NZX Full Year 2019 Results & Annual Report Published

For
New Zealand.
TE PAEHOKO O AOTEAROA
NZX ANNUAL
REPORT 2019

ABOUT THIS REPORT
For more than 150 years we have
been creating opportunities for Kiwis
to grow their personal wealth and
helping businesses prosper. As New
Zealand’s Exchange, we are proud
of our record in supporting the
growth and global ambitions of local
companies.
Our 2019 Annual Report “For New
Zealand.” recognises the importance
of aligning the way we do business
with the expectations of our key
stakeholders to create sustainable
value – for our shareholders, across
the capital markets ecosystem, for
Kiwis and New Zealand. This report
includes our full Financial Statements
for the year ended 31 December
2019, along with our management
commentary on the company’s
financial results and operational
performance.
The business overview (Who we are)
and our business model (How we
create value) provide information
about NZX, our strategic goals and
the pillars that are fundamental to
sustaining and growing value into the
future. The Corporate Governance
section of this report describes how
we set the objectives and direction for
the business, and the framework for
oversight. Our corporate governance
policies are available online at:
https://www.nzx.com/about-nzx/
investor-centre/governance/policies.
NZX Limited is registered with the
New Zealand Companies Office and
our New Zealand Business Number
(NZBN) is 9429036186358.
This report is dated 13 February
2020 and is signed on behalf of the
Board of NZX Limited by Chair, James
Miller, and Chair of the Audit and Risk
Committee, Lindsay Wright.

Contents
OUR RESULTS ..................................................................04
ABOUT NZX ....................................................................06
LETTER FROM THE CHAIR
.................................................08
OUR BOARD ....................................................................10
OUR LEADERSHIP TEAM
....................................................12
CHIEF EXECUTIVE’S UPDATE .............................................14
OUR BUSINESS MODEL .....................................................17
OUR CUSTOMERS....................................................... 18
NEW ZEALANDERS .....................................................20
SUSTAINABILITY ........................................................22
OUR PEOPLE
.............................................................24
CORPORATE GOVERNANCE ...............................................26
MANAGEMENT COMMENTARY ...........................................39
FINANCIAL STATEMENTS ..................................................46
INCOME STATEMENT ..................................................48
STATEMENT OF COMPREHENSIVE INCOME ....................48
STATEMENT OF CHANGES IN EQUITY ...........................49
ST
ATEMENT OF FINANCIAL POSITION ..........................50
STATEMENT OF CASH FLOWS ......................................51
NOTES TO THE FINANCIAL STATEMENTS
......................52
INDEPENDENT AUDITOR’S REPORT ....................................90
STATUTORY INFORMATION
...............................................94
CORPORATE DIRECTORY ...................................................102
NZX Annual Report 2019
03

OUR RESULTS
Our performance
this year
$31.4 $14.6
6.1
millionmillion
cents per share
(fully imputed)
OPERATING
EARNINGS*
NET PROFIT
AFTER TAX**
DIVIDEND
9.8%25.7%
Data highlighted on pages 4 to 7 is “for
the financial year ended 31 December
2019”, or “as at 31 December 2019”
(as applicable). Percentage changes
represent the movement from 2018 to
2019.
* Operating earnings are from continuing
operations and before net finance
expense, income tax, depreciation,
amortisation and impairment, adjustment
to provision for earnout, gain and loss on
disposal of business and property, plant
and equipment.
** From continuing and discontinued
operations.
The 2019 deliverable targets are detailed
in the Management Commentary section
on page 39 of this Report.
NZX Annual Report 2019
04

$18.7
billion
CAPITAL RAISED (TOTAL NEW CAPITAL
AND SECONDARY CAPITAL RAISED)
95.7%
$12.8
million
DATA & INSIGHTS
REVENUE
10.4%
$37.8
billion
TOTAL VALUE
TRADED
1.0%
358,928
lots
DAIRY DERIVATIVES
TRADED
3.8%
$3.97
billion
FUNDS UNDER
MANAGEMENT
36.0%
$2.3
billion
FUNDS UNDER
ADMINISTRATION
15.6%
NZX Annual Report 2019
05

TOTAL MARKET
CAPITALISATION
$202
Listed equity,
debt and funds
ISSUER
RELATIONSHIPS
323
Total listed equity,
debt and fund securities
DATA AND
INSIGHTS
7,444
SECONDARY
MARKETS
4.9
Trades in 2019 with a total
value of $37.8 billion
Data terminals
ABOUT NZX
Who we are
CORE MARKET
Investors in
Smartshares products
(directly and indirectly)
Investor portfolios
under administration
SMARTSHARES
NZX WEALTH TECHNOLOGIES
118,00022,000
million
billion
NZX Annual Report 2019
06

20%
(2)
69
59
53
3
1
GLOBAL AFFILIATIONS:
ASX - Sydney
HKEX - Hong Kong
LSE - London
NASDAQ - New York
SGX - Singapore
TMX - Toronto
SPSE - Suva
SSE - Shanghai
WFE -
World Federation
of Exchanges
SSE - Sustainable
Stock Exchanges
Initiative
GENDER DIVERSITY OFFICERS & BOARDGENDER DIVERSITY ALL EMPLOYEES
NEW ZEALAND’S EXCHANGE AND OUR GLOBAL CONNECTIONS
EMPLOYEES BY BUSINESS UNITEMPLOYEES BY AGE (NUMBER)
KEY:
NZX Offices
Head Offices
of NZX-listed
Companies
20-29 years
30-39 years
40-49 years
50-59 years
60-69 years
70-79 years
Not specified
NZX
NZX Regulation
NZX WT
Smartshares
Female officers (2018: 3)
Male officers (2018: 8)
Female
Male
Female managers
Male managers
Female directors (2018: 1)
Male directors (2018: 5)
80%
(8)
17%
44
3
54%9%
20%
226
FULL-TIME EMPLOYEES
(Full-time equivalents, excluding
contractors and consultants )
41%
59%
34%
66%
25%
(2)
75%
(6)
NZX Annual Report 2019
07

LETTER FROM THE CHAIR
A milestone year of
performance and
purpose
This year, in which we
celebrated our 150
th

milestone, was one of
encouraging earnings
growth for NZX, assisted
by a stellar performance
from our local market.
The S&P/NZX 50 (Gross)
finished 2019 at 11,492 –
up more than 30% for
the year. This extends
the excellent run of
New Zealand’s sharemarket
over the past decade.
Against this backdrop it
has been pleasing to have
seen strong appreciation in
the NZX share price, with
a total shareholder return
(TSR) of 42% for the year
ended 31 December 2019.
1
The FY2020 guidance is subject to market outcomes, particularly with respect to market capitalisation, total capital
raised, secondary market value and derivatives volumes traded, and funds under management and administration
growth. Additionally, this guidance assumes no material adverse events, significant one-off expenses, major
accounting adjustments, other unforeseeable circumstances, or future acquisitions or divestments.
NZX Annual Report 2019
08

I want to thank our shareholders
for their support. This has been
another year of delivery for
NZX, with operating earnings
at a record $31.4 million – just
above our guidance range.
Your Board has declared a final
dividend of 3.1 cents per share fully
imputed (to be paid on 20 March
2020), taking the FY2019 dividend to
6.1 cents per share, fully imputed.
Importantly, during 2019, we made
significant progress on our long-
term goal to become a more vibrant
and diverse participant in New
Zealand’s capital markets ecosystem.
NZX’s Wealth Technologies
platform and Smartshares funds
management businesses both
made strong strategic and
financial progress in 2019.
At the same time, we have kept
an unwavering focus on costs – in
line with the commitment made to
shareholders at last year’s Annual
Meeting. This has supported our
positive lift in operating margins.
The benefits from the updated
market structure and rule-set, that
took full effect on 1 July, are already
showing through in the listing
of a broader range of financial
products for investors. Simplifying
the Listing Rules has provided an
easier process to both list and raise
capital, especially for bonds and
funds. Capital raised was up more
than 95% to $18.7 billion with a
strong increase in secondary equity
raisings, along with primary retail
and wholesale debt issuance. This
is an exceptional outcome, helping
drive revenue in our core business.
A broader range of debt and fund
offerings is assisting the portfolio
investment and diversification
requirements of KiwiSaver funds.
However, as we reflect on a strong
result and focus on our plans for
2020, I am conscious that IPOs
are a fundamental measure of the
health of any stock exchange.
While New Zealand’s capital markets
have delivered strong returns for
investors and performed well in
supporting secondary capital
raisings, new equity listings have
remained subdued. Lack of new
listings is a global phenomenon,
along with the trend for a reduction
in the number of listed companies
(known as de-equitisation). The
global low interest rate environment
– with competition and availability of
low-cost funding, from private equity
in particular – has placed pressure
on listed markets around the world.
This year’s listings of Napier Port
and Cannasouth provided a
glimpse of the opportunity and
breadth of potential listings, from
local government infrastructure
assets to emerging businesses
seeking capital for growth.
NZX is more than a century and a
half old. In commemorating the
foundation of NZX at events across
the country – and in engaging with
contributors to produce our 150th
anniversary commemorative book
“Stories from the Marketplace”
– it was clear to see the level of
endorsement of the vital importance
of capital formation in New Zealand
and the role played by NZX.
In my foreword to the book I talk
about why we need to be taking an
inter-generational view of NZX. This
extends well beyond our business
operations to the many linked parts
of our capital markets ecosystem.
Healthy capital markets deliver
mutual benefits for participants and
investors, and for our country as
an integral component of a well-
functioning, sustainable economy.
With the release of the 10-year vision
and purpose in the “Growing New
Zealand’s Capital Markets 2029”
report, we now have an industry-
developed blueprint that has the
support of Government. My sincere
appreciation to the Chair of the
Steering Committee, Martin Stearne,
for leading this work with a line-up
of the very highest calibre, EY, the
Ministers of Finance and Commerce
for their engagement with us, and
everyone who has put their voice
behind the 42 recommendations. The
crucial phase is to now ensure steady

progress in implementing the broad
range of recommendations from
the Capital Markets 2029 report.
Our two new directors this year,
Elaine Campbell and John McMahon,
both have a deep understanding
and passion for the crucial role
we play within the New Zealand
economy. We also welcome Hayley
Buckley as our Future Director for
2020, replacing Anna Scott who
has made a superb contribution
in Board discussion over the past
year. Sarah Minhinnick joins us as
Head of Issuer Relationships to
attract new listings and support
our current issuers – a crucial role
on our Senior Leadership Team.
Delivery of a broad platform of
growth in FY2019 has provided a
strong base for FY2020 guidance,
with operating earnings expected
to be in the range of $30.0 million
to $33.5 million
1
. We have widened
the guidance at the lower end of
the range, reflecting the current
uncertain global environment.
No reference to our results would be
complete without acknowledgement
of the outstanding team at NZX. Our
performance in this milestone 150
th

year is a tribute to our people, built
on the heritage of our business and
with a nod to our future potential.
James Miller
Chair
“We have kept an
unwavering focus on costs.
This has supported our
positive lift in operating
margins”
NZX Annual Report 2019
09

James Miller
CHAIR
James was appointed as a
director in August 2010 and
NZX Chair in May 2015. He
has spent 14 years working
in the share-broking
industry, with Craigs
Investment Partners, ABN
AMRO, Barclays de Zoete
Wedd and ANZ Securities.
He is a qualified chartered
accountant and is a Fellow
of the New Zealand
Institute of Chartered
Accountants, a Certified
Securities Analyst
Professional, and a member
of the Institute of Directors
in New Zealand.
James is a director of the
Accident Compensation
Corporation, Mercury NZ
and New Zealand Refining
Company, and a former
director of Auckland
International Airport. He
was an inaugural director
of the Financial Markets
Authority, and previously
a member of the ABN
AMRO Securities, INFINZ
and Financial Reporting
Standards Boards.
GOVERNANCE & LEADERSHIP
Our Board
Frank Aldridge
DIRECTOR
Frank was appointed as
a director in May 2017.
Frank has an extensive
understanding of New
Zealand’s capital markets
having spent more than 20
years working for Craigs
Investments Partners
where he is now Managing
Director.
He is currently Chair of
Australian-based Wilsons
Advisory and Stockbroking,
former member and
Chair of New Zealand
Securities Association, and
sits on several of Craigs
Investment Partners’
subsidiary Boards.
Frank is an accredited
NZX Adviser, Authorised
Financial Adviser (AFA),
and a Chartered Member
of the Institute of Directors.
Nigel Babbage
DIRECTOR
Nigel was appointed as
a director in December
2017. Nigel has spent
more than 30 years’
working in financial and
capital markets locally and
globally, and brings to NZX
extensive clearing and
derivatives experience.
Nigel previously held
executive roles with
British Petroleum (now BP)
and Citibank, managing
the New York currency
derivatives desk, and
worked for BNP Paribas,
where he took on the
joint role of Global Head
of Currency Derivatives
Trading and Head of
North American Foreign
Exchange. He served on
the Foreign Exchange
Committee of the Federal
Reserve Bank of New York
for three years.
Nigel is currently CEO
of Christchurch-based
investment company
Mohua Investments
Limited.
Richard Bodman
DIRECTOR
Richard was appointed as
a director in April 2017.
Richard has spent more
than 25 years working
in the financial services
sector, including 17 years
at Jarden (previously First
NZ Capital) where he held
several executive roles,
such as Managing Director,
Head of Compliance. Prior
to this Richard spent seven
years as an inspector for
the Securities & Futures
Authority in London.
Richard is an independent
director of Forsyth
Barr Custodians
Limited, Forsyth Barr
Cash Management
Nominees Limited
and Te Ahumairangi
Investment Management
Limited, and a member
of the Governance Risk
Compliance (GRC) Institute
and the Institute of
Directors.
Richard has been a director
of Jarden Securities
and a NZX registered
Compliance Manager.
NZX Annual Report 2019
10

