NZX Full Year 2023 Results & Annual Report Published

NZX Annual Report 2023
2023 Annual Report
Strength
and resilience

NZX Annual Report 2023
About
this Report
Welcome to the
NZX 2023 Annual Report –
Strength & Resilience.
The report outlines the work the NZX Group has done this
year to deliver sustainable wealth, value and opportunities.
The report’s theme demonstrates the underlying
strength of New Zealand’s capital markets and the strength
of NZX as a listed company. This comes from the quality
of companies that utilise New Zealand’s capital markets
and the diversity of product offering within the NZX Group.
It also showcases the resilience of the New Zealand market
– and NZX itself – to cyclical changes in global markets.
Equity markets earnings are geared for strong growth
when inflation and interest rates ease.
The report includes our full Financial Statements (and
Notes to the Financial Statements) for the year ended
31 December 2023, along with commentary on the
Company’s financial results and operational performance.
The Business Year (How We Performed and Who We
Are) and the NZX Group Overview (How We Deliver
Value) provide information on our key performance and
organisational metrics as well as our Purpose, Vision
and Strategy.
Stakeholders, customers and investors can also
read about our performance in Operating Responsibly
that covers our environmental, social and governance
(ESG) matters. It is broken down into three sections
(Our People, Our Environment, and Our Markets and
Economic Performance).
This report contains the Global Reporting Initiative
(GRI) content index and includes climate statements
prepared in accordance with the Aotearoa New Zealand
Climate Standards.

NZX Annual Report 2023
We have included for the first time a standalone
Remuneration section that aligns with the new voluntary
NZX Remuneration Reporting Template for Listed Issuers.
The template was developed by NZX in conjunction with
the NZX Corporate Governance Institute (NZX CGI), which
is comprised of members representing a cross-section of
industry stakeholders.
The Governance section of the report describes how we
set the objectives and direction for the business, and the
framework for identifying and managing risks is outlined in
the Risk Report.
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 22 February 2024 and is
signed on behalf of the Board of NZX Limited by John
McMahon (Chair), and Lindsay Wright (Chair of the Audit
and Risk Committee).
Mā te huruhuru ka
rere te manu.
Adorn the bird with
feathers to enable it
to fly.
About this Report
1

NZX Annual Report 2023
Contents
1. Business Year
How we performed 4
Who we are 6
Year in Review 8
2. NZX Group Overview
How we deliver value 30
Strategic Priorities 32
Our Board

3
4
Our Leadership Team
3
6
2

NZX Annual Report 2023
3. Operating Responsibly
Overview 40
Our People 46
Our Environment 50
Our Markets &
Economic Performance

5
3
4. Corporate
Governance
57
5. Remuneration 67
6. Risk Reporting 77
7. Financial
Statements 85
8. Independent
Auditor’s Report
131
9. Statutory
Information
136
10. Appendices
NZX 2023 Climate Statement 146
GRI Content Index 164
Getting in touch 169
3

Funds Under Management
*
$10.98b
32.9%
How we
performed
Total Capital Listed and Raised
$14 . 2b
32.1% and 22.2% 5 year av.
Total Value Traded
$33.8b

9.7% and 21.5% 5 year av.
(New + secondary)
Information Services Revenue
$19.7m
1.9%
* Includes QuayStreet Asset Management acquired FUM.
Funds Under Administration
$11. 5 4 b

15.8%
Dairy Derivatives Lots traded
578,795
35.0%
NZX Annual Report 2023
4

01.
Business
01.
Business Year
Net Profit After Tax
$13. 6m

4.3%
Data highlighted on pages 4 and 5 is “for the financial year ended 31 December
2023” or “as at 31 December 2023” (as applicable). Percentage changes represent
the movement from 2022 to 2023, except Funds Under Management and Funds
Under Administration which are the movement in balances at 31 December 2022
to 31 December 2023.
*Operating earnings are before net finance expense, income tax, depreciation,
amortisation, gain or loss on disposal of assets, gain on lease modification
and share of profit of associate. Operating earnings is not a defined performance
measure in NZ IFRS. The Group’s definition of operating earnings may not
be comparable with similarly titled performance measures and disclosures by
other entities.
Excludes one-off acquisition, integration and restructure costs of $1.2 million
in 2023 (2022: $1.5 million). Operating earnings including one-off acquisition,
integration and restructure costs increased 10.9% to $38.9 million.
Dividend
(Fully imputed)
6 .1
cents per
share
Capital Listed & Raised (billions)
Operating Earnings
*
$4 0 .1m
9. 6%
0
5
10
15
20
25
20232022202120202019201820172016201520142013
5 Year Rolling Average (FY)
Capital Raised
NZX Annual Report 2023
5

6
Who we are
NZX operates New Zealand’s equity, debt, funds,
derivatives and energy markets. To support the
growth of our markets, we provide trading, clearing,
settlement, depository, and information services for
our customers.
NZX also owns Smartshares, a New Zealand
issuer of listed Exchange Traded Funds (ETFs),
KiwiSaver, investment, superannuation and
insurance provider SuperLife, and diversified fund
manager QuayStreet Asset Management.
NZX Wealth Technologies is a 100%-owned
subsidiary delivering comprehensive online
platform functionality to enable New Zealand
investment advisers and providers to efficiently
manage, trade and administer their clients’ assets.
NZX is responsible for monitoring and enforcing
the rules under which NZX’s markets operate. This
applies directly to issuers, market participants and
indirectly (through market participants) to investors.
This function is undertaken by NZ RegCo, an
independently governed entity.
Learn more about us at: www.nzx.com
Total Market Capitalisation
$220b
Listed equity, debt and funds
Secondary Markets
9.0 m
Tr ade s in 2023, with a total value of $33.8b
Issuer relationships
339
To t al listed equity, debt, funds and
other securities
Information Services
6,463
Professional data terminals
Smartshares
156,235
Members across KiwiSaver, investment,
superannuation, and insurance solutions
NZX Wealth Technologies
49, 605
Investor portfolios, with total Funds Under
Administration of $11.54b
NZX Annual Report 2023
6

7
New Zealand
NZX Operations
(Wellington and Auckland)
Head Offices of NZX-listed
Companies
Global affiliations
ASX – Sydney
HKEX – Hong Kong
LSE – London
NASDAQ – New York
Gender Diversity
All Employees
Gender Diversity
of Officers & Board
Female employees
Male employees
Female managers
Male managers
17.2%
38.6%
9.2%
35%
42%
57%
43%
58%
Female officers
Male officers
Female directors
Male directors
Employees (FTE)
by Business Unit
Employee (FTE)
by Age
Ethnic diversity
of NZX
*
176.6
15.0
72.3
75.7
NZX Markets
NZ RegCo
NZXWT
Smartshares
82.0
7.0
14.2
88.186.2
62.1
<29 years
30-39 years
40-49 years
50-59 years
>60 years
Not declared
61%
9%
5%
5%
4%
36%
21%
European
/Pākehā
Asian
Undisclosed
Other Ethnicity
MELAA (Middle
Eastern, Latin
American, African)
Māori
Pacific Peoples
New Zealand presence connecting a world of investments to NZ businesses
Full-time equivalent employees
(excluding contractors & consultants)
339.6
01.
Business Year
SGX – Singapore
TMX – Toronto
SPSE – Suva
SSE – Shanghai
WFE – World Federation of Exchanges
SSE – Sustainable Stock Exchanges Initiative
EEX – European Energy Exchange
* Data reflecting the primary and secondary
ethnic backgrounds of employees.
NZX Annual Report 2023
7

NZX Annual Report 2023
NZX Limited (“NZX” or “the
Company”) produced a solid
operating financial result in a
challenging year for global markets.
The NZX/S&P 50 index (gross)
produced a return of 2.6% for 2023.
However, the effects of high inflation
and interest rates saw equity market
trading activity remain soft and
sluggish resulting in a 9.7% reduction in
total value traded – the lowest volume
in nine years - which reflects the current
economic cycle. Value traded is a key
earnings driver for the Company.
Demonstrating strength through
diversity of product offering.
Year in review
2023
Full year review
Letter from the Chair and Chief Executive
John McMahon
Chair
Mark Peterson
CEO
8

NZX Annual Report 2023
01.
Business Year
0
20232022202120202019201820172016201520142013
10
20
30
40
50
60
0
1000
2000
3000
4000
5000
6000
Value Traded ($bn)
NZX 50 Price Return
Trade valueCapital index latest value
1 Operating earnings (EBITDA) are before net finance expense, income tax, depreciation, amortisation, gain or loss on disposal of assets, gain on lease modification and
share of profit of associate. Operating earnings is not a defined performance measure in NZ IFRS. The Group’s definition of operating earnings may not be comparable with
similarly titled performance measures and disclosures by other entities.
Approximately half of the 61 World Federation of
Exchanges members had a reduction in traded value
of 15% or more over 2023.
Despite the challenging economic conditions, the
market continued to deliver capital raising capacity to
meet our issuers’ debt and equity objectives. Alongside
this, the diversity of NZX’s product offering and earnings
base meant the Company continued to make progress on
its long-term strategy of expanding its product range in
capital markets and driving scale and operating leverage
across our funds management (Smartshares) and adviser
platform (NZX Wealth Technologies) businesses.
Results overview & key highlights
NZX lifted operating earnings, highlighting the resilience
of the Company through market cycles.
The Company is reporting 2023 operating earnings
(EBITDA)
1
of $40.1 million (excluding acquisition and
integration costs) up 9.6%. Operating earnings including
acquisition and integration costs (EBITDA) for the same
period increased 10.9% to $38.9 million, with:
—operating revenue increased $12.7 million to
$108.4 million; and
—operating expenses, excluding acquisition and
integration costs, increased $9.2 million to $68.3 million.
NZX produced a net profit after tax (NPAT) of
$13.6 million for the year (2022: $14.2 million), a year-on-
year decrease of 4.3%, with the decline largely resulting
from additional amortisation (relating to NZX Wealth
Technologies’ software development and migrations, and
Smartshares’ acquisitions) along with higher funding costs.
The higher amortisation charge largely represents the
“cost” of several years of capital investment in NZX Wealth
Technologies, an investment from which NZX is now seeing
gains through significant new client wins that are expected
to progressively onboard to the platform in 2024. NZX
Wealth Technologies is targeting cash flow breakeven by
the end of the year – adding significant value
to the Company.
Operating earnings (EBITDA)
*
$4 0 .1m
Improvement of 9.6% from 2022
* Ex cludes one-off acquisition, integration and restructure costs of $1.2 million in 2023 (2022: $1.5
million). Operating earnings including one-off acquisition, integration and restructure costs increased
10.9% to $38.9 million.
9

NZX Annual Report 2023
Dividend
The Directors have declared a fully-imputed final dividend
o f 3 .1 cents per share (2022: 3.1 cents) to be paid on
28 March 2024 to shareholders registered as at the
record date of 15 March 2024. Total dividends for the 2023
financial year are 6.1 cents per share fully imputed
(2022: 6.1 cents).
How we performed – NZX Group’s key performance
measures
Despite the muted performance in new issuances and
trading, the Company continues to experience positive
momentum towards achieving its strategic goals, due to
the diversified nature of the NZX Group’s activities.
In 2023 in particular, strong performances came from:
—T
he dairy market partnership with Singapore Exchange
saw record volumes, up 35.0% compared to 2022
—Our Information Services (Data) business – revenue
increased to $19.7 million, up 1.9%
— S
martshares, which finished 2023 with close to
$11.0 billion in funds under management – up 32.9%
from 2022 (due to acquisitions and organic growth)
—NZX Wealth Technologies – won 12 new clients in 2023;
these are expected to be transitioned on to its platform
by the end of 2024.
Financial performance
As noted, Group operating earnings (EBITDA) for 2023,
excluding acquisition, integration and restructure costs
was $40.1 million – up 9.6%. Including one-off acquisition,
integration and restructure costs, EBITDA was $38.9 million
– up 10.9% on the same period last year.
At a Group level, operating revenue increased
$12.7 million to $108.4 million, primarily driven by
incremental revenue from Smartshares acquisitions – ASB
Superannuation Master Trust and QuayStreet Asset
Management – Smartshares’ organic fund growth, and the
continued growth of our Information Services (data) and
Dairy market businesses. This growth occurred despite
headwinds from reduced market activity, with trading and
clearing volumes at their lowest levels in nine years.
Performance indicatorsF Y23 Targ e t2023 Actual2022 Actual% Change
Operating earnings (EBITDA) pre acquisition, integration
& restructure costs ($ million)
1
36.0 – 40.54 0 .136.69.6%
Capital listed & raised ($ billion)16.014. 220.9(32.1%)
Total value traded ($ billion)40.033.837. 4(9.7%)
Information Services (previously Data & Insights) revenue
($ million)
2
Grow 6.9%19.719.41.9%
Funds under management ($ billion)Grow 14%
3
11. 08.332.9%
Funds under administration ($ billion)11. 510.015.8%
Dairy derivatives lots traded (k)550 – 650578.8428.235.0%
1 Operating earnings (EBITDA) are before net finance expense, income tax, depreciation, amortisation, gain or loss on disposal of assets, gain on lease modification and share of profit of associate. Operating
earnings is not a defined performance measure in NZ IFRS. The Group’s definition of operating earnings may not be comparable with similarly titled performance measures and disclosures by other entities.
2 Information Services Revenue strategic target excludes connectivity revenue. Information Services revenue excluding connectivity revenue has increased 1.5% (2023: $16.9 million, 2022: $16.6 million)
3 The closing FUM growth excluding ASB Superannuation Master Trust and QuayStreet Asset Management FUM increased 15.6% from 31 December 2022 to 31 December 2023.
2023 total dividends
6 .1c
2022: 6.1c
10

