NZX Annual Meeting 2023 – speeches and presentation

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NZX – Annual Shareholders’ Meeting
19 April 2023
[SLIDE: 2023 Annual Shareholders’ Meeting]

Sara Wheeler

[SLIDE: Today’s Meeting]

[Housekeeping: Health and safety, emergency/evacuation and
exits/bathroom directions]

[Agenda for the meeting]

Kia ora, good morning and welcome to NZX’s 2023 ASM.
I am Sara Wheeler, the General Counsel & Company Secretary at
NZX.
Before we begin, I will quickly go through some housekeeping.
▪ Toilets are located behind you, on the left when you came in
[point out toilets]
▪ In the event of an emergency, please follow the green signs or
follow me or one of our team, who will help direct you outside.
In terms of agenda: first, we will hear from NZX’s Chair James Miller
who will give a welcome and strategic overview.
Secondly, we move to NZX CEO, Mark Peterson who will provide a
report on financial and business performance.
We will then move to the formal part of the meeting.
We have five resolutions today:
▪ The usual resolution to authorise Directors to set audit fees for
2023
▪ The election of Rachel Walsh as a Director and similarly for
Dame Paula Rebstock

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▪ The re-election of Frank Aldridge as a Director
▪ And the proposal for the total annual remuneration payable to
all directors to be increased by $42,000 from $522,000 to
$564,000 with effect from 1 July 2023.
We will attend to voting and then we will move to any general
business.
If you are intending to ask a question, please signal to us and we will
bring a microphone to you. We would kindly ask that questions
relate to the business and operations of the NZX Group – as we are
unable to answer questions relating to other companies listed on the
exchange.
Shareholders participating online will also be able to ask questions,
and you can submit these at any time using the tab at the bottom of
your screen.
I encourage shareholders who have questions relating to the
business of the meeting, to send their questions through as soon as
possible.
Please note that only shareholders, proxy holders or shareholder
company representatives may vote. Shareholders will be able to cast
their vote online using the voting tab, where you will need to enter
you CSN/Holder number for validation.
Please refer to the virtual meeting online portal guide or contact the
team at Link on 0800 200 220 if you require any assistance.
Following the meeting we invite you to stay for refreshments.
I will now hand over to James Miller.
....................................................
James Miller
[SLIDE: Welcome]

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Kia ora, good morning, I am delighted to welcome you all here today
to NZX’s 2023 Annual Shareholders’ Meeting.
Welcome to those attending – either in-person or online.
This meeting is being held as a hybrid ASM.
[SLIDE: Board Introduction]

We are pleased to be holding the meeting today in New Zealand’s
Capital Markets Centre that was officially opened in November last
year.
The new centre celebrates New Zealand’s capital markets past,
present and future.
Already, the centre has been home to many special occasions such as
IPOs, direct listings, debt issues, company anniversaries and new
product lines.
We’ve also had a number of school and university students from
New Zealand - and internationally - visit the New Zealand Capital
Markets Centre to learn more about our stock exchange and the
proud history of New Zealand’s public markets.
We look forward to the centre being a focus point for more schools
and university students in years to come.
For those of you in the room, our Directors and management team
always enjoy these opportunities to chat with you, so please stay on
after today’s meeting for refreshments.
Now to the introductions.
I am pleased to introduce to you the NZX Board: Rachel Walsh, Dame
Paula Rebstock, Frank Aldridge, Elaine Campbell, Peter Jessup,
Lindsay Wright , and Sarah Miller, our Future Director.
I will explain our recent Director changes shortly.

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Also sitting with the Board are our CEO Mark Peterson and Company
Secretary Sara Wheeler and we have most of the Senior Leadership
Team in the audience here at the meeting.
NZX's auditor, KPMG, is represented here today by Brent Manning.
I am pleased to confirm that we have a quorum and therefore
declare the 2023 Annual Shareholders’ Meeting of NZX Limited open.
[SLIDE: Strategic overview: Growing, Connecting Adding Value]

I am pleased to outline the continuing progress NZX is making in
delivering to its strategy.
I am proud of what NZX has achieved to grow the business and
implement a strategic plan that is bearing fruit in terms of our global
ambitions and value for shareholders.
Through our 2.0 Strategy: Growing, Connecting, Adding Value, we
are positioning NZX for the future.
In 2022, right across the NZX Group, we showed our purpose by
being committed to connecting people, businesses and capital every
day.
Smartshares, Wealth Technologies, the international partnerships
with Fonterra and European Energy Exchange (EEX) in Global Dairy
Trade, the SGX Group in dairy derivatives, alongside our growing
information services business, the Emissions Trading Scheme and
carbon auction, are all adding value or considerable bench strength
to our core markets business.
I take personal pride in the international partnerships and warm
friendships which ensure that NZX is well connected to the world and
the exciting opportunities that exist.

