NZX Limited (NZX) Earnings Call Transcript & Summary

Good morning, and welcome to our 2022 AGM. I am Sara Wheeler, the General Counsel and Company Secretary at NZX. Before we begin, I'd just like to take you through some housekeeping. The toilets are located to your right by the left here. In the event of an emergency, please follow the green signs or follow me or one of our team who will help direct you to the nearest exit. We are continuing to follow COVID guidelines outlined by the government, and we would therefore ask you to please keep your masks on for the duration of the ASM unless you are asking a question, eating or drinking. In terms of the agenda today, firstly, we will hear from NZX's Chair, James Miller, who will give a welcome and a strategic overview. Secondly, we will move to the NZX CEO, Mark Peterson, who will provide a report on financial and business performance, and then we will move to the formal part of the meeting. We have 5 resolutions today. Firstly, the usual resolution to authorize directors to set audit fees for 2022. Secondly, the election of Peter Jessup as a Director. Thirdly and fourthly, the reelection of James Miller as a Director and similarly, Elaine Campbell. And finally, the proposal for the total annual remuneration payable to all directors to be increased by $87,000 from $435,000 to $522,000 with effect from 1 July 2022. We will attend to voting, and then we will move to questions. [Operator Instructions] Please note that shareholders will be able to cast their vote online using the voting tab where you'll need to enter your CSN and hold a number for validation. Please refer to the virtual meeting online portal guide or contact the team at Link on 0-800-200-220 if you require any assistance. Following the meeting, we invite you to stay for refreshments. But I will now hand over to our Chair, James Miller. Thank you.

Thank you for turning up in person. We didn't know how would go today, and I'm really impressed how many who will tend up today. That's fantastic. So I'm delighted to welcome you all here today to the NZX's 2022 Annual Shareholder Meeting. For those attending in person or online, we're limited to 200 attendees in person today due to COVID restrictions. Otherwise, the meeting has been held as a normal hybrid ASM in all other respects. We're pleased to be holding the meeting today in our new Auckland office which we have already been host to a number of market events. There has been previous attempts to get a center of the New Zealand capital markets within our bigger city, and we're delighted to have finally delivered on this vision. We hope we can become a hub for the New Zealand capital markets as part of our efforts to continue to enhance NZX presence. The new space also supports the broader efforts across the country to breathe life back into the CBDs following the COVID restrictions. [Presentation]

