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1. Do you agree with the objectives of the review? If not, why not?

Yes, we generally agree with the objectives of the review.

2. Do you agree with the proposed timetable and proces s for review? If not, why not?

We suggest additional time should be included within the proposed timetable. In particular, there is currently only one month between NZX's publication of its exposure draft (April 2018) and the due date for feedback (May 2018) – this time period may be too short for valuable feedback on the revised Listing Rules to be prepared and submitted. We also suggest that the release of a second exposure draft could be useful before the revised Listing Rules are sent to the FMA for approval. The timeframe for providing feedback on the second exposure draft would not have to be as long as the timeframe in respect of the first exposure draft.

3. Do you agree that NZX should retain the current requirements under the Listing Rules, subject to ad dressing drafting issues, as the basis for the updated rules ?

Yes, subject to the Listing Rules we specifically comment on in our submission below, we agree that the current substance of the requirements under the Listing Rules should generally be retained as the basis for the updated Listing Rules.

4. Do you agree that NZX should adopt a modular approa ch to updated rules? If not, why not?

Yes. We consider a modular approach that simplifies the Listing Rules and makes them easier to navigate would be helpful.

5. Do you agree with NZX's preferred approach of deliv ering an updated market structure via a single rule set w ith differential standards for equity issuers? If not, why not?

Yes. However, please also refer to our response to Q6 below in respect of differential standards for equity issuers.

6. Do you agree that NZX should have differential requirements for equity issuers?

No, we do not agree that NZX should have differential requirements within the Listing Rules for equity issuers. Our reasons are set out below:

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− The majority of the differential requirements currently proposed by NZX seem to relate to governance matters which, in our view, are more suitably addressed within the NZX Corporate Governance Code which already has a "comply or explain" regime.

− We are of the view that differential standards will lead to unnecessary complexity.

− The proposed labels of "Premium" and "Standard" issuers (or any similar label) could be misleading as shareholders could interpret the labels as an assessment as to the return prospects of the issuer.

− There may be difficulties in compliance where issuers fluctuate from one standard to another over a period of time.

− Rather than having differential requirements for equity issuers, we suggest it would be simpler to either raise or lower particular Listing Rule thresholds (as required) and that these should apply to all issuers. For example, we do not believe it would be problematic for the proposed lower spread eligibility requirement of 100 shareholders (rather than 500) to apply to all issuers.

7. What criteria should be used to determine whether differential requirements should apply (eg options 1 or 2 above or something else)?

We do not agree that NZX should have differential requirements within the Listing Rules for equity issuers.

8. What do you consider is an appropriate cut off to b e considered a smaller issuer?

Please refer to our response to Q7 above.

9. What branding should NZX use for separate equity li sting categories?

Please refer to our response to Q7 above.

10. Do you agree that it is appropriate to have separat e rule settings for debt and funds?

Yes. These are different types of instruments, and in some cases it is appropriate and necessary for different rules to apply.

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11. Do you have any feedback on how to promote and faci litate the listing of funds, including MIS structures?

The same incentives for the listing of funds should exist for the listing of companies on the NZX.

12. Do you have any feedback on how to promote and deve lop NZX's listed debt market?

The Discussion Paper included proposals to introduce a wholesale listing platform, reduce the timeframe for QFP offers and remove the spread requirements for debt issuers. We agree with these proposals, and think that implementing them would promote and develop the NZX Debt Market. We support the proposal to reduce the timeframe for QFP offers because it will streamline the offer process and help issuers get QFP offers to market quickly. This could result in more QFP offers by listed issuers. Our reasons for supporting the removal of the spread requirements for debt issuers and the introduction of a wholesale platform are set out in our responses to Q53 and Q56 below.

13. What steps should NZX take to promote and facilitat e the issuing of green bonds in New Zealand? a. In addition, should NZX have a role: certifying green

bond issuers, certifying certifiers of green bond programmes, or should NZX leave this to external bodies and standards?

An option is for green bonds to be clearly highlighted and distinguished from regular bonds on the NZX website. NZX could do this by: − giving green bonds different labelling (eg a green bond logo or a

different colour on the NZX Debt Market Overview page of the website and the information pages for each individual green bond); and

− including "Green Bonds" alongside "Bonds" and "Hybrids" as an option for filtering debt securities on the NZX Debt Market Overview page.

