Thursday, July 30, 2009

Market announcement delay abandonment should be just the start in NZX restructure

Further to my piece on insider trading of Sky City Entertainment Group [SKC.NZ] shares last week and a convenient waiver given by the NZX for Contact Energy Ltd's [CEN.NZ] David Baldwin to get rewarded for stuffing up, it appears that the NZX is relenting to pressure from the bearded one, Bruce Sheppard from the NZ Shareholders Association, to get market announcements, previously delayed to the poor and downtrodden like you and me, now available.

Those market participants who have had NZX terminals in their offices have been using this information to trade before it is available to us, of course this is highly illegal but as Bruce has pointed out, nobody has been prosecuted by NZX, the market regulator, let alone a case of insider trading taken before.

This delay has always confused me because the advantages this gives users of this information means millions of dollars in their pockets - am I a naive idiot?

It is one of those hangovers from a regulated market that has been held onto with great gusto but other relics of a bygone age still give the advantages to the big boys.

The granting of waivers to break NZX rules, lack of clear separation of the day to day running of the New Zealand Stockmarket and its regulation and the reluctance to piss off mates by prosecuting clear breaches of insider trading rules and other market hanky panky by brokers and insiders really needs to be scrutinized closely by Government stockmarket regulators the Securities Commission because the NZX ain't going to do it.

Sadly this is unlikely to happen in any sort of expedient manner, so it is up to people like you, me and stockmarket advocates like Bruce Sheppard to keep the pressure on Mark Weldon and his mates down there in Wellington.

Of course the thing that would keep the NZX a little more honest would be a little healthy competition, and as I pointed out some ten or so years ago, why couldn't a website be set up for stockmarket investors to directly buy and sell shares without a middleman getting involved?

I'm sure others with the tech savviness that I don't have would be able to pull off such a thing.

A great little opportunity for someone to have a go.


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