Welcome also to those of you online. Shareholders participating online will be able to ask questions, and you can submit these at any time using the tab at the bottom of the screen. I encourage shareholders who have questions relating to the business of the meeting to send the questions in as soon as possible. Please note that only shareholders, proxy holders or shareholder company representatives may vote. For those in the room, our directors and management team always enjoy these opportunities to chat with you, so please stay on after the meeting for refreshments. Now to the introductions. I'm pleased to introduce the NZX Board: Elaine Campbell; Peter Jessup; Lindsay Wright; Frank Aldridge; Nigel Babbage; Richard Bodman; and Victoria Newman, our Future Director. I'll explain our recent director changes shortly. Also sitting on the Board are our CEO -- sorry, with the Board are our CEO, Mark Peterson and Company Secretary, Sara Wheeler. And we have most of the senior leadership team and the audience here at the meeting. NZX auditors, KPMG, are represented here today with -- by Graeme Edwards and Brent Manning. And I am pleased to confirm that we have a quorum and, therefore, can declare the 2022 Annual Shareholders Meeting of NZX Limited open. Four years ago, we set about transforming and reengineering NZX for future growth. This involves focusing back on our core markets business and are planned for significant changes around the regulation, pricing and market infrastructure, along with expanding our smart shares and wealth technology businesses. In addition, to strengthen the exchange business, the company's strategy is to grow the NZX Group that is stronger and better positioned to deliver sustainable value to our shareholders. We're describing this as NZX 2.0 strategy to develop a set of complementary businesses, which combined to drive growth for NZX and the New Zealand capital markets. Our capital markets business has had a strong year across new capital listings -- listed and raised secondary trading levels, data usage and the number of investors connected to the markets. Likewise, smart shares and NZX Wealth Technologies businesses are also delivering growth. All of the NZX's businesses have strong interconnections, which means we can build on what we have to unlock growth. Smartshares provides a tenant platform for saving products and solutions based around passive investment. NZX Wealth Technology provides an important element of market infrastructure for the portfolio administration to the financial adviser community in New Zealand. Expanding these businesses will create economies of scale and help grow returns and while also assisting in the evolution of the capital markets in New Zealand. After careful analysis and a period of testing the viability of the evolved strategy, I'm excited to say that we have locked in on what we're calling NZX 2.0 as a strategy for the best way to enhance the New Zealand capital markets and to continue to grow the value of NZX. This has led to the acquisition of ASB Superannuation Master Trust, which has also added to the scale of NZX's existing passive funds management business in which Mark will discuss further in his presentation. When Mark and I took over the leadership of NZX, we could see significant potential for NZX to engage and create commercial relationships with other stock exchanges so that NZX could access the scale of larger markets. We were somewhat surprised to be so warmly welcomed whether it was in Singapore, Hong Kong, Europe or America. We knew our best chance was dairy as NZ, New Zealand as a dominant player in the physical traded dairy market and the accompanying financial markets are just developing. We could see the potential opportunity to create a palm oil derivative equivalent. Long-lasting relationships take time to develop. However, we were very proud to announce the launch of NZX and Singapore dairy derivatives strategic partnership late last year. This partnership brings together NZX's core dairy expertise with Singapore's Asian presence and global distribution capability, and we'll accelerate the growth potential of the market. We have also signed a nonbinding agreement with Fonterra to take a 33% ownership stake and the world's preeminent dairy trading platform, Global Dairy Trade, GDT, alongside Fonterra and the European Energy Exchange. NZX sees an opportunity to evolve GDT to be a truly global trading facility with the potential to grow financial products to many multiples of the physical dairy market. Bringing together an ownership stake in the physical trading platform alongside some of the biggest players in the world and overlaying our partnership with Singapore to accelerate the growth of the NZX SGX dairies derivative market is a truly exciting opportunity. Another strategically important milestone was the launch of the managed auction service for New Zealand Emissions Trading Scheme, NZ ETS on behalf of the Ministry of Environment. This was a partnership achieved by combining the skills and experience of NZX and AEX to deliver a world-class solution tailored for New Zealand and is a key tool for the government addressing domestic and international climate policy targets. The achievements in 2021 with AEX, Singapore and Fonterra mark a step change in our global alliances. Underpinning our business growth is the investment required to create efficient, reliable and secure operations and technology platform. The Board has placed the highest priority and progressing the Financial Markets Authority's action plan following the cyber attacks experienced in 2021. We are pleased to complete the action plan agreed with the FMA in December, and we are looking closely at any recommendations in this year's market operator obligations review to embed any further learnings. This has involved a significant investment and costs for both NZX and the industry. We appreciate this expenditure has been a new burden for shareholders. However, it is critical New Zealand has a resilient financial infrastructure. Cyber is an ever-changing challenge, which all corporates are dealing with. Within the business, our new CIO, Robert Douglas, brings a wealth of experience and has a highly capable team behind them with deep technology experience in markets. These changes, together with the appointment of Peter Jessup to the Board, which I'll discuss shortly, also recognizes the commitment the Board places on ensuring NZX has sufficient resources and capability to operate its licensed markets properly. We announced the resignation of John McMahon from our Board effective 31st of December 2021. We are extremely disappointed to lose the services of a Director of John's caliber, but we understood the need -- understood that John needed to deal with some significant workload on his other boards, particularly dealing to step in -- and to the role of Managing Director for a company dealing with agent health problems. John made a superb contribution to NZX during his time on the Board, particularly in applying his strong skill in the areas of technology and bringing extensive experience and connections across New Zealand and Australia capital markets. I'd like to thank John for his contribution. We also announced the appointment of Peter Jessup as a director with effect 1st of January 2022. We were delighted to welcome Peter's global expertise in a highly specialized and technical part of the market skills that are second to none, especially when Peter with his deep understanding of stock exchanges. Peter has more than 35 years of financial markets IT experience and is a preeminent global expert in relation to technology requirements for regional stock exchanges. The appointment of Peter reflects technology as a priority area of NZX's skills metrics and the need for a high-quality specialist expertise to underpin the government supporting the resilience and stability and development of NZX's technology framework. Victoria Newman joined the NZX Board in July as our fourth Future Director, under the Institute of Directors program, bringing a broad-based professional experience. This includes senior strategy and professional development roles with McKinsey & Co and 3 years with -- as principal of Virgin Green Fund focused on private equity investments in the cleantech areas in North America and Europe. We have been fortunate to have had future director of high caliber and strong market connections and knowledge in Hayley Buckley. Hayley made an excellent contribution to the Board discussion, particularly in terms of market development initiatives and response to the company's broad range of COVID-related issues during her term finishing in June 2021. During 2021, we made significant changes to NZX's governance arrangements. We completed the first full year of NZ RegCo as a stand-alone independently government agency performing all of NZX's frontline regulatory functions. I want to thank the Chair, Trevor Janes, Board members, Annabel Cotton, Elaine Campbell, John Hawkins and Mike Heron QC, along with NZX RegCo's Chief Executive, Joost van Amelsfort and his team for ensuring a seamless transition for our issuer and participant customers. Our assessment after approximately 18 months of operating RegCo as a separate standalone entity with the oversight of an independent Board as the change has added clarity, specialization and transparency to the role of our regulatory function and has been very well received by the New Zealand Capital Markets. NZX has made significant progress during Mark's tenure as CEO, and your Board has viewed continuity of leadership as key to maintaining strong momentum. For this reason, we extended Mark's employment term as Chief Executive to April 2024. Mark has relocated to Auckland to lead NZX from its new office, reflecting the importance of the significant investment we've made in the Capital Market Center. With a clear date now set for CEO succession, it is an ideal opportunity for the Board to consider Chair succession. It's important that the new chair leads the process to appoint the next NZX Chief Executive and ultimately take the business forward. Therefore, I will stand for reelection today. Therefore, I stand for reelection, but I intend to step down from my role at the Annual Shareholders Meeting in April 2023 to enable a new chair to commence the CEO succession process. During my time as Chair, we first had to stabilize the business and support management in developing a long-term strategic plan. I'm very pleased to report that our growth business or smart shares and NZX Wealth Technologies are creating significant value for shareholders and the core business has been reinvigorated. I'm particularly proud of developing the partnerships with NASDAQ, Singapore, Fonterra and AEX, which is moving NZX from an isolate exchange in the South Pacific to a company with genuine global aspirations. As explained above, we have evolved the strategy set in 2017, which we are describing as NZX 2.0, which has provided a stronger base for the new chair. As with everything, there's still lots to do. However, I'm pleased that the new chair will inherit a company with a clear strategy, strong momentum and opportunities to grow the business and returns for shareholders over time. The chair's role is extremely demanding with a heavy workload beyond the normal chair's role, given the added leadership responsibility within the New Zealand broad capital markets. It's an important role for the New Zealand capital markets, and I wish for my successor every success. As you know, I have a genuine passion from New Zealand Capital Markets and it's been a privilege to hold the role. With my proposed retirement announced and the chair succession process underway, it is an important NZX can attract the highest quality chair for the role. And therefore, while all directors on the NZX Board have a strong sense of duty, it is critical to attract the highest quality candidate and that we have a commitment to move the fees to a fair market level over a reasonable period of time. One of our resolutions today relates to the proposed increase of NZX director fee pool. The fee pool of $435,000 was last independently benchmarked prior to NZX listing in 2003. Fees paid to individual directors have been made static since. The complexity of the business, together with technology requirements, regulatory obligations has increased immeasurably since the IPO in 2003. The Board engaged PwC to carry out an independent benchmarking for nonexecutive directors based on a group of 20 peer companies. The outcomes of the exercise are summarized in an independent report published in NZX's notice of meeting. PwC's report identified the following factors: the market medium pool, so the market pool fee across the agreed comparator group of NZX's listed companies were $725,000. The current pool at $435,000 is 60% of the sum. Looking at another way, if current fees have been adjusted from inflation from 2003, it would amount to a fee pool of $562,835. The NZX Chair and net fees of $100,000 and $50,000 per annum, respectively, each currently trail the market medium observation at 67% and 59%, respectively. All the peer companies pay a committee fee for the Chair of Audit and Risk Committee at $15,000 and 75% pay for the Chair of REM, Remuneration Committee, at $12,000 and between 25% and 40% of these companies will also pay committee and membership fees. To facilitate the chair succession process and attract and retain talent as essential NZX pays market rate for fees. The NZX Board therefore proposes to increase the current fee pool to $522,000, which would take it to 72% of the market medium. If approved, the Board would allocate the updated pool towards the 7 nonexecutive directors with the share fee of $120,000 and a director fee of $60,000 from the 1st of July 2022. NZX will not pay fees for nonexecutive director committee fees. The Board will also introduce a policy that at least 50% of the increase from FY 2022 director fee to be applied towards the acquisition of NZX's shares subject to legal requirements. This policy will ensure alignment between directors and shareholders' interest as a core belief, and it is all the more important given we operate the stock exchange. This supports the existing policy for staff to receive $1,000 worth of net shares on becoming employees of NZX. The policy for directors will be updated in time, so a proportion of the overall director fees will be used to acquire NZX's shares on an ongoing basis. Noting that we are some way to go for people to reach market median, the Board also wishes to signal its intention to return to shareholders over the following 2 years to achieve market median rates, provided the company performance and shareholder return support such increases. The Board considers this an important step to support successful chair succession process. While I've received various views on the implementation of the fee increase, all have been supportive of the direction of [ Trevor ], and I ask for your support today. Normally at the ASM, we like to consider tightening the bottom of the earnings range to reflect the first quarter results. However, this year, we believe there is reason to be conservative due to the geopolitical issues, rising inflation and rising yield curves and the switch from growth to value, causing markets to pause as they assess new information. Therefore, the NZX Board is leaving the full year 2022 operating earnings announced with release of our 2021 full year result unchanged within the range of $33.5 million to $38.0 million. The guidance is subject to the caveats and assumptions outlined in the presentation pack and within the NZX's 2021 results investor presentation. In conclusion, in concluding my speech, I would like to acknowledge the capability and genuine care from our CEO, Mark Peterson and leading our team and the immense workload across the business and for the Board. That has been the case again in what has been a satisfying 2021. I particularly want to commend our people across NZX and their families. The combination of COVID and the requirements of working from home for long periods for many, along with managing high levels of activity, creates pressures on individuals and families, and we collectively responded in an incredibly positive manner. I'd personally like to thank our shareholders for your continuing support during my time as Chair of NZX. I'll now hand over to Mark.