Jon Macdonald
DIRECTOR
Jon was appointed as a
director in May 2013. He
has a strong background in
technology, and between
2008 and 2019 was CEO of
Trade Me – recognised as
one of New Zealand’s best-
loved brands. Over that
time, Trade Me’s revenue
trebled to $250 million,
with a market capitalisation
of $2.5 billion.
In addition to NZX,
Jon is on the boards of
Contact Energy, Mitre 10,
and Trade Me (through
its parent company).
Earlier in his career,
Jon worked in London
for HSBC Investment
Bank, and for Deloitte
Consulting with a focus on
telecommunications and
financial services. He has
a Bachelor of Engineering
(Hons) from the University
of Canterbury, and is a
Chartered Member of the
NZ Institute of Directors.
Elaine Campbell
DIRECTOR
Elaine was appointed
as a director in February
2019. She has more
than 20 years’ legal
experience, primarily
focusing on financial and
capital markets, IT and
telecommunications law.
Elaine is currently General
Counsel and Company
Secretary for NZX-listed
Chorus. During her time on
the executive team at NZX
from 2002 to 2008, Elaine
led the legal workstream
for the demutualisation
and listing of NZX and
was responsible for the
insourcing of regulatory
functions, along with
chairing Smartshares.
Elaine spent five years
at the Financial Markets
Authority as Director
of Compliance before
joining AMP as an
executive director and
General Counsel. She
has previously worked
in the UK and US for
multinational Sun
Microsystems.
Lindsay Wright
DIRECTOR
Lindsay was appointed as a
director in February 2018.
She has more than 30 years’
financial services and fund
management experience
locally and globally.
Lindsay is Head of Asia and
Global Chief Operating
Officer at Matthews
Asia. She was Head of
Distribution and Co-Head
of APAC at BNY Mellon
Investment Management,
and prior to this was
Regional Head Institutional,
Alternatives and Investment
Solutions Business, Asia
Pacific with Invesco Hong
Kong Limited, CEO of
Harvest Alternatives
Investment Group, and
Co-CEO of Harvest
Capital Management
Limited. Lindsay started
her career with Deutsche
New Zealand where she
became CFO/CIO before
moving to Deutsche Asset
Management. Lindsay was
also Deputy Chair of the
board of the Guardians
of the New Zealand
Superannuation Fund.
John McMahon
DIRECTOR
John was appointed a
director in June 2019. He
has spent more than 20
years in the Australasian
equity markets,
predominantly as an equity
analyst covering a range
of industries including
telecommunications,
media, gaming, transport,
and industrials. He has
held a wide range of roles
in the financial sector
including Head of Equities
at ABN AMRO and
Managing Director of ASB
Securities. John has also
worked for CS First Boston
(now Jarden), BZW and
Morgan Stanley.
Today John manages his
own investment portfolio
via Sydney-based Auro
Investment Management,
and is Chair of NZX-
listed Solution Dynamics
and Wellington Drive
Technologies.
John has a Bachelor of
Commerce (Honours),
an MBA and is a CFA
(Chartered Financial
Analyst) charterholder.
NZX Annual Report 2019
11

Lisa Brock
CEO - WEALTH TECHNOLOGIES
Lisa joined NZX in November 2016. She has more than 25 years’ experience in
financial services covering investments, insurance and banking. Lisa previously
worked for the ASB Bank and Sovereign Insurance holding leadership roles across
finance, investments and operations. Prior to that Lisa started her career as an
auditor with PwC. Lisa is a Chartered Accountant.
Joost van Amelsfort
HEAD OF MARKET SUPERVISION
Joost joined NZX in 2014. He has considerable experience providing complex
legal and commercial advice to capital markets participants, operating both in
New Zealand and overseas. Joost previously worked at Simpson Grierson and
prior to that he was at Linklaters LLP, London and Dubai. Joost’s areas of expertise
include corporate governance, equity and debt capital markets, mergers and
acquisitions, corporate and commercial contracts, and public private partnerships.
Jeremy Anderson
EXECUTIVE DIRECTOR, DATA & INSIGHTS
Jeremy joined NZX in March 2017. He has extensive experience working in
agribusiness sectors across Australia and New Zealand. Prior to joining NZX,
Jeremy led and executed Vodafone New Zealand’s agribusiness strategy and
has had experience working in a number of sales management roles for fertiliser
and rural merchandise businesses.
GOVERNANCE & LEADERSHIP
Our Leadership Team
Mark Peterson
CHIEF EXECUTIVE
Mark joined NZX in May 2015 and became Chief Executive in April 2017. He
has 25 years’ experience in financial services covering the capital markets,
private wealth, institutional and retail banking, and insurance. Mark previously
worked as the Managing Principal of ANZ Securities, and before that held senior
management roles with First NZ Capital, ANZ and The National Bank of NZ.
Graham Law
CHIEF FINANCIAL OFFICER
Graham joined NZX in 2017. He has considerable experience working across the
financial and professional service sectors in New Zealand and the United Kingdom.
Graham previously worked as Head of Finance at ACC, and prior to this was Managing
Director and Chief Financial Officer at AMP Capital Limited. Graham brings expertise
in strategic leadership, corporate governance, and risk and financial management.
NZX Annual Report 2019
12

Benjamin Phillips
EXECUTIVE DIRECTOR, SECONDARY MARKETS & CLEARING
Benjamin joined NZX in 2014. He has a depth of experience across New Zealand
and Australia’s financial markets. He previously worked for Citi Australia as Senior
Operations Manager within its retail investments division. Prior to this, Benjamin
served 10 years at ANZ E*Trade Australia where he led its execution, clearing and
settlement business, and held several senior positions including Head of Broking
Services.
Hamish Macdonald
HEAD OF EXTERNAL RELATIONS AND GENERAL COUNSEL
Hamish joined NZX in July 2013 with extensive experience in financial regulation
and policy development work including having worked for five years at the UK
Listing Authority, the body that regulates issuers listed on the London Stock
Exchange. Before joining NZX, Hamish held legal roles in New Zealand, Australia
and the United Kingdom.
David Godfrey
CHIEF INFORMATION OFFICER
David joined NZX in 2009. He has more than 25 years of management experience
in IT development – including product-based, enterprise-level, business-critical
and 24/7 operations for a FTSE 100 Property company. He has other experience in
UK publishing, telecommunications, IT consulting and software houses.
Lara Robertson
HEAD OF HUMAN RESOURCES
Lara joined NZX in 2019. She brings extensive experience in strategic and
operational human resources management across a wide range of industries.
Before joining NZX, Lara held HR roles in Contact Energy and Creative
New Zealand. For 10 years prior, she advised NZ companies in executive
search and leadership development with Korn Ferry International.
Hugh Stevens
CEO - SMARTSHARES
Hugh joined NZX in 2018 with extensive fund management industry experience.
He is the former Head of Private Equity and Real Estate Fund Services for BNP
Paribas based in Paris, and prior to that was Head of BNP Paribas Securities Services
New Zealand. Hugh also worked for JP Morgan in London as Vice President,
Applications Development Director and Vice President, Head of Analytics.
NZX Annual Report 2019
13

CHIEF EXECUTIVE’S UPDATE
Strengthening
our core
and growth
potential
Our strategic reset in 2017
committed to creating
a more robust NZX, to
deliver improving results
and shareholder value
over the long-term – and
in turn, greater value
for our customers and
for New Zealand.
Our results in FY2019
are evidence that our
changes are delivering
gains. These underline the
benefit of refocusing on
our core business, building
deeper relationships
with our customers,
simplifying listing and
capital-raising, and
creating additional options
for ongoing growth.
Encouraging earnings growth
Operating earnings from continuing
activities of $31.4 million was up
9.8% on FY2018 with operating
margin improving to 45.1%.
Revenue growth has come from
across our business – Core Markets,
Funds Management and Wealth
Technologies. Changes to our Funds
Management business model in 2018
mean we now receive fund income
net of fund costs. However, on a like-
for-like basis, our revenues across the
organisation have still lifted 7.9%.
Costs have been carefully managed
and remain a key focus. Our Core
Markets and Corporate costs grew
in line with inflation, while we have
chosen to invest more significantly
in both our Funds Management and
Wealth Technologies businesses to
take advantage of new customer
opportunities during the period.
Our net profit after tax for the
period (NPAT) was $14.6 million, up
25.7% on FY2018. On a continuing
operations basis, NPAT was up
7.1% compared with 2018.
Capital expenditure has largely
been directed into our upgrade of
the NZX trading system and Wealth
Technologies. The new trading
system, scheduled to go live in mid-
2020, will offer increased trading
functionality and increased market
liquidity. The investment in NZX
Wealth Technologies is to transition
new customers onto our platform.
We have detailed our financial
results in the Management
Commentary (on page 39).
Greater strength at the core
The total market capitalisation of all
NZX-listed securities across equity,
fixed income and fund asset classes
now exceeds $200 billion and
sits at 67% of New Zealand GDP
(Gross Domestic Product). The clear
standout in this financial year was
the total value of capital raised, up
$9.2 billion to $18.7 billion, driven by
growth in the number and value of
debt listings, along with secondary
equity issuance. The range of debt
issuers touches every corner of
the New Zealand economy – from
tourism and banking to the electricity
sector, telecommunications, property,
primary sector, construction,
NZX Annual Report 2019
14

retirement care, social housing, and
local government infrastructure.
This uptake highlights the
potential for public debt issuance
with secure long-term funding
at attractive rates as a credible
alternative to bank debt.
Along with growth in fees from new
issuance, listing fees were bolstered
by the 24.7% lift in equity market
capitalisation over the year to more
than $161 billion – outweighing the
$3.7 billion taken out of the market
by a small number of de-listings,
principally due to takeovers.
As noted by the Chair, we have
seen a continuation of the factors
contributing to the recent lack of new
equity IPOs. However, it was pleasing
for NZX to have the opportunity to
support new listings from Cannasouth
and Napier Port Holdings. We will
be intensifying our focus around
attracting new listings and supporting
current listed companies accessing
New Zealand’s equity, debt and funds
markets. Our new Head of Issuer
Relationships, Sarah Minhinnick,
joined us after balance date and
will be spearheading this effort.
We see liquidity as a primary
measure of market integrity and price
transparency, so it was positive to
see on-market trading up 5.3% for
the year to 54.3%. This remains a key
objective for secondary markets, with
the improvement driven by strategic
decisions including pricing changes
introduced in 2018, broker trading
policy amendments to incentivise
on-market trading, and facilitation
of automated algorithmic trading.
Greater on-market liquidity assists
market efficiency and price discovery
and has provided price improvement
for small investors. A trading system
upgrade in 2020 should further assist
on-market liquidity with the delivery
of NZX’s mid-point order book.
With our objective to open up
NZX’s markets to a broader range
of participants and investors, we
welcomed Sharesies as a trading
and clearing participant in the
middle of the year – highlighting
how technology is also breaking
down some of the traditional barriers
to investment and helping attract
a new generation of investors.
Another key milestone of 2019 was
welcoming BNP Paribas Securities as
an accredited depository participant
– the first global custodian to
join NZX Clearing’s Depository
since it was founded in 2010. This
is reflected in a 383% increase
in our assets under custody in
depository to nearly $3.5 billion.
Our Dairy Derivatives business has
been the fastest-growing globally of
its type, setting records over 2019
for the highest volume trading day,
week and month. A lack of price
volatility in the underlying physical
market saw a relatively soft second
half limiting growth in the total
volume of lots traded to 3.8% for
the year. However, our NZ Milk Price
(MKP), launched in 2016, has been
a bright spot recording 65% growth
to around 100 million kg milksolids.
Consulting and development
revenue from energy projects
increased to more than $1 million
with the completion of some
significant one-off contracts for the
New Zealand Electricity Authority. We
have also announced a Co-operation
Agreement with the European
Energy Exchange (EEX) with the aim
of securing new opportunities in
the New Zealand carbon market.
Data & Insights revenue increased
10.4% to $12.8 million, with an
ongoing focus on complementing
royalties from terminals with
additional subscription and licence
revenue. The provision of market
information and data remains an
important opportunity for us.
Structural growth opportunities
Smartshares had a very strong year.
Funds Under Management (FUM)
increased to $3.97 billion – growth of
$161b
Equity market
capitalisation
95.7%
Increase in capital
raised
$3.5b
Assets under custody
in depository
5.3%
Lift in on-market
trading
1st
Te reo Māori offer
document
100m
kg of milksolids NZ
Milk Price (MKP)
lots traded
NZX Annual Report 2019
15

36% over the year. Several product
and customer initiatives contributed
to the growth and will continue to
contribute into future years. Eight
new Exchange-Traded Funds (ETFs)
were launched in the first half,
enabling New Zealanders to invest
in a broad range of global industry
sectors, environmentally and socially
responsible factors and global bonds
for the first time. Further ETFs are
planned and Smartshares is also
building a presence in the Pacific
with management of the Nauru
Superannuation Scheme, along
with two new funds established to
support retirement savings in Tonga.
Smartshares also launched New
Zealand’s first ever dual-language
offer document in te reo Māori
for a financial product. A key
component of the Ka Uruora
programme of services supporting
whānau to improve financial
wellbeing and achieve financial
independence, WhānauSaver,
provides an investment product
where individual contributions are
matched by the iwi. Ka Uruora is
currently available to approximately
20,000 registered members of the
two participating iwi organisations,
Te Kotahitanga o Te Atiawa Trust
and Te Kāhui o Taranaki Iwi Trust.
The major trend globally towards
low-cost, passive funds, plus growth
in KiwiSaver, will remain positive for
Smartshares’ revenue outlook. We
have previously signalled that this
structural growth outlook for funds
management requires ongoing
investment for product development,
distribution, and servicing growing
member numbers, as well as in
information technology to efficiently
manage and service this expansion.
Funds Under Administration with
our NZX Wealth Technologies
business have also grown strongly
to $2.3 billion, up 15.6% for the
year. We completed further product
refinement and extended the core
platform to now include Discretionary
Investment Management Services
(DIMS) functionality and pre- and
post-trade compliance capability.
In addition, we have announced
important customer wins, with
Hobson Wealth Partners and Saturn
Advice selecting our market-leading
scalable platform, which allows
wealth managers to efficiently
manage, maintain and report
on their customers’ investment
portfolios. Transitioning these
customers in 2020 will require
additional capital investment
and the timing for migration will
be confirmed when contractual
arrangements are finalised.
Unlocking capital
markets potential
During the year we contributed
extensively to reform discussions
around the settings for capital
markets. These included
sustainable financing, the Overseas
Investment Act, KiwiSaver
default provider settings, and
banking capital adequacy.
Alongside this we have enabled
NZX Participant firms to support
US investors into NZ by being
recognised as a Designated
Offshore Securities Market
(DOSM) by the United States
Securities Exchange Commission.
This is further recognition of
the high standards under which
NZX operates its markets.
NZX actively supported the
independent Capital Markets
2029 review, and we believe the
resulting recommendations will
assist market efficiency and result
in better long-term investment
outcomes. Implementing these
recommendations is important to
the future well-being of our capital
markets and delivering sustainable
long-term value for New Zealand.
At NZX we are working to grow
our capital markets and make them
more accessible and relevant to
New Zealanders. Our performance
this year – NZX’s 150th anniversary
– has been made possible by the
many people, past and present,
who have been part of developing
and reshaping the business.
Thank you to everyone who has
contributed – it is a privilege to
lead an organisation that plays a
pivotal role within New Zealand’s
capital markets, for Kiwi investors
and savers, and for our country.
Our progress in 2019 gives me
absolute confidence that we
are succeeding in building a
quality organisation, focused in
the right areas and capable of
delivering our future plans.
Mark Peterson
Chief Executive
“At NZX we are working to grow our capital markets and make
them more accessible and relevant to New Zealanders.”
NZX Annual Report 2019
16