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Likewise, I am proud of our achievements in growing the
Smartshares business with a diversified client base, smart
acquisitions and achieving default status as a KiwiSaver provider.
Funds under Management that were circa $1.7 billion when I
became Chair are now $10.3 billion.
In my view, Smartshares will lead the passive market in New Zealand
in the years to come.
Given the KiwiSaver market is around $96 billion, and most global
markets have approximately 20% allocated to passive, the business
has a clear path to grow to $20 billion without factoring in industry
growth factors.
This is exciting for NZX and New Zealand’s capital markets and gives
us greater control of our destiny.
In 2022 the Board reaffirmed the next stage of the strategy.
This included encouraging stronger global connections and
opportunities.
It is about bringing more size, scale and efficiencies to our capital
market operations, and our funds management (Smartshares) and
funds under administration (Wealth Technologies) businesses.
I want to thank my fellow Directors and NZX Chief Executive Mark
Peterson and his dedicated team for all their hard work and
perseverance this year.
There is of course much more to be done to deliver to our growth
aspirations.
NZX’s Vision is to be a trusted New Zealand business delivering
sustainable wealth, value and opportunities for all.
[SLIDE: Governance and regulation]

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In August we announced that NZX would establish a new institute,
the Corporate Governance Institute (CGI), as a centre for thought
leadership around corporate governance in New Zealand’s listed
companies.
The development of the CGI follows public consultation on the NZX
Corporate Governance Code.
The aim of the CGI is to ensure the NZX Main Board has settings in
place that will improve performance and increase shareholder value
in a sustainable manner, while lowering issuers’ cost of capital.
The CGI will shift away from developing assertion-based policy and
move to delivering outcomes supported by evidence and academic
research.
It aims to be a market leader for corporate governance settings that
are appropriate for a leading, innovative, regional stock exchange.
We hope the CGI will follow in the successful footsteps of NZ RegCo,
the independently governed entity, responsible for performing NZX’s
frontline regulatory functions.
NZ RegCo continues to grow from strength to strength and I want to
acknowledge the diligent work of Chair Trevor Janes, the RegCo
Board and Chief Executive Joost van Amelsfort and his team.
[SLIDE: Director changes]

On 12 October last year the NZX Board announced the resignations
of Nigel Babbage and Richard Bodman after more than five years.
It was with great sadness we learned that Nigel had passed away on
20 November just before completing his term.
Nigel was a proud champion of NZX as a board member and
significant shareholder.
He was a man of immense passion and integrity something he
demonstrated throughout his 35-year career as a currency trader,
businessman, conservationist and director.

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Richard finished his term on 31 December.
He was an excellent director, bringing first-class technical skills
alongside promoting high-quality ethical standards and behaviour.
At NZX he has helped drive the establishment and expansion of our
Wealth Technologies business alongside improvements in our
technology and clearing operations.
Both Nigel and Richard left NZX in good heart and financial position.
They have been part of a Board that has moved the organisation
from being a narrow-based exchange operator into a scaled
diversified financial business with the expansion of Smartshares and
the growth of NZX Wealth Technologies.
We thank them both for their significant contribution.
Secondly, regarding new NZX director appointments: on 12 October
2022 we announced the appointments of Rob Hamilton and Rachel
Walsh, and on 1 February this year, Dame Paula Rebstock.
Their directorships began on the day they were announced.
Sarah Miller also joined the NZX Board on 1 January as our fifth
Future Director under the Institute of Directors’ programme, bringing
legal, corporate and frontline markets experience.
With these appointments it means that in 2023, the NZX Board will,
for the first time, have a majority of directors who are women.
[Pause]
[Slide: Position of Chair]
As you will be aware on 20 March, the NZX Board announced it had
withdrawn its endorsement of the incoming Chair Elect.
Following the announcement of the AUSTRAC proceedings against
SkyCity Adelaide in December 2022, the NZX Board carefully
considered its position.

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The Board determined that, in the interests of NZX and noting its
position as the operator of New Zealand’s capital markets, it could
no longer endorse the proposed Chair while the AUSTRAC
proceedings remain unresolved.
As a result, I agreed to continue in the role as NZX Board Chair until a
new Chair is appointed.
The kind of person the NZX Board is after as Chair is someone who
understands the ins and outs of the New Zealand market,
understands the dual role NZX plays as a market operator and
business, endorses NZX’s strategic direction, and has previous Chair
experience.
As you will appreciate in light of last month’s developments, the NZX
Board is not in a position to provide an update today on the position
of Chair.
However, I am pleased to say the selection process is well advanced
and we are making good progress.
My intentions remain the same as when you last elected me in 2022.
As I have said before, I am pleased the new Chair will inherit a
company with clear strategy, strong momentum and opportunities to
grow the business and the returns for shareholders over time.
SLIDE: Leadership continuity
The NZX Board notes feedback regarding the need for greater
transparency of the Chief Executive’s remuneration.
We are committed to addressing this in the 2023 Annual Report.
The Corporate Governance Institute and the New Zealand
Shareholders Association are both working on an appropriate
industry template. We will be guided by these in deciding our
approach to enhanced remuneration disclosure.
[SLIDE: Directors’ fees]

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One of the resolutions today relates to a proposed increase to NZX’s
Director fee pool.
At the 2022 ASM, the company indicated:
▪ That Director fees had not been independently reviewed since
2001
▪ That our Director fees were substantially behind market (Chair
and NED fees trailed the 2021 market median by 67% and 59%
respectively and the fee pool represented 60% of the market
median)
▪ To attract the required talent to take the company forward, the
pool needed to increase in three steps to $690,000 by 2024
(which would represent 95% of the 2021 market median); and
▪ The company also indicated that 50% of the increase would be
applied to the acquisition of NZX shares and that it would come
back to shareholders to seek the required approvals in 2023
and 2024 for the two subsequent fee changes.
At last year’s ASM, shareholders supported (by 98.94% of votes cast)
the first step to increase the pool to $522,000, and were generally
supportive of the three-step process I have just mentioned.

