King Country Energy presses ahead with plans to move to NZX, citing concerns Unlisted could close

King Country Energy, the biggest electricity retailer in the region, is pushing ahead with plans to move its listing to the NZX from the Unlisted platform, saying new rules could force the Unlisted market to close.

Shareholders in the Taumarunui-based energy company agreed unanimously at a meeting yesterday to take initial steps to prepare for an NZX listing, including the adoption of a new constitution, the company said in a statement. It told shareholders the introduction of the Financial Markets Conduct Act in December could potentially close the Unlisted market.

Unlisted is petitioning Commerce Minister Paul Goldsmith for exemption from a rule change requiring it to be licensed by the Financial Markets Authority, saying the cost would be prohibitive for its service for smaller companies. As part of the new rules, Unlisted has to either apply for a licence from the FMA, seek an exemption, or shut down. Unlisted currently requires minimal disclosure, keeping costs low for the 17 securities that trade on its platform.

Companies trading on Unlisted include Silver Fern Farms, New Zealand's biggest meat processor and marketer, Queenstown tourism company Skyline Enterprises, and biotechnology company PharmaZen.

NZX, which is New Zealand's only registered stock market operator, said Unlisted operates without disclosure requirements and is not subject to insider trading or market manipulation restrictions, and an exemption could undermine confidence in New Zealand's financial markets. NZX gained an exemption for its NXT market aimed at smaller companies, allowing less onerous disclosure obligations and reduced costs for issuers.

Unlisted rejects the claims, saying it provides an important lower-cost service for small and medium sized issuers that otherwise wouldn't be available. Under its proposal, its existing terms would be incorporated into a set of market rules and it says various existing disclosure obligations and investor protections currently apply to the market.

The Financial Markets Conduct Act replaced the 36-year-old Securities Act.

(BusinessDesk)