We do not have a view on whether NZX should have a certification role for green bond issuers or certifiers.

14. Do you think that depository receipts should be introduced? If so/not, why/why not?

We do not have a view on this.

15. If so, what are the key shareholder protections whi ch should be introduced?

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16. Please provide feedback on demand for equity future s and options and measures to promote this aspect of the market.

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17. Are there any other financial products which NZX's rules should seek to specifically cater for?

NZX should consider how infrastructure assets could be listed under the listing framework. Infrastructure assets are commonly listed on ASX, with "stapled securities" being the financial product that is offered to investors (ie a share in the company is stapled to a unit in a trust).

18. Do you agree with our proposal to no longer review and approve constitutions for new listings?

Yes. We consider that the solicitor opinion confirming that an issuer's constitution complies with the Listing Rules (which is currently required under the Listing Rules) is sufficient.

19. Do you agree with our proposals to: a. Reduce the spread requirement to 300 holders for

Premium Issuers? b. Reduce the free float requirement to 20% for

Premium Issuers?

It would be useful to understand the policy reasoning behind the existence of the current requirements (ie what currently drives these eligibility requirements?). This information would better enable us to respond to these questions. (a) Spread requirement: Yes, we generally agree with NZX's proposal to

reduce the spread requirement to facilitate the listing of a greater number of issuers. However, on the basis of our response to Q6 above (ie that the Listing Rules should not contain differential requirements), we do not agree with the proposal to reduce the spread requirements for Premium Issuers only. Rather, our preference would be for a single spread requirement that applies to all equity issuers. If the proposal is to lower spread requirements to encourage listings by smaller issuers, then we suggest the lower spread requirements should apply to all issuers. We do not think a lower spread requirement would have negative consequences for investors. However, we further note that the number of shareholders should not be a key factor to listing. Rather, an issuer's liquidity should be key.

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(b) Free float requirement: As noted in response to (a) above, we generally agree with NZX's proposal to reduce the free float requirement. However, we suggest that the free float requirement should be the same for all issuers (ie no differential requirements) - this seems to align with NZX's current proposal that both Standard and Premium issuers would have a 20% free float requirement.

20. Should NZX amend the current minimum holding sizes outlined in Appendix 2 of the Listing Rules? If so , how?

Yes, to reduce complexity, we suggest that the NZX and ASX minimum holding requirements should be aligned.

21. Should NZX introduce additional eligibility require ments for Premium Issuers? a. If so, what requirements should we introduce?

No. Please refer to our response to Q6 above (ie we do not agree that differential requirements for issuers should be introduced).

22. Do you have any suggestions on amendments to the minimum director and director rotation requirements under the rules?

We are of the view that the director rotation requirements under the Listing Rules are unnecessarily confusing and often problematic. For example: − The 1/3 director rotation requirement is often difficult for issuers to

calculate, especially as issuers must consider additional requirements within the calculation, including managing directors being required to stand for re-election every five years.

− In comparison, under the ASX Listing Rules, directors (other than managing directors) must retire every three years, unless the issuer's constitution provides for a shorter re-election period. We suggest this requirement is simpler to comply when compared to the rotation requirement under the NZX Listing Rules.

23. Should Managing Directors and directors appointed b y shareholders with constitutional power be excluded from the director rotation requirements?

Yes, we are of the view that both Managing Directors and directors appointed by shareholders with constitutional power should be excluded from the director rotation requirements. Our reasons are set out below: − Managing directors are employees of the company and therefore

should not be subject to standard rotation requirements. Managing directors hold a key position that is important to the company – a failure

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to be re-elected may negatively impact the company and may have a negative effect on their employment with the company. If necessary, shareholders can vote to remove a director (including a managing director) under the Companies Act 1993 and Listing Rules.

− Directors appointed by shareholders that have a constitutional power to do so should also be excluded from the director rotation requirements. This power is expressly disclosed to investors in an issuer's constitution and potential investors should acquire shares in an issuer on this basis.

24. Do you agree NZX should align its NZ residential di rector requirement with legislation ie a requirement to ha ve at least one NZ resident director?

