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NZX, the operator of the New Zealand Stock Exchange, on Tuesday detailed plans to close gaps in its supervision regime by imposing voice-recording requirements on trading participants.
The move, which would bring the market in line with jurisdictions such as the UK and Singapore, has been prompted by an odd scrap between NZX, the country’s Financial Markets Authority (FMA) and Goldman Sachs.
Following the conclusion of a landmark market-manipulation case in March 2017 – New Zealand’s first such action to go to trial – that saw former Milford Asset Management portfolio manager Mark Warminger fined NZ$400,000, the FMA conducted an investigation into trading by Goldman that was related to the Warminger case.
In a report published last week, the FMA said that after its investigation it remained concerned that Goldman’s trading conduct “may have had the effect of creating a false or misleading appearance of trading” in a way that would breach the Securities Markets Act (SMA) 1988.
Goldman told the investigation that the activity being questioned was in line with accepted practice for facilitation trading, whereby brokers trade as principal.