The NZX Board previously engaged PWC to carry out independent
market benchmarking for non-executive director fees based on a
group of 20 peer companies.

In line with the previous plan for increasing Director fees, but also
being mindful our operating environment, approval is now being
sought at this ASM for a reduced increase to the Director fee pool.

The proposal for this year is to increase the pool by $42,000 to
$564,000 – around half what was originally envisaged.

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Consistent with the plan outlined at the 2022 ASM, NZX intends to
seek shareholder approval at future ASMs for further Director fee
increases in order to bring Director fees in line with relevant market
benchmarks.

I ask for your support for this resolution today.
[SLIDE: Outlook for 2023]

In the year ahead, NZX is focused on rounding out our product
offering in capital markets in line with other international exchanges.
Driving scale and operating leverage across the broader business to
increase revenue base will also be a priority.
We know our product offering could be expanded which is key to
driving further growth in capital markets activity and greater global
connections.
NZX’s full year 2023 Operating Earnings (EBITDA), excluding
acquisition and integration costs, are expected to be in the range of
$36.0 million to $40.5 million.
This guidance is subject to the caveats and assumptions outlined on
the presentation slide and within NZX’s 2022 Results Investor
Presentation.
Conclusion
When Mark Peterson and I commissioned the 150-year history of
NZX and hosted celebrations throughout the country, many
commentators were of the view we wouldn’t make it to 200 years as
a standalone entity.
While global market events have conspired against me - and I
haven’t delivered on the total shareholder returns I would have liked
- broker sum of the parts valuations clearly indicate considerable
latent value has been created by a very talented and hard-working
team.

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I have every confidence future boards will extract this value and the
capital markets community can confidently look forward to NZX
celebrating its 200
th
birthday in 43 years.
Creating NZ RegCo, the Corporate Governance Institute, the new
Capital Markets Centre, opening the company’s eyes to the potential
of NZX with our Board visit to New York in 2018, uniting the markets
behind our 150
th
celebrations, and the Capital Markets 2029 vision,
are all personal highlights for me.
I’d personally like to thank our shareholders for your continuing
support during my time as Chair of NZX.
I’ll now hand over to our CEO, Mark.
..................................................................
Mark Peterson
Kia ora koutou katoa.
Good morning, ladies and gentlemen and thank you for joining us.
My name is Mark Peterson, and I am the Chief Executive of NZX.
I welcome all shareholders with us today and those attending online.
Despite challenging market conditions in 2022, the NZX Group
delivered a pleasing result due to the diversity of our product
offering and the robust building blocks for growth we have been
putting in place since 2017.
Our results and achievements for the year ended 31 December 2022
demonstrate steady progress in delivering our growth strategy and
balancing costs with opportunity.
[SLIDE: Performance and results]
NZX has maintained solid earnings through market cycles announcing
operating earnings (EBITDA) of $36.6 million – up 2.3% year-on-year
and excluding acquisition costs – for the financial year ended 31
December 2022.

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If we included the acquisition costs, Group operating earnings were
up 1.9% to $35.1 million.
Net profit after tax for the year (NPAT) was $14.2 million, compared
with $15 million the previous year.
The NZX Board declared a final dividend of 3.1 cents per share that
was paid on 16 March 2023, contributing to a FY2022 dividend of 6.1
cents per share fully imputed.
Focusing now on the highlights –
• Group revenues were up 8.8% to $95.7 million for the full year
and the overall revenue growth reflects the strength of our
strategy and broader earnings base
• Capital Listed and raised through 2022 was at the highest level
since 2015
• Our data business had another very strong year
• Our Dairy derivatives business, now in partnership with SGX has
an increase of lots traded by 40% through 2022, and is up 61%
as at 31 March 2023
• Smartshares Funds Under Management continues to grow
strongly and is now at $10.3 billion (including through the
successful acquisition of the QuayStreet funds)
• Operationally, we had a very strong year with 100% uptime
recorded on all critical market trading, clearing and settlement
systems
We have had to deal with challenges through the year like many
firms, and these include –
• The macro-economic environment. With inflation running high
– and monetary policy lifting interest rates in an attempt to
curb demand – pressure has come onto equity prices. This has
in turn flowed through to materially lower secondary trading

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levels through the year. We believe the negative impacts to
FUM and FUA and the lower trading levels have resulted in our
revenues being $5-6 million lower than the trajectory we were
previously on.
• We would have liked to have transitioned our substantial new
client onto the Wealth Technologies platform last year.
However, some parties critical to the transition last year were
not ready to deliver the service the end investor would expect,
and the transition is now scheduled for the beginning of May.
• Operating expenses, excluding acquisition and integration
costs, increased 13.3% to $59.1 million. Cost inflation is
impacting our business and is being felt in staff costs alongside
other areas – IT in particular. We also have taken on two
integration projects within Smartshares for ASB
Superannuation Master Trust and QuayStreet, and we continue
to resource these above our normal BAU staffing levels.
• The integration efforts and associated headcount costs will be
spread over two years, but the uplift in earnings are expected
to remain at previously disclosed levels.
• And finally, it was terribly sad for all of us at NZX to have Nigel
Babbage pass away. He was a huge supporter of what we are
trying to achieve with our business.
Turning to key business areas:
[Slide: Capital markets activity remains strong]
In 2022, $20.9 billion of capital was listed and raised on market.
This this was one of the strongest years of capital listed and raised
since 2015 and continues the positive run of the last decade.
Pathways to listing worked well with seven new issuers joining the
NZX Main Board. Promoting these pathways was a key
recommendation in Growing New Zealand’s Capital Markets 2029.

