Date 11 October 2010
The Reserve Bank and NZX run New Zealand's two principal securities settlement systems: NZClear and New Zealand Clearing Limited, respectively.
In December 2009, the Capital Markets Development Taskforce recommended that the Reserve Bank and NZX Limited work together to ensure an efficient clearing and settlement infrastructure that supports the development of capital markets in New Zealand.
Reserve Bank Deputy Governor Grant Spencer said today that, following an extensive review of alternative options, the Bank and NZX have agreed to maintain separate competing systems but with full interoperability between them.
The agreement is formalised in a Memorandum of Understanding (PDF 1.5MB) which sets out joint objectives for the Bank and NZX with regard to the clearing and settlements infrastructure.
Mr Spencer said that, consistent with its broader liquidity policy, New Zealand Clearing Limited will be eligible for backup liquidity support from the Reserve Bank in its standard overnight facility.
Further, the Bank and NZX agree to establish a joint settlements advisory council to create a unified approach to dealing with industry issues.
Mr Spencer said the Bank and NZX consider agreement on these issues will help to ensure an efficient and competitive securities settlement infrastructure which will in turn support the development of New Zealand's capital markets.
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