NZX well down

How can the stock exchange be a company that is listed on the stock exchange? How can it be a regulator and be a regulated entity nominally equal to other participants?

The inherent conflicts of interest are obvious enough without them now starting to acquire other companies like a rural publisher to complicate matters. Publishing in that market is risky despite what the high growth path would indicate - for starters; and as a means of influencing the investment decisions of cash rich farmers it has a valid promotional function for the NZX and the firms on its boards, but it is a function contrary to a publisher's prerequisite of editorial independence.


Cactus Kate on the case of NZX CEO Mark Weldon:

Quality Senior business reporter Jenni McManus has had a first crack at unraveling the mystery that is the NZX buy-in to rural publications.

Max Bowden, from Trans-Tasman et al has launched a Commerce Commission complaint regarding the proposed purchase by NZX of publisher Country-Wide. While there is limited chance of success with a bunch of head-nodders that work at the Comm-Comm, it highlights broader issues of the stock market regulator participating in the market to this extent. As McManus notes:

At issue: whether an organisation calling itself a regulator should be cornering the market in anything, let alone a commercial enterprise, by acting as both a player and the market enforcer.

To some extent the NZ blogosphere project is in a similar situation to the NZX in that a participant is also the one who operates the board. It is my experience that maintaining impartiality comes from a level of disclosure and transparency that means anyone on the internet can check it all for themselves. But the NZX is in the position of being able to buy some of the other participants or compete with them through the purchase of other companies - with a profit motive. This is not a good environment for the impartial workings of a system. De-mutualisation must have been as much about releasing some money for the then ownership circle as it was about developing the capital markets. However it appears the model is a common one around the world these days.