NZX Annual Report 2023
Operating expenses, excluding acquisition, integration
and restructure costs, increased $9.2 million to $68.3
million. This was driven by incremental costs as a result of
integrating the Smartshares acquisitions, inflationary
pressures (employee and technology costs), and increases
in costs relating to compliance and statutory obligations.
NZX is conscious of its cost base and the cost pressures
it is facing. It has been necessary to invest in new staff and
technology as we assumed the support functions for the
new clients we received through those acquisitions.
However, we have dedicated effort to reviewing
headcount, managing project priorities and rationalising
supplier contracts across the NZX Group. We have
prioritised key projects that will deliver to our strategy, put
on hold other projects, and negotiated supplier contract
savings opportunities. Cost control remains a priority.
Acquisition, integration and restructure costs primarily
relate to the integration of the ASB Superannuation Master
Trust which was completed in August 2023, when
investment management, investment administration and
registry services transferred to Smartshares. While this
required the hiring of additional staff, the net impact has
been an unlocking of synergies of more than $1.2 million
on an annualised basis. In 2024 the operating revenue and
expenses will reflect the full year impact of the migration.
Additionally, the QuayStreet operating model migration
is expected to be completed in the last quarter of 2024.
This will have a similar impact on operating revenue and
expenses, potentially unlocking further synergies.
Depreciation and amortisation increases are due to
amortisation of QuayStreet management rights,
amortisation of additional development of NZX Wealth
01.
Business Year
Summary Financial Performance ($ million)20232022% Change
Markets60.961.7(1. 2%)
Funds Management37. 024.550.9%
Wealth Technologies6.86.013.8%
Corporate Services0 .1–n/a
Regulation3.63.53 .1%
Total operating revenue108.495.713.2%
Personnel costs(43.3)(37.3)(15.9%)
Information technology costs(13.8)(13 .1)(5.3%)
Other costs(11. 2)(8.7)(28.8%)
Total operating expenses excl. acquisition, integration & restructure costs(68.3)(59.1)(15.5%)
Operating earnings (EBITDA)
1
pre acquisition, integration & restructure costs
1
4 0 .136.69.6%
EBITDA Margin (%)37. 0 %38.2%(3.2%)
Acquisition, integration & restructure costs(1. 2)(1.5)21.1%
Operating earnings (EBITDA)
1
38.935 .110.9%
Depreciation & amortisation(16.8)(13.9)(21.0%)
Investment in associate and other gains1.10.2n/a
EBIT23.221.48.5%
Net finance expenses(4.0)(1.9)(115.6%)
Net profit before tax19. 219.5(1.6%)
Tax expense(5.6)(5.3)(5.5%)
Net profit after tax13.614.2(4.3%)
1 Operating earnings (EBITDA) are before net finance expense, income tax, depreciation, amortisation, gain or loss on disposal of assets, gain on lease modification and share of profit of associate. Operating
earnings is not a defined performance measure in NAZ IFRS. The Group’s definition of operating earnings may not be comparable with similarly titled performance measures and disclosures by other entities.
11

NZX Annual Report 2023
$14.2b
Technologies’ core platform and client migration costs
completed over 2022 and 2023, and additional
depreciation on the fit out and use of additional space
in, and the new ticker for, the Auckland Capital
Markets Centre.
The net finance expenses increase relates to the funding
of the QuayStreet acquisition and the progressive
unwinding of the present value discount on the QuayStreet
earnouts through to November 2025, as well as the
subordinated notes interest rate being reset from 5.4% to
6.8% in June 2023 and increased interest on leased assets,
offset by higher interest income from
increasing interest rates.
CAPITAL MARKETS
Origination
Despite economic uncertainty, issuers continued to access
the market, with $14.2 billion of capital listed and raised on
market for the year. This has been equally split across
primary and secondary capital raises, with 24 significant
equity capital raising events, ranging in size from
$1.5 million to $902 million. The diverse range of capital
raisings this year reflects NZX’s ability to deliver to issuers’
capital needs and highlights the value of being NZX-listed
in a more economically difficult capital
constrained environment.
Interest rates remained elevated compared to record
low levels through the COVID-19 years of 2020 and 2021,
creating a tailwind for debt market activity, with senior
bond and hybrid issuance delivering the highest headline
yields in years. In 2023 there were 25 primary debt deals
with $6.7 billion raised, and 34 secondary retail debt
deals completed totalling $2.1 billion – a combined total
of $8.8 billion.
Capital Listed and Raised
Markets performance ($ million)20232022% Change
Capital Markets Origination16 .117. 0(5.4%)
Secondary Markets25 .125.3(0.9%)
Information Services19.719.41.9%
Markets revenue60.961.7(1.2%)
Markets EBITDA excl. restructure costs40.942.6(3.9%)
EBITDA Margin excl. restructure costs67. 2 %69.1%(2.7%)
Key Operating Metrics
Equity Markets capitalisation (ending, $ billion)155.0155.9(0.6%)
Equity listed & raised ($ billion)2.77. 6(64.5%)
Debt listed & raised ($ billion)8.811. 4(22.8%)
Funds listed & raised ($ billion)2.71.942.1%
Total value traded ($ billion)33.837. 4(9.7%)
Dairy lots traded (k)578.8428.235.0%
12

NZX Annual Report 2023
We saw an increase in ESG-designated bonds which
now make up 29.4% of the total NZDX market. The Local
Government Funding Agency celebrated its 100th bond
tender (18 of which are listed on NZDX) with the company’s
first sustainable finance bond issue.
NZX’s total market capitalisation of $220 billion is made
up of approximately $155 billion of equity, $56 billion of
debt and $9 billion of investment funds.
NZX continues to provide issuers with a platform to
grow and connect with New Zealand’s investment
community. Turners Automotive Group entered the S&P/
NZX 50 Index this year (see case study on page 54 – 55)
and Gentrack returned to the Index following a strong
year of performance.
NZX’s Origination team continues to support issuers
through high-quality communication and engagement
opportunities. In 2023 we provided podcasts, spotlight
videos, virtual investor events, education workshops and
social media support enabling issuers to connect to a
broader investment community.
The launch of our new high-tech ticker on the exterior
of the NZX Capital Markets Centre building in Auckland’s
Queen Street – along with the ticker in Wellington – gives
us greater opportunity to effectively promote
achievements and milestones of New Zealand’s listed
companies and capital markets community to a
broader audience.
Despite a globally subdued environment for new equity
issuance, the Origination team is actively contacting
unlisted companies and engaging with investment banks,
law firms, accounting firms, private equity and sponsorship
partners to drive new listings. The bulk of our activity is
focused on New Zealand, but we are simultaneously
working to strengthen our Australian relationships with
the aim of increasing dual listing activity of Australian
companies onto NZX.
New Zealand has many companies and funds expressing
interest in listing on NZX. They are waiting for
macroeconomic and market conditions to show sustained
improvement to maximise their listing opportunity. NZX is
engaging with the government to encourage settings that
will further facilitate the process of listing. NZX remains
confident that as economic conditions start to become more
favourable, equity market activity levels should increase.
01.
Business Year
ESG-designated bonds
29. 4%
Percentage of the total market
13

NZX Annual Report 2023
NZX holds a 33.33% stake in GlobalDairyTrade (GDT)
alongside Fonterra and the European Energy Exchange
(EEX) and in 2023 two new sellers were added (one in
the US and one in Europe) as part of its strategy to grow
into new markets. It also hired an international sales team
based in Europe and the US. GDT also added new product
lines – European whole milk powder and mozzarella cheese
– expanding the offering available on the platform and
price points visible to the market.
Information Services
The continued growth of the Information Services business
helped make up for lower cash market revenue. The
Information Services growth has come particularly from
growth in licence numbers.
Royalties from terminals’ revenue relates to the
provision of market data to data resellers who distribute
data to their customers. The royalty revenue from terminals
increased by 2.5% driven by price increases (effective
January 2023) and were partially offset by lower levels of
average terminal numbers.
Subscriptions and licences’ revenues relate to the
provision of markets data to other participants in the
capital markets. The subscriptions and licences revenue
increase of 7.1% reflects the continued growth in data
usage as well as the ability to capture licence revenue
streams post audit, resulting in increased total license
numbers (2.7%), partially offset by reduced subscriptions
(2.9%). There has also been a positive revenue impact from
price increases (effective January 2023).
Dairy data subscriptions relate to the sale of dairy data
and insight products. Dairy data subscription revenue
declined versus last year, reflecting less one-off and
consulting revenues.
The decrease in audit and back dated licensing revenue
(down 36.8% from 2022 to $0.9 million) is attributable
to significant levels of audit activity occurring in 2022
and revenues now being captured within royalties or
licence revenues.
Secondary Markets – Cash
Participant services revenue is charged to Market
Participants (broking, clearing and advisory firms) that
are accredited for NZX’s equity, debt and derivatives
markets. The total number of Market Participants
decreased to 27 (December 2022: 29), with the resignation
of three NZX sponsors and the introduction of Trustees
Executors as a Depository Participant. Participant services
revenue is net of an internal allocation to NZ RegCo, which
was higher in 2023.
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 over-the-counter
settlement and registry messaging services provided to
Market Participants. The largest component is clearing
fees which are based on the value of settled transactions.
Securities trading and clearing revenue
decreased reflecting:
— lower market activity levels - the total value traded and
cleared ($33.8 billion) was 9.7% lower than last year;
—uncharged value traded impacting securities trading
revenue (caused by large index rebalance trading days
where fees on value traded exceeds the fee cap), which
increased to 8.9% (2022: 6.5%); and
—lower levels of clearing margin, clearing penalties and
depository registry transfer fees.
Secondary Markets – Dairy derivatives and Global
Dairy Trade
Dairy remains well positioned across the physical and
futures markets, with record growth in 2023. The expected
significant growth from the SGX strategic partnership in
dairy derivatives is being achieved and demonstrates the
value of NZX driving strategic international partnerships.
Highlights include:
— R
ecord daily volume: 11,310 lots - 15 August 2023
— Record average daily volume: 3,413 - August 2023
— R
ecord daily trade count: 290 trades - 11 August 2023
— Record monthly volume: August 2023 - 78,504 lots
— R
ecord quarterly volume: 179,557 lots - Q3 2023
—Record month end open interest: December 2023
– 146,287 lots – this is a sign of market quality and
indicates the durability of growth
— 2023 volume: 578,795 lots - up 35%
— N
ew incentive schemes are attracting new traders
to the market
7.1%
Growth in subscriptions and
licences revenue
14

NZX Annual Report 2023
Indices revenue relates to the revenue generated
on index licensing in partnership with S&P. The indices
business has grown over the last few years, driven by
an increase in the number of funds using the indices as
benchmarks across the funds management market, and
additional index data clients.
Connectivity revenue relates to the provision of
connectivity and access to NZX systems for participants
and data vendors. Connectivity revenue has increased in
line with increased connectivity requirements from both
Participants and data vendors.
Capital Markets - Operating Expenses
Personnel costs (net of capitalisation) have increased,
driven by wage inflation in the highly competitive labour
market for specialist resources, especially in technology.
IT costs relate to licensing and hardware/software
maintenance costs for the trading and clearing systems,
energy electricity market, energy carbon market, SGX-NZX
Dairy Derivatives Market and strategic partnership, and
data platforms feeds. IT costs have been impacted by
movements in FX rates and inflation.
Professional fees relate to the annual assurance
programme (including assurance fees, tax advice, and
energy audit obligations under Electricity Authority
contract), terminal royalty audit fees, and royalty fees
relating to both the energy carbon market, SGX-NZX Dairy
Derivatives Market. Professional fee expenses have
increased for consultancy costs for the clearing house,
which is partially offset by decreased terminal royalty audit
fee costs. These vary in proportion to audit revenue (with
revenues recognised on a gross basis).
Other costs include marketing (for example, Capital
Markets Origination team’s memberships of various
industry groups to identify listing pipeline opportunities,
and SGX-NZX dairy derivatives new market maker
arrangements), travel, statutory compliance costs and
non-recoverable GST costs.
01.
Business Year
15