OUR BUSINESS MODEL
How we create
value
OUR CUSTOMERS
We supply a wide range
of quality financial
services to our customers
in New Zealand and
around the world – from
operating capital markets
infrastructure to managing
investors’ assets, and
providing unique insights.
NEW ZEALANDERS
At the core of the capital
markets ecosystem, we
offer businesses access
to capital in order to
prosper and future-proof
the country’s economy.
That creates jobs and
opportunities, alongside
facilitating growth in
personal wealth through
investment and savings.
SUSTAINABILITY
The nature of NZX’s
business means our
use of resources and
emissions are relatively
small, however we have
a key role in supporting
the growth of sustainable
finance that is necessary
to address climate change
and deliver a step-change
in environmental outcomes
for New Zealand.
OUR PEOPLE
NZX has a strong brand in
the employment market,
reflected in the talent
we have been able to
attract to our organisation
and also the positive
engagement that drives
performance and delivery
of our strategic goals.
As New Zealand’s Exchange, we are proud of our record
in supporting the growth and global ambitions of local
companies over more than 150 years. We recognise that
our future success, and delivering on our strategic goals,
requires integrated thinking within our business and
alignment with the expectations of our key stakeholders.
Consistent with the guiding principles of Integrated
Reporting we have highlighted four pillars (Our customers,
New Zealanders, Sustainability, Our People), which are of
primary importance to creating sustainable value for our
shareholders, across the capital markets ecosystem, for
Kiwis and New Zealand as a whole.
STRATEGIC GOALS
WHAT MATTERS MOST
GROWTH
OPPORTUNITIES
REFOCUS
CORE
GET

FIT
MAXIMISE

OPTIONS
NZX Annual Report 2019
17

OUR CUSTOMERS
Supporting growth and
global ambitions
We supply a wide range
of quality financial
services to our customers
in New Zealand and
around the world – from
operating capital markets
infrastructure to managing
investors’ assets, and
providing unique insights.
Every day, our customers access NZX
markets and services. Ensuring we
understand our customers, are close
to their needs, and delivering to
their expectations was a significant
focus for the business in 2019.
In the equities area, a particular
highlight of the year was working
alongside our new issuers to
help them prepare for the listed
environment. The Napier Port IPO is
an illustration of the value that can
be unlocked from local government
assets to help fuel regional growth.
Another new entrant to the NZX Main
Board was Cannasouth. The IPOs
reflected the diversity of the equities
market – one being a long-established
infrastructure investment and the
other a start-up in pre-revenue phase.
Along with promoting listings and
celebrating issuer milestones in 2019,
we had an ongoing educational
focus on sharemarket investing
and provided opportunities for our
listed companies to build profile
at our retail investor events in
Auckland, Wellington, Christchurch,
Hamilton and Tauranga.
At the end of the financial year, we
announced that Sarah Minhinnick
would be joining the company in early
2020 as Head of Issuer Relationships
– continuing our core strategic
focus on attracting new listings and
supporting current listed companies
in accessing New Zealand’s equity,
debt and funds markets.
The increase and diversity in
capital raising during 2019
clearly shows our capital markets
are serving our customers and
helping fuel their growth.
One of the world’s leading
international banks, BNP Paribas,
expanded its New Zealand credentials
by becoming the first global
custodian to join the NZX Clearing’s
Depository. Wellington-based
Sharesies was also accredited as an
NZX trading and clearing participant.
NZX’s Dairy Derivatives market
continued to grow in 2019 supported
by client engagement and education
programmes. In 2019, NZX’s
global dairy derivatives market
traded 358,928 lots, up 3.8% on
2018. Participation of active users
increased 11%. Milk price contracts
grew 65% in annual volumes.
Most dairy derivative traders are
based offshore, and NZX reaches
many of our key customers at
our annual Singapore Dairy
Seminar, which this year drew
more than 175 attendees. We also
presented at the Dairy Industry
News conference in London.
A first during 2019 was a dairy price
risk-management roadshow to Cairo
and Dubai to educate 20 significant
wholesale dairy buyers in the region.
To increase the accessibility of dairy
derivative data, we have improved
the online functionality and data
provision, including 30-day dairy
NZX Annual Report 2019
18

data sets. New video tutorials
on nzx.com show how the Dairy
Derivatives market works, and we
have also added a derivative margin
calculator to help our customers.
As the dairy derivatives market has
grown, so have our dairy research and
data services from our Data & Insights
team, which are sold to a wide range
of interested parties, from dairy
farmers to some of the largest dairy
producers and traders in the world.
In 2019 the Data & Insights team
produced another Dairy Outlook
report, focusing on the potential
impacts of alternative proteins
and other consumer trends
shaping the future landscape for
the traditional dairy industry.
Our data and insights on the NZX
markets is sold through a range
of channels to distributors, market
participants, issuers, investors,
fund managers and banks.
To strengthen our client relationships,
Data & Insights has been
working on simplified contracts,
ensuring that clients are licenced
appropriately and are complying
with NZX terms and conditions.
An important internal development
during the year was the
implementation of Salesforce
at NZX. The first phase of the
implementation has been completed,
with all customer-facing teams having
access to the Customer Relationship
Management (CRM) software to
serve our customers better.
While continuing the progressive
onboarding of existing clients, our
NZX Wealth Technologies business
has secured new customers for its
“wrap” platform functionality that
enables investment advisors to
manage and seamlessly trade their
clients’ assets. During 2019 Hobson
Wealth Partners and Saturn Advice
agreed to move to the Wealth
Technologies platform. Growth in
funds under administration (FUA)
was 15.6% in 2019 to $2.3 billion.
An IPO showcase
A 150-year-old business
with double-digit growth
forecasts, supporting
trade and tourism in
heartland New Zealand,
sounds like the perfect
prospect for listing on the
New Zealand Exchange.
And that’s what it proved to
be, with the start of trading
in Napier Port Holdings’
shares on 20 August 2019.
Tooting tug-boats heralded the
arrival of “NPH” on the NZX
Main Board – the culmination
of a five-year journey and close
partnership between the Port,
Hawke’s Bay Regional Council
and the broader community
working toward a shared goal.
For NZX’s Regulatory and Issuer
Relationships teams the fanfare of
the listing ceremony at the Port’s
Breakwater Road site in Napier
– including the presentation of
a mere pounamu to Chairman
Alasdair MacLeod – was a
celebration of the success of a
close working relationship forged
in the weeks leading up to the
initial public offer (IPO), tailored
training and direct support
to ensure a smooth transition
to life as a listed company
A showcase example of the
potential identified in the Growing
New Zealand’s Capital Markets
2029 report for local government
to access alternative funding
options for infrastructure – the
Napier Port IPO raised $234
million of equity capital and freed
up more than $100 million of
cash for the Hawke’s Bay Regional
Investment Company to support
long-term economic growth.
Along with retaining majority
community ownership and
protecting ratepayers from the
costs of port development, a
priority share pool allowed more
than 7,500 locals and 97% of
Napier Port employees to take a
direct stake in the iconic business.
CASE STUDY
Napier Port CEO Todd Dawson
and Chairman Alasdair MacLeod
NZX Annual Report 2019
19

NEW ZEALANDERS
Building enduring
wealth for all
At the core of the capital
markets ecosystem, we
offer businesses access to
capital to prosper, and to
future-proof the country’s
economy. That creates
jobs and opportunities,
alongside facilitating
growth in personal wealth
through investment and
savings.
One of our primary areas
of focus is on broadening
investment options,
and making our capital
markets more accessible
and relevant to Kiwis.
The benefits are not
isolated to “investors”,
with around three million
New Zealanders already
participating in our capital
markets through KiwiSaver
– with this nest-egg
expected to grow four-fold
over the next 10 years to
more than $200 billion.
During the year we seized
opportunities – such as the review
of KiwiSaver default provider
arrangements – to advocate for
changes that we believe will deliver
more choice, greater flexibility
and also ensure members are not
disadvantaged by investment
predominantly in lower growth assets.
While New Zealand’s capital markets
have delivered strong returns
for investors and savers, market
development initiatives are an
ongoing priority. One of the most
significant initiatives in 2019 was
simplifying the market structure and
implementing the first new rule-set in
15 years. This has stimulated capital
raising and led to much greater
diversity, which aligns our product
more closely with the investment
requirements of KiwiSaver funds.
Alongside NZX’s focus on delivering
internal initiatives, the Capital
Markets 2029 report has brought the
capital markets ecosystem together
to deliver a common vision and
purpose for New Zealand’s capital
markets.
The aim is to grow the market
capitalisation of New Zealand’s equity
markets to a higher ratio of GDP
and to maximise the opportunities
in those areas where NZX’s markets
are performing well or have natural
advantages – such as supporting the
need for infrastructure investment,
green finance, and continuing
the momentum in our strongly
performing debt market.
The report lists 42 recommendations
to unlock stronger capital markets
for all New Zealanders, with 18
recommendations prioritised. The
recommendations canvas topics such
as KiwiSaver, regulation, public sector
assets and infrastructure, promotion
of public markets, tax, new products
and the impact of technology. Key
outcomes sought are:
•

Raising the level of individual

participation and engagement in
capital markets
•

Of
fering more choice of investment
for individuals, both within
KiwiSaver and more generally
•

Cr
eating greater wealth for
New Zealanders.
We continue to see positive
trends in confidence from retail
investors. The UBS Evidence Lab
NZ Consumer Survey published
in late 2019 showed that there
has been a statistically significant
improvement in people’s propensity
to invest in stock markets, with 39%
of respondents intending to invest
savings in the stock markets. NZX
also recorded a 15% increase in retail
trading participation for 2019.
On-market trading activity, the key
indicator of liquidity, reached a record
in December 2019 at 61.5%, and was
up over the full year. We have also
seen pricing and policy amendments
translate into tangible value for
investors of about $40 per trade, or
more than $250,000 for the year.
With Wellington-based investment
platform, Sharesies, which actively
targets retail investors, joining
the exchange as a participant we
have made further progress on our
NZX Annual Report 2019
20

A first for
te reo Māori
When your aim is to improve
the financial wellbeing
of New Zealanders, it’s
important to be speaking
the same language.
That was the intent of Ka Uruora
WhānauSaver – to open up new
conversations with a reo Māori
version of the offer document
tailored for Te Kotahitanga o
Te Atiawa Trust and Te Kāhui o
Taranaki Iwi Trust members.
Beyond the solutions to address
significant linguistic and regulatory
challenges around this ground-
breaking Product Disclosure
Statement, an indelible measure
of the success for our Smartshares
team were the kuia (female elders)
listening keenly in the audience at
the launch event at the Novotel
Hotel in New Plymouth with a
bunch of WhānauSaver sign-up
forms – for their children and
grandchildren.
This bespoke financial product
was designed to ensure a deeper
understanding of the offer to
nurture inter-generational wealth,
and is a celebration of partnership
– that extended to Māori language
experts, Te Taura Whiri i te Reo
Māori, the Federation of Māori
Authorities, and the Financial
Markets Authority.
As part of the wider Ka Uruora
programme of services,
WhānauSaver is currently available
to about 20,000 registered
members of the two participating
iwi organisations. It allows for iwi
contributions to each member’s
savings account, and withdrawals
for tertiary education, first-home
purchase, and retirement at the
age of 55.
Through this project Smartshares
has established a model for the
financial services industry to actively
support Māori customers’ language
needs, awakening a new domain for
te reo in the modern era.
CASE STUDY
ambition of creating a more vibrant
capital markets ecosystem.
In welcoming Sharesies as an NZX
trading and clearing participant
we have seen how technology and
innovation can remove barriers and
open up market access to a wider
range of New Zealand investors.
We reported at the half-year, how the
increased range of Exchange-Traded
Funds (ETFs) is offering investors
access to a broader range of sectors
and asset classes. This has been led
by our Smartshares business, which
at year-end had nearly 120,000 New
Zealanders invested in Smartshares’
products, either directly or through
our SuperLife schemes.
Smartshares currently offers a range
of more than 30 product choices –
from New Zealand and global bonds,
and exposure to the local cash
market, to different geographies,
along with environmentally and
socially responsible global equities,
megatrends and passive global
bonds. This allows investors to easily
create their own portfolios with a
high level of diversification.
Through Smartshares we also
manage the workplace-based saving
schemes of employees of 120 large
New Zealand companies. Operating
outside of the KiwiSaver framework,
these financial wellbeing schemes
offer employees the ability to save for
a range of short- or long-term goals.
During the year Smartshares held 16
investment seminars on-site at our
members’ workplaces – including
manufacturing sites, campuses
and warehouses from Tokoroa
to Invercargill.
Members of Te Atiawa and Taranaki Iwi welcoming the launch of WhānauSaver
NZX Annual Report 2019
21

SUSTAINABILITY
Financing a
brighter future
The nature of NZX’s
business means our
use of resources and
emissions are relatively
small. However, we have
a key role in supporting
the growth of sustainable
finance that is necessary
to address climate change
and deliver a step-change
in environmental outcomes
for New Zealand.
Our primary environmental
impacts arise from energy
consumption (1.5%) in our offices
and data centres in Auckland and
Wellington, domestic land (0.8%)
and domestic air travel (38.4%)
and international flights (55.4%),
with the balance indirectly from our
supply chain and waste disposal.
A vital part of our role as New
Zealand’s Exchange is to enable a
well-understood and viable flow
of capital into investments that
our country needs for sustainable
growth, including projects that
address climate change.
We consider that environmental,
social and governance (ESG)
reporting acts as a foundation for
New Zealand’s development of a
sustainable and climate-resilient
economy, by enabling investors to
make informed investment decisions
based on sustainability considerations
– including an entity’s climate-
related risks and opportunities.
NZX is a partner exchange of the
Sustainable Stock Exchange initiative,
making a voluntary commitment
to promote ESG disclosure to our
issuers. We have released an ESG
Guidance Note to assist issuers in
understanding how to interpret
recommendation 4.3 of the NZX
Corporate Governance Code (Code),
and the benefits and importance
of ESG (including climate-related)
reporting. This year we further
promoted awareness among
New Zealand issuers through
the release of an assessment
of current practice: Reporting
Uptake in S&P/NZX 50 Index and
Investor Perspective 2019.
As part of the World Federation
of Exchanges (WFE), our team at
NZX has also been contributing
to a set of Sustainability Principles
for derivative products, another
way in which exchanges can
contribute to advancing the
sustainable finance agenda.
NZX is also a member of the
Aotearoa Circle’s Sustainable
Finance Forum’s Leadership Group,
supporting the work undertaken by
the Sustainable Finance Forum, and
the recommendations from Capital
Markets 2029, that will assist in
creating a market environment to
support sustainable environmental
wellbeing in the long term. In our
view, New Zealand has a unique
2019 Greenhouse gas inventory
ScopeEmissions sourcesTonnes C0
2
-e*
Scope 1 Rental cars (km travelled)3.6
Scope 2 Electricity purchased (kWh)6.5
Scope 3 Air travel
•

