreed to a number of actions designed to ensure that:
- persons that can influence NSX are of good repute, are sufficiently knowledgeable and will act in the best interests of the NSX market as well as the wider Australian market
- the NSX market attracts issuers with legitimate motives and connection to Australia and ensures listings occur under Australian-regulated disclosure documents, 聽and
- the NSX market operates with integrity and its users are informed.
These actions also address serious questions about the rationale for some foreign listings on NSX.
ob体育 Commissioner Cathie Armour said, 鈥楲isting standards are critical to the integrity of the Australian equities market, and the trust and confidence investors have in it. As one of only a small number of domestic listing markets, NSX has an important role to play in upholding standards expected of listing markets in Australia鈥�.
The assessment also identified that some listings had a disproportionately large amount of trades occurring off-market following very thin trading on NSX. This activity is likely not unique to NSX so ob体育 will separately conduct a wider market review across all Australian equity markets.
Ms Armour said, 鈥楾his review may lead to additional expectations for market operators to deter this activity and to maintain the integrity, quality and strong international reputation of the Australian financial system鈥�.
ob体育 will continue to closely monitor NSX鈥檚 listing arrangements. NSX has agreed to update ob体育 by 31聽October聽2017 on its progress in addressing the agreed actions and to engage a third party to report on its implementation of the agreed actions to ob体育 by 31聽March聽2018.
Download
Background
The report drew on materials, analysis and research over the period 1聽July 2013 to 8聽August 2016, and subsequent discussions with NSX on a range of related matters.
Under the Corporations Act, ob体育 may assess how well a licensed market operator is complying with any or all of its obligations. This was previously tested by way of an annual assessment against a wide set of prescribed obligations. However, due to a change in regulations, ob体育 can now more effectively target specific areas relevant to the operation of the market.
This is the third assessment arising from ob体育鈥檚 targeted assessment of listing standards across Australian listing markets. See also our assessment reports of Australian Securities Exchange ( Assessment of ASX Limited鈥檚 listing standards for equities (REP聽480)) and Sydney Stock Exchange ( Assessment of Sydney Stock Exchange Limited鈥檚 listing standards (搁贰笔听518)).
In this report, we assessed the extent to which NSX had in place adequate arrangements to operate its listing market, with a specific focus on NSX鈥檚:
- governance, including resources to implement its conflict handling measures and arrangements for persons of influence
- commercial and regulatory strategy for its listing functions, including in relation to the suitability of companies for listing to ensure a fair, orderly and transparent market, and
- NSX鈥檚 monitoring and enforcing of compliance with its listing rules.