3 Dec 2009

Single settlement system 'better for NZ'

7:22 am on 3 December 2009

A single clearance and settlements system serving the entire New Zealand market will help bolster NZX's quest to become a world centre of agriculture trading, according to the chair of the Capital Markets Development Taskforce.

At present, the Reserve Bank operates a clearance and settlement system for high-value bank transactions such as bonds and currencies, while sharemarket operator NZX operates another for equities.

They are investigating whether they can work together to create a single clearance and settlements system.

Taskforce chairman Rob Cameron says its own study concludes New Zealand would be better served if the two systems were consolidated into one.

He says it would assist innovation and product development in the market and provide the opportunity for New Zealand to become a hub of global capital markets, in agriculture in particular.

The NZX is upgrading its systems with the hope of introducing agricultural derivatives and emissions trading in the future and is creating a central counter-party clearing system to protect buyers and sellers.

The taskforce's final report will be released on 16 December.