NZX Annual Report 2023
SMARTSHARES – FOCUSED ON GROWTH,
EFFICIENCY AND SCALE
Smartshares is a key component of NZX’s growth story.
Smartshares has had another positive year of growth,
closing the year with $11.0 billion of funds under
management (FUM), having increased by more than
$10 billion over the last 10 years.
In the last five years FUM has grown $8 billion, from
$2.9 billion as at 31 December 2018 (acquisitions of
$3.4 billion, cash flows of $3.2 billion, and positive market
return of $1.4 billion). FUM compound annual growth rate
(CAGR) since December 2018 is 30.2%. Contributing to the
2023 increase in FUM was the acquisition of QuayStreet
Asset Management. This added $1.6 billion of FUM to the
business as well as additional fund expertise and
experience into the team.
Smartshares is New Zealand’s leading passive funds
management business with a product range that includes
SuperLife superannuation and KiwiSaver, exchange traded
funds (ETFs), ASB Superannuation Master Trust (acquired
February 2022) and QuayStreet Asset Management
(acquired February 2023).
Smartshares welcomed a new Chief Executive, Anna
Scott, to the team in September. Anna joined Smartshares
bringing a wealth of operational, strategic and leadership
capability. Her most recent role was Chief Operating
Officer at Hobson Wealth. Anna’s core objectives are
to continue to drive sustainable business growth and
deliver high-quality customer service, alongside having a
greater emphasis on building a more efficient and scalable
operating model.
The transition of ASB Superannuation Master Trust
investment administration, investment management
and registry services was completed in the third quarter
of 2023. This has resulted in synergies being realised,
including in-house management of some asset classes.
In June 2023, Smartshares launched five new ETFs
giving investors more options. These were the first new
Smartshares products since our Core Series launch back in
July 2020.
$11. 0 b
Increase of 32.9% in 2023
Smartshares
16

NZX Annual Report 2023
01.
Business Year
Smartshares welcomed a new Chief Executive, Anna
Scott, to the team in September. Anna joined Smartshares
bringing a wealth of operational, strategic and leadership
capability. Her most recent role was Chief Operating
Officer at Hobson Wealth. Anna’s core objectives are
to continue to drive sustainable business growth and
deliver high-quality customer service, alongside having a
greater emphasis on building a more efficient and scalable
operating model.
The transition of ASB Superannuation Master Trust
investment administration, investment management
and registry services was completed in the third quarter
of 2023. This has resulted in synergies being realised,
including in-house management of some asset classes.
In June 2023, Smartshares launched five new ETFs
giving investors more options. These were the first new
Smartshares products since our Core Series launch back in
July 2020.
$11. 0 b
Increase of 32.9% in 2023
Smartshares
The new ETFs not only extend the range of our offering,
but they also represent the growth in partnerships
Smartshares continues to build with global fund managers
and index providers. For example, Smartshares worked
with S&P to develop a new index covering an Australian
Equities ESG ETF.
The acquisition of the QuayStreet business - and the
associated product support and distribution agreement
with Craigs Investment Partners private wealth network
– offers a significant growth opportunity for Smartshares.
It advances Smartshares towards NZX’s strategic goal of
achieving scale and operating leverage which are
important elements for a funds management business.
The new US 500 (NZD Hedged) ETF was developed
through growing our relationship with Craigs and
welcoming QuayStreet to the Smartshares team.
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. Smartshares is on a pathway
that aims for around $18 – $20 billion of FUM by the end
of 2027.
QuayStreet contributed revenue of $6.7 million,
operating earnings of $4 million and profit of $1.5 million
(excluding acquisition and integration costs) to the Group’s
results for the period from acquisition to
31 December 2023.
Funds management revenue is generated from:
—Funds under management-based revenue which relates
to variable FUM fees 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; and
—Other revenue, for example interest income, insurance
service fees and stock lending and borrowing
service fees.
FUM-based revenue (net of fund expenses) has
increased 53.6%, which reflects FUM at 31 December 2023
of $10.98 billion, up 32.9% on last year. The FUM movement
year to date is a combination of the QuayStreet acquired
FUM ($1.6 billion; acquired 23 February 2023), positive
market returns and positive net cash flows.
Smartshares performance ($ million)20232022% Change
Fund based fees33.121.653.6%
Member based fees2.72.317. 0 %
Other1.20.682.4%
Funds revenue37. 024.550.9%
Funds EBITDA excl. acquisition, integration & restructure costs19. 412 .752.2%
EBITDA margin excl. acquisition, integration & restructure costs52.4%52.0%0.9%
Funds EBITDA18.311. 263.5%
Key operating Metrics
Opening FUM ($ billion)8.36.526.4%
FUM effect from market movement ($ billion)1.0(0.8)225.0%
FUM effect from net cash flows ($ billion)0 .10.8(87. 5 %)
FUM effect from acquisition ($ billion)1.61.8(11.1%)
Closing FUM ($ billion)11. 08.332.9%
Number of NZX listed Smartshares funds403514. 3%
17

NZX Annual Report 2023
Member based revenue has increased, reflecting an
increase in investor numbers from the ASB Superannuation
Master Trust and QuayStreet acquisitions.
Other revenue has increased due to higher levels of
stock lending and interest income.
During the prior financial year management identified
additional FUM based, member-based fees and other
revenue relating to prior Fund financial years that had not
been recognised. No revenue was recognised in the prior
financial year as it was not virtually certain that these fees
were recoverable. As recoverability has now been
confirmed, revenue of $1.4 million has been recognised in
the current period.
Personnel costs (net of capitalisation, excluding
acquisition, integration and restructure costs) have
increased due to the acquisition of QuayStreet, resource to
support the transitioned services for the ASB
Superannuation Master Trust, and additional resource to
the Risk & Compliance function.
IT costs include database and software licence fees for
the Bloomberg front and middle office operating systems,
which have increased with the acquisition of QuayStreet.
The Bloomberg databases were merged in October 2023
and the synergy benefit has been realised.
The net result for Smartshares is a significant increase in
operating earnings and EBITDA margin. This has been
achieved through increased scale from both acquisitions,
continued organic growth, synergy extraction and
improved operating leverage.
NZX WEALTH TECHNOLOGIES –
BUILDING ADMINISTRATION PLATFORM
INFRASTRUCTURE
NZX Wealth Technologies develops, administers and
operates a custodial investment management platform
that enables both large-scale and small-scale New
Zealand-based financial adviser groups to manage their
clients’ investments.
Our platform, service quality, reputation and
experience is being well received by the market. The main
success for us this year was winning 12 new clients that are
expected to be transitioned on to the platform by the end
of 2024. All of these are for the full-service custody and
operations markets – as opposed to Software as a
Service (SaaS).
This includes the announcement in December that NZX
Wealth Technologies would partner with Fisher Funds,
which serves more than half a million clients and has
$23 billion in funds under management. The initial tranche
of Funds Under Administration (FUA) onto the platform will
be approximately $1.5 billion.
In 2023 we completed three significant onboardings of
clients in the form of:
— The first tranche of a large SaaS client, that will later be
onboarded to full service custody and operations;
—Cook Islands National Superannuation Fund; and
— Y
ovich & Co Wealth Management.
In addition, we have won and are progressively on-
boarding smaller size advisers including Ethical Investing
NZ and Multiply Limited.
Another significant achievement in 2023 was the
transition of all clients off NZX Wealth Technologies’
legacy platform which was subsequently de-commissioned
in March. NZX Wealth Technologies now operates a single
platform with a single code base. There are multiple client
environments but all operate with the single code base.
The platform is cloud based and operates on modern
technology and interfaces to other systems and data
sources via the latest API (application programming
interfaces) standards.
We remain confident the growth from the existing
contracted transition activity and the new business
prospect pipeline should ensure NZX Wealth Technologies
meets its objective of being cashflow breakeven by the
end of 2024 and will deliver on its longer term target of
FUA between $35 and $50 billion. The key risk in 2024 is
that the timing of transitioning new business onto the
platform is in part controlled by the client, so is therefore
subject to their technology roadmap priorities.
18

NZX Annual Report 2023
01.
Business Year
12
New clients won in 2023
NZX Wealth Technologies
Wealth Technologies performance ($ million) 20232022% Change
Wealth Technologies revenue6.86.013.8%
Wealth Technologies EBITDA excl. restructure costs1.61.323.5%
EBITDA Margin excl. restructure costs24 .1%22.2%8.5%
Key Operating Metrics
Opening FUA ($ billion)10.011. 0(9.7%)
FUA effect from market movement ($ billion)1.1(1. 2)(191.7%)
FUA effect from net cash flows ($ billion)0.40.2100.0%
Closing FUA ($ billion)11. 510.015.8%
Capitalised costs for client onboarding7.78 .1(5.3%)
NZX Wealth Technologies’ revenue is generated from
administration services provided on its management
platform and development fees received from the
customisation of the platform or data migration effort
specific to client requirements. Administration fees are
based on FUA and have been positively impacted by
positive cashflows and market returns over the period.
FUA at 31 December 2023 was $11.5 billion, up 15.8% on
December 2022.
Personnel costs (net of capitalisation) have increased,
driven by:
—wage inflation;
— l
ower levels of capitalisation compared to 2022,
reflecting the non-capitalisable effort required to
migrate clients between the legacy and new platform.
This migration is now complete, and the legacy
system decommissioned; and
— These costs were offset by lower average FTEs due to
vacancy levels. Headcount is dependent at any point
in time on the levels of platform investment (including
migration activity) required for current and future
clients, and the operational services provided to
current clients.
Capitalised labour and overhead remains at high levels,
predominantly reflecting new client migration activity, plus
continued product development. The levels of
capitalisation are expected to continue as clients migrate
additional FUA and new clients are onboarded.
IT costs have decreased due to the decommissioning of
the legacy system and a rationalisation of data hosting and
data feed spend.
Operating earnings and EBITDA margin improved
slightly driven by the operating leverage achieved through
the increased FUA.
$11. 5 b
Up 15.8% on December 2022
FUA at 31 December 2023
19

NZX Annual Report 2023
NZX closed the year with net debt of $36.6 million
(excluding Clearing House risk capital which is not
available for general use) including:
—subordinated notes ($38.8 million) – the subordinated
notes were rolled over in June 2023 with the interest
rate being reset at 6.8% which will apply until the next
election date on 20 June 2028;
—term loan ($22.5 million; expiry date 28 February 2025),
used to fund the QuayStreet acquisition in February
2023; and
Cash and cash equivalents of $24.7 million which includes:
—Cash of up to $2.8 million held in Clearing House
to meet International Organisation of Securities
Commissions’ principles requiring retention of working
capital; and
—C
ash of up to $1.9 million held in Smartshares to
maintain sufficient net tangible assets in accordance
with its license requirements.
Balance Sheet and Cashflow Figures ($ million)20232022% Change
Net debt (excludes restricted cash)(36.6)(18.4)(98.6%)
Restricted cash20.020.0–
Goodwill50.630.267. 4 %
Other intangible assets99. 268.644.6%
Other non-current assets44.546.4(4 .1%)
Net other liabilities(60.3)(35 .1)(72.0%)
Net assets / equity117. 4111.75 .1%
Operating activities cashflow31.428.410.6%
Working capital movements3.0(5.0)161.1%
Cash inflow from operations34.423.446.9%
Payments for acquisitions(22.4)(41.6)46.2%
Payments for PPE & other intangible assets(12.5)(15.5)19.4%
Cash outflow from investment(34.9)(57.1)(38.9%)
Net proceeds from equity raise/term loans21.942.7(48.8%)
Dividends and other(17. 3)(17. 5 )1.1%
Cash inflow from financing4.625.2(82.0%)
Net increase/(decrease) in cash and cash equivalents4 .1(8.5)148.0%
BALANCE SHEET, LIQUIDITY & DEBT
The acquisition of QuayStreet in February 2023 has
resulted in increases in net debt, goodwill, other intangible
assets and net other liabilities. The effect of the QuayStreet
acquisition is explained fully in note 6 to NZX’s financial
statements.
Operating activity cashflow represents the profit for the
year (adjusted for non-cash items - for example,
depreciation and amortisation, share of profit of
associates, share-based payments) and working capital
movements. We are conscious of NZX Wealth
Technologies’ capital spend for growth and are targeting
that business to be cashflow positive by the end of 2024
based on the migration pipeline.
20

