NZX is pleased to advise that it has been notified by Fonterra Co-operative Group Limited of Fonterra’s intention to appoint NZX to operate the Fonterra Shareholders’ Market as part of Trading Among Farmers.
The Fonterra Shareholders’ Market is the private market where Fonterra farmer shareholders will trade Fonterra shares among themselves, as part of the planned Trading Among Farmers regime approved by Fonterra farmer shareholders in June 2010, and on track for launch in November 2012.
“The Fonterra Shareholders’ Market will be operated independently from other securities markets operated by NZX, such as the NZX Main Board, NZX Alternative Market, the NZX Debt Market and the NZX Derivatives Market,” said NZX CEO Mark Weldon.
NZX’s role with the Fonterra Shareholders’ Market will have parallels to its operation of the wholesale electricity market, operated on behalf of the Electricity Authority.
NZX will provide a suite of trading, clearing, settlement, surveillance, regulatory and other reporting services to Fonterra to ensure the Fonterra Shareholders’ Market is operated according to the highest possible standards. At the same time, its design will be straightforward, seamless and sound for all participants. The currency for the Fonterra Shareholders’ Market will be New Zealand dollars.
“NZX looks forward to providing services to Fonterra and its shareholders, and is proud that a New Zealand company has been selected to serve an iconic New Zealand company and, by association, New Zealand’s world leading agricultural sector,” said Weldon.
Final commercial terms are still under discussion; however NZX can confirm that it will operate the Fonterra Shareholders’ Market for Fonterra under a flat licence fee structure.
Under the Securities Markets Act 1988, the Fonterra Shareholders’ Market must be operated by a registered exchange approved by the Financial Markets Authority. Currently NZX is New Zealand’s only registered exchange operator.
While the Fonterra Shareholders’ Market will operate as a distinct market separate from public securities markets, its design and operation will reflect financial markets best practice.