Thank you, James. [Foreign Language] My name is Mark Peterson, and I am the Chief Executive of NZX. It is very special to be addressing you in our new office today, which we are thinking of as the Capital Market Center, and I welcome all shareholders with us today and those attending online. NZX at its core is a meeting point for buyers and sellers, and it's extremely fitting to have this reflected in our new Auckland office. We hope that this can be a place for the capital market sector to call their own. We look forward to an opportunity to host listing events, which we're able to do at the end of last year with Winton Land Company and host investor presentations and welcome community groups and school tutors to come and learn more about the exchange and the role it plays in New Zealand's economy. 2021 has been another significant year of progress for NZX Group across all key areas: capital markets, smart shares, wealth technologies and our operations and technology platforms. I could not be prouder of the entire team at NZX for what has it achieved over the year in very trying conditions. But before I talk about our performance, can I make a couple of comments on a few of the team. Firstly, I want to take this moment to acknowledge somebody who has been heavily involved in our efforts and progress for more than 8 years, Hamish McDonald. As he relocates to Australia with his family, I want to sincerely thank Hamish for his part and our success through his contribution to our leadership team and his support to the Board and his leadership more broadly. Second, Sara Wheeler, who James introduced has replaced Hamish's General Counsel and Company Secretary. Sara is a highly experienced corporate and commercial lawyer and brings over 20 years of legal experience working in New Zealand, Sydney and London. I also want to acknowledge several adjustments to the senior leadership team, which were made last year to better position the business and delivering on its strategic ambitions. Kristin Brandon, who previously reported to Hamish, continues in her role as Head of Policy and Regulatory Affairs, reporting directly to me. And Kristin has extensive knowledge of NZX, a deep background and regulatory policy and is responsible for leading the development of NZX's market rules and managing our regulatory relationships. She has played an instrumental role in the execution of the financial market authorities action plan following the cyber attacks experienced in 2020 and will continually work closely alongside the FMA as our main point of contact for NZX. We're also looking forward to welcoming Felicity Gibson back from parental leave as she moves into the role of General Manager of Market Operations. Felicity has been with us since 2014 and will lead the Capital Energy Markets clearing businesses. A special congratulations to Felicity for recently being voted as one of the World Federation of Exchanges women leaders of 2022, a well-deserved accolade. Finally, I want to acknowledge Roger Bailey, who has been covering Felicity's role while she has been on leave. Roger brings over 30 years of experience to NZX and managing operations risk and technology teams in the finance sector, and he has done an exceptional job during his time as General Manager of Market Operations. We are pleased to announce that Roger will be continuing with us as our Head of Energy IT once Felicity returns. Reshaping our exchange to better enhance its growth potential has been on the Board and management -- or has been the Board and management's strategic priority since 2017. At our Annual Shareholders Meeting last year, I reiterated our plan to grow the NZX Group into a more integrated financial markets infrastructure and services business through what we call NZX 2.0. At the heart of the NZX 2.0 strategy is a focus on creating value through a set of complementary businesses, which combined to drive growth for NZX and New Zealand's capital markets. Creating scale in each of these is key to unlocking their embedded value. Partnering with others to create scale has been a focus for NZX, and we are pleased to have made further gains in this area. Growing markets is fundamental to what we do, helping business get access to capital and providing investors opportunities to grow their wealth for investing in equity debt and fund securities. Dairy has always been viewed as a growth opportunity, and our recent proposal to purchase 33% cornerstone stake in the global dairy trade business alongside Fonterra and the European Energy Exchange gives us greater input into the strategy and direction of the physical auctioning component of a fully functioning dairy market. Combined with our partnership with SGX to grow the dairy derivatives business, our dairy business is now much better positioned to reach its growth potential. We continue to build scale in our Smartshares and Wealth Technologies businesses. The acquisition of management rights for the ASB Superannuation Master Trust by Smartshares completed earlier this year, winning the key resave default status and the 3 additional high-quality clients that transitioned onto our Wealth Technologies platform last year are examples of our ambition coming to life. NZX's recent $44 million capital raise supports both areas of our growth strategy, with proceeds being used to fund the ASB Superannuation Master Trust acquisition in our cornerstone stake in GDT, alongside other supporting future growth opportunities. Lastly, it's about ensuring we have quality operating infrastructure. We have made a step change in investment to lift the performance resilience and security of our technology platforms, and this will continue through 2022. 2021 continued the momentum we saw in our markets in 2020, with structurally higher levels of market activity, particularly for capital listed and raised and value traded. Group operating earnings held up well. On a like-for-like basis, operating earnings were up 4% to $35.8 million, which is slightly ahead of our 2021 guidance range. If acquisition costs were included in our operating earnings, they would have totaled $34.4 million. Group revenues increased 12% to nearly $88 million for the full year. In our investor pack, we explained the changes to our cost base, which were grouped into 3 buckets: cost increases linked to growth initiatives, which are approximately $4 million; costs associated with investment in technology and resilience, approximately $2 million; and cost changes associated with inflation and labor market challenges, approximately $2.4 million. Operating margin, excluding acquisition cost, was 40.7% and was lower due to investments in growth and bringing forward the increased spend in people and technology costs to ensure the resilience of our infrastructure and support expansion. Lower interest rates impacted interest income on operational cash balances, NZX clearing risk capital and regulatory working capital. Amortization was higher due to the capitalized costs in late 2020 relating to the spend associated with migrating new clients onto NZX Wealth Technologies platform and the implementation of the new trading system. Net profit after tax for the year was $15 million compared with $17.6 million in the previous year. Capital expenditure continues to focus on investing in IT capacity, resilience and security alongside growth opportunities in Smartshares and NZX Wealth Technologies and creating this Capital Market Center here in Auckland. Alongside our financial performance, it's pleasing also to report the following positive results: $19.8 billion of capital listed and raised is the highest it's been since 2016. The total value traded of $52.4 billion remained historically high but slightly down by 2.4% from last year's record off the back of the 2020 COVID activities. Our Data and Insights business delivered an 8.1% increase in revenue, reaching $17.5 million, largely reflected in the lift in royalties from professional terminal use. Smartshares has continued to grow strongly with funds under management up 28% to $6.54 billion as at 31 December. And our NZX Wealth Technologies business recorded significant new client business, which successfully transitioned onto the platform in 2021, taking the funds under administration from $7.2 billion to $11 billion at the end of last year. 2021 has been challenging for our dairy derivatives business. Total lots traded decreased by 15% to just over 305,000 lots for the year, and it was due to subdued volatility in the underlying market for dairy ingredients and restrictions on international travel, limiting promotional and marketing activity. While geopolitics and global economic influences, notably rising inflation, continued to impact market conditions, there is still a real sense of positivity towards listing, as companies seek new capital to support their business goals and ambitions. It's been great to kick start the year with the listings of the Booster Innovation Fund and the South and Building Society Bank bond. Last year, we were pleased to welcome 9 new companies to NZX equity markets, slightly higher than the 8 listings in 2020. We are encouraged to see the different pathways being used to list with My Food Bag IPO in the first half of the year, alongside direct listings from NZ automotive investments and Third Age Health and the foreign exempt dual listing of GGL Group. Last year, we also saw the sizable Ventia Services Group foreign exempt listing alongside Vulcan and the direct listings of Greenfern Industries and trade window and the Winton Land IPO closed out the year. There are many paths to raising capital, and we believe we've had another solid year for new listings and capital raisings as our listed issuers source equity and debt funding when needed. The quality of our prospect pipeline is the result of a concerted focus and the efforts of our Capital Markets origination team, combined with the strategic changes we have made to reduce complexity and costs while promoting the full breadth of pathways to listing. Our debt markets have also performed strongly with 21 new debt issues over 2021 and 1 existing issuer joining the debt market for the first time. We have also observed a notable increase in the issuance of listed sustainability-related financial products, including wellbeing bonds and green bonds, which totaled $9.78 billion at the end of the year, up from $8.6 billion in 2020, representing a 21% of the NZX debt market. Our original objective 5 years ago was to grow liquidity by putting in place the right market settings to open greater access, attract greater participation and a broader range of investors as well as lift on market activity. We are continuing to see evidence that our strategy is working. Alongside the high levels of value traded across our markets, we continue to observe growth and one on market -- sorry, we continue to observe growth in all market liquidity levels, which averaged 62% in 2021. We aim to take this higher, and we believe we will reach 70% to 80% over the next 5 years. This will be possible as a result of the functionality in the new trading system implemented in August last year, which has given us the ability to launch our midpoint order book trading venue. We've also seen a deeper level of activity and interest from local and offshore institutional investors, great demand for NZX data from a range of jurisdictions, including the U.S., Australia, Hong Kong and Singapore, driving 11% increase in professional terminal subscriptions, which are now at record levels. With the lift in royalties from professional terminal use, we have completed a project to provide enhanced connectivity with our participants via dedicated high-speed links that will improve the service we offer. These positive trends across capital listed and raised secondary trading activity and data usage show how a healthy listed market can deliver reliable, liquid and open access to opportunities in New Zealand for all investors so that everybody can support and benefit from the success of Kiwi companies. We are also really looking forward to BNP Paribas joining as a general clearing participant in 2022 as they strengthen their commitment to helping grow New Zealand's capital markets. Smartshares continues to make very good progress. Funds under management is up 28% to $6.5 billion. This growth was underpinned by net cash flows of more than $1 billion. Operating earnings, excluding acquisition costs, lifted 64% to $9.2 million. In addition, the acquisition of the management rights of the ASB Superannuation Master Trust will add $1.8 billion in retirement savings from more than 17,500 members across more than 100 employer groups, taking the passively managed funds under administration of Workplace Savings being business margins to more than $3.2 billion at year-end. The SuperLife key reserve scheme became a default provider from 1 December 2021, and we expect the Superlife default fund to be an excellent fit for New Zealand investors with the flexibility for KiwiSaver investors to invest in 43 investment options, including exposures to a range of Smartshares ETFs. The KiwiSaver default transition occurred through December 2021, which resulted in $385 million of funds under management being transferred in a doubling of the number of New Zealanders who are supported by SuperLife KiwiSaver solutions. Holding default KiwiSaver provider status is expected to continue to add around 10,000 new members each year. As I commented earlier, we remain confident about the growth prospects of our Smartshares business and the related benefits it provides across the NZX Group, and we remain ambitious for this business in particular. [ Progressive ] Funds Management as a proportion of total funds managed in New Zealand has some distance to catch up with levels in other countries. Scale in our Smartshares business also assists the growth of New Zealand's capital markets. Managing larger pools of money allows the creation of a greater range of ETF products, providing opportunity to cover a broader range of mid and smaller cap stocks. NZX Wealth Technologies also had a very strong year, welcoming 3 high-quality clients transitioning onto the platform. This took funds under administration to $11 billion at year-end. New client business has lifted revenues for the business and resulted in operating earnings being positive for the year. As at 31 December, NZX Wealth Technologies managed just over 32,000 investor portfolios, and it's pleasing to note, we continue to get positive feedback from our clients about the platform and the service levels our staff provide. This is flowing through to the increased level of demand for NZX Wealth Technology Services that we are observing. To take advantage of the growth opportunities, we have continued to invest in our platform technology and staffing capability to onboard service our growing client base, with public trust, hubs and wealth, set and advice, [indiscernible] and Craigs Investment Partners, among others on the platform. This track record and the opportunities in front of NZX Wealth Technologies has seen NZX make additional investments to support these growth opportunities. And we expect, given the NZX Wealth Technologies is engaged with several new prospects for project activity continued growth in 2022 and cash flow positive -- and a cash flow positive business within the next 3 years. Through 2021, we advanced several unique opportunities to grow our business through strategic partnerships. To effectively support global trade, we believe a fully functioning dairy market must have 3 fundamental components: a price discovery platform for physical product that sets global prices for dairy commodities; a well-functioning derivatives market where users can effectively manage their risk positions; and both elements are complemented by quality data and insights into the global dairy industry. For more than a decade, NZX has been developing a global dairy derivatives market alongside our quality data and insight offering. It has been the fastest-growing dairy derivatives market globally through this period. Our recently launched partnership with SGX accelerates the growth of this market through SGX's increased distribution capability. The derivatives market has always been complemented by our dairy data and insights business which has an excellent reputation globally for the quality of our team's work. We are pleased to be progressing the final core component to assist in delivering our dairy ambition with the proposal to purchase a 33% cornerstone stake in the global dairy trade platform alongside Fonterra and the European Energy Exchange, as mentioned earlier. Our involvement in 1 -- sorry, our involvement in the move to a broader ownership structure for global dairy trade marks the next step in the evolution of the global physical trading platform, further enhancing GDT's role as an independent neutral and transparent auction platform and giving it a presence and prominent international dairy producing regions fueling future growth opportunities. By working together with Fonterra and EEX and involving GDT, on a voting GDT to be a global trading platform, there is potential to grow financial products to many multiples of the physical dairy market. The expansion of the physical trading environment would further strengthen existing financial market contracts and the development of GDT for new price points in the physical market would enable the creation of new financial markets contracts, providing new tools and opportunities for dairy processes and end users to manage price volatility. Technology remains a key priority for NZX, and we have lifted our folks materially on the capacity, reliability and security of our platforms. Additional resources and a wider range of skill sets have been added to our technology teams. NZX implemented a new trading system in early August 2021, working closely with our technology partner, NASDAQ. The successful delivery of the new trading platform was an extremely complicated project, which stretched over 3 years and were supported and enabled not only by our staff but through essential contributions by stakeholders across the participant ecosystem. With this new trading system now live, enhancements will assist us in anticipating the needs of participants in New Zealand's capital markets. James talked earlier about our strategic partnership with the European Energy Exchange and how we took our first step into carbon markets by implementing the managed auction service for the New Zealand Emissions Trading Scheme. Since then, we have successfully run a total of 5 auctions and seen interest building in emissions trading and growing international participation. Along with a strong relationship with the ministry for the environment, the mix of participation is a vote of confidence in what we have delivered in partnership with EEX. The NZX EEX as auction operator cleared a total transaction value of $1.325 billion by year-end. The rising New Zealand unit price and importance of the New Zealand ETS to the government's climate change targets is seeing increased focus from government and the sector on potential trading and managing market risks. We do see the development of exchange traded secondary and derivatives markets as the next logical step. We also understand the importance of our own environmental performance in areas where we can improve. We took an important step forward this year, engaging Toitu Envirocare to independently verify and report NZX submissions from 2022, along with a commitment to Carbon Zero program. Verified environmental disclosures will be released in Q2 2022, so that investors and stakeholders have a better view of our ESG performance. We have also continued to support the work undertaken by Aotearoa Circle's Sustainable Finance forum, including the launch of Toitu Tahua, the sustainable finance center, along with promoting the development of issuance and sustainably related securities. 2021 has been a year of delivery in every part of our business. The team at NZX has risen to the challenge in trying conditions. I would also like to acknowledge the efforts of the teams at our participant firms, corporate advisory firms, law firms and investing community and the many other organizations in New Zealand's capital markets ecosystem. It's the entire community that creates the growth and all have crucial roles to play. The role of capital and a trading platform like the exchange is central in the story of New Zealand's economic development. It's a story of helping people grow their wealth to achieve their dreams and those dreams may be a safe and happy retirement or they could be to have your business grow and compete on the world stage. We stood the test of time and we are New Zealand's Exchange, and when the country grow -- grew on New Zealand's Exchange and when we grow the country grows. And with that, we also -- we will also deliver long-term value for our shareholders. As we look at the opportunities for the future give me considerable optimism. Before I hand back to James, I want to do 2 things. First, thank you, our shareholders, for your continued support and confidence in NZX. And second, I just want to acknowledge James. James has spoken about his plans to step down as Chair of NZX at next year's ASM, and we know James likes a good party. And we will certainly plan a fitting farewell next year. However, I just want to take this moment now to recognize the enormous contribution James has made to the NZX and New Zealand's Capital Markets. James' passion and work ethic for NZX knows no bounds. A former director described James as the hardest working Chair in New Zealand, and I don't think that would be far wrong. This job is incredibly challenging because of the role of the company in the market and the unrelenting nature. Everybody has a view and at times it can be unrelenting. James should be incredibly proud of his achievements at NZX and his enormous contribution. James also has been a huge support for me, and I want to thank him for that. As I say, we look forward to a proper celebration in due course, but this is just a quick and public acknowledgment. Back to you, James.