Yes. We do not consider that there is a basis for the Listing Rules and Companies Act requirements being different in regard to the number of directors that should be NZ-resident (or Australia-resident). However, for clarity, we do not consider that NZX-listed companies that are incorporated offshore with an offshore home exchange should be subject to the requirement to have one NZ or Australian resident director.

25. Should NZX retain a requirement to have a minimum number of independent directors within its mandator y rules or, alternatively, introduce a "comply or explain" recommendation (potentially for majority independen ce) within the NZX Corporate Governance Code?

We suggest that mandatory minimum independent director requirements should remain in the Listing Rules and that the minimum number of independent directors should be at least two. Our reasons are set out below: − Independent directors play a vital role in effective corporate governance

and decision-making. Director independence is critical to ensure Boards are not in a state of conflict and do not loose objectivity.

− Director independence is especially important in a takeover scenario. − We suggest that two independent directors (compared to only one)

should be the mandatory minimum requirement to reduce the risk of only one independent director being marginalised.

We also recommend that current director independence guidance is consolidated so that issuers can use a single reference point to assist them in determining independence. For example, we understand that our clients

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often refer to both FMA and Institute of Directors published guidance when determining a director's independence. NZX should engage with the FMA and Institute of Directors to establish a consistent test of director independence.

26. If you support inclusion within the NZX Corporate Governance Code, should NZX recommend that boards a re majority independent (noting that companies will be able to explain why they may not meet such a recommendation )? a. If not, should NZX retain the current minimum

independence requirements within the rules? If not, why not?

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27. Do you agree that NZX should move to a more princip les based test of independence?

Yes, we believe that a simplified, more principles based test of independence would work more effectively, rather than the current inclusion of deeming provisions which automatically deem a person to not be independent in certain situations. The current test for independence should be more pragmatic. As noted in our response to Q25, we also suggest that current guidance on director independence is consolidated.

28. If not, should NZX delete Listing Rules 1.8.3, 1.8. 4 and 1.8.5 in their entirety?

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29. Do the auditor rotation requirements within the Lis ting Rules achieve outcomes that could not be met by aud iting standards? (ie are these valued by investors)

No. We are of the view that the auditor rotation requirement under LR 3.6.3(f) is no longer required given auditing standard requirements.

30. If submitters support retention of these requiremen ts, should NZX make any further amendments to respond t o

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the current XRB proposals – for example, to ensure greater alignment with Australia?

31. Should the additional audit committee requirements within the Listing Rules (ie to have an audit committee, i ts composition and role) be moved into the NZX Corpora te Governance Code? Why/why not?

Yes. As Board sub-committees might not be appropriate for all issuers, we suggest that the NZX Corporate Governance Code's "comply or explain" regime is preferable in respect of committee requirements.

32. Should NZX make any amendments to the current disclosure requirements within the rules?

We generally do not think the current continuous disclosure requirements within the Listing Rules require amendment. However, we suggest that current guidance on continuous disclosure could be improved by being more granular. Our listed clients often turn to ASX guidance on continuous disclosure as they find this to be more useful than NZX's guidance. The administrative disclosure requirements under LR 10.6 should be clarified. They currently sit at the back of Part 10 of the Listing Rules and it is unclear when LR 10.6 would apply when another Listing Rule also applies in the same or similar circumstances. For example, when an employee share scheme is established and securities are issued under the scheme, it is unclear when LR 10.6 and/or LR 7.12 should apply.

33. Should NZX update the content requirements for peri odic reports?

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34. What additional tools should NZX consider introduci ng to assist issuers to meet their disclosure obligations under the rules?

A template timetable that sets out all standard periodic disclosure requirements would be useful to help issuers meet their periodic disclosure requirements.

35. Should NZX reduce the current headroom for further issues to 15%? Why/why not?

We do not consider that the current 20% headroom should be reduced to 15% as we are not aware of any current issues with the current threshold.

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In addition, the current 20% threshold is calculated on a pre-issuance basis, resulting in an approximate 16% post-issuance threshold.

36. Do you agree that the major transactions approval requirement should apply to a broad range of transa ctions which might affect a company? (eg acquisitions or disposals, leases, borrowing, lending, issues of se curities)

We do not have a view on this.

