BNP Paribas Partners with NZX to Develop Capital Markets

The initiative from the bank focuses on increasing offshore capital flows into the NZX.

The New Zealand Exchange (NZX) announced this Tuesday that BNP Paribas Securities Services is planning on using the Kiwi exchange for a new initiative that will focus on increasing the country’s capital markets.

In particular, BNP Paribas is planning on increasing offshore capital flows into the NZX. As part of this, BNP Paribas is working on becoming a General Clearing Participant. This is anticipated to be finished in the first half of 2021, according to NZX Chief Executive, Mark Peterson.

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NZX: Significant Untapped Potential in New Zealand

Once BNP Paribas completes the process of becoming a General Clearing Participant, NZX believes the bank will enhance operational efficiencies when bringing its Third Party Clearing (TPC) model to the country.

Mark Peterson, CEO of NZX, New Zealand Stock Exchange
Mark Peterson, CEO of NZX
Source: LinkedIn

“We see this as a hugely positive signal about the untapped potential in our markets. BNP Paribas is a high-quality clearer and custodian, with an unparalleled regional clearing footprint and global credentials, committing its innovation and expertise to New Zealand,” Peterson said in the statement.

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A TPC model allows brokers to streamline their clearing and settlement processes, as BNP Paribas would manage the operational, regulatory and IT requirements. Therefore, brokers would be able to focus on other areas of their business.

By bringing its TPC model, NZX expects this will benefit brokers further by offering a solution to manage large trading volumes. Thus, this will reduce the capital outlay of connecting to NZX’s market and more.

BNP Paribas in New Zealand

BNP Paribas was the first and only global custodian to become a Depository Participant on the NZX Clearing and Settlement System. Furthermore, the Paris-headquartered bank was the first custodian to go live with STP announcements (ISO15022) on NZX.

Commenting on the initiative, NZX Executive Director for Markets Development & Clearing, Benjamin Phillips added in a statement: “In BNP Paribas, we have a participant with a genuine commitment to the ongoing development of New Zealand’s capital markets, now partnering with us to develop new models and processes to drive operational efficiencies and mutual benefits for the market, investors and issuers.”

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