Domestic167.5
•

Short haul inter
national35.3
• Long haul international206.5
Accommodation15.3
Transmission and distribution losses for purchased electricity0.5
Paper disposal1.3
Total436.5
* C0
2
– equivalent emissions calculated using Ministry for the Environment 2019 Emissions Factors. Air travel emissions
calculated with radiative forcing.
NZX Annual Report 2019
22

opportunity to demonstrate
global leadership, by developing
a reporting regime that delivers
competitive advantages for
New Zealand entities, as well as
broader environmental benefits.
Financial products, such as green
bonds, and the environmentally
and socially responsible Exchange-
Traded Funds (ETFs) offered by
Smartshares, are responding to
the growing international trend
towards sustainable investment and
investors who are more conscious
of where they put their money.
We welcomed our first green bond
listing on the NZX Debt Market in
June 2018. This has been followed
by others, along with the first NZX-
listed carbon fund – supporting the
strategic commitment to grow our
range of sustainable investment
options for New Zealand investors.
Global issuance of green bonds has
quadrupled since 2014, setting a
record US$200 billion in 2019. In
New Zealand while the green debt
market has risen year-on-year, it
remains small and under-utilised –
despite an abundance of potential
issuers and strong investor interest.
In our 2019 submission to the
Financial Markets Authority on
Green Bonds and Other Responsible
Investment Products we lent our
support to initiatives that provide
greater clarity around the conduct
and disclosure practices for green,
ethical and responsible investment
products. We said that we considered
these products to be crucial to
New Zealand’s ability to maintain
its international standing through
responsible investment practices.
To support the development and
growth of the New Zealand carbon
market, NZX announced in December
2019 a Co-operation Agreement
with the European Energy Exchange
(EEX), which has deep expertise in
the European and North American
emissions markets. Beyond the
New Zealand carbon market,
both NZX and EEX will be jointly
exploring areas for co-operation
in other regions or asset classes.
Driving green
bonds
In a fast-growing
Auckland aspiring to
be “The World’s Most
Liveable City” there is a
delicate balance between
economic, social and
environmental outcomes.
The acute challenge of reducing
the dependence on private
motor vehicles – and transport
that contributes about 35%
of the city’s Greenhouse
Gas (GHG) emissions – has
been met with a strong
commitment to transformative
action, funded in part by New
Zealand’s first green bond.
The trail-blazing move by
Auckland Council in June 2018
to raise $200 million for funding
projects that will benefit the
environment, has been followed
by another $150 million green
bond this year – earmarked
for supporting sustainable
development targets and goals,
including cycleways and electric
trains. Further investment in
electrification of the passenger
rail network will build on
the 25,000 tonnes of annual
emissions already cut from this
source, while helping grow
patronage with an attractive
and efficient transport choice.
Global issuance of green bonds
is growing rapidly, topping
US$200 billion for the first time
in 2019. With an abundance
of potential issuers in New
Zealand, and strong investor
interest, a key focus for NZX is
supporting the development
of appropriate disclosure and
conduct settings for green and
responsible investment products.
We see these products as
creating an international
competitive advantage for New
Zealand, given the opportunities
to use the proceeds in renewable
energy, green buildings, waste
management, sustainable
water management and land-
use (including sustainable
forestry and agriculture),
clean transportation and
biodiversity conservation and
climate change adaptation.
CASE STUDY
One of Auckland’s
electric trains, helping
reduce transport
emissions in the city
(Photo courtesy of
Auckland Council)
NZX Annual Report 2019
23

OUR PEOPLE
Investing in a
winning team
NZX has a strong brand in
the employment market,
reflected in the talent we
attract to our organisation,
and also in the positive
engagement that drives
performance and delivery
of our strategic goals.
An important focus in 2019
was on ensuring we have
the right people, structures
and capacity to deliver on
our priorities – including
serving our customers.
We continued the
momentum in lifting
employee engagement to
new heights – as shown in
our Gallup Engagement
Score in 2019 of 4.15 (on
the 5-point scale).
With 94% of our people having
their say, there is real substance
to the voice behind initiatives
we have underway, and planned,
to ensure we offer a compelling
employee experience.
We believe that by addressing
these opportunities we will ensure
everyone in our team understands
how they can contribute and be
their best at NZX – with a direct
correlation to employee satisfaction,
retention and advocacy, along with
business outcomes. Our people
say NZX has a caring culture, they
know what is expected of them,
they are appreciated by their
colleagues and have opportunities
to progress their careers.
We were able to validate that
NZX provides an inclusive
workplace for our employees by
expanding our engagement survey
questions and demographics.
Diversity and inclusiveness were
the foremost of our attention
during the year. We set three
objectives for 2019: to ensure
we have measures encouraging
diversity in our recruitment
pipeline; to explore engagement
by ethnicity; and expand the reach
of our unconscious-bias training.
During the year we invited all
employees to an unconscious-bias
workshop after running successful
workshops for hiring managers
the previous year. We place a
strong emphasis on our place as
New Zealand’s Exchange (Te
Paehoko o Aotearoa) and recognised
the importance of marking
Te Wiki o te reo Māori (Māori
Language Week) running te reo
Māori workshops for our team.
We remain vigilant around health,
safety and wellness – maintaining
health and safety committees,
safety initiatives and programmes to
support our employees. We manage
annual leave across the business
in order to support the wellbeing
of our people and mitigate the
potential for work-related stress.
NZX provides proactive services
including offering influenza
vaccinations, access to EAP
Employee Assistance Programme
(EAP) counselling and workspace
ergonomics assessments. In 2019
we implemented a Domestic
Violence Leave Policy in line
with the new legislation. Mental
Health Awareness workshops
were also offered to increase
awareness and support for people
experiencing mental health issues.
Through efficiency gains and
automation in selected areas, we
have been able to reinvest in new
customer-facing roles and expand
business development teams. Twelve
new roles were added in NZX Wealth
Technologies and four new roles
in Smartshares. An additional 14
fixed-term project roles were added
to support strategic initiatives.
NZX Annual Report 2019
24

We have strengthened
organisational capability in a range
of leadership roles around the
company, particularly in senior
customer-centric roles. We made
a conscious decision to invest in
adding high capability and more
senior experience in key functional
leadership roles to add depth and
strength where it is needed most.
Our people have been focused
on delivering against the business
goals and making sure they have
the capacity and clarity of purpose
to do so. We have prioritised
operational and financial delivery,
and living our company values.
We have accelerated our
performance culture through
the implementation of a new
management system and practices,
which have a heightened focus
on business goals and teamwork.
We also successfully implemented
the Salesforce CRM platform with
training workshops, as part of a drive
to align our people more closely
with the needs of our customers.
Passionate people
There may be 8,230km
and a stark difference
between the Gore RSA
and the opulence of
the St Regis Hotel in
Singapore but Julia
Jones moves seamlessly
between these worlds.
Only a week before presenting
amid the glittering chandeliers
and marble surroundings at
NZX’s Global Dairy Seminar,
our Head of Analytics was in
Gore at the Beef + Lamb winter
seminar talking with local farmers
about the changing landscape
and trends in food production
and consumer demand.
Julia’s passion for helping other
Kiwis succeed, and a contagious
positive energy, takes her to
a calendar of events – sharing
insights and engaging with
a broad range of industry
stakeholders and NZX customers.
Along with the speaking roles and
media commentary to spread the
good word, there were points
of particular pride for Julia this
year with the release of two
white papers with a sustainability
focus: the 2019 New Zealand
Dairy Outlook and another on
the uptake of Environmental,
Social and Governance (ESG)
reporting among New Zealand
listed companies. She sees
the reports as an opportunity
for NZX to engage across the
spectrum of sector interests
and capital markets ecosystem
– stimulating discussion and
showcasing best practice.
In the year ahead, Julia has her
eyes on the tech industry, and the
potential to support early-stage
companies with their ambitions
and fuel growth in New Zealand’s
third-largest and fastest growing
export industry. She will also
be keeping up a strong voice
on the importance of ESG and
diversity as key ingredients to
the long-term success of New
Zealand businesses and the
strength of our economy.
CASE STUDY
“Julia has her eyes on the tech industry, and the potential to support early-stage companies
with their ambitions and fuel growth.”
NZX Head of Analytics
Julia Jones
NZX Annual Report 2019
25

NZX Annual Report 2019
26

Corporate
Governance
NZX Annual Report 2019
27

NZX Annual Report 2019
28
Corporate governance
N
Z
X’s shares are quoted on the NZX Main Board. NZX
also has a subordinated note quoted on the NZX Debt
Market. In this part of the annual report, we disclose
the extent to which we have followed the
recommendations set out in the NZX Corporate
Governance Code 2020 (NZX Code). The information
in this section is current as at 31 December 2019 and
has been approved by the board of directors of NZX.
NZX’s board is committed to maintaining the highest
standards of governance by implementing a
framework of structures, practices and processes that
it considers reflect best practice. NZX’s corporate
governance policies and procedures, and its board
and committee charters, document the framework and
have been approved by the board.
The framework has been guided by the
recommendations set out in the NZX Code and the
requirements set out in the listing rules. The board’s
view is that NZX’s corporate governance framework
has followed these recommendations and
requirements in the year to 31 December 2019
(reporting period).
The corporate governance framework is regularly
reviewed by the board against the corporate
governance standards set by NZX, any regulatory
changes, and developments in corporate governance
practices.
The key corporate governance documents referred
to in this section are available from NZX’s investor centre.
NZX Code
Principle 1 – code of ethical behaviour

Directors should set high standards of ethical
behaviour, model this behaviour and hold
management accountable for these standards
being followed throughout the organisation.
Code of Conduct
NZX’s Code of Conduct sets out the standards of
co
nduct expected of directors (including members of
committees) and employees (including secondees,
contractors and consultants). The purpose of the code
is to underpin and support the values that govern our
individual and collective behaviour.
Training on the code is included as part of the
induction process for new directors and employees.
The code requires directors and employees to
promptly report material breaches of the code and
sets out the procedure for doing so.
The code is reviewed at least every two years and was
last reviewed in November 2019.
Financial Products Trading Policy
NZX’s Financial Products Trading Policy sets out
NZX’s restrictions on its directors and employees
buying or selling financial products. In particular:
• directors and employees may not buy or sell NZX’s
shares in the “blackout” periods set out in the
policy (these periods occur prior to the release of
NZX’s financial results to the market); and
• outside of a blackout period, directors and
employees must obtain consent to buy or sell
NZX’s shares.

NZX Annual Report 2019
29
Because NZX is a licensed market operator, NZX’s
senior managers and employees with access to
market sensitive information must obtain consent to
buy or sell financial products quoted on a market
operated by NZX.
Training on the policy is included as part of the
induction process for new directors and employees.
The policy is reviewed at least annually and was last
reviewed in May 2019.
Principle 2 – board composition and
performance

To
ensure an effective board, there should be a
balance of independence, skills, knowledge,
experience and perspectives.
Board charter
NZX’s board operates under a written charter, which
sets out the responsibilities and framework for the
operation of the board.
The charter is reviewed at least every two years and
was last reviewed in May 2018.
Management of NZX on a day-to-day basis is
un
dertaken by the Chief Executive Officer and senior
managers through a set of delegated authorities that
clearly define the Chief Executive Officer’s and senior
managers’ responsibilities and those retained by the
board. The delegated authorities are set out in NZX’s
Delegated Authority Policy. The policy is reviewed at
least annually and was last reviewed and updated in
January 2020.
The board meets its responsibilities by receiving
reports and plans from management and through its
annual work programme. The board uses committees
to address issues that require detailed consideration.
Committee-work is undertaken by directors (and, in
the case of the Conflicts Committee and Regulatory
Governance Committee, non-director members who
have specialist knowledge and experience). However,
the board retains ultimate responsibility for the
functions of its committees and determines their
responsibilities.
Nomination and appointment of directors
NZX has a Nomination Committee, which is
responsible for reviewing candidates for appointment
and re-election to the board and committees, and
making recommendations to the board. An
independent recruitment consultant provides
assistance in preparing a list of candidates for the
committee’s consideration. The committee meets with
preferred candidates before making a
recommendation to the board. Checks are done on
candidates in accordance with NZX’s Fit and Proper
Policy. Key information about candidates is provided
to shareholders in the notice of annual meeting.
At each annual meeting, current directors retire by
rotation as required by the NZX Listing Rules and are
eligible for re-election. Under the updated Listing
Rules a director must seek re-election at least every
three years. Any directors appointed since the
previous annual meeting must also retire and are
eligible for election.
Board Composition
Board Structure
Number of
DirectorsGender Diversity
Average Director
Tenur
e
Average Director
Age
Diversity
Characteristics
Single tier86 men,
2 women
2 years, 9 months53.1Education
qualifications,
professional
experience,
personal
achievements,
geography
, gender,
age

NZX Annual Report 2019
30
NZX uses a skills matrix when selecting candidates for
a
p
pointment and re-election to the board. The board
developed the skills matrix in 2016 in conjunction with
governance services firm Propero Consulting and it
was last updated in 2019. The skills matrix outlines the
ideal mix of skills, experience and diversity needed
to ensure the board is equipped to provide the high
standard of corporate governance required to lead
NZX. If the board determines that new or additional
skills are required, training is completed or a formal
recruitment process is undertaken.
The matrix assesses directors against the following
criteria:
• strategy and performance – expertise in respect of
stock exchanges, data information, media,
technology and business operations;
• quality committee leadership – skills to serve on
NZX’s committees; and
• connectivity to stakeholder groups – connectivity
to stakeholder groups such as regulators or
government, the Electricity Authority, listed issuers,
brokers or institutional and retail investors.
Based on these criteria, the board considers that its
members currently have the balance of
independence, skills, knowledge, experience and
perspectives necessary to lead NZX.
Written agreement
NZX provides a letter of appointment to each newly
appointed director setting out the terms of their
appointment. The letter includes information
regarding expected time commitments, the board’s
responsibilities, remuneration, independence
requirements, disclosure requirements, confidentiality
obligations, indemnity and insurance provisions,
intellectual property rights and cessation of
appointment.
Director information
The board currently comprises eight directors with
diverse backgrounds, skills, knowledge, experience
and perspectives. All directors are non-executive and
independent.
Information in respect of directors’ ownership
interests is available on page 96. NZX’s directors are
not formally required to own NZX shares, but are
encouraged to do so.
Lead independent director
Lindsay Wright is NZX’s lead independent director in
the event that James Miller is conflicted on any
matters that arise.
Further information about NZX's directors
are available on pages 10 to 11.
Diversity
NZX’s Diversity and Inclusion Policy sets out how NZX
will set measurable objectives for achieving diversity
and inclusion, and how it will assess its progress
towards achieving these objectives. The policy also
sets out the diversity and inclusion initiatives NZX
currently has in place, together with the initiatives it
is currently implementing.
The policy is reviewed at least annually and was last
reviewed in February 2019. Further details on NZX’s
diversity and inclusion are outlined on pages 7 and 24.
Director Training
Directors are expected to understand NZX's
operations and undertake training and education to
enable them to effectively perform their duties. This
includes:
• attending management presentations in respect
of NZX’s operations
• attending presentations on changes in governance,
legal and regulatory frameworks
• attending technical and professional development
courses
• attending presentations from industry experts and
key advisers
• attending the World Federation of Exchanges
(WFE) conferences of which NZX is a member
• receiving regular educational materials