All right. Finally, if I get to the business time. So thanks, Mark, and we'll now move on to the formal business of the day. All items of the business are ordinary resolutions and required to be passed by a simple majority being more than 50% of the votes of the eligible votes cast. The resolutions that we're voting on today are as follows would just be: election of Peter Jessup; re-election of myself; re-election of Elaine Campbell and the approval of the updated director fee pool. As stated in the voting proxy form, all voting at today's meeting will be by way of poll. And accordingly, the capacities here require poll to be held for each of the resolutions. Shareholders attending in person, please mark your voting card by ticking for, against or abstain alongside the corresponding resolution and hand the voting card back to Link who you registered on entry. Shareholders on Link's virtual meeting platform will be able to cast their vote using the electronic voting card received when online registration is validated. Voting will be open until the close of the meeting. Please refer to the virtual meeting portal guide or use the helpline 0800-200-220. To vote, you need to click Get Voting Card within the online meeting platform. You'll be asked to enter your shareholder or proxy number to validate. Please then mark your voting card in the way you wish to vote by clicking for, against or abstain on the voting card. Once you have made your selection, please click submit vote on the bottom of the card to lodge your vote. Voting will remain open until 5 minutes after the conclusion of the meeting. Proxy appointments have been received for the purpose of this meeting in respect of approximately 122,900,000 vote -- sorry, that's 122,900,000 ordinary shares to vote. As was indicated on the proxy form, where the proxy discretion has been given as Chairman and the other directors intend to vote, these proxies we have received in favor of resolutions 1 to 4 and will abstain from voting on resolution 5. As requested by the New Zealand Shareholders Association, we will not disclose the voting of the proxies received for each of the resolutions before the shareholders' vote. The resolutions of the vote will be -- sorry, the result of the vote will be announced via the market announcement on NZX.com. I will now introduce each of the resolutions and turn for discussion. Resolution 1 relates to the Board being authorized to fix the fees and expenses of KPMG as the company's auditor for 2022 financial year. KPMG is the current auditor of NZX, unanimously recommends shareholders vote in favor of this resolution. I move as an ordinary resolution that the Board be authorized to determine the [ ordinary ] fees and expenses for the 2022 financial year. Are there any questions on this resolution? Any questions online? Okay. Being no further questions, we'll move to the next resolution. Resolution 2 relates to the election of Peter Jessup. Peter Jessup was appointed a Director of NZX with effect from 1st of January 2022. Peter retires in accordance with the listing rules and the NZX constitution and offers himself for election. The Board recommends Peter Jessup as a Director of NZX and unanimously supports his election. I invite Peter to address the meeting.