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In 2022 there was a shift from equity to debt, reflecting global
market conditions.
During the height of the COVID-19 outbreak we saw a pivot away
from bonds as investors climbed up the risk curve to achieve returns.
In 2022 bonds were back with 26 bond deals on market, and more
than $11.3 billion listed and raised.
ESG bonds remain strong with 41 bonds listed on the NZX Debt
Market in the ESG category, representing 26% of listed bonds on
issue.
We expect to see green bonds continue to grow as more companies
look to raise funds for projects to deliver environmental benefits.
Contact Energy’s recent $300 million green bond issue is a great
example of this.
[SLIDE: Market Development]
In 2022 NZX maintained its on-market liquidity levels of 64%.
This was despite total value traded being lower due to ongoing
market uncertainty.
The expectation remains NZX will reach 80% on-market liquidity in
the next five years.
Our midpoint trading venue launch will be key to reaching these
levels, and this project is a key focus for our team in 2023.
Alongside this development, our other priority is launching our
NZX20 futures product.
Our cornerstone group remains very supportive and so too is the
wider market.
Our priorities are getting our clearing rules more aligned to global
standards around risk and recovery tools, and enhancing our

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technology platform to cater for the needs of the participants. We
expect to launch this in 2024, all going to plan.
Despite softer market conditions, Information Services revenues
continue to grow.
They were up 10.9% to $19.4 million.
This will be a source of recurring revenue growth into the future as
we develop new product and delivery mechanisms.
Professional terminal numbers remain steady, with an uplift in
revenue demonstrating strong interest in our markets from local and
global investors.
[Slide: Dairy – exciting area of growth]
The dairy derivatives partnership between NZX and SGX Group has
led to a significant increase in growth with the annual volume trading
record broken on 20 October 2022.
By the end of 2022, just over 428,000 lots were traded, surpassing
the previous full-year traded volume record of just under 361,000
lots set in 2021 – an increase of 40%.
The partnership has seen NZX’s dairy derivatives listed on SGX’s
derivatives platform, and combines NZX’s core dairy expertise in
industry engagement, market insight, research capability, and
product development with SGX’s leading Asian presence and global
distribution capability.
The first quarter of 2023 has seen the growth continue, with just
over 134,000 lots traded, which is an increase of almost 62% on the
same period last year.
We now sit at the table to assist in unlocking the significant potential
to evolve Global Dairy Trade to be a truly global trading platform,
alongside the opportunity to grow SGX-NZX dairy derivatives to many
multiples of the physical dairy markets.

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NZX’s Information Services continues to provide effective market
insights to support engagement across our dairy market investments.
Slide: Energy & carbon
In partnership with Electricity Authority and Transpower, we
delivered the Real Time Pricing project that went live on 1 November
2022.
Since 2021, NZX in partnership with the EEX, has been managing the
New Zealand Emissions Trading Scheme Auctions for New Zealand
Units (NZUs).
The auction now has 102 fully registered participants, ranging across
multiple sectors within New Zealand and abroad.
The secondary carbon market also provides opportunities to deepen
carbon trading in New Zealand.
In November, the New Zealand Government announced a Request
for Information for a centralised, regulated exchange operator for
the trading of spot carbon.
NZX is supportive of the potential market benefits of this
opportunity.
[SLIDE: Smartshares]
Smartshares continues to be on a strong growth path.
In recent years we have been steadily building capability with our
people and technology to match our growth ambitions.
While the changes in market conditions in 2022 impacted top line
Funds Under Management (FUM) levels, this was largely offset by
strong net cash inflows of $800 million and the acquisition of the ASB
Superannuation Master Trust.
This lifted overall FUM to $8.26 billion.

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Operating earnings including acquisition and integration costs lifted
42.8% to $11.2 million.
We have said we would look for the right mergers and acquisitions
opportunities that fit our strategy.
This has included the ASB Superannuation Master Trust
announcement in 2021 and, in November last year, the
announcement of the purchase QuayStreet Asset Management, and
its $1.6 billion in FUM from Craigs Investment Partners.
QuayStreet provides another opportunity towards achieving scale
and operating leverage in Smartshares.
We remain on track for at least the $4.0 – $4.3 million earnings
growth annually from the ASB Superannuation Master Trust and $3.3
- $3.6m for QuayStreet. The remaining external integration costs
expensed over 2023/2024 are estimated at around $3.0m - $3.5m.
Scale and operating leverage are important elements for a funds
management business. With markets showing some recovery in Q1
2023, and with the settlement of the QuayStreet transaction, at the
end of March, Smartshares has $10.3 billion of funds under
management.
Our market analysis indicates $15-$20 billion of FUM is the point
when cost bases are at their most efficient for New Zealand fund
managers.
[SLIDE: NZX Wealth Technologies]
Impacted by market conditions, NZX Wealth Technologies’ Funds
Under Administration (FUA) at 31 December 2022 was $9.96 billion.
Revenue reached $5.99 million – an increase of 36.3% from 2021.
Wealth Tech’s pipeline prospects remain strong.
As previously mentioned, further FUA growth is underpinned by a
large, contracted client that we are now onboarding in early May.