NZX Annual Report 2019
31
NZX continues to support the Institute of Directors’
Future Director Programme with Hayley Buckley
r
e
placing Anna Scott as NZX’s Future Director for 2020.
Assessment of Board Performance
A detailed board evaluation has been conducted in
January 2020 to review the performance of the board
and committees in 2019 across key areas, including
strategy, risk management, board processes and
monitoring organisational performance. This process
was run by external and independent governance
experts. The key findings of the process, including
questionnaire responses were reviewed by the board
and next steps are being considered.
The review found that NZX’s board and management
are aligned strategically, including with respect to
growth businesses. The review also found that
progress has been made since the 2018 review in a
number of governance areas including board
committees, stakeholder engagement and risk
management. In addition a number of opportunities
were also identified for the board to continue to
develop and enhance performance.
Separation of the Chairperson and Chief
Executive Officer
NZX’s board chair is a different person to NZX’s Chief
Executive Officer.
Principle 3 – committees

The board should use committees where this
wi
ll enhance its effectiveness in key areas, while
still retaining board responsibility.
Committees and members
The board uses committees where specialist skills and
experience is required. Six standing committees have
been established to assist the board on matters falling
within their areas of responsibility. Each committee
has authority to undertake any activity set out in its
charter or as authorised by a separate resolution of the
board.
The board and six committees and the members of
each as at 31 December 2019 are set below.
Board and committees (as at 31 December 2019)
Board of Directors
• James Miller (Chair)
• Frank Aldridge
• Nigel Babbage
• Richard Bodman
• Elaine Campbell
• Jonathan Macdonald
• John McMahon
• Lindsay Wright
Commitees
Core CommitteesRegulatory Committees
Audit & Risk
Committee
HR and
Remuneration
Committee
Nomination
Committee
Clearing
Committee
Regulatory
Governance
Committee
Conflicts
Committee
Lindsay Wright
(Chair)
Frank Aldridge
(Chair)
James Miller (Chair)Nigel Babbage
(Chair)
David Flacks (Chair)Jayshree Das (Chair)
Richard BodmanJonathan
Macdonald
Frank AldridgeRichard BodmanNigel BabbageNigel Babbage
Jonathan
Macdonald
James MillerLindsay WrightElaine CampbellElaine CampbellRichard Bodman
John McMahonJohn McMahonJohn McMahonElaine Campbell

NZX Annual Report 2019
32
Director meeting attendance
Core CommitteesRegulatory Committees
DirectorBoard
Audit and Risk
Committee
Human Resources
and
Remuneration
Committee
Nomination
Committee
Clearing
Committee
Regulatory
Governance
Committee
Conflicts
Committee
Frank Aldridge
1
7/72/23/31/1–––
Nigel Babbage6/7–––4/44/42/2
Richard Bodman
2
7/76/6––4/41/12/2
Elaine Campbell
3
6/6–––3/33/31/1
Jon Macdonald
4
6/74/43/3––1/11/1
John McMahon
5
3/43/32/2–1/2––
James Miller7/76/63/31/1–––
Lindsay Wright
6
7/76/6–1/10/1––
1 Frank Aldridge retired from the Audit and Risk Committee on 4 April 2019.
2Richar
d Bodman retired from the Regulatory Governance Committee on 4 April 2019.
3 Elaine Campbell was appointed as a director effective 18 February 2019. Elaine Cambell joined the Regulatory Governance Committee, Clearing Committee and Conflicts
Committee on 4 April 2019.
4 Jon Macdonald retired from the Regulatory Governance Committee, Conflicts Committee and Nomination Committee and was appointed to the Audit and Risk Committee on
4 April 2019.
5 John McMahon was appointed as a director effective 26 June 2019. John McMahon was appointed to the Audit and Risk Committee, Clearing Committee and HR and Remuneration
Committee on 17 July 2019.
6 Lindsay Wright retired from the Clearing Committee and was appointed to the Nomination Committee on 4 April 2019.
External committee member meeting attendance
Committee
memberBoard
Audit and Risk
Committee
Human Resources
and Remuneration
Committee
Nomination
Committee
Clearing
Committee
Regulatory
Governance
Committee
Conflicts
Committee
Jayshree Das––––––2/2
David Flacks–––––4/4–

NZX Annual Report 2019
33
Audit and Risk Committee
N
Z
X’s Audit and Risk Committee assists the board to
fulfil its responsibilities in relation to the NZX Group’s
financial practices and reporting, internal control
environment, internal audit, external audit and risk
management. The committee operates under a written
charter, which sets out the responsibilities and
framework for the operation of the committee. The
charter is reviewed at least every two years and was
last reviewed in May 2018.
The committee must be comprised solely of NZX
directors, have a minimum of three members, have a
majority of members that are independent directors
and have at least one director with an accounting or
financial background. The makeup of the current
members of this committee complies with this
recommendation.
The committee’s chair, Lindsay Wright, holds a
bachelor of commerce degree from the University of
Auckland majoring in finance and accounting and has
previously held the role of CFO of Deutsche New
Zealand (Previously Bankers Trust) and was also
formerly Chair of the Audit Committee for the New
Zealand Superannuation Fund. Lindsay’s full
biography is on page 11.
The committee chair and the board chair are different
people.
Management may only attend meetings at the
invitation of the committee and the committee
routinely has committee-only time and time with the
external and internal auditors without management
present.
Human Resources and Remuneration Committee
NZX’s Human Resources and Remuneration
Committee assists the board in overseeing the
management of the human resources activities of
NZX, including the remuneration of employees. The
committee operates under a written charter, which
sets out the responsibilities and framework for the
operation of the committee. The charter is reviewed
at least every two years and was last reviewed in May
2018.
The committee must have a majority of members that
are independent directors. The makeup of the current
members of this committee complies with this
recommendation.
Management may only attend meetings at the
invitation of the committee.
Nomination Committee
NZX’s Nomination Committee assists the board in
identifying and recommending to the board
individuals for nomination as directors and members
of committees. The committee operates under a
written charter, which sets out the responsibilities and
framework for the operation of the committee. The
charter is reviewed at least every two years and was
last reviewed in May 2018.
The committee must have a majority of members that
are independent directors. The makeup of the current
members of this committee complies with this
recommendation.
Management may only attend meetings at the
invitation of the committee.
Other Committees
Clearing Committee
The Clearing Committee assists the board in ensuring
that New Zealand Clearing Limited has adequate risk
capital to meet its obligations as the central
counterparty clearing house for NZX Clearing. The
committee operates under a written charter, which
sets out the responsibilities and framework for the
operation of the committee. The charter is reviewed
at least every two years and was last reviewed in
May 2018
The committee must have a minimum of three
members. The committee may have a non-director
as a member (who must have skills and experience
relevant to the operation of the committee). The
makeup of the current members of this committee
complies with this recommendation.

NZX Annual Report 2019
34
Conflicts Committee
The Conflicts Committee assists the board in
overseeing the effectiveness of NZX’s policies and
procedures for ensuring that any conflicts of interest
within the NZX Group are appropriately managed,
including any conflicts between NZX’s regulatory
responsibilities and its commercial interests. The
committee operates under a written charter, which
sets out the responsibilities and framework for the
operation of the committee. The charter is reviewed
at least every two years and was last reviewed in
November 2019.
The committee must have a minimum of three
members, have a minimum of two directors as
members and must have one non-director as a
m
e
mber (who has skills and experience relevant to the
operation of the committee). The makeup of the
current members of this committee complies with this
recommendation.
The committee’s non-director member, Jayshree Das,
is Craigs Investment Partners’ Process Excellence &
Governance Advisor.
Regulatory Governance Committee
The Regulatory Governance Committee assists the
board in reviewing and providing feedback in respect
of the governance of NZX’s regulatory function. The
committee operates under a written charter, which
sets out the responsibilities and framework for the
operation of the committee. The charter is reviewed
at least every two years and was last reviewed in May
2018.
The committee must have a minimum of three
members, have a minimum of two directors as
members and must have a minimum of one non-
director as a member (who has skills and experience
relevant to the operation of the committee). The
makeup of the current members of this committee
complies with this recommendation.
The committee’s non-director member, David Flacks,
is a former Chair of the NZ Markets Disciplinary
Tribunal chair.
Takeover protocol
NZX’s Takeover Protocol sets out the procedure to
be followed if there is a takeover offer for NZX.
The protocol is reviewed at least every two years and
was adopted in February 2018.
Principle 4 – reporting and disclosure

The board should demand integrity in financial
an
d non-financial reporting, and in the timeliness
and balance of corporate disclosures.
Continuous disclosure
NZX’s Continuous Disclosure Policy sets out NZX’s
arrangements to ensure material information is
identified, reported, assessed and, where required,
disclosed to the market in a timely manner.
NZX is committed to ensuring the timely disclosure
of material information about the NZX Group and to
en
suring that NZX complies with the NZX Listing Rules.
It is the responsibility of the board to monitor
compliance with the Continuous Disclosure Policy. The
board considers at each board meeting whether any
information discussed at the meeting requires disclosure.
The policy is reviewed at least annually and was last
reviewed and updated in November 2019.
Charters and policies
The key corporate governance documents referred
to in this section, including policies and charters, are
available from NZX’s investor centre.
Financial reporting
NZX is committed to ensuring integrity and timeliness
in its financial reporting and in providing information
to the market and shareholders which reflects a
considered view on its present and future prospects.
The Audit and Risk Committee oversees the quality
and integrity of external financial reporting, including
the accuracy, completeness, balance and timeliness

NZX Annual Report 2019
35
of financial statements. It reviews NZX’s full and half-
year financial statements and makes
r
e
commendations to the board concerning accounting
policies, areas of judgement, compliance with
accounting standards, stock exchange and legal
requirements, and the results of the external audit.
All matters required to be addressed and for which the
committee has responsibility were addressed during
the reporting period.
NZX has published its full and half-year financial
statements that were prepared in accordance with
relevant financial standards. The full year financial
statements are set out on pages 46 to 89.
The Chief Executive and Chief Financial Officer have
confirmed in writing to the board that NZX’s external
financial reports present a true and fair view in all
material aspects.
Non-financial reporting
NZX releases data on its non-financial performance
metrics each month through its monthly shareholder
metrics publications. It also releases quarterly revenue
and shareholder metrics, and regulation metrics
representing the key features of NZX’s activities in
regulating its markets.
This year NZX has continued to integrate its non-
financial reporting and disclosures to align with its
financial performance and strategy.
To support this, and provide increased clarity for
shareholders and the market on our financial
performance and execution of strategy, a series of five
year financial and non- financial targets are now being
reported.
Further information is available from the NZX investor
centre.
Principle 5 – remuneration

The remuneration of directors and executives
should be transparent, fair and reasonable.
Directors’ remuneration
Shareholders fix the total remuneration available for
directors. The annual fee pool limit is $435,000 and
wa
s approved by shareholders at the annual meeting
in April 2012.
The current fees paid to NZX’s directors are $50,000
per annum for directors and $100,000 for the chair.
Directors are not paid additional fees for being
members of committees. The number of NZX
directors increased from 7 to 8 during the reporting
period.
Jayshree Das and David Flacks, being non-director
members of committees, are paid $465 per hour for
work on committee business.
Total remuneration received by each director in 2019
is set out in Note 5 of the Statutory Information section
on page 97.
External committee member remuneration is set out
below.
External committee member remuneration
Committee memberCommittee member fees
Jayshree Das$2,697
David Flacks$17,670
Directors do not receive any performance or equity
b
a
sed remuneration, or superannuation or retirement
benefits. This reflects the differences in the role of the
directors, which is to provide oversight and guide
strategy, and the role of management, which is to
operate the business and execute NZX’s strategy.

NZX Annual Report 2019
36
Remuneration policy
NZX’s Remuneration Policy sets out the principles,
which apply to the remuneration of NZX’s directors
and employees. In particular, director remuneration
is paid in the form of director fees, while employee
remuneration will include a mix of the following
components:
•
f
ixed remuneration (which includes base salary and
employer KiwiSaver contributions)
• short-term incentive plan (which is available to
senior employees)
• long-term incentive plan (which is available to
members of NZX’s executive team and senior
management)
• a one-off grant of $1,000 of NZX shares when an
employee starts at NZX to ensure that all
employees are shareholders
The policy is reviewed at least annually and was last
reviewed and updated in February 2020.
NZX’s short-term incentive plan is performance based,
with any short-term incentive plan payment being
conditional on (1) NZX’s financial performance and the
employee’s business unit’s performance; and (2) the
employee’s individual performance.
Potential short-term incentive plan payments are
generally between 15% and 25% of base salary,
depending upon the employee’s seniority and role.
Under NZX’s long-term incentive plan, executive team
members and senior managers may be awarded NZX
shares based on NZX’s long-term (generally three
year) performance. The plan is designed to:
• align managers’ rewards with improvement in
shareholder value
• achieve business plans and corporate strategies
• reward performance improvement; and
• retain key skills and competencies.
Chief Executive Officer remuneration
Mark Peterson commenced his role as NZX’s Chief
Executive Officer on 10 April 2017.
Mark Peterson’s remuneration is a mix of base salary
and short term and long-term incentive plan
components.
Mark Peterson’s base salary for 2019 was $500,000.
Mark Peterson’s potential short-term incentive plan
payment for 2019 was $500,000 ($250,000 for on-
target performance). Mark Peterson’s actual short-term
incentive plan payment for 2019 was $340,000, this
will be paid in February 2020. Mark Peterson's 2019
STI comprised two components. The first component
was based on NZX's financial performance against
target. The second component was based on delivery
against the key elements of the five year strategic plan
which included refocusing the business back on the
core markets business, building on the growth
opportunities, leading the business effectively and
further developing our market engagement.
Mark Peterson is currently allocated a long-term
incentive performance share rights plan to the value
of $250,000 each year. Vesting is dependent on NZX
meeting performance hurdles in respect of NZX's
total return to shareholders and its earnings per share
for the prior five year period, and on Mark Peterson
remaining an employee at the applicable vesting date.
Principle 6 – risk management

Directors should have a sound understanding
of
the material risks faced by the issuer and how
to manage them. The board should regularly
verify that the issuer has appropriate processes
that identify and manage potential and material
risks.
Risk management framework
The board is responsible for the establishment and
oversight of NZX’s risk management framework,
together with setting NZX’s overall risk tolerance.

