New Zealand’s FMA Portends Capital Raising Growth Trajectory with NXT

The NXT market provides a parallel alternative market platform for smaller and mid-sized New Zealand companies trying to raise capital.

New Zealand’s Financial Markets Authority (FMA) has portended a new era of capital raising in the country, following its inaugural listing on the NXT market, according to an FMA statement.

The NXT market provides a parallel alternative market platform for smaller and mid-sized New Zealand companies trying to raise capital. Moreover, the NXT market also allows for the use of reduced complexity with a comprehensive set of simplified listing rules and a new approach to disclosure.

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More specifically, the NXT market caters to small to mid-sized businesses with an expected market capitalization ranging from $10-100 million and a minimum capital raising of $5 million for seeking additional capital. Presently, there are three tiers of capital raising platforms operating in New Zealand, with its financial framework providing adequate flexibility in each.

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The NXT market boasts a number of unique characteristics and attributes that in some ways separates it from the NZX. These include, among others:

  • Simplified listing rules and documents
  • Periodic disclosure environment via quarterly business updates
  • Provision of indications to investors of the underlying performance of the business
  • Support from NXT Advisors, both before and after listing on NXT

According to Rob Everett, FMA Chief Executive, in a recent statement on the listing, “Providing high performing capital markets that support investment, growth and jobs is a key initiative proposed in the government’s business growth agenda. The new NXT market is an innovative step that helps to meet the dynamics of the New Zealand economy, which has a significant proportion of small and medium-sized businesses.”

“Enabling equity crowd funding and the NXT growth market, to complement the NZX Main Board, recognises the different levels of business development and sizes of enterprise within our economy. We will be working with the industry to ensure investors understand the different disclosure rules for each of these markets,” he added.

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