NZX Annual Report 2023
01.
Business Year
Investment activities include:
— the acquisitions of QuayStreet Asset Management in
February 2023, ASB Superannuation Master Trust in
February 2022 and GlobalDairyTrade (as to 33%) in June
2022; and
—capital expenditure relating to NZX Wealth
Technologies’ software development, Auckland office
fit outs and new ticker, as well as other technology
upgrades and enhancements, including system
enhancements required for the integration of the ASB
Superannuation Master Trust.
Financing activities reflect the equity raised and new
term loans to fund the acquisitions, and the payment
of dividends (net of participation in the dividend
reinvestment plan).
NZX’S GROWTH STRATEGY – GROWING,
CONNECTING, ADDING VALUE
NZX is well positioned for the future through the growth
strategy which we have been implementing over the last
five years. This has involved focusing on our core markets
business, plus refinement and alignment around
regulation, pricing and market infrastructure, along with
significant investment to expand our funds management
(Smartshares) and funds administration (NZX Wealth
Technologies) businesses.
Since the first year of implementing this strategy in
2018, operating earnings have increased by 47% from
$27.3 million to $40.1 million. Likewise operating revenue
has moved from $67.5 million in 2018 to $108.4 million.
In the same period, FUM via Smartshares has grown
from $2.9 billion to $11.0 billion and NZX Wealth
Technologies’ funds under administration has grown from
$2 billion to $11.5 billion.
NZX Wealth Technologies has required significant
capital investment to reach the stage where it is now
nearing cash flow break even. This has resulted in a
significant rise in the amortisation charge to the Income
Statement which has acted as a constraint to growth in net
profit compared to growth in Operating Earnings
(EBITDA). The pipeline of recent client wins and client
onboarding activity to come supports the value the
business will increasingly add to NZX.
In 2023, NZX is now a more integrated and resilient
financial markets infrastructure and services business with
a platform for strong growth prospects. This will create
further value to our shareholders.
Looking out to 2028 the strategy is:
—expand our product offering in Capital Markets
(mid-point orders, equity derivatives, carbon markets,
drive greater scale in clearing);
— l
everage the global connections and partnerships we
have made and build market reach; and
— drive scale, efficiencies and operating leverage across
the businesses – including Smartshares and NZX
Wealth Technologies.
While remaining conscious of cost control and ensuring
return on investment, we continue to look for strategic
opportunities that will add value, particularly when
markets recover.
21

NZX Annual Report 2023
MARKET OPPORTUNITIES
In line with the strategy of rounding out its product
offering, NZX remains focused on initiatives that will be
beneficial to the Company and the New Zealand markets in
the years to come.
NZX Dark
NZX will launch an additional trading venue in the first half
of 2024. Currently all exchange orders flow into the “lit”
market where they have the opportunity to trade. Common
features of sophisticated markets internationally is to
operate an “unlit” order trading venue alongside the more
traditional “lit” market. This type of order book is
commonly referred to as a “dark” market and in addition to
all orders being anonymous, the venue provides trades to
occur at the “mid-point pricing” of the “lit” market spread.
NZX Dark is designed to attract the off-market trading
activity into on-market activity that all investors can
participate in.
NZX has modelled the settings of this new market off
other international markets, but once launched, NZX will
continue to review and refine these for local conditions.
S&P/NZX20 Index Futures
The Company remains committed to delivering the S&P/
NZX20 Index Futures for New Zealand. We have the
backing of a cornerstone group of 12 local and global fund
managers and participant firms who have provided
commitment to utilise and trade, settle and clear the
product. Equity derivatives will help drive growth in capital
markets through additional cash market trading,
participation and data revenue.
NZX is working towards a relaunch of the S&P/NZX 20
Index Futures later in 2024. Having optimal market settings
and risk capital providers is critical to success. We are
focused on delivering a successful product launch for the
market and having all of the component parts (regulatory
settings, technology, participants and investment
managers) in place for the launch, is critical.
22

NZX Annual Report 2023
01.
Business Year
Carbon
Since 2021, NZX, in partnership with the European
Energy Exchange (EEX), has been managing the New
Zealand Emissions Trading Scheme (ETS) Auctions for
New Zealand Units (NZUs) on behalf of the New Zealand
Government. The ETS is the Government’s key tool for
meeting New Zealand’s domestic and international
climate change targets.
The auction now has 102 fully registered participants,
ranging across multiple sectors within New Zealand and
abroad. The partnership with EEX is consistent with
NZX’s strategy of building global connections with
partners that have proven expertise.
The combined effects of NZU oversupply and
regulatory uncertainly saw a subdued carbon market in
2023. The four NZU Auctions did not clear as demand
and prices did not meet the auction reserve levels set by
Government. Secondary market prices also fell from the
$88 highs seen in 2022 down to a low of $37 in
July 2023. Late 2023 saw some recovery in prices.
NZX is supportive of opportunities by the New
Zealand government to develop the secondary and
futures carbon markets. It is important New Zealand
moves quickly to uphold – and secure – the integrity of
emissions trading in our country.
102
Fully registered participants
within New Zealand and abroad
Carbon auction
23

NZX Annual Report 2023
GOVERNANCE & MANAGEMENT UPDATE
In May 2023, experienced markets practitioner and
former NZX director John McMahon was re-appointed as
an independent NZX director and then Chair, replacing
James Miller.
James served nearly 13 years as an NZX director and
Chair through a time of significant change and
development for the Company and exchange. He oversaw
the stabilisation and modernisation of the NZX Group
business, development of a long-term strategic growth
plan and the development of strategic partnerships with
Nasdaq, SGX and EEX.
Dame Paula Rebstock was appointed as an independent
director in February 2023 and appointed Deputy Chair in
August 2023. This appointment recognises Dame Paula's
considerable governance experience and the key role she
is playing in helping to improve New Zealand's
economic productivity.
NZX acknowledges Sarah Miller, NZX’s Future Director
for 2023, for her contribution, analysis and clear
communications which have been very much appreciated
by the Board. Sarah also contributes to New Zealand’s
capital markets as a member of the NZX Corporate
Governance Institute and we thank her for her ongoing
involvement in improving capital markets’ settings.
Rob Hamilton resigned as an independent director in
March 2023.
For the first time in its 157-year history, the NZX Board
has a majority (57%) female representation.
In August, the NZX Board extended Mark Peterson’s
employment term as NZX Chief Executive beyond April
2024. Mark was appointed NZX Chief Executive in 2017
with an initial employment term of five years and an option
to extend for a further two years. That option was exercised
in December 2020 extending the employment term to
April 2024. The NZX Board has now agreed to an open-
term agreement.
Mark’s new employment agreement is about ensuring
stability of leadership and maintaining momentum across
our business. In setting Mark’s expectations, the Board has
taken into account shareholder interest and medium-term
performance requirements. The NZX Group has a clear
work programme in front of it that requires focused and
proven leadership. This includes successful delivery of
initiatives and products under NZX’s growth strategy –
S&P/NZX20 Index Futures and NZX Dark – and more size,
scale and efficiencies in capital market operations, and in
the Smartshares and NZX Wealth Technologies businesses.
The Board wishes to thank and acknowledge NZX Chief
Financial and Corporate Officer Graham Law for acting as
the CEO of Smartshares from April to September, when
Anna Scott was appointed as new CEO of Smartshares.
Mark’s new employment
agreement is about
ensuring stability of
leadership and maintaining
momentum across our
business. In setting Mark’s
expectations, the Board
has taken into account
shareholder interest and
medium-term performance
requirements.
24

NZX Annual Report 2023
01.
Business Year
TECHNOLOGY – DELIVERING SUPPORT
& RESILIENCE
A critical role for NZX is to operate the markets efficiently
and effectively. It was pleasing that in 2023 NZX
maintained 100% uptime with no markets outages to our
operating platform. This is a credit to the operational
management of the senior leadership team and our
people. It highlights the resilience, capability and capacity
of our systems from the significant and ongoing investment
in technology in recent years.
With a focus on continuous improvement, NZX
continues to engage and work with our customers in the
market technology ecosystem on ensuring appropriate
infrastructure is in place to effectively and securely operate
the markets.
The performance of NZX’s technology and relationships
with the market was positively noted in the Financial
Market Authority’s annual market obligations review
published in June 2023. We wish to thank our key
technology stakeholders for their constructive
relationships.
OPERATING RESPONSIBLY
NZX’s focus is to create value while delivering a positive
impact on society and the environment.
We play a dual role as both the operator of
New Zealand’s capital markets and as a listed company.
Sustainable economic growth is a priority for NZX.
New Zealand has committed to net zero emissions by
2050. As we have seen with the increasing number of
green bonds in 2023, public markets will continue to
play an important role in achieving this goal, facilitating the
flow of capital towards decarbonising the
New Zealand economy.
As a business, NZX is committed to taking action on
climate change. In 2023 NZX achieved net carbon zero
certification from Toitū Envirocare – the third year we have
achieved this.
In 2024 under the mandatory climate-related
disclosures framework (Aotearoa New Zealand Climate
Standards, ANZCS), NZX will be reporting in
accordance with our climate change reporting obligations
regarding governance, strategy, risk management, and
metrics and targets. Our 2023 Climate Statement is
attached to this annual report.
In 2023, NZX undertook a materiality assessment to
grow and deepen the Company’s stakeholder
understanding and relationships, support and further
inform NZX’s strategy execution, and guide future
Environmental, Social and Governance (ESG) prioritisation,
targets, and reporting. Please see pages 40 – 45 for more
detail on this.
POLICY & REGULATION
During 2023, NZX continued to enhance regulatory policy
settings for our markets. We completed the review of
our capital raising settings, with the changes effective in
January 2024. This will provide greater flexibility to listed
issuers in relation to the mechanisms that are available
to raise capital, while ensuring that appropriate investor
protections are maintained, including through increased
disclosure of the rationale for an offer at the time an offer
is made.
We also completed the design of regulatory settings
to facilitate enhancements and innovation in trading
practices, through consultation in relation to the
requirements for utilising NZX Dark, and additional
functionality for our self-match prevention tool that assists
NZX brokers in complying with their obligations. We also
implemented a new set of tools for NZX Clearing that are
designed to manage default scenarios, these tools further
mature our risk management arrangements, in line with
regulatory expectations and international practice.
The Exchange’s regulatory functions are performed by a
separate, independently governed entity, NZ RegCo. After
three years in operation, NZ RegCo continues to develop
and oversee its monitoring and enforcing compliance by
listed issuers and accredited market participants of NZX’s
market rules. NZX would like to thank the NZ RegCo Board,
led by Chair Trevor Janes and NZ RegCo management
under Chief Executive Joost van Amelsfort.
The Financial Markets Conduct Act 2013 requires the
FMA to carry out an annual review and report on how well
NZX is meeting its licensed market operator obligations.
One of the key objectives of this review is to ensure
potential conflicts between regulatory and commercial
functions of NZX, as a self-regulating organisation, are
appropriately managed.
The FMA’s report, published in June 2023, noted the NZ
RegCo model was maturing, with continued and enhanced
independence from the NZX’s commercial function. The
report also noted material improvements to NZX’s
technology systems and trading platform stability.
NZX was pleased with the review’s findings that noted
the improvements NZX continues to make to our people,
processes, risk management and systems.
25

NZX Annual Report 2023
The NZX CGI was originally convened for a one-year
establishment period that expired in December 2023.
The NZX Board has decided to continue the NZX CGI for a
further one-year establishment period in 2024, to enable
the NZX Board to consider the outputs of the 2023
initiatives when determining whether to move the NZX CGI
to a permanent body supporting the development of
NZX’s corporate governance regulatory body.
The NZX Board wishes to acknowledge the members of
the NZX CGI for their efforts and hard work in 2023, and
their support for NZX and New Zealand’s capital markets.
LOOKING AHEAD – WELL-FUNCTIONING
MARKETS ESSENTIAL TO NEW ZEALAND’S
ECONOMIC GROWTH
To ensure business investment benefits more people in
our country and there is a level playing field between listed
and unlisted companies, NZX wants to see changes to our
public market regulatory settings.
Appropriate ‘rules of the game’ that give investors
confidence and allow businesses to access capital
effectively and at a low cost, are more important than ever.
New Zealand needs market settings that are “match fit”
and internationally competitive.
As a country we are rapidly increasing our national debt
and running large deficits. Smart financing choices will be
needed to fund deficit spending plus central and local
government capital project requirements. As part of that,
public markets can play a critical role in helping reach the
broadest range of investors, to efficiently price capital, to
ease the pressure on central and local government balance
sheets and fund the infrastructure required to assist in
improving productivity.
NZX CORPORATE GOVERNANCE INSTITUTE
The NZX Corporate Governance Institute (CGI) was
established in late 2022 as one of the outcomes of the
review of the NZX Corporate Governance Code (Code).
The NZX CGI is comprised of a cross-section of highly-
respected members representing a broad cross-section
of the capital markets’ ecosystem including institutional
investors, issuers, experienced board directors,
shareholder groups and academics.
During 2023, the NZX CGI developed a remuneration
reporting template, through a targeted consultation
process with the market. Submitters endorsed the
objective of this initiative which was to provide additional
resources to issuers to support their disclosure practices,
and the practical nature of the template.
NZX has now approved this template as a voluntary
tool that issuers may elect to adopt when reporting their
remuneration practices. NZX acknowledges our issuers’
business and remuneration practices differ, and that
issuers may prefer to provide remuneration
disclosures in an alternative manner to the structure
proposed in the template.
The other primary initiative of the NZX CGI in 2023
was to support NZX in the scheduled review of NZX’s
regulatory policy in relation to director independence
contained in the NZX Listing Rules and Code. This review
is being undertaken in two stages, with the first stage
(which sought high-level feedback around the current
settings) concluding in early Q3 2023.
26