NZX Annual Report 2019
37
Significant risks are discussed at each board meeting,
or as required.
The board has established an Audit and Risk
Committee with responsibility to:
•
review and provide feedback in respect of the
principal risks set out in NZX’s risk register
•
ensure that management has established a risk
management framework which includes policies and
procedures to effectively identify, manage and
monitor NZX’s principal risks; and
• monitor compliance with, and assess the
effectiveness of, the risk management framework.
The committee reviews the risk register every quarter.
The committee also reviews the risk management
framework annually. The committee receives reports
on the operation of risk management policies and
procedures.
The executive team and senior management are
required to regularly identify the major risks affecting
the business, record them in the risk register and
develop structures, practices and processes to manage
and monitor these risks.
NZX maintains insurance policies that it considers
adequate to meet its insurable risks.
The board is satisfied that NZX has in place a risk
management framework to effectively identify,
manage and monitor NZX’s principal risks, including
a Conflict Management Policy, Continuous Disclosure
Policy, Delegated Authority Policy, Financial Products
Trading Policy, Fit and Proper Policy, IT Acceptable
Use Policy and Protected Disclosures Policy.
NZX engages EY to carry out internal audit functions
on various parts of its operations, including assessing
the effectiveness of NZX’s risk management policies
and procedures. Additionally, independent assurance
is provided, and reviews are undertaken on matters
such as risk capital, operational controls, IT/software
security and anti-money laundering procedures.
Key risks
NZX’s material issues for 2019 are outlined and
discussed at pages 17 to 25.
Chief Executive Officer and Chief Financial
Officer assurance
The Chief Executive Officer and Chief Financial Officer
have provided the board with written confirmation
that NZX’s 2019 financial statements are founded on
a sound system of risk management and internal
compliance and control; and that all such systems are
operating efficiently and effectively in all material
respects.
Principle 7 – auditors

The board should ensure the quality and
independence of the external audit process.
NZX’s Audit and Risk Committee makes
recommendations to the board on the appointment
and removal of the external auditor. The committee
al
so monitors the independence and effectiveness of
the external auditor and reviews and approves any
non-audit services performed by the external auditor.
An External Auditor Independence Policy was
approved by the NZX board in July 2018 setting out
the services that may or may not be performed by the
external auditor.
The committee regularly meets with the external
auditor to approve their terms of engagement, audit
partner rotation (at least every five years) and audit
fee, and to review and provide feedback in respect
of the annual audit plan. A comprehensive review and
formal assessment of the independence and
effectiveness of the external auditor is undertaken
periodically. The committee routinely has time with
NZX's external auditor, KPMG, without management
present.
KPMG attends the annual meeting, and the lead
audit partner is available to answer questions from
shareholders at that meeting. KPMG attended the
2019 annual meeting.

NZX Annual Report 2019
38
KPMG has provided the Audit and Risk Committee
w
i
th written confirmation that, in their view, they were
able to operate independently during the year.
NZX has appointed EY to perform a number of
internal audit functions. The Audit and Risk Committee
is responsible for overseeing the independence and
objectivity of the internal audit function and for
reviewing and monitoring the internal audit work plan,
reports from internal audit and management
responses. The committee routinely has time with EY
without management present.
Principle 8 – shareholder rights and
relations

The board should respect the rights of
shareholders and foster constructive
relationships with shareholders that encourage
them to engage with the issuer.
Information for shareholders
NZX seeks to ensure that investors understand its
ac
tivities by communicating effectively with them and
giving them access to clear and balanced information.
The key information channels are NZX's website,
announcements and media releases, social media
channels, the annual and interim report, and the
annual meeting.
NZX’s investor centre contains annual and interim
reports, investor presentations, dividend information
and other information relating to NZX (including key
corporate governance documents).
Communicating with shareholders
NZX’s investor centre sets out NZX’s Chief Financial
Officer’s and Company Secretary’s contact details for
communications from shareholders. NZX responds to
all shareholder communications within a reasonable
timeframe.
NZX provides options for shareholders to receive and
send communications electronically, to and from both
NZX and its share registrar.
Shareholder voting rights
In accordance with the Companies Act 1993, NZX’s
Constitution, and NZX Listing Rules, NZX refers major
decisions which may change the nature of NZX to
shareholders for approval.
NZX conducts voting at its shareholder meetings by
way of a poll and on the basis of one share, one vote.
Further information on shareholder voting rights is set
out in NZX’s Constitution.
Notice of annual meeting
NZX’s annual meeting was held on 5 April 2019. The
notice of the meeting was released to the market on
7 March 2019 and was posted on NZX’s investor
centre. The 2020 meeting will be held on 31 March
2020 in Auckland. A webcast of the meeting will be
made available to shareholders.

NZX Annual Report 2019
39
Management Commentary
Overview
A breakdown of NZX’s financial results by business unit (adjusting 2018 fund expenses to be netted against
revenue for comparability - refer to footnote 3 below) is summarised in the following table:
Operating RevenueOperating ExpensesOperating Earnings
1
Operating
Margin
FTEs
20192018
2
Change20192018
2
Change20192018
2
Change20192018
2
20192018
$000$000%$000$000%$000$000%
Issuer
Relationships26,22123,56711.3%5,1074,939(3.4%)21,11418,62813.3%80.5%79.0%34.637.6
Secondary
Markets15,44916,758(7.8%)6,4245,682(13.1%)9,02511,076(18.5%)58.4%66.1%28.428.6
Data &
Insights12,82911,62310.4%1,8161,8310.8%11,0139,79212.5%85.8%84.2%9.88.0
Funds
Management
3
12,88111,44312.6%6,8335,757(18.7%)6,0485,6866.4%47.0%49.7%45.244.5
Wealth
Technologies1,6931,07357.8%2,5731,999(28.7%)(880)(926)5.0%(52.0%)(86.3%)45.136.5
Corporate
Services
4
475-N/A15,43115,6941.7%(14,956)(15,694)4.7%N/AN/A63.261.7
Total Continuing
Operations69,54864,4647.9%38,18435,902(6.4%)31,36428,5629.8%45.1%44.3%226.3216.9
Agri (Discontinued
Operations)-4,329N/A-3,483N/A-846N/A-19.5%-18.5
Total69,54868,7931.1%38,18439,3853.0%31,36429,4086.7%45.1%42.7%226.3235.4
1 Operating earnings are from continuing operations and before net finance expense, income tax, depr
eciation, amortisation and impair
ment, adjustment to provision for earnout,
gain and loss on disposal of business and property, plant and equipment.
2 The 2018 financial results have been restated for the adoption of the new accounting standard NZ IFRS16 Leases (operating expense restated for Wealth Technologies $0.113m
and Corporate Services $1.167m). Refer to Note 5 in the financials statements.
3 The funds management operating model for Smartshare changed (October 2018) to align with SuperLife; fund expenses (and audit fees) are now payable by the funds and FUM
based revenue is now received net of fund expenses (and audit fees). Consequently 2018 has been restated in the table above to ensure comparability of operating revenue and
operating expenses (both restated by $3.029m).
4 Corporate Services provides accommodation, legal, accounting, IT, HR and communications and marketing support to the other business units. Related costs are currently not
recharged to these businesses.

NZX Annual Report 2019
40
Operating Earnings from continuing operations has increased 9.8% to $31.364 million, with:
•
operating revenue increasing 7.9% to $69.548 million; and
•
operating expenses increasing 6.4% to $38.184 million.
The operating revenue and operating expenses are discussed in the following pages.
The Investor Presentation (refer https://www.nzx.com/about-nzx/investor-centre/reports-and-disclosure)
provides a detailed summary of the financial results by business unit.
Key Metrics
The key metrics for 2019 (as outlined in the Investor Presentation in February 2019) are summarised in the table
below:
External dependencies2019 deliverables2019 actual
NZX GroupOperating earnings
1
$28 - $31 million$31.4 million (up 9.8%)
Core Markets
Issuer
Relationships
Capital raised (total primary and
secondary capital issued or raised
for Equity, Funds and Debt)
• Listing ecosystem
dependent on others
• No major market
correction
$9.1 billion (average of
two prior years)
$18.7 billion (up 95.7%)
Secondary
Markets
Total value traded
• Participant activity
levels drive value traded
• No major market
correction
$41.0 billion$37.8 billion (down 1.0%)
Dairy Derivatives lots traded
• Participant activity
levels drive lots traded
0.45 million lots358,928 lots (up 3.8%)
Data & Insights
Revenue growth (in
subscriptions, licenses and dairy
subscriptions changing revenue
mix)
• Dependent on core
markets growth
License growth: 10%
Dairy subscription
product gr
owth: 24%
Subscriptions and
license revenue gr
owth:
up 17.7%
Dairy subscription
revenue growth: down
1.4%
Funds
Management
Total Funds Under Management
• Investment market
returns impacts FUM (all
asset classes)
• No major market
correction
Continue three year
rolling average growth:
14%
$3.97 billion (up 36.0%)
Wealth
Technologies
Total Funds Under Administration
• Investment market
retur
ns impacts FUA (all
asset classes)
• No major market
correction
Prepare for new client
phase two migration
and transition of current
clients
$2.30 billion (up 15.6%)
Two new customers
1
Operating earnings are from continuing operations and before net finance expense, income tax, depreciation, amortisation and impair
ment, adjustment to provision for earnout,
gain and loss on disposal of business and property, plant and equipment.

NZX Annual Report 2019
41
Operating Revenue
Issuer Relationships
Annual listing fees paid by NZX’s equity, debt and
fund issuers are driven by the number of listed issuers
and equity, debt and fund market capitalisations.
Annual listing fees have been positively impacted by
the growth in number and value of debt instruments,
and the growth in equity market capitalisation despite
delistings.
Primary listing fees are paid by all issuers at the time
of listing. The primary drivers of this revenue are the
number of new listings and the value of capital listed.
Primary listing fees in the period have been driven by
strong debt listings (retail and wholesale); with total
new capital listed of $7.16 billion up 46.2% on last year.
Secondary issuance fees are paid by existing issuers
when the company raises additional capital through
placements, rights issues, the exercise of options,
dividend reinvestment plans, or further debt issues.
The primary drivers for this revenue are the number
of secondary issuances and the value of secondary
capital raised. Secondary issuance fees in the period
have been driven by equity raised, with total
additional capital raised of $11.51 billion up 147.9%
on last year.
Other issuer services revenue arises from time spent
by NZX Regulation reviewing listing and secondary
capital raising documents, requests for listing rule
waivers, and other significant issuer matters.
Contractual and consulting and development revenue
arises from the operation of New Zealand’s electricity
market (under a long term contract with the Electricity
Authority) and the Fonterra Shareholders' Market
(under a long term contract with Fonterra). Earning
consulting and development revenue through systems
enhancements has been a focus post completion of
the electricity market operator upgrade program in
late 2018.
Secondary Markets
Participant services revenue is charged to market
participants (broking, clearing and advisory firms) that
are accredited for NZX’s equity, debt and derivatives
markets, and includes revenue that arises from market
surveillance recoveries and time spent by NZX
Regulation reviewing participant applications. The
total number of market participants decreased to 35
(2018: 37), with BNP Paribas Securities Services
Australia becoming accredited for cash market
depository services, Sharesies being accredited as a
cash trading and clearing participant, and the
consolidation of markets (i.e. NZAX and NXT into the
Main Board) resulting in the removal of NZAX
Sponsors and NXT Advisors.
Securities trading revenue comes from the execution
of trades on NZX’s equity and debt markets. Securities
clearing revenue relates to clearing and settlement
activities, and related services such as stock lending
undertaken by NZX’s subsidiary New Zealand Clearing
and Depository Corporation Limited. The largest
component is clearing fees which are based on the
value of settled transactions.
Securities trading and clearing revenue has, as
anticipated, been impacted by the fee changes
effective 1 October 2018, which were implemented
to improve market liquidity and attract new
participants, and will in time deliver growth.
Additionally the total value traded and cleared
($37.8 billion) is 1.0% lower than last year. Revenue
was adversely impacted by trading patterns which
have seen large peaks across index rebalance periods
and lower turnover in-between relative to the
comparative period, resulting in:
• The trading fees cap resulting in greater uncharged
value traded; and
• The clearing fees tiered structure resulting in lower
average clearing fees.
The fee structure was updated (from 1 July 2019) to
address these issues (e.g. trading fee cap has been
raised).
Dairy derivatives revenue relates to trading, clearing
and settlement fees for trading NZX dairy futures and
options. The fees are largely charged in USD
(reflecting the global nature of the market) per lot
traded. Dairy derivatives revenue increased in line

NZX Annual Report 2019
42
with the 3.8% growth in lots traded and was adversely
i
m
pacted by low market volatility in the final quarter.
Data & Insights
Royalties from terminals relate to the provision of
capital markets real time data for display on terminals
(retail and professional). Royalties from terminals
increased revenue relates to higher retail terminal
numbers.
Subscription and licences relate to the provision of
capital markets data to other participants in the
capital markets (e.g. non-display applications). The
subscriptions and licences revenue increase of 17.7%
is driven by increased non-display usage. Audit and
back dated licencing revenue increased from
$0.76 million to $1.29 million.
Dairy data subscriptions relate to the sale of dairy
data and analytical products. Dairy data subscription
revenue has decreased 1.4% as a result of the
divestment of NZX Agri business causing a churn of
dairy subscriptions.
Funds Management
Funds management revenue is generated from:
• Funds under management based revenue which
relates to variable funds under management (FUM)
fees; these are now received net of fund expenses.
Fund expenses include a combination of fixed
costs (principally outsourced fund accounting and
administration costs, registry fees and audit fees),
and variable costs proportionate to FUM
(principally custodian fees, trustee fees, index fees,
settlement costs and third party manager fees).
• Member based revenue which includes fixed
membership administration fees and other
member services.
FUM based revenue has only been recognised net of
fund expenses since the operating model change in
October 2018 (to align the Smartshares and SuperLife
operating models). The comparable funds FUM based
revenue has increased 13.8% driven by:
• higher average FUM over the period, arising from
a combination of market returns and positive net
cash flows ($476 million). FUM at 31 December
2019 has grown to $3.97 billion up 36.0% on last
year; offset by
• fund expense increases associated with 8 new
Blackrock iShares ETFs, and the segregation and
unitisation of SuperLife Invest providing access for
wholesale clients; partially reduced by efficiencies
from the changed operating model and
improvements to supplier arrangements.
Investor numbers (ETFs and SuperLife) have increased
8.5% resulting in an increase in member based revenue.
Wealth Technologies
Wealth Technologies revenue is generated from
administration services provided on both the original
(OE) and new wealth management platforms, and
development fees received for part of the new
platform that is in production. The administration
service fees are based on funds under administration
(FUA) and have been driven by:
• New platform – started earning fees in November
2018 when the foundation customer transitioned
phase one to the new platform, with FUA continuing
to increase through 2019; offset by
• OE platform – the number of customers is
unchanged, with FUA remaining stable.
FUA at 31 December 2019 has grown to $2.30 billion
up 15.6% on last year.
Corporate
Other corporate revenue primarily relates to the short
term sub lease of part of the Wellington premises,
NZX.com advertising revenue and sponsorship of
NZX’s 150th year celebrations.