Thank you, James. Good morning. Firstly, I'd like to say it's an honor to be here at today's ASM coming back to New Zealand. I'm currently based in Australia, so it's a short trip over this week to attend the meeting and the Board meeting yesterday. I started out my IT career about 40 years ago. Most of that has been focused on financial markets. I started at Databank, which some of you may recall, was the utility company owned by the 4 trading banks here in New Zealand and provided all the computerization services for banking as a single entity. I joined as a trainee programmer, so it was like an apprenticeship, if you like, straight out of school. And I think it's interesting to note that back then in the early '80s, the technology that Databank had implemented was really world beating. You can present a check from 1 bank in Invercargill to the bank at 3:00 p.m. in the afternoon, and it would clear against another bank's account that evening in Auckland. And I don't -- I think that, that -- whilst we don't -- I believe checks have been abolished now in New Zealand. But back then in the '80s, no other country could do that. And I don't think many other countries actually ever got to that level where there was same-day settlement of paper-based transactions. I spent a couple of years overseas. And when I come back to New Zealand in the '80s, I actually joined the New Zealand Stock Exchange as it was then called. And it was the beginning, I think, of the major computerization effort. So I joined the team that was implementing the broker-broker accounting system, which essentially digitized the transactions on the trading floors. I think there were 3 in existence in Auckland, Wellington, Christchurch. There were still, I think, officially 4 exchanges. They thought it wasn't -- they weren't combined at that point. It was a mutualized company. And we built a computer system that took the trading slips off the floor. The buy and sell slips match those up, presented a report to the brokers who would then that evening deal with all the mismatches and then generated an accounting report for settlement, which in those days could take months because there was still paper in the system. So the next thing that we did is we implemented a solution for that problem called Faster. And what that did is it truncated the paper so much like presenting a check in a way to a bank that took the sets, the transfer forms and so forth, digitize those and we then electronically transmitted that detail back through to the registry. So there were 4, I think, registries at the time. We built interfaces into the registries, directly move the shares electronically into settlement accounts and achieved a DVP [ model ] to settlement, which was net cash, but gross share delivery share broker-to-broker deliveries of shares. The next thing we did was the -- in the '90s after '87 crash, the volumes were in the hundreds of trades a day. Lots of brokers exited the business. We were still running matching on the open outcry on the trading floors. So we implemented the first electronic trading system. And that system was actually the ASX solution. ASX have built that themselves. They're one of the first equity exchanges to launch electronic trading, and the NZX acquired that solution from ASX for the sum of $1 at the time, which was actually a testament to one of the engineers who still works at the Exchange. [ Bill Mathis ] who had built a prototype solution. And we've demonstrated that we could build it ourselves. The ASX wanted to spread their technology out. And so we've got quite a good price for that. So we implemented that system in the mid-90s. I then left the exchange. I returned to New Zealand in '99 when I was then working for Computershare in Australia. I joined that company in '96 when I bought a start-up company that was building matching technology. I returned here in '99 to implement that system for the exchange. And that solution is actually still running today. So the new trading system upgrade that's just happened is essentially that same technology that's been serving the exchange extremely well for, well, 20 years. I stayed with that group. And over my time, it went from Computershare to OMX, which is a Swedish company, which was in turn acquired by NASDAQ. So NASDAQ is now the supplier of technology to the exchange, and I left that role only 3 years -- 3 or 4 years ago, by which time I was a senior executive with running the Australian office. We had about 200 or 250 staff reporting into me at the point when I left that job. And so over that career of 23 years with NASDAQ, I have been involved in a huge number of projects with exchanges around the world, different cultures, different market models, different technologies. I was responsible not just for the matching engine solution that is running here today, but also I ran the smart team, which provides the surveillance solution here, and also involved in many other projects on post trade, cleaning, clearing, depository and so forth. My current role -- my day job, if you like, is with the London Stock Exchange Group. It's very similar to what I did at NASDAQ. I'm responsible for a suite of market infrastructure products and trading, pairing, settlement and so forth. So I continue to work in an area where I've developed a lot of experience over the years. Last year, given my background and experience around the world, I was invited to join the Technology Committee. I joined that in April, and it was an honor to serve in that committee last year and especially with Robbie Douglas and the excellent team and the tech team there. And then I was invited to join the Board when John retired at the end of last year. It's been a great pleasure to work over the past year with the exchange, and I'm looking forward to continuing in that role. And I guess it's really interesting to see the growth of this market in which I joined when it was open outcry to now, I think, a really interesting and diversified fintech company. When I look around the world, NZX has really sort of set a pathway for diversification and growth, which is quite extraordinary. And so I'm looking forward to the challenges ahead. And I ask you, finally, your shareholders for your support. Thank you.

Well, that's what some CV. Thank you, Peter. I move as an ordinary resolution that Peter Jessup be elected as a Director of NZX. Are there any questions on this resolution? Are there any questions online? Okay. Thank you. The next resolution concerns me, so I'm going to ask Elaine Campbell to chair the meeting.

Thank you, James. James is appointed as a Director in August 2010, and he's been the NZX Chair since May 2015. James retires by rotation in accordance with the NZX listing rule and offers himself for re-election. This Board recommends James Miller to you as a Director of NZX, and we unanimously support his re-election. Being eligible, James has confirmed he is available for re-election, and I invite James to address this meeting on his proposed re-election.