NZX Annual Report 2023
01.
Business Year
NZX has a vital role to play in the future New Zealand
growth story. That is why we are working with others in the
New Zealand capital markets community in engaging with
the Government to streamline and simplify regulatory and
legislative settings and look at initiatives that will boost
capital formation and New Zealand’s economic growth.
2024 EARNINGS GUIDANCE
Through the delivery of the initiatives underway for capital
markets, alongside the anticipated growth in Smartshares
and Wealth Technologies, NZX expects full year 2024
operating earnings (excluding integration and
restructuring costs) to be in the range of $40 million to
$44.5 million.
This guidance also assumes there are no material
adverse macro-economic and/or market condition
impacts on our assumed market outcomes, and there
are no significant one-off expenses, major accounting
adjustments, other unforeseeable circumstances, or future
acquisitions or divestments.
ACKNOWLEDGEMENTS
NZX’s core capability and reason for being is “connecting
people, business and capital.” A sincere thank you to all
NZX staff for the work they do every day to that end. NZX
operates markets and funds but at our heart we are a
people business. We are people helping the people in
business and investing to get ahead through the services,
products and market infrastructure we provide.
The effort and dedication NZX staff put in – especially in
challenging times for markets – is truly appreciated. They
are committed to providing first-class customer service,
ensuring we leverage off the investments we’ve made to
grow our business, provide returns to shareholders, and
help deepen New Zealand’s capital markets.
NZX wants to see New Zealand grow and prosper,
delivering more and better paying jobs, and a higher
standard of living. As New Zealand’s stock exchange we
are critical to helping New Zealand achieve that through
high-performing capital markets’ infrastructure.
Mark Peterson
CEO
John McMahon
Chair
NZX wants to see New Zealand grow and
prosper, delivering more and better paying
jobs, and a higher standard of living.
27

28.
NZX Annual Report 2023
28

02.
NZX Group Overview
NZX Group
Overview
NZX Annual Report 2023
29

NZX Annual Report 2023
How we
deliver value
For 157 years we have been creating and delivering
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 and fueling the
growth and global ambitions of local companies.
NZX is an integral part of the New Zealand economy.
By operating efficient, effective, transparent and
resilient public markets, we help provide the capital
for business to grow, innovate, invest in much-needed
infrastructure, and create more and better paying jobs
for New Zealanders.
Our Purpose or mission, lies at the heart of
why we exist. We are New Zealand’s exchange, an
integrated financial services business, and a frontline
market regulator.
We utilise our expertise and connections here and
overseas to bring together all the ingredients required
for economic prosperity. Customer service is in NZX’s
DNA and in the people we employ. We want to make a
positive impact on people’s lives.
Our Vision is our goal or aspiration of what we want
NZX to achieve. We want to ensure we grow our business
– and the businesses and individuals we serve – in a way
that is sustainable and profitable; helping our country,
and the citizens who live in it, succeed.
Our Values are the behaviours our people
demonstrate that underpin our Purpose and achieve
our Vision.
Our Strategy is the guiderail for our decision making.
We are growing a more integrated financial markets
infrastructure and services business, building on NZX’s
core strengths and continuing to explore growth
opportunities across our businesses to create further value
to our shareholders over time. Successful execution will
benefit consumers of capital, investors, our shareholders
– and ultimately our economy and the standard of living of
all New Zealanders.
The Operating Responsibly section in this report
outlines how and where NZX delivers value.
“NZX has a dual role:
strengthening
New Zealand’s exchange
with resilient, vibrant
markets and growing a
more integrated financial
markets infrastructure
and services business.”
JOHN MCMAHON
NZX CHAIR
Committed to
connecting people,
businesses &
capital every day
Our
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30

NZX Annual Report 2023
02.
NZX Group Overview
Committed to
connecting people,
businesses &
capital every day
Our
Purpose
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31

NZX Annual Report 2023
Developing our strategy to late 2027
The Capital Markets market cycles
Market cycles are inevitable, we have the
building blocks for further opportunities and
growth and as markets recover, we expect to see
capital markets activity levels accelerate and
asset prices rise
Maturing our Market
We know our product offering could be
expanded (equity derivatives, carbon markets)
which is key to driving further growth in capital
markets activity and greater global connections
– rounding out our product offering will broaden
our earnings base and add scale to our
settlement and clearing activities
Continued secular growth
There are long-term structural market tail winds
that support growth in the managed funds and
platform businesses
Continued M&A activity
We will continue to explore M&A activity to help
drive and accelerate growth where appropriate
Operating Leverage
Still investing for growth but also focusing on
efficiencies and driving operational leverage
Our strategy to late 2027 is simple –
round out our product offering in Capital
Markets and drive scale and operating
leverage across the businesses
STRATEGIC THEMES
CAPITAL
MARKETS
SMARTSHARES
WE ALTH
TECHNOLOGIES
Scale
—L
isted securities
—Trade volumes
—Depository/
Clearing volumes
Client Requirements/
Product Expansion
—NZX Dark
—Derivatives
(NZX 20 Equity,
Fl, Commodities)
Scale
—FUM
Client Requirements/
Product Expansion
— Enhanced Passive
product range
Operational Leverage
Scale
—FUA
Client Requirements/
Product Expansion
—Platform functionality
Operational Leverage
Stable/Secure Platform – Well Managed Risk; Healthy Culture
InterconnectivityInterconnectivity
Growing, Connecting, Creating Value
“A trusted New Zealand business, delivering sustainable wealth, value & opportunities for all”
Strategic
priorities
32

NZX Annual Report 2023
02.
NZX Group Overview
33

NZX Annual Report 2023
John McMahon – Chair
John has extensive industry
experience in the finance
sector, including a background
in technology, company
turnarounds and transformation,
and entrepreneurial small cap
governance. He has spent more than
30 years in the Australasian equity
markets, predominantly as an equity
analyst (covering a broad range of
industries), and was Head of Equities
at ABN AMRO. John has worked
for CS First Boston, BZW, Morgan
Stanley, ABN AMRO, and Walker
Capital, and was Managing Director
of ASB Securities for three years. He
now manages his own investment
portfolio. John is a director of several
small cap NZX-listed companies:
Solution Dynamics (Chair), AoFrio
(Chair of Audit Committee) and
Vital (Chair). He has a Bachelor
of Commerce (Honours), an MBA
and is a CFA (Chartered Financial
Analyst) charterholder.
Elaine Campbell – Director
Elaine was appointed as a director in
February 2019. She has more than 20
years’ executive experience, primarily
in financial and capital markets,
and the IT and telecommunications
industry. Elaine is the Executive GM
of Fibre Access at NZX-listed Chorus.
During her time on the executive
team at NZX from 2002 to 2008,
Elaine led 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 USA for multinational
Sun Microsystems.
Dame Paula Rebstock –
Deputy Chair
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,
a Director of Bluecurrent Australia
and Bluecurrent New Zealand, 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. She is
a member of the Clearing,
Nominations and Human Resources
and Remuneration committees.
Our
Board
34

NZX Annual Report 2023
Lindsay Wright – Director
Lindsay was appointed as a director
in February 2018. She has more than
30 years’ financial services and funds
management experience locally and
globally. Lindsay is CEO of the Funds
Management unit at HKEX listed Sun
Hung Kai & Co (resigned effective
21 May 2024). She has held a range of
senior roles in the funds management
sector both globally and regionally
(APAC) for Matthews Asia, BNY
Mellon Investment Management,
Invesco Hong Kong, Harvest Funds
and Deutsche Asset Management.
Lindsay started her career with
Bankers Trust, becoming CFO/COO
before moving to Deutsche Asset
Management. From a governance
perspective Lindsay is a director of
Milford Asset Management and Chair
of the Audit and Risk Committee and
is a director of ASX listed Navigator
Global Investments. She has served as
Deputy Chair of the Board and Chair
of the Audit and Risk Committee of
the Guardians of the NZ Super Fund,
and as a director of Kiwibank. Lindsay
has a Bachelor of Commerce from
the University of Auckland and is a
Fellow of the Hong Kong Institute
of Directors.
Rachel Walsh – Director
Rachel was appointed as a director
in October 2022. She has more than
25 years’ experience across finance
technology, healthcare, infrastructure,
and other sectors and is a Fellow
of CAANZ. She is a Director of IAG
NZ Limited and a member of the
External Reporting Advisory Panel
(XRAP). Rachel was previously CFO
at Datacom Group Limited and 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. Rachel has also worked
at PricewaterhouseCoopers as a
Director in Audit. She Chairs the
NZX Clearing Committee and is a
member of the Audit and Risk, and
Technology committees.
Peter Jessup – Director
Peter joined the NZX Board in January
2022, following his appointment to
the Technology Committee in April
2021. He brings more than 35 years’
financial markets IT experience
– including trading, surveillance,
clearing, depository and settlement
systems. Peter is a capital markets
consultant with Accenture prior to
which he led the Market Infrastructure
Business Development team at LSEG
and was Senior Vice President at
Nasdaq’s Global Technology Services
group. In Peter’s earlier career he
worked for NZSE (New Zealand Stock
Exchange), where he played a key
role in automation of the exchange,
including the implementation of
electronic settlement and automated
trading technology.
02.
NZX Group Overview
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 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
between 2005 to March 2021. In
addition during this period, he
was also Chair of Australian-based
Wilsons 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.
35

NZX Annual Report 2023
Mark Peterson – Chief Executive
Mark joined NZX in May 2015 and
became Chief Executive in April 2017.
He has 30 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.
Jeremy Anderson – General
Manager, Capital Markets
Development
Jeremy joined NZX in March 2017. He
has significant experience working in
the agribusiness, technology and
financial service sectors across
Australia and New Zealand. Prior to
joining NZX, Jeremy led and executed
Vodafone New Zealand’s agribusiness
strategy. Since working for NZX he
has led the NZX Agri business,
established and led the Information
Services business and now leads the
Capital Markets Development
business. His areas of expertise
include leadership, strategy
development, sales management
and innovation.
Graham Law – Chief Financial &
Corporate Officer
Graham joined NZX in November
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
Our
Leadership
Team
Kristin Brandon – Head of Policy
& Regulatory Affairs
Kristin joined NZX in 2007 and is
responsible for leading the
development of NZX’s market rules,
and managing NZX’s regulatory
relationships. Kristin has extensive
experience in financial services law,
having previously worked in legal
roles in corporate and commercial,
and financial services teams at DLA
Piper and Chapman Tripp in New
Zealand, and Dechert LLP in London.
Kristin holds an LLB(Hons) and BCA
(accounting major) from Victoria
University in Wellington.
Robert Douglas –
Chief Information Officer
Robert joined NZX as the Chief
Information Officer in February 2021.
He has over 27 years’ experience in
financial services, including leading
large teams in real-time technology
environments. Prior to joining NZX,
Robert was the Chief Operating
Officer at Verifone NZ and has held
previous roles as Head of ANZ Bank
Institutional, Corporate and
Commercial Operations, the Head of
Technology at First NZ Capital and
the Chief Information Officer of
Markets Business Technology for ANZ
Bank based in Australia.
Felicity Gibson – General Manager,
Market Operations*
Felicity joined NZX in March 2014 and
leads the Market Operations team,
covering the capital and energy
markets’ clearing businesses. Before
joining NZX, Felicity held capital
markets legal and regulatory roles in
New Zealand and the United
Kingdom, including with the FMA in
New Zealand and FCA in the United
Kingdom. Felicity holds an LLB and
BA (Geography major) from the
University of Otago.
Limited. Graham brings expertise in
strategic leadership, corporate
governance, and risk and
financial management.
* From 1 December 2023, Roger Bayly is the
acting General Manager of Market Operations
while Felicity Gibson is on parental leave.
36