NZX Annual Report 2019
43
Operating Expenses
Core markets and corporate costs increased in line
w
i
th inflation, while we invested for customer growth
in the Funds Management and Wealth Technologies
businesses.
Personnel costs
Personnel costs are made up of:
• Salary costs (including bonuses, commissions, ACC
levies and KiwiSaver contributions); plus
• Contractor and other personnel costs (including
training, recruitment and staff benefits); less
• Capitalised labour (where employees or contractors
are engaged on capital projects).
Personnel costs have increased due to a combination
of wage inflation, short term contractor resources (e.g.
assisting with the delivery of increased energy
consulting activity) and the movement in average FTEs
arising from:
• the full year impact from the additional strategic
roles created through 2018, including the refocus
to be client centric, plus additional FTEs to
strengthen cyber security and marketing
capabilities, and address recommendations set out
in the Financial Markets Authority Annual Market
Operator Obligations Review;
• Smartshares additional sales resources and to on
board new business, in line with the strategic focus;
• Wealth Technologies additional resources planning
for the migration of new clients in 2020; and
• the number of vacancies throughout the year.
Capitalisation of internal development resources
(2019: $4.29 million; 2018: $4.38 million) primarily
relates to Wealth Technologies' core platform and
NZX's trading system upgrade.
Information Technology
Information Technology costs were made up of
software licence fees, hardware support and
maintenance fees, telecommunications and data
network costs, and IT services provided by third parties.
Efficiency gains from prior year projects (e.g. through
modernised and rationalised data centre hosting) have
been used to support further business initiatives (e.g.
increased cyber security) and produced lower costs
in the current year.
Professional Fees
Professional fees, including legal expenses, assurance
costs and advisory / consultancy fees, include those
relating to:
• Smartshares investments for growth (approx.
$297k) e.g. costs associated with the SuperLife
Invest unitisation, setting up the Blackrock iShare
new ETFs, creating Ka Uruora WhānauSaver and the
extension of the SuperLife Pacific Series;
• the assurance programme – internal audits, energy
audits and consulting obligations under the
Electricity Authority contracts, annual conflicts
review, funds conduct risk assessment review; and
• stock lending and borrowing (SLB) costs and
terminal royalty audit fees; both vary in proportion
to their related revenues, with costs and revenues
recognised on a gross basis.
Marketing
Marketing costs relate primarily to Smartshares, and
the NZX corporate centre (which supports the core
exchange businesses). Smartshares has significantly
increased its marketing campaigns to attract new
investors/members and has undertaken a rebranding
for launch in 2020. NZX increased its investor relations
deliverables and broader communications and
marketing efforts to support sales. Additionally
marketing includings the costs of the NZX book and
150th year celebrations costs (related sponsorships
have been recognised within corporate revenue).

NZX Annual Report 2019
44
Fund Expenditure
The fund expenses (e.g. custodian fees, trustee fees,
index fees, settlement costs and third party manager
fees) are now payable directly by the funds since the
operating model change in October 2018.
Other Expenses
Other expenses relate to premises related costs,
insurance, directors fees, travel, external audit costs,
outsourced payroll system, corporate memberships,
statutory/compliance costs and non recoverable GST
(on the Funds Management and Wealth Technologies
businesses). Other expenses have moved in line with
inflation.
Capitalised overheads
The portion of all expense categories which relate to
capital activities (e.g. Wealth Technologies core
platform and NZX's trading system upgrade) has
decreased slightly.
Non-operating Income and Expenses
Net finance expense comprises interest income (on
cash balances, Clearing House risk capital and
regulatory working capital), interest expenses (on the
subordinated note, loans, overdrafts and lease
liabilities), unrealised fair value gain on investment and
foreign exchange gains/(losses). Increased net finance
costs result from the subordinated notes issued on
20 June 2018.
Depreciation and amortisation expenses have
increased due to the commencement of amortisation
of:
• the Wealth Technologies core platform from
November 2018 when the first customer migrated
to the platform; and
• new lease of IT equipment from May 2019.
The effective tax rate is higher than the statutory rate
of 28% due to non-deductible items.
Discontinued operations relate to the operating
results (including impairment of goodwill and
intangibles) of the non-dairy agri businesses (Farmers
Weekly, AgriHQ and the Australian based Grain
Information Unit).

NZX Annual Report 2019
45
Directors' Responsibility Statement
The directors are responsible for the preparation, in
accordance with New Zealand law and generally
a
c
cepted accounting practice, of financial statements
which give a true and fair view of the financial position
of NZX Limited and its subsidiaries (the NZX Group)
as at 31 December 2019 and the results of their
operations and cash flows for the year ended
31 December 2019.
The directors consider that the financial statements
of the NZX Group have been prepared using
accounting policies appropriate to the NZX Group’s
circumstances, consistently applied and supported
by reasonable and prudent judgments and estimates,
and that all applicable New Zealand Equivalents to
International Financial Reporting Standards have been
followed.
The directors are pleased to present the financial
statements of the NZX Group for the year ended
31 December 2019.
The financial statements were authorised for issue for
and on behalf of the directors on 13 February 2020.
James Miller
Chair of the Board
Lindsay W
right
Chair of the Audit and
Risk Committee

NZX Annual Report 2019
46

NZX Annual Report 2019
47

NZX Annual Report 2019
48The accompanying notes form an integral part of these financial statements
Income Statement
For the year ended 31 December 2019
Note
2019
$000
2018
$000
Restated*
Operating revenue969,54867,493
Operating expenses10(38,184)(38,931)
Earnings before net finance expense, income tax, depreciation, amortisation and
impair
ment, adjustment to provision for earnout, loss on disposal of businesses
and property, plant and equipment
31,36428,562
Net finance expense11(2,153)(1,279)
Loss on disposal of businesses and property, plant and equipment8(83)(1)
Depreciation and amortisation expense(8,595)(7,216)
Impairment expense4 / 8-(352)
Adjustment to provision for earnout-15
Profit before income tax20,53319,729
Income tax expense13(5,888)(6,056)
Profit from continuing operations14,64513,673
Loss from discontinued operations (net of tax)7-(2,024)
Profit for the year14,64511,649
Earnings per share
Basic (cents per share)145.34.3
Diluted (cents per share)145.34.3
Earnings per share - continuing operations
Basic (cents per share)145.35.1
Diluted (cents per share)145.35.0
Statement of Comprehensive Income
For the year ended 31 December 2019
2019
$000
2018
$000
Restated*
Profit for the year14,64511,649
Other comprehensive income recognised through equity
Foreign currency translation differences(1)(170)
Total other comprehensive income(1)(170)
Total comprehensive income for the year14,64411,479
* Restated for the adoption of the new accounting standard NZ IFRS 16
Leases, see Note 5.

NZX Annual Report 2019
The accompanying notes form an integral part of these financial statements49
Statement of Changes in Equity
For the year ended 31 December 2019
Note
Share
Capital
$000
Retained
Earnings
$000
Translation
Reserve
$000
Total Equity
$000
Balance at 1 January 2018, as previously reported47,45121,14712568,723
Impact of adoption of NZ IFRS 16 - Leases5-(2,104)-(2,104)
Restated balance at 1 January 201847,45119,04312566,619
Profit for the year-11,649-11,649
Foreign currency translation differences--(170)(170)
Restated total comprehensive income for the year-11,649(170)11,479
Transactions with owners recorded directly in
equity:
Dividends paid22-(20,426)-(20,426)
Issue of shares213,201--3,201
Share based payments21534--534
Cancellation of non-vesting shares21(120)120--
Total transactions with owners recorded directly in
equity
3,615(20,306)-(16,691)
Restated balance at 31 December 201851,06610,386(45)61,407
Profit for the year-14,645-14,645
Foreign currency translation differences--(1)(1)
Total comprehensive income for the year-14,645(1)14,644
Transactions with owners recorded directly in
equity:
Dividends paid22-(16,662)-(16,662)
Issue of shares213,834--3,834
Share based payments21695--695
Cancellation of non-vesting shares21(72)72--
Total transactions with owners recorded directly in
equity
4,457(16,590)-(12,133)
Balance at 31 December 201955,5238,441(46)63,918

NZX Annual Report 2019
50The accompanying notes form an integral part of these financial statements
Statement of Financial Position
As at 31 December 2019
Note
31 December
2019
$000
31 December
2018
$000
Restated*
1 January
2018
$000
Restated*
Current assets
Cash and cash equivalents1527,74025,38514,881
Cash and cash equivalents - restricted1520,00020,00020,000
Funds held on behalf of third parties1279,66756,70558,890
Receivables and prepayments169,0069,21711,136
Total current assets136,413111,307104,907
Non-current assets
Property, plant & equipment172,6122,7602,444
Right-of-use lease assets55,8266,2777,068
Goodwill330,22230,22233,929
Other intangible assets237,49836,50536,290
Assets held for sale8--2,415
Total non-current assets76,15875,76482,146
Total assets212,571187,071187,053
Current liabilities
Funds held on behalf of third parties1279,66756,70558,890
Trade payables183,7823,7983,810
Other liabilities - current1912,27611,68323,500
Lease liabilities51,4391,1451,054
Current tax liability131,7762,222666
Liabilities held for sale8-20-
Total current liabilities98,94075,57387,920
Non-current liabilities
Non-current other liabilities19323161-
Lease liabilities57,1728,0679,212
Interest bearing liabilities2038,85238,79720,000
Deferred tax liability133,3663,0663,302
Total non-current liabilities49,71350,09132,514
Total liabilities148,653125,664120,434
Net assets63,91861,40766,619
Equity
Share capital2155,52351,06647,451
Retained earnings8,44110,38619,043
Translation reserve(46)(45)125
Total equity attributable to shareholders63,91861,40766,619
* Restated for the adoption of the new accounting standard NZ IFRS 16
Leases, see Note 5.

NZX Annual Report 2019
The accompanying notes form an integral part of these financial statements51
Statement of Cash Flows
For the year ended 31 December 2019
Note
31 December
2019
$000
31 December
2018
$000
Restated*
Cash flows from operating activities
Receipts from customers69,94473,782
Net interest paid(2,091)(1,203)
Payments to suppliers and employees(37,029)(42,846)
Income tax paid13(6,034)(4,800)
Net cash provided by operating activities1524,79024,933
Cash flows from investing activities
Lease payments received from finance leases-196
Net cash paid on disposal of businesses and acquisition(4)(5,449)
Cash received from short term investment6-
Payments for property, plant and equipment17(708)(1,181)
Payments for intangible assets2(7,594)(8,204)
Net cash used in investing activities(8,300)(14,638)
Cash flows from
financing activities
Payment of lease liabilities(1,288)(1,053)
Loan facility cancellation20-(20,000)
Issue of subordinated note20-40,000
Transaction costs relating to subordinated note-(1,230)
Dividends paid(12,847)(17,508)
Net cash (used in)/provided by financing activities(14,135)209
Net increase in cash and cash equivalents2,35510,504
Cash and cash equivalents at the beginning of the year45,38534,881
Cash and cash equivalents at the end of the year1547,74045,385
* Restated for the adoption of the new accounting standard NZ IFRS 16
Leases, see Note 5.

NZX Annual Report 2019
52
Notes to the Financial Statements
For the year ended 31 December 2019
1. Reporting entity and statutory base
Reporting entity
These consolidated financial statements are for NZX Limited (the Company) and its subsidiaries (together
referred to as the Group) as at and for the year ended 31 December 2019.
The Group operates New Zealand securities, derivatives and energy markets, including maintaining the
infrastructure on which they operate. It provides funds management services including superannuation and
E
x
change Traded Funds (ETFs), as well as developing and operating wealth management platforms for other
providers. It also provides a range of information and data to support market growth and development in the
securities and dairy sectors.
The Company is incorporated and domiciled in New Zealand, registered under the Companies Act 1993 and
is an FMC reporting entity under the Financial Markets Conduct Act 2013 (FMCA). These financial statements
have been prepared in accordance with the Companies Act 1993 and the Financial Reporting Act 2013. The
Company is listed and its ordinary shares are quoted on the NZX Main Board. The company also has listed
debt which is quoted on the NZX debt market.
Basis of preparation
The Group financial statements have been prepared in accordance with New Zealand Generally Accepted
Accounting Practice (NZ GAAP). They comply with New Zealand equivalents to International Financial
Reporting Standards (NZ IFRS) and other applicable Financial Reporting Standards, as appropriate for profit
oriented entities. The financial statements also comply with International Financial Reporting Standards (IFRS).
The measurement basis adopted in the preparation of these financial statements is historical cost, modified
by the revaluation of certain financial instruments as identified in the accompanying notes. These financial
statements are presented in New Zealand Dollars ($), which is the Company’s functional currency. All financial
information presented in New Zealand dollars has been rounded to the nearest thousand, except when
otherwise indicated.
Basis of consolidation
The Group financial statements are prepared by consolidating the financial statements of all the entities that
comprise the Group, being the Company and its subsidiaries. Consistent accounting policies across the
parent and all subsidiaries are employed in the preparation and presentation of the Group financial statements.