Thank you, Elaine. As indicated earlier, given Mark's role as CEO will end in April 2024, it's important a new Chair leads the process to appoint the new CEO. And accordingly, I intend to step down at next year's ASM to allow the new Chair to take the -- to take the company forward. I'm therefore seeking a mandate to continue as Chair for the next year to lead our orderly process for appointing a new Chair, which has already commenced to support the execution of the NZX 2.0 strategy and to provide expertise in the critical policy reviews such as setting up the New Zealand Corporate Governance Institute. And finally, delivery of shareholder returns also remains a key focus. While you are relatively familiar with my career to date and governance experience, a full description of my background is available to view in the notice of meeting. As you know, I'm passionate about the New Zealand capital markets, and I'm proud to be able to get back to the industry that gave so much to me during my career. This encompasses NZX and the company's place in New Zealand. I've experienced many highlights during -- while serving the last 7 years as chair. But firstly, it was privilege to appoint Mark as Chief Executive in 2017. Mark continues to showcase himself as a highly capable leader who has been instrumental in the turnaround of NZX's fortune and creating a dynamic and energetic senior leadership team to take the company forward. Following the appointment of Mark as Chief Executive, our priority focus on resetting the strategic direction of our company and supporting management and developing a long-term strategic plan. The Board and I played a central role in this review, analyzing global market trends and the performance and activities of our peers. The result from this delivered a compelling vision for NZX with the initiatives that drove growth and delivered improved performance for you, our shareholders. The operating earnings EBITDA is a strong reflection of the success of our strategy. Up to the -- up from $22.5 million when the turnaround strategy was adopted in 2017 to $35.8 million in 2021, excluding acquisition costs. I believe we are on track to exceed $40 million in earnings subject to the normal market conditions caveats we always have. Throughout my tenure, bringing the capital markets and its stakeholders together has been one of my key priorities. The development of Capital Markets 2029 report helped create a shared vision for the New Zealand capital markets. We also noted the market behind our 150th year celebration with NZX's Board and senior leadership team, connecting with the ecosystem across New Zealand and market this momentum milestone for the exchange. The development of NZX RegCo as a structurally independent organization was groundbreaking in the 150th year history of the New Zealand Capital Markets. In terms of structure and governance and operating model, the new model is in line with best global practice and represents an important milestone for the continuing evolution of the New Zealand exchange. And finally, developing our partnerships with NASDAQ, Singapore, Fonterra and EEX, a significant achievement moving NZX from an isolated and interior exchange in the South Pacific to a company with genuine global aspirations. It's been a privilege to serve on the Board. There's still lots to do, but however, I'm pleased to report the new Chair will inherit a company with a clear strategy, strong momentum and opportunities to grow the business and shareholders -- and returns for shareholders over time. Ladies and gentlemen, some of us stand here today seeking re-election as your Director, and I ask for your support. Thank you.

Yes. Yes?

Good morning. I am Robert Green, shareholder. I have a question where you've got time for all these roles of yours. All I can see so you got to sleep on the job. There was a meeting from New Zealand Refining, a special meeting of about 6 months ago. And it appears you can't read your own stock exchange diary. For your listed companies, booked in for their AGM from the same time. And they were listed several in the system several months before that meeting. And yet there are 4 meetings on 1 day, out of the few we've had over the few years in person. Don't you read your stock exchange diary?

Yes. Look, this is a perennial problem. And as I understand that, we don't actually control the date companies sit for their annual meetings or...

You're on the Board of the company. That's the only reason I'm bringing this up. And you could have looked at in the stock exchange diary. You don't mean on the system is several months before.

Look, I don't know precisely about the refining date. It was actually quite critical for us to go at that date. I do remember that. You couldn't ask for more serious changes that we had to push through at refining to become channel infrastructure. And I've got no doubt Naomi would have had a reason for setting the date as it was, but it wasn't an area that I personally saw. I didn't know there was another 3. Sorry about that.

They were in the system. They were in the system [indiscernible].

Yes. I hear this for the -- it's -- it is an area that comes up regularly, and I do sympathize that it does affect shareholders who are trying to go to multiple meetings. That's why we created the diary system. So you do raise a point and you've probably gotten that 1.

I understand that not many people showed up and that was the reason. And besides that, it's a time when the rights issue is after COVID. Vista [indiscernible] are there a rights issue? And none of the paperwork, I don't do it by a computer. I've tried that sort of thing. Nigerian scammers got a system, created a hell for me. But all of paperwork, I don't know anything about it. It doesn't turn up to paperwork -- did not turn up to after this had closed, because so the right are going to take them out. The paperwork, hey, this is closed.

Yes. Look, first of all, I wasn't on the Board of Vista when that happened...

You couldn't get in the door, couldn't contact security or anything.

Again, I recently joined, so I can't possibly comment on that. Could we keep it to NZX business?

I've got a whole lot of extra shares in this deck. The last purchase before that. And now I'm very upset about it. And I said that's it, I haven't bought any shares on the New Zealand Stock Exchange since.

Thank you for your comments. We are going to ask shareholders to please limit their questions to matters that relate to NZX business. Thank you. Roger?

Roger Wallace, representative of a shareholder. Can I endorse what Mark Peterson said about the contribution that James has made while he's been Chair? I think you've done an outstanding job and obviously, before that as a director before you became chair. Could I ask you though, just to give us a sense of how much time you're spending on an average month outside unusual business just on the NZX matters? Because I think some shareholders may not appreciate how big a commitment it is, James.

Probably should ask my wife. It just never stops. It comes always would be the answer. It can be all consuming. That's what you're doing. And then other times, basically, management's got it all covered. So as I've got more experience in doing the job, I've been able to let more things sneak through the keeper. But yes, it's a reasonable workload this job. And the reason why is I tried to allude this in my speech is that you have the normal chair role that you're doing today or at any time. But also the strength of NZX as our ecosystem the companies and the brokers and the in stores, et cetera, that we all want to relate with. And you've got to be able to show some kind of leadership into those markets, and that's where it's particularly demanding as a chair role. So I never tell you that, but you probably knew that, but it's quite a bit.

Thank you. I move as an ordinary resolution that James Miller be re-elected as a director. Are there any further questions from the floor on this resolution? Do we have any questions online, Sara?

No.

Thank you. As there are no questions on this matter from shareholders joining online, and there appears to be no further discussion, I will hand the chairmanship of the meeting back to James. Thank you.

Resolution 4 relates to the re-election of Elaine Campbell. Elaine was appointed a director in February 2019. Elaine retires by rotation in accordance to the listing rules -- sorry. Thank you. In accordance with the listing rules and offers herself for reelection. The Board recommends Elaine Campbell to you as a Director of NZX and unanimously support for re-election. Being eligible, Elaine has confirmed that she is available for re-election, and I invite Elaine to address the meeting on her proposed re-election.

[Foreign Language] My name is Elaine Campbell, and 3 years ago, I stood before you and [ the nation ] seeking election to this Board. Today, I ask for your continued confidence and support. During my tenure, I have served you as a member of the Human Resources and Remuneration Committee, the Clearing Committee and both the regulatory governance and conflicts committees before these 2 letter committees were disestablished because of the work performed to create NZ RegCo Limited. As has been said earlier today, NZX RegCo Limited now oversees and governs the performance of NZX's regulatory operations conducted by NZX regulation. This frees the Board of NZX Limited to focus on our commercial operations. The establishment of NZX RegCo was a significant achievement in my first period of Board tenure. It required both significant engagement with FMA and policy work to make it a reality. I serve you as the crossover Director from the NZX Limited Board to NZX RegCo Limited Board, bringing my prior experience as a market's regulator to that subsidiary board. Having a separate regulatory company with its own Board ensures greater accountability for the performance of NZX's regulatory functions, provides NZX regulation staff greater support and further the bank's criticisms regarding perceived conflicts of interest. NZX has delegated all regulatory decision-making to that Board and the management of NZ RegCo. And like James, I would like to acknowledge the work of Joost van Amelsfort that ended RegCo Limited CEO, who is here with us today. As I noted earlier, NZ RegCo enables the NZX Limited Board to focus on our commercial operations and spend our Board meeting time on our portfolio of businesses and on the formation of and monitoring the execution of our strategy. My background in funds management, financial advice, insurance and as a former NZX executive and IT lawyer enables me to contribute effectively across this portfolio. I stood for this Board on a platform of my personal values and integrity. And I invited you to hold me to account for my performance. I told you of my passion for NZX. It's important to NZ Inc. and the future that I want to see for this country. That passion has not dimmed. I see it I would work for your interests. I acknowledged at the time of my appointment the challenges that NZX then faced of attracting companies to list, improving liquidity, capital efficiency and competing against private capital. NZX has made significant progress on all of these dimensions over the past 3 years. In particular, on market liquidity has improved substantially, we have solid strategies to continue to make progress, and we're seeing a growing number of listed companies and increasing ways to attract these companies to our markets. You've heard about our continuing progress in the CEO and Chairman's speeches. And you can see the results for yourself and our annual report. I won't call them out again here. Now these gains are not mine to claim, but I am really incredibly proud to be part of the team that is making those gains. NZX is a technically challenging board. The breadth of the portfolio that we manage and that special place in the capital markets ecosystem that James referred to means that there are always challenges that we need to rise to. And this Board and in particularly your Chairman works tirelessly for your interests. I will continue to bring all of my energy, skills and experience to the challenges we face whilst prioritizing the generation of shareholder value and recognizing the interest of all of our stakeholders. Being on this Board is an honor, and I hope that today, you see fit to reelect me so I can continue to serve you. [Foreign Language].