NZX Annual Report 2023
Nick Morris – General Manager,
Strategic Delivery
Nick joined NZX in February 2016
and leads the strategic delivery
function, including derivatives,
energy and environmental markets.
Nick has extensive financial markets
experience both in exchange traded
and over the counter products.
Before joining NZX, Nick held
markets-based roles at Bank of New
Zealand, and at Medley Global
Advisers in central bank policy
research. Nick holds a BCom
(accounting and tax major) from the
University of Canterbury.
Lisa Turnbull – 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,
distribution and operations. Lisa is a
Chartered Accountant.
Ronnie Redpath – Chief Risk Officer
Ronnie joined NZX in August 2021
and leads the Risk function for the
NZX Group. Ronnie has more than 20
years experience in financial services
covering capital markets and banking
in New Zealand, the United Kingdom
Joost van Amelsfort – CEO,
NZ RegCo
With the establishment and structural
separation of NZX’s new regulatory
agency NZ RegCo on 10 December
2020, Joost, formerly Head of Market
Supervision became Chief Executive
of NZ RegCo. Joost has more than
20 years’ legal experience advising
capital markets Participants, including
roles with Simpson Grierson and
Linklaters LLP, London and Dubai.
Joost’s particular areas of expertise
include corporate governance, equity
and debt capital markets, and
mergers and acquisitions.
Sarah Minhinnick – General
Manager, Capital Markets Origination
Sarah joined NZX in February 2020.
She has deep experience in capital
markets – most recently as a Director
of Capital Markets at Bank of New
Zealand, and began her career as a
lawyer with Freshfields Bruckhaus
Deringer LLP New York and Russell
McVeagh. She has a Bachelor of
Commerce (majoring in Economics),
and a Bachelor of Laws with Honours,
both from the University of Auckland.
Sarah also holds a Master of Laws (in
Corporate Law and Finance) from
New York University.
02.
NZX Group Overview
Anna Scott – CEO, Smartshares
Anna joined NZX in September 2023
as the CEO of Smartshares. Before
joining NZX, Anna has held
management roles in New Zealand
and London at Hobson Wealth and
JPMorgan as well as New Zealand
directorships in financial service
firms. Anna brings expertise in
strategic development, leadership,
operational & technology synergies
& corporate governance and holds a
BE(Hons) in Engineering Science
from Auckland University.
and Australia. He has an extensive
risk management background with
expertise in operational risk,
controls management and
assurance. Prior to joining NZX,
Ronnie held various management
roles for Barclays in the United
Kingdom and has previously worked
for ASB in New Zealand.
37

38.
NZX Annual Report 2023
38

03.
Operating Responsibly
Operating
Responsibly
NZX Annual Report 2023
39

NZX Annual Report 2023
NZX’s focus is to create value while
delivering a positive impact on society
and the environment.
As New Zealand’s public market
operator we have a key role in
connecting buyers and sellers in a
transparent and efficient way,
ensuring financial stability and
sustainable growth in New Zealand’s
capital markets.
Public markets will continue to play
an important role in facilitating the
flow of capital towards decarbonising
the New Zealand economy and
empowering sustainable finance.
It is important stakeholders
consider both the financial and
non-financial measures of our
performance in how we deliver
sustainable long-term value. The
four “Ps” – Planet, People, Prosperity
and Principles of governance
– are the core pillars of NZX’s
environmental, social and governance
(ESG) approach
1
.
The NZX Board approved an ESG
strategy framework in November
2022 that lays out our ambitions. In
2023, further work was undertaken to
build out this strategy – including a
materiality assessment with key
stakeholders – to ensure NZX
understands and prioritises relevant
risks and opportunities as both the
operator New Zealand’s public
markets and as a listed company. This
assessment provides rich material and
insights that will assist with
implementation plans in 2024.
Our ESG performance for 2023 has
been prepared in accordance with the
Global Reporting Initiative (GRI)
Standards. It provides comprehensive
disclosure of our performance against
key ESG metrics we track. The GRI
Content Index can be found on page
164 of this report.
In 2023 NZX confirmed its 2025
emissions reduction target (-21%) and
implementation plans will be
advanced in 2024. This aligns with our
organisational purpose, vision and
strategy, and with New Zealand’s
long-term sustainability goals and
international commitments. As a
climate-reporting entity, our Climate
Statement for 2023 is included in this
annual report in Appendix 1.
In 2023 NZX achieved net carbon
zero certification from Toitū
Envirocare for the third year in a row.
NZX was the second stock exchange
in the world to reach net carbon zero.
NZX is a signatory of the United
Nations Sustainable Stock Exchanges
(SSE Initiative). We want to align with
international best practice for
sustainable stock exchanges.
Robust governance, such as the
Corporate Governance Code, is
paramount to the role that NZX plays
in overseeing the integrity of New
Zealand’s public markets.
Continuing to have a strong focus
on advancing our position on
diversity and inclusion in the NZX
Group workforce remains essential to
our business success and to better
reflect the customers, businesses and
country we serve.
NZX is focused on attracting more
female managers, executives and
governors and provide them with
leadership development.
NZX provides our employees a
paid day’s leave each year to
volunteer in our communities and we
are supportive of events that provide
assistance to those in need.
Overview
40

NZX Annual Report 2023
03.
Operating Responsibly
Stakeholder engagement
& materiality assessment
NZX as both a listed company and
market operator, interacts with a
broad range of internal and external
stakeholders, on a diverse range of
matters. The views of stakeholders
are important in helping us to define
ESG topics that are most relevant to
them, and material to NZX’s core
strategy and long-term value creation.
These range from important and
emerging risks, such as climate
change, through to the economic and
social impacts and opportunities of
doing business.
In 2023, we partnered with an
independent consultant, Lisa Martin
from Sustainz Business Solutions
Limited (Sustainz), to complete our
first formal stakeholder engagement
and ESG materiality process. This
comprehensive work provided a
robust and informative basis for
engaging a broad range of
stakeholders, both internal and
external to NZX, who are impacted by
our activities and contribute to our
ability to optimise how we create
value over time.
1 2020 World Economic Forum report – Measuring Stakeholder Capitalism: Towards Common Metrics and
Consistent Reporting of Sustainable Value Creation.
With representation across a range
of groups, key stakeholders to NZX
were selected and ranked using best
practice criteria from AA1000
Stakeholder Engagement Standard
2015. This work was also informed by
the IFRS Integrated Reporting (IR)
Framework, and the GRI Sustainability
Reporting Standards. A double
materiality approach ensured the lens
of both financial and impact
materiality was considered, with
identification of sustainability risks
and opportunities for NZX (both as a
listed company and market operator),
and the impacts of NZX on the
environment and society.
2
Through a systematic process
that included a series of stakeholder
interviews, an online survey and
research around macroeconomic
considerations; a diverse range
of material impacts, risks and
opportunities were identified
and ranked, from the perspective
of both business impact and
stakeholder concern.
This represents an important
foundational piece of work for NZX,
providing insights that will continue to
inform our ESG strategy, target, and
metric development, and support our
approach to enhanced transparency
in reporting, as NZX seeks to refine
and adopt its strategic approach to
sustainability in the future.
Through this process, 30 material
topics were identified. These covered
a range of areas, including financial,
communications, employees, ethical,
risk, environmental, community,
regulatory, products and governance,
with topics categorised and their
relative importance grouped
according to whether they relate
to NZX as a listed company, or
market operator.
The highest ranked material
ESG topics, aggregated across all
stakeholder groups, are shown on
page 44. From the perspective of
NZX as a listed company, the highest
ranked topics include Business
Continuity, Organisational
Financial Performance and
Business Ethics & Integrity (ranked
first equal), while for NZX as market
operator, Supporting Market
Integrity was rated highest overall, as
shown in our materiality matrices on
the following pages.
In 2023 NZX achieved net carbon
zero certification from Toitū
Envirocare for the third year in a row.
NZX was the second stock exchange
in the world to reach net carbon zero.
2 References to materiality in this context refer to material topics that we have, through our stakeholder
engagement and materiality process, determined to be relevant to our NZX, whether as a Listed Company
or Market Operator. Such references to materiality may be different and are separate from how materiality
is used and understood in the context of securities, financial statements, financial reporting and audit
interpretations, and with respect to disclosures made in the climate statement.
41

NZX Annual Report 2023
OUR KEY STAKEHOLDERS
Our 345 employees and the
Board that governs NZX are the
foundation of our business and
our most valuable assets.
Board &
Employees
Support NZX’s dual role of
strengthening NZ’s exchange
with resilient, vibrant markets
and growing a more integrated
financial markets infrastructure
& services business.
Market
Participants
The views and needs of the
future generation of NZX
employees and external
stakeholders assists us to
ensure their perspectives can
be built into our long-term
business strategy and focus.
Future
Generations
Offer leadership and
perspectives aimed at balancing
short-term economic goals
with long-term sustainable
development goals, by
considering the interests of all
stakeholders.
Sustainability
Thought
Leaders
Have an interest or influence
on NZX’s reputation, goals,
or activities. Facilitate broad
distribution of NZX’s story as
both a listed company and
market operator, to inform our
stakeholders.
Media
Academia
Provide insights to help us to
gain a deeper understanding of
ESG and financial issues. Deliver
research that has the potential
to unlock new opportunities and
alert us to potential challenges
that may need to be addressed.
Contribute essential products and
services to our markets, including
data, software and information
services valued by market
participants and stakeholders
wanting to keep up to date with
NZX market developments.
Suppliers,
Vendors &
Distributors
Stakeholder
engagement
in 2023
NZX views
accountability to
our stakeholders as
both a mark of good
governance and a
critical component
of our operational
success.
We seek to manage
our business with the
goal of delivering
sustainable, long-
term value to wide
array of stakeholders.
Throughout the
year, we engaged
with a diverse set of
stakeholders across a
variety of ESG topics,
and this was reflected
in the breadth
of stakeholders
included in our
inaugural stakeholder
engagement and
materiality process.
Shareholders
& Investors
Our shareholders and investors
provide essential financial
capital required to sustain,
grow and diversify our business,
supporting us to ensure we
deliver value, remain strong and
resilient.
Our NZX listed clients, some
of NZ and Asia Pacific’s most
successful and dynamic
companies, provide liquidity
to investors, and enhance the
strength and resilience of our
financial markets.
Listed Clients
Provide our formal licence to
operate, including policy and
regulatory frameworks which
define what, how, where and
when we can perform our
business activities.
Financial
Markets
Entities
42

NZX Annual Report 2023
OUR FIVE-STEP STAKEHOLDER ENGAGEMENT PROCESS
1. Identify Stakeholders
An even balance of internal and external
stakeholders participated in this project.
Intentionally, this included the voices of a
range of stakeholders, selected to ensure
diversity in terms of gender, age, ethnicity
and geographic locations. Stakeholders
based across New Zealand, Australia, Hong
Kong, Singapore, India and the United
Kingdom participated.
2. The Interviews
All stakeholders were interviewed using
a semi-structured format around a set of
open-ended questions, designed to allow
the stakeholders’ views to be determined on
the issues most crucial for NZX, in the short,
medium and long term. Interview questions
were framed to explore both what the NZX
can do as an operating entity; i.e. its own
policies and practices to manage ESG related
risks and opportunities (NZX as a listed
company); and what NZX can do in terms of
the products and services it can provide to
clients and the New Zealand market (NZX as
market operator).
3. Conducting Surveys
A shortlist of 30 material topics was prepared
from a combination of the interview
outcomes, and an external review of key
sources, including global megatrends, the
expertise of the professional leading this
process, and a range of international global
exchanges. A bespoke web-based survey was
then designed and sent to all stakeholders
involved in this project. This provided an
opportunity for stakeholders to rate the
material focus areas in terms of importance
to NZX, from their own perspective, risks
and opportunities for NZX were highlighted,
and stakeholders identified where they
considered NZX could improve its current
performance – both from the perspective of a
listed company, and as the market operator.
4. Analyse & Produce Materiality
Outputs
These questionnaire results were analysed,
with rich insights used to populate a range of
outputs from the process. These include the
materiality matrices shown here, which reflect
stakeholder priorities from the perspective
of NZX as a listed company and market
operator respectively.
5. Sense-check throughout process
The perspective of stakeholders was one of
a number of lenses that have been applied
to frame material topics and determine
the material significance of these topics to
NZX. Others include macroenvironment
considerations such as global megatrends,
and insights from other leading stock
exchanges around the globe, as well as the
financial ecosystem more widely, which were
also considered and reflected in this process.
1
Identify
Stakeholders
3
Conducting
Surveys
2
The
Interviews
5
4
Analyse &
Produce
Materiality
Outputs
Sense-check
throughout process
03.
Operating Responsibly
43