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NZX Wealth Technologies has also had a very positive first quarter.
Funds Under Administration lifted to $10.3 billion and also won three
new medium-sized advisory clients. All three are scheduled to be
transitioned onto our platform this year.
[SLIDE: Delivering on a growth strategy in trying times]
From a strategic perspective, we have made significant progress in
strengthening the NZX Group business and our market and
operations infrastructure in the last five years.
This has enabled the NZX Group to maintain earnings through the
cyclical movement of markets and tightening of financial conditions
and is reflected in our results.
When markets turn back to being more favourable, we expect a
revenue uplift of $5-$6 million.
Through 2022, NZX was focused on continuing to grow our revenue,
maintain our earnings, drive efficiencies and maximise the leverage
off the acquisitions and investments we have made in recent years
under our strategy.
At the same time as making appropriate investment in market
infrastructure, we have focused on addressing cost pressures.
This remains a key priority for the year ahead.
It is about balancing cost with developing our group business to
capture opportunities that will have an upside when markets
recover.
We are making good progress towards growing a more integrated
financial markets infrastructure and services business as mentioned
already.
An at-scale, integrated business is at the heart of our growth
strategy.

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Growing markets is fundamental to what we do – helping businesses
get access to capital and providing investors opportunities to grow
their wealth via investing in equity, debt or fund securities.
Our ambition to round out our capital markets product offering in
areas such as equity derivatives and carbon markets will broaden our
earnings base, add scale to our settlement and clearing activities and
mature our market.
We are globalising our footprint across all businesses – as evidenced
by the partnerships between NZX, Singapore Exchange, European
Energy Exchange and Fonterra in Global Dairy Trade and SGX-NZX
Global Dairy Derivatives.
We see significant opportunities in a ‘star alliance-type’ strategy.
Global partnerships will help us achieve scale.
In addition, most exchanges have a level of diversification, and in our
case, for the Smartshares and Wealth Technologies businesses, there
are long-term structural market tailwinds that support strong growth
in both.
With Smartshares we want to create further products to ensure
investors can use our markets to get exposures all round the world.
Our group strategy to 2027 is clear: round out our product offering in
capital markets in line with other exchanges internationally and drive
scale and operating leverage across the broader business to increase
our revenue base.
And we are off to a good start in 2023 with revenue up $3.6 million
or 16.5% to $25.45 million in the first quarter.
$1.6 million has come from the ASB SMT and QuayStreet
acquisitions, with $2.0 million coming from organic growth.
[Slide: Commitment to ESG]

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ESG remains a priority area for NZX, and we have further
opportunities within our business alongside providing capability and
leadership for the wider market to leverage.
We continued to make steady progress in 2022 across the business
and NZX achieved net carbon zero certification for the 2021 and
2022 years from Toitū Envirocare.
Governance remains our strength while our focus in the year ahead
will be on improving our transparency and communication on the
environmental and social aspects of ESG and delivering to legislative
reporting requirements
As James has mentioned, our remuneration disclosure for the group
will take a step up in the 2023 Annual Report.
In the last year, NZX completed our review of the NZX Corporate
Governance Code after comprehensive engagement with industry.
We were delighted with the interest and thoughtful feedback we
received.
The updated Code promotes good governance in business practices,
including greater environmental, social and governance disclosure
among listed companies.
As the operator of New Zealand’s stock exchange and markets, as a
financial services and technology business, and as a regulator, our
focus is to create value while delivering a positive impact on society
and the environment.
Demonstrating our commitment as a business and market operator,
in 2022 NZX published in our Annual Report for the first time our
Climate Statement.
We also partnered with BusinessDesk in supporting its new
Sustainable Finance section.

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Public markets will continue to play an important role in facilitating
the flow of capital towards decarbonising the New Zealand economy.
Slide Our people
In 2022 further significant geopolitical and macroeconomic events
were added to the growing list of significant challenges the world
economy and businesses are facing.
Through all of this I am extremely proud of the fortitude and
resilience NZX staff continue to demonstrate.
‘Committed’ and ‘customer focused’ are words that best sum up the
collective attitude in the last year.
They are a testament to the calibre of our people – and their ability
to cope with constant change – alongside strong management by our
senior leaders.
I have a huge appreciation of everyone in the team’s efforts and
achievements.
Acknowledgement also needs to go to NZ RegCo, the independently
governed entity, responsible for monitoring and enforcing
compliance by listed issuers and accredited market participants with
NZX’s market rules.
Under the leadership of Chief Executive Joost van Amelsfort, NZ
RegCo continues to go from strength to strength.
It was pleasing to see in the Financial Market Authority’s annual NZX
market operator obligations review in June last year, recognition of
how effectively NZ RegCo was operating as a standalone frontline
regulator and demonstrating an appropriate level of independence
from NZX.
NZX was also pleased with the findings of that review which noted
the significant improvement in NZX’s technology and systems
capabilities, personnel and risk management practices.

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Finally, before I hand back to James, I want to thank you, our
shareholders, for your continued support and confidence in NZX.
Thank you.
..........................................................................
James Miller
[SLIDE: Resolutions]
Thanks Mark.
We now move on to the formal business of the day.
All items of business are ordinary resolutions and are required to be
passed by a simple majority – being more than 50% – of the eligible
votes cast.
[SLIDE: Shareholders voting online]
The resolutions that we will be voting on today are as follows:
Resolution 1: Auditor’s fees
Resolution 2: Election of Rachel Walsh as a Director of NZX
Resolution 3: Election of Dame Paula Rebstock as a Director of NZX
Resolution 4: Re-election of Frank Aldridge as a Director of NZX
Resolution 5: Approval of an updated Director fee pool
As stated in the Voting/Proxy Form, all voting at today’s meeting will
be by way of poll and, accordingly, in my capacity as Chair I require
that a poll be held for each of the resolutions.
Shareholders on Link, please refer to the powerpoint slide with
instructions on how to vote.
Your Board supports each of the resolutions and intends to vote
undirected proxies in favour of these five resolutions (noting the
voting restrictions in relation to resolution five.