Thank you, Elaine. I move as an ordinary resolution that Elaine Campbell be reelected as a director. Are there any questions from the floor on this resolution?

James, I'd like to [indiscernible] on this resolution, given Elaine's obvious contribution. But in values as you just should be given an indication of probably how much since in location just described on these things at export and then simply [indiscernible].

Thanks, Roger. Look, the work of the 2 Boards are quite distinct, and the work of NZ RegCo obviously is different to the work that we do at NZX Limited. Because I served on 2 committees prior to the establishment of NZ RegCo, the overall time commitment isn't massively different kind of trading 2 committees for 1 of the Board. I guess the difference is that we do get involved real time in regulatory decisions. There are certain decisions that are reserved for the Board. So whilst it is a reasonable time commitment, I certainly feel that I have both the bandwidth and capacity to serve you and [ Nick ] in those 2 functions.

Any other questions? Any questions online?

No.

Okay. Resolution 5 seeks the approval of the total annual remuneration payable to all directors to be increased from $87,000 -- by $87,000 from $435,000 to $523,000 with effect 1st of July 2022. As noted earlier in my presentation, the current NZX director fee pool was last approved in 2012, although it has not been substantively reviewed or benchmarked since NZX was listed in 2003. It is important that NZX pays market rates in order to attract and retain quality directors in NZX, and therefore, engaged PwC to conduct an independent market benchmarking and the result of this process are outlined and a summary report available on NZX.com. Paying market fees is especially important in context of the chair succession process now underway. As noted, at the resolution of support today and subject to the ongoing company performance, the Board would like to signal its intention to seek further increases of the fee pool to achieve market rates. I move as an ordinary resolution that total annual remuneration payable to all directors to be increased by $87,000 to $435,000 to affect -- with effect from 1st of July 2022. Are there any questions from the floor? John.

Thanks, James. Folks, my name is John McMahon. You might have heard my name earlier. I retired from the Board at the end of last year. So I can do 2 things. One is I can give you a bit of insight into what the nature of the workload on the Board is like and the degree of difficulty that's involved. And I think probably there's a couple of dimensions to start with. One is -- and we've heard Elaine mention the breadth of the businesses inside NZX. It's not just a place where you buy and sell shares. In fact, that's some ways, the lesser part of it. There's a data and analytics business that drives off that. There's a clearing house, which then does the settlement and all the back-end processing to let the money in the shares change hands. And as Mark mentioned, it is an important and growing dairy and dairy derivatives business. There's also a growing platform administration business. There's a large and again, growing quickly, funds management business. There's a business which undertakes and provides the infrastructure to support the -- most of the energy trading that goes on in New Zealand. And again, more recently, there's now a platform that's been developed and provided to support the emissions trading scheme, and that's also growing very rapidly from a small base. So you've got about probably the thick end of 8 businesses there. Now underlying each of those businesses, you've got a high degree of complexity around the IT infrastructure. And there's some quite detailed domain knowledge that you have to get on top of and be across of. Overlaying all of those businesses, almost all of them have quite complex and strict regulatory and compliance requirements, so there's an awful lot of hygiene factor around that, which, again, the Board needs to monitor and keep on top of. And what that all adds up to is a very high degree of difficulty. This is one of the -- this is by far and away the most difficult board I've ever served on. I'm on a couple of other listed company boards, I've been on a variety of private company boards. This is almost an order of magnitude higher than anything else I've struck. It is difficult, and that just translates through into an exceptionally high workload. I know there would be many days -- many periods where James would not go a single day without having to undertake work on behalf of NZX. It's just the nature of the job. I think you're very lucky to have a very dedicated Board. A lot of them have been in the capital markets and are very keen to support the development and growth of the capital markets, and that's predominantly why I think they are here. And so quite frankly, I support the resolution. My only shoot with is I actually think they should be going to market immediately rather than in stages. But I support the resolution as it stands and encourage you to do the same. It's well over due. Thank you.

Thank you, John. William.

Okay. I oppose this resolution because I've been a shareholder for 10 or 12 years, and the dividend has been flat for most of that time. And I think the Board must realize that in a business like us, shareholders get paid first, then staff get paid and then directors get paid. And I don't support any pay rises for staff or the directors until we start seeing an increase in dividends for the shareholders. Shareholders come first. Thank you.

I'll just take that as a comment statement. Thank you, William. Anybody else got another question? Okay. Let's go to online.

We do have some questions online. The first one. In regard to the proposed increase in Board remuneration, do the chair and the directors feel they are underpaid in the current difficult economic climate? Does the Board feel that arise is justified irrespective of what the market median might be for such a company?

Look at the end of the day, what director fee increases is never a good time. And working from 2003 until now is a little bit ridiculous. I think everyone would agree on that. It was relatively easy to do the benchmarking work, and we're so far out of the money, it's not funding. And then finally, this is a serious business. We're trying to do the succession of myself here. So we've really got to be able to say to the next candidate, we've got a track to go towards market. And that is really important for people. So yes, look, I do feel for if things are tough in the economy at the moment, inflation is strong and all those kind of things. But there isn't a Director here that doesn't primarily work on NZX' Board as service first and foremost, and give back to the capital markets, but I just need to track to and support basically to get fees somewhere towards a market level that would reasonably attract good quality candidates for the company to take it to the next stage. We've got any more?

Yes, there is another question. Have the fees hampered succession planning and/or paid a part in past resignations? And will the Board now review fees on a regular basis to ensure they are in line with the market? So that's two questions.

Well, the second one is easy because I've already signaled that is the plan. And so in the first one, you never know why someone doesn't accept a Director spot, but it has happened over a number of times, and then they suddenly pop up and the Board paying twice as much. So that does happen. But at the end of the day, the people that are motivated to serve on this Board are doing it because they want to get back to the markets, first and foremost. We're now getting to a size and a scale. And I think the next step for NZX is you're going towards the $500 million to the $1 billion zone. You've really got to get professional about running this Board, and that means paying what it takes to attract the best quality talent for Board rather than just driven on service. You've got any more?

No. That's all?

I've got another one.

You've got another one?

Just one more?

Yes. Sure.

Can you confirm that the Board members will be abstaining from this vote?

Yes. Yes, definitely. Yes. That is 3, isn't it? Yes. Yes.

[indiscernible] undirected proxies?

Okay. Did you hear that?

Undirected proxies.

[indiscernible] I would have thought Board members should abstain in this situation because they've got a vested interest in this resolution.

Yes. So but it wasn't back in the audience, yes. So I'm not going to contradict them.

The legal position is that they may vote as shareholders, but they may not direct proxies in relation to that resolution. So where the Directors might choose themselves to abstain, it's a decision for them.

Okay. So any further questions? You've got one more.

