JASON KRUPP. Securities market operator NZX says it has been approached by Fonterra to run its farmer share trading scheme, which is expected to launch in November.
The selection of the NZX was almost inevitable as local securities law stipulates that the scheme be run by a Financial Markets Authority-approved exchange. NZX is currently the only registered exchange operator in the country.
The announcement comes after the dairy giant’s shareholders last month voted in favour of the Trading Among Farmers scheme, which will allow them to trade stakes in the company between themselves as part of Fonterra’s capital restructure.
The platform will be run independently from NZX’s other platforms, and will be denominated in local currency terms.
The move adds another string to the NZX’s agricultural products bow, having last year launched the dairy derivatives market.
The securities market operator said the Fonterra Shareholders’ Market will have parallels to the wholesale electricity market, which it handles on behalf of the Electricity Authority.
As part of the deal it will provide trading, clearing, settlement, surveillance, regulatory and other reporting services to Fonterra, while making trading of shares «straightforward, seamless and sound for all participants», the NZX said.
The commercial arrangements are still being thrashed out but it was disclosed that the basis of the arrangement will be structured around a flat licence fee model.
NZX share closed at $2.70 yesterday, and have more than doubled in value of the past 12 months.