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I will now introduce each of the resolutions in turn for discussion.
[SLIDE: Resolution 1 - Auditor]
Resolution one relates to the Board being authorised to fix the fees
and expenses of KPMG as the company’s auditor for the 2023
financial year. KPMG is the current auditor of NZX.
I move, as an ordinary resolution, that the Board be authorised to
determine the auditor’s fees and expenses for the 2023 financial
year. Are there any questions from the floor on this resolution?
Are there any questions from shareholders online?
[IF NO QUESTIONS] – There are no questions on this matter from
shareholders joining online.
There appears to be no [further] discussion.
[SLIDE: Resolution 2 – Rachel Walsh]
Resolution two relates to the election of Rachel Walsh.
Rachel Walsh was appointed a Director of NZX with effect from 12
October 2022. Rachel retires in accordance with the Listing Rules and
NZX’s constitution, and offers herself for election.
The Board recommends Rachel Walsh to you as a Director of NZX
and unanimously supports her election.
Being eligible, Rachel has confirmed she is available for election. I
invite Rachel to address the meeting on her proposed election.
RACHEL WALSH
[Address from Rachel Walsh]
JAMES MILLER
Thank you, Rachel.
I move, as an ordinary resolution, that Rachel Walsh be elected as a
director. Are there any questions from the floor on this resolution?

24

Are there any questions from shareholders online?
[IF NO QUESTIONS] – There are no questions on this matter from
shareholders joining online.
There appears to be no [further] discussion.
[SLIDE: Resolution 3 – Dame Paula Rebstock]
Resolution three relates to the election of Dame Paula Rebstock.
Dame Paula Rebstock was appointed a Director of NZX with effect
from 1 February 2023. Dame Paula retires in accordance with the
Listing Rules and NZX’s constitution, and offers herself for election.
The Board recommends Dame Paula Rebstock to you as a Director of
NZX and unanimously supports her election.
Being eligible, Dame Paula has confirmed she is available for
election. I invite Dame Paula to address the meeting on her proposed
election.
DAME PAULA REBSTOCK
[Address from Dame Paula Rebstock]
JAMES MILLER
Thank you, Dame Paula.
I move, as an ordinary resolution, that Dame Paula Rebstock be
elected as a Director. Are there any questions from the floor on this
resolution?
Are there any questions from shareholders online?
[IF NO QUESTIONS] – There are no questions on this matter from
shareholders joining online.
There appears to be no [further] discussion.
[SLIDE: Resolution 4 – Frank Aldridge]

25

Resolution four relates to the re-election of Frank Aldridge.
Frank Aldridge was appointed a Director of NZX in May 2017. Frank
retires by rotation in accordance with the Listing Rules, and offers
himself for re-election.
The Board recommends Frank Aldridge to you as a Director of NZX
and unanimously supports his re-election.
Being eligible, Frank has confirmed he is available for re-election. I
invite Frank to address the meeting on his proposed re-election.
FRANK ALDRIDGE
[Address from Frank Aldridge]
JAMES MILLER
Thank you, Frank. I move, as an ordinary resolution, that Frank
Aldridge be re-elected as a Director. Are there any questions from
the floor on this resolution?
Are there any questions from shareholders online?
[IF NO QUESTIONS] – There are no questions on this matter from
shareholders joining online.
There appears to be no [further] discussion
[SLIDE: Resolution 5 – Directors’ fees]
Resolution five seeks approval for the total annual remuneration
payable to all Directors to be increased by $42,000 from $522,000 to
$564,000 with effect from 1 July 2023.
As noted earlier in my presentation, the current NZX Director fee
pool was approved last year and at that time we signalled our
intention to return to shareholders to seek further adjustments to
bring NZX Director fees in line with the market median.

26

This year we are seeking half the increase that was originally
envisaged, in recognition of the challenges in the current operating
environment.
As noted, if the resolution is supported today, and subject to ongoing
company performance, the Board would also like to signal its
intention to seek further increases of the fee pool to achieve market
rates.
The Board unanimously supports this proposed resolution. Voting
restrictions apply to this resolution as set out on page 4 of the notice
of meeting, which broadly restrict each Director and the Associated
Persons of each Director from voting in favour of this resolution,
except for votes they cast as a directed proxy for a person entitled to
vote.
JAMES MILLER
I move, as an ordinary resolution, that the total annual remuneration
payable to all Directors to be increased by $42,000 from $522,000 to
$564,000 with effect from 1 July 2023.
Are there any questions from the floor on this resolution?
Are there any questions from shareholders online?
[IF NO QUESTIONS] – There are no questions on this matter from
shareholders joining online.
There appears to be no [further] discussion.
[SLIDE: Voting]
We will now turn to voting, for any shareholders who have not
already cast a postal or proxy vote.
Shareholders should now submit their votes – select “for”, “against”
or “abstain”, alongside each resolution. Voting will be open until the
close of the meeting.