37. Do you have any comments on how "transaction" might be defined in the rules in order to capture the approp riate transactions?

We do not have a view on this.

38. Should NZX reduce the threshold for shareholder app roval of major transactions to 25% of the size of a trans action?

No. Our reasons are set out below: − We are not aware of any issues with the current 50% threshold. − We understand that the purpose of the current Listing Rules and

relevant Companies Act requirements is to provide shareholders with some control over the company in respect of any management decisions that would result in a fundamental change in the nature or direction of the company. A lower threshold of 25% is a significant reduction from 50% and may prevent issuers from entering into transactions that are currently within their ordinary course of business.

− We suggest that the current alignment between the 50% Listing Rule and 50% Companies Act 1993 thresholds for major transactions should be maintained to reduce complexity. Please also refer to our suggestion in response to Q39 below.

39. How should NZX measure the size of a transaction? In order to better align the two tests under the Listing Rules and the Companies Act 1993, we suggest that the size of a transaction should be measured on a gross asset basis as described under section 129(2) of the Companies Act 1993 (ie excluding debt), but on a consolidated issuer

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group basis. This can be compared to the current measure under the Listing Rules which is based on an issuer's average market capitalisation.

40. Should NZX make any amendments to the related party transaction thresholds?

We are of the view that the thresholds do not require amendment.

41. Do you agree with the proposal for a spread require ment of 100 holders and free float requirement of 20% for S tandard Issuers?

As noted in the above responses, we do not agree with differential requirements within the Listing Rules.

42. Should there be any other eligibility requirements for Standard Issuers, including a minimum market capitalisation?

As noted in the above responses, we do not agree with differential requirements within the Listing Rules.

43. Do you agree with the proposal to allow more flexib ility in governance requirements for Standard Issuers? Why/ why not?

As noted in the above responses, we do not agree with differential requirements within the Listing Rules. However, we suggest that the majority of governance requirements can be dealt with in the NZX Corporate Governance Code which already includes sufficient flexibility for all issuers.

44. What should the minimum governance requirements be for Standard Issuers?

Please refer to our response to Q43 above.

45. Should Standard Issuers be required to report again st the NZX Corporate Governance Code or a tailored version of this?

Yes, all issuers should be required to report against the same NZX Corporate Governance Code which includes a "comply or explain" regime. As noted in our previous responses, we do not think there should be differential requirements between issuers.

46. Should NZX allow more relaxed timeframes for period ic reporting obligations under the rules?

No, as noted in our previous responses, we do not think there should be differential requirements between issuers.

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If NZX's concern is that the current periodic reporting obligations under the Listing Rules will be difficult for smaller issuers to comply with, we suggest that a better alternative is to provide issuers with tools that will assist their compliance, including additional NZX support and engagement during an issuer's first few years of listing. For example, it would be helpful to have a timing calculator, similar to the calculator on the Takeovers Panel website.

47. Should NZX introduce quarterly cash flow reporting for Standard Issuers? Should this apply to all new Sta ndard Issuers (or a subset) and for how long?

No. Quarterly cash flow reporting would create overly onerous compliance requirements for listed entities.

48. Should NZX require reporting of Key Operating Metri cs for Standard Issuers? Should this apply to all new Sta ndard Issuers (or a subset) and for how long?

No.

49. Should NZX make any other amendments to the reporti ng and disclosure requirements for Standard Issuers?

No. As noted in the above responses, we do not agree with differential requirements within the Listing Rules. Where NZX considers that amendments to the reporting and disclosure requirements are required, these amendments should apply to all issuers.

50. For which types of transactions should shareholder approval be required for Standard Issuers?

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51. What should the relevant approval thresholds be? -

52. Do you agree NZX should allow a pre break regime in relation to shareholder approval requirements for S tandard Issuers?

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53. Do you agree NZX should remove current spread and f ree float requirements for debt issuers? Who/why not?

Yes, we think the current spread and free float requirements for debt issuers should be removed. Our reasons are as follows: − The key objective should be to maintain sufficient liquidity for retail

bonds, and we do not think the spread requirements are necessary to achieve this. Debt securities are generally not subject to the same degree of trading activity as equity securities, and less liquidity is expected in the secondary market for debt securities. Also, some market participants provide liquidity to the debt market through their market-making activities.

