Buying Shares in a Company
The buying and selling of shares in publicly listed companies in New Zealand is carried out through the New Zealand Stock Exchange (www.nzx.com).
The exchange operates three 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 the 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.
The three capital markets offered by on the New Zealand Stock Exchange are:
NZ Stock Market
The NZSX 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 NZX and New Zealand's economy.
The NZX headline index is known and the NZSX 50, and comprises the 50 largest companies listed on the NZSX Market by market capitalisation.
NZ Alternative Market
The NZAX Market provides a low-cost market for Listed Issuers and is designed for small to medium-sized, fast-growth businesses seeking a safe and efficient alternative capital raising facility.
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.
Buying shares
Investments in the New Zealand stock market can be made directly through a broker who is registered with the NZX. For a list of registered brokers see the “Find a Broker” tool at www.nzx.com.
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 advisor will be able to provide details of the funds available at any time in New Zealand.
Buying shares in a private company, not listed on the share market, is also possible under the Investor categories for immigration. You will 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 has securities laws that regulate the way investments are offered to people.
The main purpose of New Zealand securities law is to provide protection to investors requiring issuers to disclose the information investors need to make informed decisions. These laws are enforced by regulators such as the Securities Commission and the Registrar of Companies.
Registered banks and finance companies are supervised by the Reserve Bank.
The stock exchange is supervised by NZX and the Securities Commission.
Key requirements of the law in New Zealand are:
Registered prospectus - most investments must have a prospectus which explains the details of the investment and who is offering it. This document must not be false or misleading and it must be registered at the Companies Office.
Investment statement - this must explain the investment in plain language and must be given to an investor before they invest. It also must not be misleading or deceptive and directors face criminal and civil penalties if it is not true.
Audit - companies and funds must be audited each year and the auditor's report included in the prospectus 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.
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