NZX Annual Report 2023
Ranking of material and important topics across all stakeholders
NZX as a Listed CompanyNZX as Market Operator
10
Diversity, Equity & Inclusion (7.3)
Decarbonisation & Climate Strategy (7.3)
Executive Compensation & Incentives (7.4)
9
Employee Engagement & Satisfaction (7.7)
8
Labour Practices & Human Rights (7.9)
Employee Attraction, Retention & Future of
W o r k ( 7.9)
7
Customer Relationship Management (8.0)
6
Health, Safety & Well-being (8.1)
5
Enterprise Risk Management (8.3)
Role, Function & Brand (8.3)
4
Leading in Governance & Reporting (8.5)
Board Composition & Governance (8.5)
Effective Communication (8.5)
3
Data Privacy & Cybersecurity (9.2)
2
Business Continuity (9.3)
Organisational; Financial Performance (9.3)
Business Ethics & Integrity (9.3)
1
Supporting SME Development (7.2)
8
ESG Data, Connection & Disclosure (7.6)
ESG & Sustainable Finance Produces,
Services (7.6)
7
Developing a Sustainable Ecosystem (7.7)
6
Encouraging Innovation & Technology (7.9)
5
Partnerships & Collaboration (8.0)
4
Competition from Global Exchanges (8.1)
3
Securities Regulation (8.4)
2
Supporting Market Integrity (9.4)
1
44

NZX Annual Report 2023
6.57.07.58.08.59.09.510.0
6.5
7.0
7.5
8.0
8.5
9.0
9.5
10.0
Business impact (based on internal stakeholder concern)
Stakeholder concern (external stakeholders only)
Supporting SME Development
Developing a Sustainable Ecosystem
Encouraging Innovation & Technology
Partnerships & Collaboration
ESG & Sustainable Finance Products, Services
ESG Data, Connectivity & Disclosure
Competition from Global Exchanges
Securities Regulation
Supporting Market Integrity
6.57.07.58.08.59.09.510.0
6.5
7.0
7.5
8.0
8.5
9.0
9.5
10.0
Business impact (based on internal stakeholder concern)
Stakeholder concern (external stakeholders only)
Champion Financial Literacy
Decarbonisation & Climate Strategy
Natural Resource
Consumption
Employee Attraction, Retention & Future of Work
Employee Engagement & Satisfaction
Executive Compensation & Incentives
Leading in Governance & Reporting
Customer Relationship Management
Health, Safety & Well-being
Labour Practices
& Human Rights
Enterprise Risk Management
Role, Function & Brand
Diversity, Equity & Inclusion
Supply Chain Responsibility
Community Engagement
Board Composition & Governance
Effective Communication
Business Continuity
Data Privacy & Cybersecurity
Business Ethics & Integrity
Organisational Financial Performance
Materiality matrix - NZX as market operator
Materiality matrix - NZX as a listed company
The focus of these material ESG topics in the Report reflects the importance that both the business and external
stakeholders placed on these ESG topics
03.
Operating Responsibly
45

NZX Annual Report 2023
Our
people
46
At NZX we are passionate about working with our
customers and stakeholders to generate wealth integral
to New Zealanders’ prosperity. This allows New Zealand
companies, investors and savers to get ahead.
Our people are critical to the success
of NZX achieving its strategic
goals and a high level of customer
service. We are focused on creating
a culture that nurtures talent,
embraces diversity and rewards
outstanding performance.

NZX Annual Report 2023
47
We are committed to equal
opportunity in the workplace, the
Living Wage, and we embrace the
insights and values from all
employees to ensure we make
improvements to their lives – and
that of our customers – every day.
To support business growth
across the group and market
stability, our permanent workforce
grew by 20.5 full time equivalents
in 2023.
Challenging labour market
While the labour market did show
signs of loosening in 2023, with
more candidates applying for
vacant roles, the market continued
to be challenging, driven by
significant wage pressure. We
continue to use our NZX Graduate
programme to attract employees.
In addition, NZX became an
Accredited Employer in mid-2023
which allows us greater access to
international talent.
Diversity and inclusion
Our commitment to gender
pay equity and a fair working
environment continues. Our aim
is to have at least 40% women and
40% men in each workforce group.
We continue to meet this goal at the
workforce level and increasing the
number of women in senior roles
remains a priority. We continue
to focus our attention on our pay
gap (now at 16.6% – well below the
financial and insurance industry
average). Through our graduate
programme and IT summer
internships, we are increasing
our workforce diversity. We value
the input and skills people from a
broad range of backgrounds and
ethnicities provide to our business.
Gender pay gap
16 . 6%
Well below the financial and insurance industry average
Age and Gender Diversity of the NZX Board
*
No of
Males
No of
Males
(%)
No of
Females
No of
females
(%)
Under 30 years old––––
30 – 50 years old––––
Over 50 years old343%457%
Tot al34
Age and Gender Diversity of the NZX Workforce
*
No of
Males
No of
Males
(%)
No of
Females
No of
females
(%)
Gender
not
declared
Tot al
Under 30 years old 5567% 2733%–82
30 – 50 years old9051%8849%–178
Over 50 years old41 58% 30 42%–71
Not declared429%964%114
Tot al 19055% 15445%1345
Role and Gender Diversity of the NZX Workforce
*
No of
Males
No of
Males
(%)
No of
Females
No of
females
(%)
Gender
not
declared
Tot al
CEO + EXEC 758%542%– 12
Management 5165%2735%–78
Workforce13252%12248%1255
Employees Overall19055%15445%1345
* D isclosed genders as at 31 December 2023
03.
Operating Responsibly

NZX Annual Report 2023
48
Health & Safety
Total Recordable Incident Rate (TRIR)
0.00
2 0 2 2: 1.16
Employee Engagement
(Gallup Score)
4.30
2022: 4.25
Engagement
The NZX engagement survey is the
tool used to measure engagement,
motivation and commitment of staff
to NZX. It provides insights into
employee views – what is working and
where improvements can be made.
Since the pandemic lockdowns and
more staff returning to the offices,
the two surveys conducted in 2023
showed a consistent lift in overall
engagement. The engagement score
at the end of 2023 was 4.3 out of 5.0,
this is the highest engagement score
s i n c e 2 017. The participation rate
remained stable at 94%.
Health and Wellbeing
In 2023 we started training our
people leaders in Mental Health
First Aid to enable them to both
identify any mental health signs and
symptoms, alongside the skills to
have the discussion about mental
wellbeing with their teams. This is in
addition to the Employee Assistance
Programme run where staff can
access EAP services at any time
for any health issue (personal or
professional). The quantum of staff
usage of this service remains stable,
with less than five staff reaching out
for work related issues.
Our health and safety record at
NZX remained strong with a total
Recordable Injury Rate (TRIR) of
0.0 incidents per 200,000 hours
worked, a drop from 1.16 in 2022.
Our absentee rate for the year was
1.9 – up from 1.67 in 2022– back to
pre-pandemic lockdown levels.
Employee Engagement since 2017
Oct 23May 23Oct 22May 22Oct 21Apr 21Nov 20May 20Oct 19May 19Oct 18Apr 18Sep 17
3.97
3.98
4.08
4.09
4.15
4.16
4.11
4.09
4.26
4.25
4.27
4.30
4.28

NZX Annual Report 2023
49
03.
Operating Responsibly
Supporting
New Zealand
This year, we furthered our
commitment to New Zealand charities
by becoming the primary sponsor of
the New Zealand Financial Markets
(NZFM) Charity Golf Classic. As in
2022, we helped fundraise for The
Little Miracles Trust.
The Little Miracles Trust supports
the whānau of premature and unwell
babies. Each year 5000 babies are
born premature, and many more full-
term babies require specialist care
due to health complications or illness.
The Little Miracles Trust provides
support to families in three ways:
— Peer-to-peer in-unit support, key
resources, and co-ordination of
services to help them through their
journey in a wide range of ways, as
well as post-discharge support for
their baby’s development.
— S
upport to the 23 neonatal units
so they can provide the very best
care. This is achieved through the
purchase of equipment such as
breast pumps, privacy screens, cot-
side chairs for cuddling their baby
and whānau room refurbishments.
— Supporting neonatal research and
education so that outcomes are
enhanced for future premature and
sick babies worldwide.
In its 33rd year, the NZFM Charity
Golf Classic hosted more than
100 players and volunteers across
New Zealand’s capital markets. We
were proud to collectively raise more
than $53,000.
In addition, the launch of our new
high-tech ticker on our building in
central Auckland, alongside the ticker
located on Wellington’s waterfront,
has proven to be a valuable asset
in raising awareness for important
charitable events.
Throughout the year, we’ve
featured messages in support of
various charitable organisations and
fundraising days, including Daffodil
Day, Pancreatic Cancer Awareness Day,
UNICEF, and World Prematurity Day.
NZX recognises the
important role we
play in supporting the
success of businesses,
our communities,
charities and country.
CASE STUDY

NZX Annual Report 2023
Our
environment
50
Increasing transparency and
strengthening climate disclosures
As a reporting entity under the
Aotearoa New Zealand Climate
Standards (ANZCS), NZX is delivering
its first climate statement in 2024.
Smartshares is a separate climate
reporting entity under the standards
as manager of an investment scheme
and will deliver its first climate
statement in mid-2024. NZX’s climate
statement is provided on page 146.
In addition to mandatory climate-
related disclosures, NZX undertakes
voluntary assessment of our
environmental disclosures. NZX has
been rated a ‘fast follower’ in Forsyth
Barr’s C&ESG ratings (B-), an
improvement on 2022’s rating of
“explorer” (C+).
Understanding how we impact
the climate
In 2023, we again achieved Toitū
Envirocare net carbonzero
certification. This year represents the
third consecutive year of NZX’s net
carbonzero certification, applied
across our Scope 1, Scope 2, and
relevant Scope 3 emissions. This
includes the assessment of emissions
from various sources such as vehicles,
business travel, fuel and electricity
usage, paper consumption,
and waste generation.
The emissions are evaluated annually,
and the entire inventory undergoes
independent verification to ensure
accuracy and completeness.
In 2023, we broadened the
boundary of Scope 3 emissions that
we measure to include emissions
related to Employee Commuting,
bringing our total GHG emissions for
2023 to 529.8 tCO
2
e. Excluding the
employee commuting emissions,
NZX’s total GHG emissions for 2023
were 356 tCO
2
e - 29% lower than the
baseline year emissions from 2019. In
2024 we will further expand our
Scope 3 emissions coverage to gain a
more complete understanding of our
climate impact. Intensity metrics are
provided in our climate statement on
page 162.
GHG emissions for 2023
356
*
29% lower than the baseline
year emissions from 2019
*excludes employee commuting, which was
calculated for the first time in 2023.
tCO
2
e

NZX Annual Report 2023
51
03.
Operating Responsibly
NZX Greenhouse Gas (GHG) Emissions*
ScopeEmissions sources CO
2
-e2019
Tonne s
2021
Tonne s
2022
Tonne s
2023
Tonne s
Scope 1Direct Emissions (diesel)1.94.28.82.6
Scope 2
(location
based)
Electricity purchased4 8 .139. 851. 526.5
Scope 3
A ir Tr avel
- Domestic
- Short haul international
- Long haul international
212.1
33.6
174 .9
84.5
1.3
-
155 .1
22.2
65.2
94.5
25.3
142.0
Accommodation8.03.29. 212. 2
T&D losses for purchased electricity4.33.24.73 .1
Fuel Emissions (rental and other cars)10.65.35.78.6
Employee Commuting–--173 . 8
Working from home-26.515.08.8
Freight 2.3-26.63.9
Office Waste2.31.87. 228.4
Recycling1.80 .10 .10 .1
Total (excl.
Employee
commuting)
501.9169.9371.3356
Total (incl.
Employee
commuting)
501.9169.9371.3529.8
* Audited by Toitū Envirocare
** Includes 173.8 tCO
2
e from Employee Commuting, which were measured for the first time in 2023.
Excluding the emissions from Employee Commuting, NZX’s total emissions for 2023 are 356 tCO
2
e.
Setting targets
NZX is targeting a 21% reduction
in absolute Scope 1, 2, and 3
emissions by 2025 from a 2019
baseline year. This absolute
emissions reduction target is
aligned with limiting our impact to
a 1.5º warming scenario and
applies to emissions sources that
were included in 2019 inventory.
With 2023 GHG emissions being
29% below the 2019 figures, NZX is
well-positioned to achieve its
emissions reduction targets by
2025. Looking ahead, NZX intends
to develop and set interim and
long-term, science-aligned
emissions reduction targets in line
with limiting our impact to a 1.5°
warming scenario.

