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RB and NZX agree to run separate clearing systems

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, Oct 11 NZPA - The Reserve Bank and New Zealand sharemarket operator NZX today announced that they would continue to run separate, competitive clearing and settlement services, but with full interoperabilty, for capital markets.

The central bank and NZX run New Zealand's two principal securities settlement systems: NZClear and New Zealand Clearing Limited, respectively.

In December 2009, the Capital Markets Development Taskforce recommended the bank and NZX work together to ensure an efficient clearing and settlement infrastructure that supported the development of capital markets in NZ.

Reserve Bank deputy Governor Grant Spencer said today that, following an extensive review, the bank and NZX had agreed to maintain separate systems but with full interoperability between them.

The agreement is formalised in a Memorandum of Understanding.

Mr Spencer said that, consistent with the bank's broader liquidity policy, New Zealand Clearing Limited would be eligible for backup liquidity support from the bank in its standard overnight facility.

The bank and NZX agreed to establish a joint settlements advisory council to deal with industry issues.

Mr Spencer said the Bank and NZX considered agreement on these issues would help to ensure an efficient and competitive securities settlement infrastructure which would in turn support the development of New Zealand's capital markets.

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