− Developments in the New Zealand debt market over recent years have led to debt securities being held by fewer registered holders, even though the number of beneficial owners may still be large. Therefore, the number of registered holders may not accurately reflect the level of liquidity.

− Issuers of debt securities often have to seek waivers from LR 5.2.3 as part of the offer process. Removal of this requirement will allow issuers to get their products to market more quickly, with lower compliance costs.

54. What steps should NZX take to improve liquidity in its Debt Market, particularly for perpetual and longer dated instruments?

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55. What steps can NZX take to encourage listing of lon ger dated debt instruments?

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56. Should NZX list wholesale debt instruments? If so, what steps should be taken to facilitate the listing of wholesale debt instruments?

Yes, we think NZX should introduce a platform for listing wholesale debt instruments. This would provide a New Zealand listing alternative for wholesale debt issuers, providing more options for issuers and more transparency for wholesale investors. It would also bring NZX in line with ASX (which already provides a wholesale listing platform) which would allow NZX to compete with ASX for wholesale listings.

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In order to facilitate the listing of wholesale debt, NZX should: − create a platform that is easy to access, search and use; − introduce simple, transparent rules for the platform; and − set fees at appropriate levels.

57. What other amendments should NZX consider in relati on to debt issuers?

We agree with NZX's proposal to amend LRs 11.1.1 and 11.1.5 to distinguish between selling restrictions and transfer restrictions, and allow transfer restrictions to ensure compliance with the minimum holding requirements in the Listing Rules. This will give issuers more certainty, help them get their products to market more quickly and reduce compliance costs. We also think registered banks that issue debt securities should be exempt from LRs 10.3 and 10.4, given that they already make regular public disclosures under the Reserve Bank of New Zealand Act 1989. Finally, we query whether LR 10.6.1(a) needs to apply to issuers who only have debt quoted on NZX. This imposes an unnecessary compliance burden on such issuers (and there can be uncertainty as to when the "proposal" trigger is met), with no obvious corresponding benefit to the market.

58. What amendments should NZX make to the rules to the current debt governance arrangements?

We agree with NZX's proposal to amend LR 3.2.1 to contemplate alternative governing documents (eg deed polls) and offers that are not regulated under part 3 of the Financial Markets Conduct Act 2013 ("FMCA"). This will reduce compliance costs for registered bank issuers (for instance), who currently have to apply for a waiver from LR 3.2.1(a) in order to offer debt securities under a deed poll. NZX should also ensure that the amended LR 3.2.1 is consistent with the requirements set out in part 4 of the FMCA.

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In line with our response to Q18, we are of the view that the requirement for NZX to approve trust deeds is no longer required as the solicitor's opinion confirming that the trust deed complies with the Listing Rules is sufficient. Similarly, NZX review of any subsequent amendments to trust deeds should be limited to material changes (as determined by the Supervisor). This would bring the Listing Rules in line with the FMCA.

59. Should NZX make any amendments to the disclosure an d reporting requirements for debt issuers?

NZX should consider amending Listing Rule 7.12.1 to allow issuers to acquire their own debt securities without notifying the market in certain circumstances. For example, where an issuer purchases its own bonds in the course of its market-making activities (for example, under repurchase transactions) or on behalf of a client.

Our reasons are as follows: − The policy intent behind Listing Rule 7.12.1 is to ensure that the correct

number of an issuer's quoted securities on issue is known to the market. This policy is particularly important in the context of equity securities, as the number of equity securities on issue directly impacts their market price and dilutes existing shareholders' interests. The number of debt securities on issue, however, is less relevant to the market price of debt securities. Further, the acquisition by an issuer of its own debt securities on behalf of a client or in the course of its market-making activities will not change the number of its quoted debt securities on issue or affect their price. Therefore, allowing issuers to acquire their own quoted debt securities in certain limited circumstances would not undermine the policy behind Listing Rule 7.12.1.