NZX Annual Report 2023
52
CASE STUDY
NZX 2023
Commuter Survey
As part of our commitment to net
carbonzero certification, NZX
measures and manages our
greenhouse gas emissions. In
2023, we extended our Scope 3
measurement efforts to include
carbon emissions from our
employees’ commute. Through a
partnership with Abley
CarbonWise, NZX conducted a
commuter survey to track the
commuting emissions and gain
insights into our employees’
commuting patterns.
For our first commuter survey,
our main objective was to
accurately capture the various
locations and modes of
transportation NZX employees use
for their daily commute. The survey
received great buy-in and a high
participation rate from NZX staff.
By inviting the entire organisation
to participate in this process, we
raised awareness of the impact of
commuting choices with the aim
of fostering a sense of ownership
and collective responsibility
towards reducing commuting
emissions.
Based on results from the
survey, NZX commuting emissions
for 2023 were 173.8 tonnes of CO
2

equivalent. This means, on
average, an NZX employee
emitted 0.51 tonnes of CO
2

equivalent over the past year.
The survey also provided a solid
baseline for improvement,
revealing that 22% of trips were
walked or cycled, and only 19%
of trips were made by solo car
drivers. This indicates a strong
level of active travel and low car
use compared to the average New
Zealander (as per Abley results).
NZX intends to continue to use
commuter surveys to monitor our
commuting emissions and identify
opportunities to support our staff in
reducing their carbon footprint.
By understanding our commuting
impact, NZX is better equipped to
drive meaningful change and work
towards a more sustainable future.
“Our carbon footprint
may be small, but
we’re taking action
now to contribute our
fair share to global
climate action efforts.”

NZX Annual Report 2023
Our markets
& economic
performance
As New Zealand’s Exchange we are passionate about working
with our customers and stakeholders to grow the markets NZX
operates, which generate wealth integral to Kiwis’ standard of
living, and New Zealand companies getting ahead.
To support the growth and
development of our core markets
business, and to ensure we are well
connected to New Zealand investors,
NZX owns Smartshares, a New
Zealand issuer of listed Exchange
Traded Funds, and KiwiSaver
provider SuperLife.
NZX provides wealth management
services for New Zealand advisers via
our Wealth Technologies business.
NZX is also responsible for
developing, consulting on, and
enhancing the market rules, practices
and policies under which NZX’s
markets operate.
NZX makes a significant
contribution to New Zealand’s
economy, both directly and indirectly
via companies that are listed on the
public markets. Around two million
New Zealanders are investors through
their KiwiSaver accounts and many
more though online platforms such
as Sharesies.
The value that NZX has added to the
New Zealand economy since 2017 has
been substantial when compared to
our gross revenue. Similarly,
constituents of the S&P/NZX50 index
contribute significant value to the
New Zealand economy.
The NZX Main Board covers
180 listed issuers with a market
capitalisation of $164.10 billion.
53
03.
Operating Responsibly

NZX Annual Report 2023
The NZX Debt Market supports 50
listed issuers with $55.83 billion
outstanding on the market. There are
155 financial instruments listed on the
NZX Debt Market.
S&P/NZ X50
The GDP contribution of S&P/NZX 50
companies was approximately $70
billion in 2023. Combined gross
revenue approximated $145 billion.
On average, share of value added to
gross revenue was 55%. This means
that, in 2023, for every dollar of
revenue generated, companies in the
NZX 50 contributed 55% directly to
the New Zealand economy.
NZX’s economic contribution
In 2023, NZX directly contributed
$220 million to the New Zealand
economy, up 13.4% from $194 million
in 2023.
Despite challenging market
conditions, NZX’s share of value
added to gross revenue has dropped
slightly, to 68%. This means that for
every dollar of revenue generated,
in 2023 NZX contributed 68%
directly to the New Zealand
economy in the form of labour
(wages or salaries), capital or taxes.
Internally we have a workforce
of 339.6 full time equivalents –
adding 20.5 FTEs in 2023 to
support business growth and paid
a total of $47 million in salaries.
Creating value
Along with providing investors with
ready access to world-leading
companies, the markets operated
by NZX enable New Zealand
companies and other organisations
to raise capital that directly leads
to value creation for businesses,
society and our environment.
As well as capital raising to
strengthen balance sheets, funds
are raised via NZX-operated
markets to provide for a range of
wellbeing initiatives such as social
housing, and environmental and
climate change-focused projects.
In 2023, NZX directly contributed
$220m
to the New Zealand economy
13. 4%
up from $194 million in 2022
54
CASE STUDY
Turners
– they love cars
NZX is proud to support the success
of our listed community, providing
avenues for scale and growth
through access to new pools of
investors, increased liquidity and
enhanced profile.
Turners Automotive Group
(Turners), New Zealand’s largest
vehicle and machinery retailer and
leading consumer and finance
business, is an example on how
dedication and commitment to
engaging the market post-listing has
helped propel the company’s brand
exposure and market performance.
The company’s recent inclusion
into the S&P/NZX 50 in December
2023 is a strong testament to this.
While Turners quickly became a
household name through its iconic
campaign ‘Tina from Turners’, Chief
Executive, Todd Hunter said “it’s taken
years and years to be an overnight
success”, attributing the S&P/NZX 50
milestone to the strong culture within
their team of 700 across New Zealand.
The ‘secret sauce’, Todd believes,
is a combination of showing up,
transparency and being consistent
across all communications.
“It’s about taking your business
model and distilling it down so it
becomes an understandable and
repeatable story. We are relying on
externals to be able to tell that story,
whether it’s institutional investors
or everyday Kiwis talking around
the BBQ.”

NZX Annual Report 2023
55
03.
Operating Responsibly
Recognising the importance of
strong advocacy across stakeholder
groups, Turners turned its attention
to a more focused approach to its
investor relations strategy, engaging
an investor relations firm, Sharesies
and other investment platforms.
Its strategy included utilising as
much external support as possible,
while taking any opportunity to talk
about the business – whether it be
through Virtual Investor Events,
hosting shareholders at their
locations, annual reports, road shows,
being active on social media or
investor presentations.
“Don’t be afraid to communicate
what you intend to deliver in five
years. It’s not going to be straight
lines – there’s ups and downs,
and investors get this, but being
transparent will earn trust.”
Turners receives support from the
analysts at Craigs Investment Partners
and Jarden who provided regular
reporting on the business. Turners has
also leveraged Forsyth Barr’s issuer-
sponsored research and tapped into
various opportunities provided by
analysts to acquire valuable insights
into their business.
Given the time analysts put into
learning about the business, this was
viewed as an extremely beneficial
experience for the company, lifting
Turners trading volume at the start
of 2023 and helping to build key
relationships with sell-side analysts.
Speaking to advice he would give
to other companies looking to build
engagement with the market or to
secure a spot within the S&P/NZX
50, Todd reiterated the importance
of a strong culture within the
company and not being focused on
the outcome.
“It will come over time. If you
are telling your story, what are your
metrics? Everything is backed up by
your track record.”
Being listed on the NZX has
enabled more than 50% of the team
at Turners to be shareholders in the
company, contributing significantly
to employee engagement, with them
bringing an ownership mentality to
work every day.
“It’s been interesting to hear
feedback from the business about
how proud they are to see the
company go into the S&P/NZX 50. It
really caps off what has been a great
five years.”
Looking forward, Turners has an
exciting pipeline ahead. While they
very much have a ‘watch this space’
mentality, Todd emphasised the
company’s commitment to delivering
on promises they have made, with
aspirations to secure a position within
the S&P/NZX 20.
“Being listed on the
NZX has enabled
more than 50% of the
team at Turners to be
shareholders in the
company, contributing
significantly
to employee
engagement, with
them bringing an
ownership mentality
to work every day.”

NZX Annual Report 2023
56.56

NZX Annual Report 2023
Corporate
Governance
04.
Corporate Governance
57

NZX Annual Report 2023
NZX’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 2023 (NZX Code). The
information in this section is current
as at 31 December 2023 and has been
Corporate
governance
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 2023 (reporting period),
except for recommendation 8.5 of the
NZX Code as explained below.
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 (Investor Centre - NZX,
New Zealand’s Exchange).
The following diagram summarises the NZX corporate governance framework.
REGULATORSSHAREHOLDERS
NZX BOARD OF DIRECTORS
REGCO CHIEF
EXECUTIVE OFFICER
NZX CHIEF EXECUTIVE OFFICER
NZX EMPLOYEES
REGCO EMPLOYEES
NZ REGCO BOARD
OF DIRECTORS
AUDIT AND
RISK COMMITTEE
TECHNOLOGY
COMMITTEE
HUMAN
RESOURCES &
REMUNERATION
COMMITTEE
NOMINATION
COMMITTEE
CLEARING
COMMITTEE
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NZX Annual Report 2023
NZX Regulation Limited
The exchange’s regulatory
functions are performed by NZX
Regulation Limited (NZ RegCo), a
separate, independently governed
entity. All regulatory decision-making
has been delegated to the NZ RegCo
Board and NZ RegCo management.
NZ RegCo does not regulate NZX
as a listed issuer, or any related
entities of NZX that are subject to the
exchange’s market rules. This means
NZ RegCo also does not regulate
Smartshares Limited (as the listed
issuer of the Smartshares ETFs) or
NZX Wealth Technologies Limited (as
an accredited NZX Participant). NZX
and its related entities are regulated
by the Special Division of the NZ
Markets Disciplinary Tribunal.
NZ RegCo’s functions in relation to
regulation of operations on NZX’s
markets include:
—monitoring and enforcing
compliance with NZX’s market
rules by issuers listed on
NZX’s markets;
—mo
nitoring and enforcing
compliance with the NZX
Participant Rules and the NZX
Derivatives Market Rules by
participants operating on NZX’s
markets, such as NZX Firms, NZX
Advisors and Trading
Participants; and
—w
orking with the FMA as a co-
regulator under the FMCA in
relation to continuous disclosure,
market manipulation and
insider trading.
NZ RegCo is subject to a charter,
which sets out the objectives,
responsibilities and framework for the
operation of NZ RegCo management
and the NZ RegCo Board.
NZX CODE
Code of Conduct
NZX’s Code of Conduct sets out the
standards of conduct expected of
directors (including members of
committees) and employees
(including secondees, contractors
and consultants). The purpose of the
code is to underpin and support
NZX’s values, legal obligations and
policies that govern and guide 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 refers to the NZX Protected
Disclosures Policy, which includes
reference to NZX’s processes around
whistleblowing and includes details of
a confidential third party agency for
employees to contact for
whistleblowing reporting purposes.
The code is reviewed at least every
two years and was last reviewed in
April 2022. Amendments to the code
following a review are summarised
and detailed to NZX employees via
NZX’s intranet. NZX’s Board Charter
notes that directors should set high
standards of ethical behaviour, model
this behaviour and hold management
accountable for these standards
being followed throughout
the organisation.
Principle 1 –
ethical standards
Directors should set high
standards of ethical behaviour,
model this behaviour and hold
management accountable
for these standards being
followed throughout
the organisation.
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:
—apart from certain listed
exemptions, 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);
—outside of a blackout period,
directors and employees must
obtain consent to buy or sell
NZX’s shares; and
—d
irectors and employees involved
in trading financial products for a
managed investment scheme
managed by Smartshares Limited
are prohibited from trading in
financial products on their own
behalf or on behalf of related
persons, before trading in those
products for the managed
investment scheme in order to
avoid gaining a price advantage.
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, with
annual refresher training to
all employees.
The policy is reviewed at least
annually and was last reviewed in
November 2023.
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04.
Corporate Governance

NZX Annual Report 2023
Principle 2 –
board composition
and performance
To ensure an effective board,
there should be a balance of
independence, skills,
knowledge, experience
and perspectives.
Board Composition as at
31 December 2023
Board
Structure
Number of
Directors
Gender
Diversity
Average
Director
Tenure
Average
Director
Age
Diversity
Characteristics
Single tier73 men,
4 women
3 years,
2 months
58 years,
6 months
Education
qualifications,
professional
experience, personal
achievements,
geography, gender, age
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
may provide 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 at least
every three years as required by the
NZX Listing Rules and are eligible for
re-election. Any directors appointed
since the previous annual meeting
must also retire and are eligible
for re-election.
NZX uses a skills matrix when
selecting candidates for appointment
and re-election to the Board. 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
The gender diversity of the NZX
Board has moved from five men and
three women during the 2022 year to
three men and four women during the
2023 year.
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 November 2022.
Management of NZX on a day-to-
day basis is undertaken 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 in
November 2023.
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. However,
the Board retains ultimate
responsibility for the functions of its
committees and determines
their responsibilities.
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;
—q
uality committee leadership –
skills to serve on NZX’s
committees; and
—c
onnectivity 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.
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