27

Once all the votes have been cast, they will be counted by the
Company’s share registrar, Link Market Services, and scrutinised by
the company’s auditor, KPMG, who are in attendance at the
meeting.
The results of today’s meeting will be released to the market on the
completion of verification of voting.
[SLIDE: Questions]
At this point we will open up to any questions from shareholders in
attendance and online on the financial results, the business update
or any other matters you would like to raise.
Please complete your voting while we take questions.
QUESTIONS FROM SHAREHOLDERS
Are there any items of general business from the floor to be
discussed?
Are there any items of general business from shareholders online to
be discussed?
[IF NO QUESTIONS] – There are no questions from shareholders
joining online.
There appears to be no further business for discussion.
That brings this meeting to a close.
Ladies and gentlemen, that brings us to the end of formal business
for NZX’s 2023 Annual Shareholders’ Meeting.
[SLIDE: Thank you]
Thank you.

---

Annual
Shareholders’
Meeting
Auckland
19 April 2023

Today’s meeting
2
•Welcome and strategic overview –
James Miller, Chair
•Report on financial and business
performance –Mark Peterson, CEO
•Resolutions
-Audit fees
-Election of Rachel Walsh
-Election of Dame Paula Rebstock
-Re-election of Frank Aldridge
-Directors’ fees
•Voting
•Questions

Voting and asking questions
3
Voting Card
Question box

Welcome and
strategic overview
James Miller, Chair

New Auckland
office and Board
introduction
5
[Holding slide for Auckland office walk through]

Image from Annual Report
Section footer
6

Governance and
regulation
7
•Corporate Governance Institute (CGI) established
in 2022
•Founded to ensure the NZX Main Board has
settings in place to help improve performance and
increase shareholder value, while lowering issuers’
cost of capital
•Goal to be a market leader for corporate
governance settings appropriate for a leading,
innovative, regional stock exchange

Director changes
8
•On 12 October, the NZX Board announced the
resignations of Nigel Babbage and Richard Bodman
•Sadly, Nigel passed away on 20 November before
completing his term
•Rob Hamilton and Rachel Walsh were appointed onto
the NZX Board effective 12 October 2022
•Dame Paula Rebstock was appointed onto the NZX
Board effective 1 February 2023
•Sarah Miller appointed onto the NZX Board effective 1
January as our fifth Future Director

Position of Chair
9
•On 20 March, the NZX Board announced it had
withdrawn its endorsement of the incoming Chair
Elect
•James Miller will continue in the role as NZX Board
Chair until a new Chair is appointed
•Selection process is well advanced and making good
progress
•The new Chair will inherit a company with clear
strategy, strong momentum and opportunities to grow
the business and the returns to shareholders over
time

Leadership continuity
10
•The NZX Board notes feedback regarding greater
transparency of the Chief Executive’s
remuneration
•We are committed to addressing this in the 2023
Annual Report
•The NZX Board will be guided by the Corporate
Governance Institute and the New Zealand
Shareholders Association when deciding approach
to enhanced remuneration disclosure

Directors’ fees
11
•Fee pool of $435,000 was last independently
benchmarked in 2003 and remained static prior to
2022
•PWC engaged to carry out market benchmarking
for non-executive director fees based on a group
of 20 peer companies
•Our Director fees were substantially behind market
•Target overall fee pool of approximately $690,000
to allow for a Chair fee of $150,000 and Non-
Executive Director fee of $80,000
•The NZX Board proposes second step to increase
the fee pool by $42,000 to $564,000 –around half
what was originally envisaged

Outlook for 2023
12
•NZX has today announced guidance* to be in the
range of $36.0 million to $40.5 million for FY2023
•NZX is focused on rounding out our product
offering in capital markets in line with other
international exchanges
•Driving scale and operating leverage across the
broader business to increase revenue base will be
a priority
*The guidance is subject to market outcomes, particularly with respect to market
capitalisation, total capital listed and raised, secondary market value and derivatives
volumes traded, funds under management and administration growth, acquisition
related integration costs and technology costs
Additionally, NZX notes the market volatility in the current year, the lower levels of
trading, and a general tightening in financial conditions and this guidance assumes
no material adverse events, significant one-off expenses, major accounting
adjustments, other unforeseeable circumstances, or acquisitions or divestments
during the period

Report on financial
and business
performance
Mark Peterson, CEO

Performance and
results
14
•The diverse mix of the NZX Group business
and the breadth of offerings available to
access capital highlighted our resilience
through market cycles
•Group revenues were up 8.8% to $95.7 million
for the full year
•NZX’s overall revenue growth reflects the
strength of our strategy and earnings base
•Smartshares and NZX Wealth Technologies
continue to provide a platform for future growth
•Increase of operating expenses largely due to
increased headcount and wage inflation

Capital markets
activity remain strong
15
•In 2022, $20.9 billion of capital was listed and
raised on market –making it one of the strongest
years
•Pathways to listing worked well with seven new
issuers joining the NZX Main Board
•Shift from equity to debt a reflection of global
market conditions
•In 2022 bonds were back with 26 bond deals on
market and more than $11.3 billion listed and
raised
•41 bonds listed on the NZX Debt Market in the
ESG category, representing 26% of listed bonds
on issue

Market
development
16
•In 2022 NZX maintained its on-market liquidity
levels of 64%
•Our objective is to reach 80% on-market
liquidity in the next five years
•Information Services Revenues continue to
grow –up 10.9% to $19.4 million
•Professional terminal numbers remain steady.
Uplift in revenue demonstrates strong interest
in our markets from local and global investors

