ELEVATION CAPITAL – CONCLUSION (CONTINUED) STRATEGIC JOINT-VENTURES THAT ENABLE NZX TO REDUCE HEADCOUNT & ACCESS GLOBAL SKILL-SETS ■
We suggest that NZX must “rinse and repeat” its past experiences (NZX Indices, TZ1, etc), and seek a JV partner from a global commodity powerhouse such as ICE, CBOE or CME to lower the cost/s, increase volume/s and to hasten the development and marketing of NZX’s Dairy Derivatives business globally.
SPIN-OFF THE FUNDS SERVICES BUSINESS ■
NZX should spin-off its Funds Services business, as it allows NZX and the spun-off company to access capital and implement strategies in ways that make sense for their respective needs. The two businesses (exchange market operator vs funds service business) are clearly different in business nature. An optimised wide-moat core markets business can be highly profitable while remaining nimble, while the funds service business (both the funds management and administration businesses) require economies of scale just to be competitive. Lastly, the two businesses clearly require different Management/Board skills.
REVIEW REGULATORY FUNCTIONS ■
We suggest there exists significant benefits toward adopting a government/statutory model similar to that of the ASX. Such a centralised approach promotes efficiency and reduces the duplication/ layering of regulation, including supporting infrastructure and oversight activities.
BECOME “NEW ZEALAND’S MARKETPLACE FOR CAPITAL” ■
Lastly, NZX should explore possible horizontal integration. i.e., to enter into markets via unlisted, and crowd funding platforms, etc. to become “New Zealand’s Marketplace for Capital”.