NZX Annual Report 2019
53
i.Business combinations
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the
date on which control is transferred to the Group. On acquisition, the assets, liabilities and contingent
liabilities of a subsidiary are measured at their fair values at the date of acquisition. In determining the fair
value of assets acquired, NZX assesses identifiable intangible assets including brands, intellectual property,
software, management rights and any other identifiable intangible assets using recognised valuation
methodologies and with reference to suitably qualified experts. Any excess of the cost of acquisition over the
fair values of the identifiable net assets acquired is recognised as goodwill.
ii.Investments in subsidiaries
Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the
consolidated financial statements from the date that control commences until the date that control ceases.
In preparing the Group financial statements all intercompany balances and transactions, and unrealised
profits arising within the Group are eliminated in full.
Accounting policies
Accounting policies that summarise the measurement basis used and are relevant to the understanding of the
financial statements are provided throughout the accompanying notes.
The accounting policies adopted have been applied consistently throughout the periods presented in these
financial statements.
The Group has initially adopted NZ IFRS 16
Leases from 1 January 2019. As a result, the Group has changed
its accounting policy for lease contracts as detailed in Note 5. The Group has elected to adopt the full
retrospective approach, which means the 2018 comparative information has been restated. The impact of
changes is disclosed in Note 5.
A number of new standards, amendments to standards and interpretations are effective for annual periods
beginning after 1 January 2020, and have not been applied in preparing these financial statements. The
Group does not plan to adopt these standards early. None of these standards are expected to have a
significant effect on the financial statements of the Group.
Presentational changes
Certain amounts in the comparative information have been reclassified to ensure consistency with the current
period's presentation.
Accounting estimates and judgements
The preparation of the financial statements in conformity with NZ IFRS requires management to make
judgements, estimates and assumptions that affect the application of accounting policies and the reported
amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates
and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimates are revised and in any future periods affected.
The principal areas of judgement for the Group in preparing these financial statements that have a significant
risk of resulting in a material adjustment within the next financial year, including information about
assumptions and estimation uncertainties, are set out in:

NZX Annual Report 2019
54
• note 2 - intangible assets
•
note
3 - goodwill
• note 23 - share based payments
2. Intangible assets
Intangible assets are initially measured at cost. The direct costs associated with the development of software
and website assets for internal use are capitalised where success is probable and the capitalisation criteria of
NZX's accounting policy and NZ IFRS are met. The cost of intangible assets acquired in a business
combination is their fair value at the date of the acquisition. Intangible assets with a finite life are amortised
from the date the asset is ready for use on a straight-line basis over its estimated life which is as follows:
• Software and websites: 3 — 9 years
• Brands, Trademarks, and rights to use Brands: 10 years
• Data archives, customer lists, databases, and other IP: 10 years
• Management rights: 20 years
At each reporting date, the Group reviews the carrying amounts of its intangible assets to determine whether
there is any indication that those assets have suffered an impairment loss. This is outlined in note 4.
Where estimated useful lives or recoverable values have diminished due to technological change or market
conditions, amortisation is accelerated.

NZX Annual Report 2019
55
Software
and
websites
$000
Brands,
Trademarks
and
rights to
use Brands
$000
Data
archives,
customer
lists,
databases,
and other IP
$000
Management
rights
$000
Intangible
work in
progr
ess
$000
Total
$000
Gross carrying amount
Balance at 1 January 201839,7852,5703,38718,1164,63668,494
Additions2---8,2028,204
Disposals(1,138)(2,388)(1,929)--(5,455)
Transfer from WIP10,168---(10,168)-
Transfer to assets held for sale(58)----(58)
Balance at 31 December 201848,7591821,45818,1162,67071,185
Additions13---7,5817,594
Transfer from WIP3,997---(3,997)-
Balance at 31 December 201952,7691821,45818,1166,25478,779
Accumulated amortisation &
impairment
Balance at 1 January 201827,6771,5176392,371-32,204
Amortisation expense4,92583-784-5,792
Impairment expense-136---136
Disposals(1,074)(1,681)(639)--(3,394)
Transfer to assets held for sale(58)----(58)
Balance at 31 December 201831,47055-3,155-34,680
Amortisation expense5,79418-789-6,601
Balance at 31 December 201937,26473-3,944-41,281
Net Book Value
As at 1 January 201812,1081,0532,74815,7454,63636,290
As at 31 December 201817,2891271,45814,9612,67036,505
As at 31 December 201915,5051091,45814,1726,25437,498
3. Goodwill
Carrying amount
2019
$000
2018
$000
Balance at beginning of the year30,22233,929
Agri impairment-(2,526)
Goodwill sold-(1,181)
Balance at end of the year30,22230,222
A cash generating unit (CGU) to which goodwill has been allocated is tested for impairment annually, and
whenever there is an indicator of impairment based on the performance of the CGU relative to expected
future performance and other relevant factors.

NZX Annual Report 2019
56
The directors have carried out impairment testing with the key assumptions set out in Note 4.

No impairment
was required in 2019. In 2018 the Group sold its remaining Agri businesses (AgriHQ and the Grain Information
Unit), resulting in a goodwill impairment of $2,526,000.
4. Impairment tests
Indefinite life intangible assets are reviewed for impairment annually. They are also reviewed for impairment
whenever there are indicators of impairment, as are finite life intangible assets.
A summary of the CGUs to which intangible assets have been allocated as at 31 December 2019 is outlined below:
Software &
websites
$000
Other finite
life
intangible
$000
Indefinite
life
intangible
$000
Work in
progr
ess
$000
Total other
intangible
$000
Goodwill
$000
Total
$000
Cash generating unit
Clearing House3,252---3,252-3,252
Funds management27111,8282,34431714,76020,73035,490
Wealth Technologies7,919--2,85910,7781,49412,272
Energy2,816--392,8557,72010,575
Direct data-1091,458-1,5672781,845
Other
Other intangible assets359---359-359
Other computer software888--3,0393,927-3,927
15,50511,9373,8026,25437,49830,22267,720
Impairment test
Fo
r the year ended 31 December 2019, the directors have reviewed all intangible assets for impairment using
discounted cash flow analysis, comparable EBITDA multiple analysis and/or other factors as appropriate to the
asset being tested. All impairment tests have been undertaken on a value in use basis.
Key assumptions used in the calculation of recoverable amounts in discounted cash flow analysis are
consistent with those used and disclosed in the financial statements for the year ended 31 December 2018
unless indicated otherwise. Discounted cash flow analysis using a forecast period of five years was used for
all CGUs, other than Energy where forecast periods of four and a half years (to match the remaining
contractual period) and seven and a half years (to match the remaining contractual period plus three years
potentially to be renewed) were both used. The analysis also uses an WACC of 8.8% (2018: 10.0%) and were
stress tested at higher rates. The terminal growth rate used to extrapolate cash flow projections beyond five
years was 1.75% (2018: 1.75%). Management has assessed the long term economic outlook data available,
and assessed that the use of this terminal growth rate was appropriate, consistent with the prior year. Where
relevant, EBITDA multiples were used to cross-check the discounted cash flow analysis for established businesses.
The review of the carrying values of goodwill and intangible assets has determined that all the CGUs have
recoverable amounts exceeding their carrying values and no impairment is therefore required.
In 2018 the Agri businesses (Farmers Weekly, AgriHQ and the Grain Information Unit) were sold, resulting in
goodwill and intangible assets impairment charges totalling $2,662,000 on disposal. Additionally the

NZX Annual Report 2019
57
FundSource business which was sold effective 21 June 2019, within the Direct Data CGU, incurred an
impairment charge of $352,000.
Further information on specific assumptions (other than the general assumptions outlined above) underlying
the CGU discounted cash flow analysis is set out below.
a.
Clearing House
The principal assumption on which the discounted cash flows for this CGU are dependent is the future
r
evenue growth rate. Future revenue growth is dependent on growth in equity and dairy derivatives markets.
Growth in equity markets has been forecast based on historical growth rates, while dairy derivatives are
expected to grow at 20% p.a. (2018: 33% p.a.). This assumption is based on trading statistics for similar
derivative products in overseas markets and NZX's five year strategic plan.
b. Funds Management
Smartshares Limited acquired the management rights for the Smartshares NZ Mid Cap ETF, the Smartshares
Australian Mid Cap ETF and the Smartshares Australian Top 20 ETF funds during 2004 - 2006 for a total value
of $2,344,000. These are held in the Group accounts with an indefinite life, as there is no expiry date for these
rights and they are expected to apply indefinitely. Additionally the acquisition of SuperLife Limited, effective
1 January 2015 has resulted in additional management rights acquired of $15,772,000, which are held in the
Group accounts as a finite life asset amortised over 20 years and goodwill of $20,730,000. The principal
assumption on which the discounted cash flows are dependent is the future level of funds under management
(FUM), which is assumed to grow through both net cash flows and market growth, driving FUM based
revenue. FUM based revenue would have to reduce by 46% (2018: 46%) in the forecast period to potentially
indicate an impairment in the intangibles carrying value. The company considers the FUM growth assumption
reasonable based on historic experience and NZX's five year strategic plan.
c.Wealth Technologies
The principal assumptions on which the discounted cash flows for the Wealth Technologies CGU are
dependent is the future level of funds under administration (FUA) which is assumed to grow through both
bringing new clients on to the platforms and current client growth, driving FUA based revenue. FUA based
revenue would have to reduce by 24% (2018: 21%) in the forecast period to potentially indicate an
impairment in the intangibles carrying value. The Company considers the FUA growth assumptions
reasonable given the start-up nature of Wealth Technologies and based on the continued interest from
current, future and potential customers.
d. Energy
The carrying value of the Energy CGU includes a goodwill amount of $7,720,000. This business has a
significant reliance on service provider contracts it has in place with the Electricity Authority (EA) over the
period to mid 2024, with the EA having an option to renew for a further 3 years. As a result of these service
provider contracts, NZX has certainty of minimum cash flows to be received over the contract period which,
along with additional contracted consulting revenue, supports the current carrying value of the CGU.

NZX Annual Report 2019
58
e.Direct data
Th
e
principal assumptions on which the discounted cash flows for the Direct Data CGU are dependent is the
future revenue growth rate which is assumed to grow (through increased volumes and price increases) at 2.6%
p.a.to 7.4% p.a. (2018: 4.2% p.a. to 4.5% p.a.) during the explicit forecast period. The Company considers the
revenue growth assumption reasonable based on historical experience and NZX's five year strategic plan.
5. Leases
On entering into a contract, the Group determines whether the contract contains a lease that conveys the
right to control the use of an identified asset for a period of time in exchange for consideration. Determining
whether there is a right of control involves the assessment of whether the contract involves the use of an
identified asset, whether the Group has the right to obtain substantially all of the economic benefits from use
of that asset through the period of use, and whether the Group has the right to direct the use of the asset.
As a lessee
The Group recognises a right-of-use asset and a lease liability at the lease commencement date.
The right-of-use asset is initially measured at cost net of any lease incentives received and is subsequently
depreciated using the straight-line method from the commencement date to the end of the lease term.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted at the Group’s incremental borrowing rate or the interest rate implicit in the
lease, if this can be determined. The lease liability is measured at amortised cost using the effective interest
method. It is remeasured when there is a change in future lease payments arising from a change in an index
or rate or if the Group changes its assessment of whether it will exercise a purchase, extension or termination
option, with a corresponding adjustment made to the carrying value of the right-of-use asset.
The Group has elected not to recognise right-of-use assets and lease liabilities for short term leases (lease
term less than 12 months) or leases of low-value assets.
Detail of leases for which the Group is a lessee is presented below:
Right-of-use assets
Property
leases
$000
Other leases
$000
Total
$000
Balance at 1 January 2018 (restated)7,021477,068
Depreciation expense for the year (restated)(777)(14)(791)
Balance at 31 December 2018 (restated)6,244336,277
Additions during the year14673687
Depreciation expense for the year(974)(164)(1,138)
Balance at 31 December 20195,2845425,826
Other leases includes leases of IT and office equipment.
Lease liabilities

NZX Annual Report 2019
59
31 December
2019
$000
31 December
2018
Restated
$000
1 January
2018
Restated
$000
Maturity analysis - contractual undiscounted cash flows
Up to one year1,8011,5331,482
One to two years1,3791,5621,531
Three to five years3,5913,4613,829
More than five years3,4064,5865,762
Total undiscounted lease liabilities10,17711,14212,604
Lease liabilities included in the statement of financial position8,6119,21210,266
Current1,4391,1451,054
Non-current7,1728,0679,212
Property leases for the Group's Wellington and Albany offices give the Group the right to renew the lease at
the end of the current contracted period for a further 6 year term.
As a lessor
On
entering into a lease as a lessor, the Group assesses whether the lease transfers to the lessee substantially
all of the risk and rewards of ownership of the underlying asset. Where such a transfer is assessed to occur, the
lease is recognised as a finance lease; otherwise it is recognised as an operating lease.
Where the Group is an intermediate lessor, its interest in the head lease and the sub-lease are accounted for
separately, with the sub-lease classification assessed with reference to the right-to-use asset arising from the
head lease.
The Group recognises lease payments received under operating leases as income on a straight-line basis over
the lease term as part of other corporate revenue.
The Group sub-leases part of one of its property leases. The current sub-lease is for a short term period and
therefore does not transfer substantially all of the risks and rewards of the underlying asset and has been
classified as an operating lease accordingly. Income related to this short term sub-lease for the current year
was $278,000 (2018: nil). A maturity analysis of operating lease payments, showing the undiscounted lease
payments to be received after the reporting date is set out below:
31 December
2019
$000
31 December
2018
Restated
$000
1 January
2018
Restated
$000
Maturity analysis - contractual undiscounted cash flows
Up to one year69--
Total undiscounted lease liabilities at period end69--
Prior property sub-leases had longer terms, and were assessed as finance leases. The following table sets out
a maturity analysis of finance lease receivables, showing the undiscounted lease payments to be received
after the reporting period:

NZX Annual Report 2019
60
31 December
2019
$000
31 December
2018
Restated
$000
1 January
2018
Restated
$000
Maturity analysis - contractual undiscounted cash flows
Up to one year--204
Total undiscounted lease payments receivable--204
Unearned finance income--(8)
Net investment in the lease--196
Impact of initial application on financial statements
The Group has undertaken an assessment of existing operating leases on initial application of NZ IFRS 16
Leases and determined that property leases and certain IT and office equipment leases meet the right-of-use
definitions.The Group has elected to adopt the full retrospective approach, and the 2018 comparative
information has therefore been restated. The Group has recognised the cumulative historic effect of initially
applying the standard as an adjustment to equity as at 1 January 2018.
The Group has recognised leases subject to NZ IFRS 16 in the Statement of Financial Position through
recognising a right-of-use asset and a corresponding lease liability. This has resulted in changes to the Income
Statement, recognising an interest expense as the liability is unwound over the term of the lease and
depreciation of the right-of-use asset (over the remaining term of the lease). These expenses replace the
previous reported operating rental expense in the restated financial statements.
The following tables summarise the impacts of adopting IFRS 16 on the Group's consolidated financial statements:

NZX Annual Report 2019
61
Statement of Financial Position
31 December 20181 January 2018
$000
Previously
reportedAdjustmentsRestated
Previously
reportedAdjustmentsRestated
Right-of-use lease assets-6,2776,277-7,0687,068
Receivables and prepayments9,217-9,21710,94019611,136
Others assets171,577-171,577168,849-168,849
Total assets180,7946,277187,071179,7897,264187,053
Lease liabilities - current-1,1451,145-1,0541,054
Lease liabilities - non-current-8,0678,067-9,2129,212
Deferred tax liability3,873(807)3,0664,120(818)3,302
Other liabilities113,439(53)113,386106,946(80)106,866
Total liabilities117,3128,352125,664111,0669,368120,434
Net assets63,482(2,075)61,40768,723(2,104)66,619
Retained earnings12,461(2,075)10,38621,147(2,104)19,043
Other51,021-51,02147,576-47,576
Net equity attributable to
shareholders63,482(2,075)61,40768,723(2,104)66,619