NZX has today released the final version of a new set of listing rules, as well as the first tranche of accompanying explanatory materials. The new rules will apply from 1 January 2019, although there will be a transitional period through to 30 June 2019.
Submissions on the first four draft guidance notes are due by 13 November 2018. Further guidance and forms are expected to be released by the end of November.
Key changes from the exposure draft
NZX released an exposure draft of the new rules in April 2018. Key changes to the final version from the exposure draft include:
- changes to the definitions of associated person
- retaining the requirement in the existing rules for at least two Directors to be ordinarily resident in New Zealand
- removing the exemption from rotation for executive directors
- requiring voting at meetings to take place by polls, rather than a show of hands or voice, and
- requiring further information to be included in notices of meeting to consider resolutions for the appointment of directors.
There have also been numerous other detailed drafting improvements from the exposure draft, so issuers should ensure that they are referring to the final rules, rather than earlier drafts.
As flagged above, the new rules will apply from 1 January 2019. However, there will be a transition period through to 30 June 2019, during which issuers may elect to have the rules apply early.
In order to make such an early election, issuers must give at least one week's notice to the market of their transition date. The NZX Market Announcement Platform (MAP) will also be updated from 7 January 2019 to require issuers to provide additional information through MAP when releasing certain types of announcement. This will apply to all issuers, including those who have not yet transitioned to the new rules. Those who are listed on the ASX will likely be familiar with this process for announcements of dividends, but NZX will be providing issuers with training in November 2018 on the new MAP features.
To facilitate the transition process, NZX Regulation proposes to grant a waiver and ruling that will generally carry forward existing waivers and rulings through to 30 June 2020. The waiver and ruling will also confirm that issuers will not be in breach of the new rules relating to governing documents so long as they update these at their next annual meeting.
NZX has published four draft guidance notes on continuous disclosure, governance, backdoor and reverse listing transactions and spread. Submissions are due on these draft guidance notes by 13 November 2018. NZX has signalled that further guidance and forms are expected to be released by the end of November, so further help and guidance will be on the way.
Issuers should start thinking now about getting their house in order to transition to the new rules in an orderly manner.