Shares in publicly listed companies in New Zealand are bought and sold on the New Zealand Stock Exchange.
The exchange operates four capital markets, providing a diverse offering for investors.
The markets are operated within a regulatory framework designed to maximise transparency, fairness, efficiency and competitiveness, and to promote confidence among all market participants. Under NZX rules, companies are required to disclose information to the market that is material to the value of their shares as soon as they become aware of the information. This ensures the market is fully informed and investors all have fair access to material information.
NZ Stock Market
The NZX Market is the premier equities board and is home to many of New Zealand's best known brands. Among the more than 200 listed issuers are many of New Zealand's long-established heritage companies and a number of overseas companies. They are the cornerstone companies of the NZX and New Zealand's economy.
The NZX headline index is known as the NZSX 50, and comprises the 50 largest companies listed on the NZSX Market by market capitalisation.
NXT is a new, streamlined market targeted at small to mid-sized businesses whose growth potential may be constrained by a lack of expansion capital. The previous offering for this sector, the NZ Alternative Market, NZAX continues to trade but no further listing applications are being accepted.
NZ Debt Market
The NZDX is New Zealand's market for trading debt securities, offering a range of investment securities including corporate and Government bonds and fixed income securities.
NZ Derivatives Market
The NZX Derivatives Market provides investors with the tools to manage and gain exposure to New Zealand's capital markets and the global dairy industry.
Investments in the New Zealand stock market can be made directly through a broker who is registered with the NZX. You can find a list of registered brokers on their website.
Investments can also be made through managed funds. A number of managed funds are listed and traded on the New Zealand share market as Exchange-Traded Funds (ETFs). Others are offered by fund managers, and your legal or financial adviser will be able to provide details of the funds available.
Buying shares in a private company, not listed on the share market, is also possible under the Investor immigration categories (Visas for investors). You’ll need to consult a business broker, or legal and financial professionals for more information about companies which may be open to investment.
Investment regulations in New Zealand
New Zealand’s securities laws regulate the way investments are offered to investors.
The main thrust of these laws is to protect investors by requiring issuers to disclose the information investors need to make informed decisions.
These laws are enforced by regulators including the Financial Markets Authority.
Registered banks and finance companies are supervised by the Reserve Bank. The stock exchange is supervised by NZX.
The laws governing securities are in the process of changing as the provisions for Financial Markets Conduct (FMC) Act 2013 are phased in. That process will be complete by 1 April 2016. Key requirements of the regime are:
- Product Disclosure Statement - most investments must have a concise PDS, aimed at prudent, non-expert. It must be clear and concise and is subject to page limits. It will be accompanied by an online register of all the other material required by the FMC Act. (There are some exceptions however, including small offers of debt and equity, for example, through 'angel' investor networks.
- Audit - companies and funds must be audited each year and the auditor's report included in any PDS and in the annual report to investors.
- Annual financial statements - all issuers must prepare and register annual audited financial statements. Most issuers send these to investors with their annual reports.
- Peer-to-peer lending and equity crowd funding – are now regulated under the Act.
The Financial Markets Authority has a comprehensive help me invest section which covers the processes, risks and safeguards you should consider when buying shares in New Zealand.