WELLINGTON Aug 28 New Zealand's stock exchange operator, NZX Ltd, is to set up a new market with easier disclosure and reporting rules aimed at small, fast-growing companies.
NZX said on Thursday it expected the NXT market to start operating in the fourth quarter, subject to regulatory approval, and it would be aimed at small-to-mid sized businesses looking for capital.
"Currently it's time consuming for them to find capital, and can be a drain on their limited resources," said NZX chief executive Tim Bennett.
He said the market would cover companies valued at between NZ$10 million and $NZ100 million ($8.39 million to $83.9 million), and they would face lower listing costs and streamlined rules and procedures.
"We've taken the best of what other markets around the world are offering and combined that with the unique market environment and regulatory structure we have in New Zealand to design a market that is fundamentally different," Bennett said.
Companies seeking to list will only have to provide simplified financial documents to prospective investors compared with the current requirement for a prospectus with detailed financial forecasts.
Once listed they would file quarterly reports on activities and performance against operating milestones, rather than the continuous disclosure rules of the main NZX board.
NZX would assist liquidity with a market maker, as well as hire an independent research provider.
The NZX has been boosted this year by a flurry of share floats and listings, the biggest being the New Zealand government's NZ$733 million sale of 49 percent of Genesis Energy Ltd.
In June and July, seven small-cap mainly technical, software companies raised modest amounts through sales of new and existing shares.
The NXT market will eventually replace the NZAX market, set up in the late-1990s as an incubator market for small stocks, which has suffered from poor liquidity and little investor support.
(1 US dollar = 1.1919 New Zealand dollar) (Reporting by Gyles Beckford; Editing by Stephen Coates)