− Issuers who purchase securities on behalf of their clients and in the course of their market-making activities may regularly purchase their own securities. Requiring them to release a notice under Listing Rule

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7.12.1 each time they acquire their own securities on that basis would impose a disproportionate compliance burden on them. There would be little corresponding benefit to the market, as the number of Quoted Debt Securities on issue will remain unchanged as a result of these transactions. Further, it would act as a deterrent to trading, and would therefore have a negative impact on the liquidity of debt securities in the market.

60. What spread and free float requirements should be i mposed for listed funds? Please also provide feedback on any necessary amendments to Appendix 2 under the Listin g Rules for funds.

We consider the spread and free float requirements should be the same as for equity, and we do not consider any amendments for Appendix 2 to be necessary for funds.

61. For those fund entities who are licensed and may wi sh to be listed, we seek feedback on areas of the Listing Ru les which should supplement licensing requirements.

Such funds should have to comply with the Listing Rules in the same way as any other entity.

62. A number of entities with fund qualities but with c orporate structures are listed as equity issuers under the r ules (for example, corporate property investment companies). Is this the most appropriate treatment of these vehicles or would bespoke rules be preferable?

Given we consider funds should be treated as though they were companies for the purposes of the Listing Rules, we do not consider companies with fund qualities should be treated differently to companies.

63. Should a separate approach be taken to the listing/regulation of active and passive funds? Or open and closed ended funds?

We do not consider that any different approach should be taken to the listing/regulation of active/passive funds, on the basis that the boundary is difficult to determine and often meaningless. Provided such issuers comply with their disclosure requirements, we do not consider any different treatment would benefit investors. There may however be some merit in considering whether a closed ended fund should be able to list "as is" in order to provide liquidity for investors.

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64. What governance arrangements should NZX require for listed funds? Please explain appropriate distincti ons for different structures.

We consider existing legislation appropriately addresses investor protection for the replacement of an investment manager or external supervisor.

65. What disclosure and reporting requirements should N ZX require for listed funds?

We agree with the suggestion that continuous disclosure requirements apply to a fund, although we consider the same obligations in terms of what constitutes a disclosable matter should apply to funds as for companies, and it will be for the listed entity to determine whether disclosure is required. We consider that, other than continuous disclosure requirements, listed funds should have the same disclosure obligations as other listed entities, as well as the disclosure obligations that unlisted funds have (in which case, MAPs could secure as the platform for electronic disclosure to investors).

66. What member/unitholder approval requirements should NZX require for listed funds?

We consider existing legislation adequately addresses disclosure and approval of investment policies and key roles.

67. What amendments should be made to the current corpo rate action timetables under the rules?

As noted in the Discussion Paper, we suggest that the Listing Rules are amended to give effect to the NZX Class Waiver for Accelerated Entitlement Offers (dated 13 June 2017). This would align with NZX's goal of reducing the number of waivers which are currently necessary under the Listing Rules. In addition, we have recently assisted a company with procuring a waiver from LR 7.11.1 in relation to an accelerated entitlement offer. LR 7.11.1 requires issuers making an issue of quoted securities (or securities to be quoted) to proceed to allotment within five Business Days after the latest date on which applications for securities close. However, where companies have multiple overseas institutional shareholders in various jurisdictions and/or where such shareholders are themselves custodians, there may be a material risk that the share registry is unable to complete the required

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reconciliation exercises to ensure allotment of the securities to institutional shareholders within the timeframe dictated by LR 7.11.1. Accordingly, for practical purposes, we suggest that it may be appropriate to extend the period to allotment under this Listing Rule.

68. Should the timeframe under Listing Rule 7.12.2 be r educed? If so, by how much?

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69. Should NZX introduce a mandatory latest date for acceptances of DRP elections of the record date plu s 1 business day to align with Australia?

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70. Do you agree with the proposals above in relation t o reverse/backdoor listings? Why/why not?

We agree with the proposals in relation to reverse/back door listings, which largely reflect our experience of the current requirements of such listings. However, it will be important to recognise that in some cases such transactions are acquisitions by an operating listed company, rather than reverse/back door listings, for which it would be inappropriate to require an offer document for and which, instead, are best addressed by the current major transaction requirements.

71. Do you have any other feedback in relation to reverse/backdoor listings?

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72. Should NZX facilitate the listing of SPACs/SPVs? W hat are the appropriate shareholder protections for these v ehicles?

