NZX chairman James Miller has formally apologised for the trading disruption caused by a series of cyber attacks on the exchange’s computer network in late August.
The DDoS (distributed denial of service) attacks sent a flood of requests, overwhelming the NZX’s website which could not fulfil its continuous-disclosure obligations and had to be shut down on more than four occasions.
Miller told shareholders at the NZX annual meeting in Tauranga: “I want to formally apologise on behalf of the board and restate our commitment to significantly invest in our systems to do everything we can to make sure this does not happen again.
“We have come out of the year battle-hardened on the tech front,” he said. NZX established a permanent technology sub-committee and took on a new chief information officer, Robert Douglas.
NZX has also appointed Peter Jessup, formerly senior vice president of Nasdaq’s global technology services group, to its sub-committee. With 35 years IT experience, Jessup is a global expert in stock exchange computer systems.
Miller said “we have acknowledged – as has the Financial Markets Authority – that we did not meet our own high standards in certain areas of our technology systems as a result of these volume-related issues.”
He said NZX has acted on recommendations from EY and cyber experts InPhySec “to ensure our IT and cybersecurity processes are stable and secure – and fit for the future”.
Miller told the shareholders that the investor re-engagement with the equities market has been the most significant in the past 30 years. “Retail participation has been at levels never seen before in our sharemarket.”
He credited Sharesies and ASB Securities for boosting the retail participation, together making up 19 per cent by value and 45 per cent by volume of the total trading by the end of last year.
“The popularity of online retail trading platforms is burgeoning and that’s about easier and low-cost access for do-it-yourself investors, which is positive for our market and spurring interest and investment in our issuers.”
Trading volumes and value increased 149 per cent and 42 per cent respectively last year.
The NZX is establishing a meeting place or wharenui in downtown Auckland that will bring back remnants of the traditional stock exchange – at a cost of $3.5 million including office fit-out and electronic equipment.
“We will have a new NZX ticker above Queen St again,” said Miller. “Our plan is to welcome the New Zealand capital markets to our meeting house where we can showcase what the NZX does for our country and communities.”
The New Zealand Capital Markets Centre opens in the Tower Building at 45 Queen St later this year. The centre will host listing events, small annual meetings, investor presentations, media and digital broadcasts, and bring the public closer to the sharemarket by initiating community and school group tours.
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