17
Dairy –exciting area of growth

Energy and carbon
18
•Delivered the Real Time Pricing project on 1
November 2022 in partnership with Electricity
Authority and Transpower
•NZ ETS auctions has 102 fully registered
participants, ranging across multiple sectors
with New Zealand and abroad
•The secondary carbon market provides
opportunities to deepen carbon trading in New
Zealand

Smartshares
19
•Strong net cash inflows and the acquisition of
the ASB Superannuation Master Trust lifted
overall FUM to $8.26 billion as at 31
December 2022
•Operating earnings including acquisition and
integration costs lifted 42.8% to $11.2 million
•In November 2022, NZX purchased
QuayStreet Asset Management from Craigs
Investment Partners adding $1.6 billion of FUM
•QuayStreet provides another opportunity
towards achieving scale and operating
leverage in Smartshares
•Market analysis indicates $15 -$20 billion of
FUM is the point when cost bases are at their
most efficient for New Zealand fund managers

NZX Wealth
Technologies
20
•Funds Under Administration (FUA) was $9.96
billionas at 31 December 2022
•Revenue reached $5.99 million -up 36.3%
from 2021
•NZX Wealth Technologies pipeline prospects
remain strong
•Large, contracted client is being onboarded in
earlyMay
•Positive first quarter. FUA lifted to $10.3 billion
and won three new medium-sized advisory
clients

21
Delivering on a growth strategy in trying times

Commitment to
ESG
22
•Achieved net carbon zero certification for the
2021 and 2022 years from ToitūEnvirocare
•Continued focus on improving our transparency
and communication on environmental and social
aspects of ESG and delivering to legislative
reporting requirements
•Completed our review of the NZX Corporate
Governance Code
•Public markets will continue to play an important
role in facilitating the flow of capital towards
decarbonising New Zealand’s economy

Our people
23
•‘Committed’ and ‘customer focused’ are words
that sum up the collective attitude of the NZX
team last year
•Special acknowledgment to NZ RegCo for
continuing to grow from strength to strength
•Thank you to shareholders for your continued
support and confidence in NZX

Resolutions

Shareholders voting
online
25
•Shareholders will be able to cast your vote using the
electronic voting card received when online registration is
validated
•To vote, you will need to click “Get Voting Card” within the
meeting platform
•You will be asked to enter your Shareholder or Proxy
Number to validate. Please then mark your voting card in
the way you wish to vote by clicking “FOR”, “AGAINST” or
"ABSTAIN" on the voting card
•Once you have made your selection please click “Submit
Vote” on the bottom of the card to lodge your vote
•The meeting and the results of the vote will be announced
via a market announcement on nzx.com
•The NZX Board supports each of the resolutions and
intends to vote undirected proxies in favour of these five
resolutions (noting the voting restrictions in relation to
resolution five)
•Link helpline: 0800 200 220
Voting card image to come

Resolution 1:
Auditor
26
That the Board be authorised to determine the
auditor’s fees and expenses for the 2023 financial
year.

Resolution 2: Election of
Rachel Walsh
27
To elect Rachel Walsh as a Director of NZX
Limited.
Rachel was appointed as a Director in October 2022. She is a
senior financial executive and a qualified chartered accountant.
She is the Chief Financial Officer of Datacom Group and a
member of the External Reporting Advisory Panel (XRAP).
Rachel was previously CFO at listed healthcare company Abano
Healthcare Group. She has worked at Rank Group Limited
where she was involved in private equity acquisitions and
divestments, debt raising in the US markets and financial
reporting in the US market and under International Financial
Reporting Standards.
Ms Walsh has also worked at PricewaterhouseCoopers as a
Director in Audit.

Resolution 3: Election of
Dame Paula Rebstock
28
To elect Dame Paula Rebstock as a Director of
NZX Limited.
Dame Paula joined the NZX Board in February 2023. She is a
leading Auckland-based economist and company director, who
was made a Dame Companion of the New Zealand Order of
Merit in 2015 for services to the State.
Dame Paula has extensive professional experience in corporate
and public services governance. She is Deputy Chair of NZX-
listed Vector, and also serves on unlisted entities including AIA
Sovereign Insurance New Zealand, Auckland One Rail, Chair of
Asia Pacific Healthcare Group, and Sealink New Zealand
among others.
Dame Paula is a former Chair of the New Zealand Commerce
Commission, and the Accident Compensation Corporation
(ACC); was a Deputy Chair of KiwiRail, and a Director of
Auckland Transport.

Resolution 4: Re-election
of Frank Aldridge
29
To re-elect Frank Aldridge as a Director of
NZX Limited.
Frank was appointed as a director in May 2017. Frank has
an extensive understanding of New Zealand’s capital
markets having spent more than two decades working for
Craigs Investments Partners where he led the business for
16 years as Managing Director through a period of
significant growth and expansion.
In addition, during this period he was also Chair of
Australian-based Wilson’s Advisory and Stockbroking,
former member and Chair of New Zealand Securities
Association, and sat on several of Craigs Investment
Partners’ subsidiary Boards.
Frank is an accredited NZX Adviser, Financial Adviser (FA),
and a Chartered Member of the Institute of Directors. Frank
is a Director of Avion Private advising corporates, trusts
and individuals.

Resolution 5:
Directors’ fees
30
To increase the NZX Director fee pool by $42,000
to $564,000 with effect from 1 July 2023

Voting

Questions

Thank you