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73. Do you agree with the proposals above in relation t o settings for overseas listed issuers?

Yes.

74. Do you have any other feedback in relation to setti ngs for overseas listed issuers?

We consider that the Australian "foreign exempt listing" regime currently works well for New Zealand issuers that want to list on ASX.

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75. Should NZX introduce any additional requirements in relation to the conduct of Annual Meetings?

We generally consider that the current annual meeting requirements are antiquated and require review and modernisation. Annual meetings are a large expense for issuers and very time consuming. In light of the current review of the Listing Rules, this would also be a good time for NZX to work with MBIE to update the current annual meeting requirements. By way of example only, the requirement that shareholders approve an issuer's auditor fees each year should not be a requirement and seems to be an unnecessary compliance cost. It would be useful to know in how many instances shareholders have not approved these and what the practical outcome would be if shareholder approval is not obtained. Although we agree that shareholders should be able to question an issuer's management at the annual meeting, the current legal requirements around shareholder proposals should also be reviewed, especially since shareholder proposals are non-binding on management.

76. What amendments should NZX made to Listing Rules 5. 1 and 5.2?

We query the policy reasoning behind the requirement that all advertisements in relation to an offer are sent to NZX for review before they are released (LR 5.2.2(d)). The legislative regime relating to advertisements before and after a PDS is lodged is contained within the FMCA and issuers must ensure prescribed statements are included within each advertisement (as applicable). The process of obtaining NZX's pre-approval to each advertisement adds another level of complexity to the offer process and is time consuming for issuers. We also query whether it is necessary for both the FMA and NZX to review offer documents during a listing process. The dual-review process is time consuming and introduces an additional compliance burden for companies

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proposing to list, especially when they are having to consider and respond to two different sets of questions or comments from regulators. We suggest that the Listing Rules are updated to reflect terminology used under the FMCA. For example, "Prospectus" should be changed to "Product Disclosure Statement".

77. Are any specific amendments needed to the rules to address requirements of co-operatives or other stru ctures?

-

78. Do any of the key definitions under the rules need to be amended?

As a general comment, we suggest the definitions and terminology used within the Listing Rules should be updated to align with terminology used under the FMCA.

79. Please provide any feedback on other areas of the r ules which you think should be amended and the reasons f or requesting such amendments.

− LR 6.1.2(d) – we suggest that this rule is extended to also exclude notice of meetings to consider shareholder proposals from the mandatory NZX review. Issuers have no control over the content or substance of shareholder proposals that are included in notice of meetings. On this basis, we consider that NZX approval should not be required before the notice of meeting is provided to shareholders.

− LR 10.6.1 – as noted in response to Q32 above, we suggest that the requirement for an issuer to immediately disclose administrative matters to market is reviewed as this is sometimes inadvertently overlooked by issuers. This rule is also particularly confusing in relation to the issue of new equity securities or securities that may convert into equities – it is unclear whether the disclosure/announcement required under LR 7.12.1 or LR 10.6.1(a) applies.

− Definitions in the Listing Rules should be reviewed in the light of similar

definitions in the FMCA. This is especially the case in the context of

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options and rights attached to shares, which may be characterised differently under the Listing Rules and the FMCA respectively.

− We agree that where waivers are frequently given in respect of a

particular matter, the Listing Rules should be amended to permit these situations. Requiring issuers to apply for a waiver increases compliance costs and causes timing issues.

OTHER COMMENTS

Funds It is not clear to us that the distinction between an issuer and a fund has been clearly drawn in the Discussion Paper, leading to some confusion on the responses requested. In most cases, the Listing Rules should apply to the fund (ie the MIS), not the issuer of that fund, being the manager under the FMCA. If an issuer were listed, it is the business of that manager, not the fund it manages; which is relevant. However, if a fund is listed than very few matters regarding the issuer/manager will be relevant (eg solvency and key personnel). That key distinction does not appear to be adequately reflected in the NZX's questions (and, in some cases, the two are conflicted). Further, it is not clear how if a fund is listed the current requirements that apply to the manager/issuer of that fund under the FMCA would apply in a listed environment – for example, the FMCA's (and FMA's) concern with pricing methodologies is misplaced in the context of a listed fund where the price of the unit is valued by the market, rather than the manager.