A comment or question, James. The voting restrictions are clearly covered in the Notice of Meeting. So I think all shareholders sort of read that. My question is why has the Board made a policy decision not to differentiate between the varying committee work, which is apparent in the Annual Report versus a fee that's payable to all directors, which seems to be the current practice.

At the end of the day, you don't build Rome in a day would be the answer to that. So I have signaled over time, we need to go to a market-based practice and if that involves committee fees, so be it. But it's really important that the fee increase as in any 1 year is something that we can easily budget for and still hit our numbers and also is seen as reasonable by you, the shareholders. So I think it's a 19.9% increase this year. And so we just felt, the best way to do this is incremental over time. And some of the issues we've paying for committee fees -- and like some of my directors working enormous hours on their committees. And so you're raising a really valid point. And so -- but it's just going to take us time to get to that level of professionalism.

Okay.

Okay. I think we're done on this now. Okay. So I'll just go to voting now. We now turn to voting for our shareholders who have not already cast a postal or proxy vote. Shareholders should now submit their votes be it for, against, or abstain, alongside each resolution. Voting will be open until the close of the meeting. Once all votes have been cast, they will be counted by the company's share registrar, Link Market Services and scrutinized by the company's auditor, KPMG, who is attendance of the meeting. The results of today's voting will be released to the market on completion of verification of voting. Okay. At this point, we can open to any questions from shareholders and attendants or online in relation to general business from the floor.

My name is Chris Patel. I've been a shareholder for 10 years with NZX, maybe more. And I've listened today the beginning line saying, you are surprised to see shareholders come to the meeting, but I think I made it a point to come. I've never come, but I had to come for a reason because I believe that retail shareholders and small shareholders when I say that are the backbone of any corporate shareholding. Unfortunately, what we have seen this time is regarding the recent rights issue, which you had, I don't know whether the Board is happy with the outcome. Maybe you are happy with the institutional outcome but not for the retail shareholders because we all know what has happened, okay? Now coming to that, what I'm trying to say is it should not be taken for granted in terms of what the small shareholders are. In terms of the explanations and the layout what you have said and the details of the business model and the changes, which are coming, I think that's fine, that's good. You raise the money to probably get into the funds business. And I hope that those decisions are right in terms of adding to the bottom line because the retail shareholders understand only one thing. One is dividend, all right? Other is the share price, all right? It doesn't know anything else, all right? And if you neglect that, that's going to be a cause of concern because if you look at the last 3 years reporting, the profit, after that the share price have dipped by 25%, all right? You may say that geopolitical reasons, inflation, but we have seen 10 New Zealand companies in the stock exchange lose only by 10%. We have lost 25%, and you have come with a rights issue. I hope the money is being deployed in the right area, which is very important for a shareholder like us because dividend is what we are looking at and not at the cost of losing the share price. Because if that happens that means you're paying back from my capital. We don't want that. I'm an accountant and I know that. And I must tell PwC -- I mean, KPMG as well as an auditor. So it's nothing new. But I think it's very important to understand. And I'm particularly not happy with what's happened with the rights issue for the retail segment because it was 15 days apart, the institution got a premium, the retailers were sucked out, all right? And this has happened, and I don't know what the Board likes it or not. So that's number one. And the second question is very simple, it's on a lighter note, this time where I say, okay, you're raising money, fine. It should add to the bottom line and which should reflect in dividends and the share price growth. Then we don't mind paying you 100% rise in your director's fee. No problem. Because it's not a social enterprise. I think we agree to that. It's not a social enterprise. This is a business model. It's a commercial enterprise as well apart from the social obligation of running a stock market. And I think the split takes that now when we have seen that. So on a lighter note, what I would like to say is very simple. Money was printed in COVID by our great finance minister and the ministry. It went on and who made the money? The housing boom and the banks made the money. The banks made $5 million of profit, and same thing, I'd like to be very cautious in terms of you buying out the banks fund businesses, whether that is going to be profitable. We are not over here to relieve them. They are -- that ended off businesses, which are not generating money. And we are buying it. We are not in the business of salvaging stuff. We are in the business of making money for our own shareholders as well. So I appreciate the Board recognizes that the rights issue which went through has been, to me, it's not been a good one. And it's not right to treat -- there should have been other options as soon as you realize things are not right. So I would appreciate some comments on this. Thank you.

Yes. Look, that's a fair comment. Obviously, the intent was doing an [ REO ] and its structuring. How it works is all about giving equal access to every shareholder no matter who they are. And so with that, there's 2 parts to it, the institutional part and the retail part. It means you have a time period apart between both book build. And of course, you said it yourself, we got prudent in the middle of it. And sorry, we were caught in an unfortunate position from that perspective. And it's hard to know what to say apart from you're going to be more effective if you're trying to do a liquidity event in a major market change rather than just the companies that are just normally trading. Let me finish. Let me finish. So yes, look, we weren't happy about how we planned out in the end. But at the end of the day, that's why you have underwriters there and sub-underwriters, et cetera. And so the issue was successful in getting the money to the company, and that enables the purchase of the funds business and GDT as we have mentioned before to grow the business. So I can get Mark to talk about there's confidence on delivering on performance from that. But I personally think the passive funds business inside here is one of the best opportunities we've ever seen. There will be probably one passive player in New Zealand that's going to get scale and the lowest unit cost, and we're going to aim for doing that. And so I think it could be a great outcome for NZX both short term and medium term. Any other team that's actually running has done a superb job. So that's what were the elements. Yes. So what was the other part? Yes, give a go just to the other part of that question.

Hopefully, everybody can hear me. Thank you for the question. Just to reiterate James' point around the rights issue, I mean, clearly, it takes time. The institutional piece was accelerated. And then obviously, we had that world event, which nobody really wanted to see happen, and that did impact unfortunately, the retail shareholders' position with the value of the rights. The second question really related, I think, to what are we going to do with the money? And is it going to be accretive, if you like, to earnings? And certainly, the acquisition of the ASB Superannuation Master Trust will be positive to earnings. It is accretive and was accretive either through funding it through capital or through funding it through debt facilities. So it will put a positive impact on the unit position for us. The GDT piece. Let's give a little bit more time to it. As I'll talk about it in my address, the dairy market has 3 components. You've got the physical price discovery component, which is GDT. The activity in that area drives the ability for our dairy derivatives business to grow. The more often, the price discovery comes from that physical auctioning, the more price points people have to be able to manage their risk, and we should see more activity, if you like, in the dairy derivatives business. So we will end up with some growth. And when I say some growth, we're expecting a lot of growth because there's a lot of opportunity in front of it. But what it does is acquiring that business as it gets a seat at the table to influence the strategy in order to do 2 things: one, drive more suppliers onto the platform so we see more activity and more flow. And the second point is, to advance the current business in order to be able to have pricing options more frequently. So the earnings growth, if you like, that's going to come out of dairy is going to come at a couple of different levels. We're hopeful to see more growth in the derivatives business, and we should actually see in time growth in the actual physical auctioning business. So the whole intention of the capital raise is to drive earnings growth.

Thank you for being optimistic. That's what I would say so. But again, as I said earlier, this also was a sudden raise, okay? The rights issue came out of the bolt. It's not something, which just came. For us, it was like overnight, it says, oh, it's gone on [indiscernible]. All right? So that's one thing. Secondly, as I mentioned to you earlier. So do you agree that this is going to raise -- brought on the equity base because you have raised money again. So the equity is going to go up. In terms of that, do you believe that you are going to be able to sustain the dividends what you are giving at this stage at the same rate? Or you're going to come back and say, "Oh, now we're going to give you $0.05 because equity has increased, and we are trying to service that." So that's why I'm saying it's a cause of concern. When you come to the market to get money, especially in this tough time, it's very important that money is very precious. That money which is coming to you, you have to ensure that it's serviced in a manner where a retail small shareholder, and I appreciate your initiatives since you came to NZX because you have been saying that I want more retail investors, more New Zealanders to come into the market, all right? And we have seen that in the recent times, maybe because of COVID, but we saw the introduction of share season and those kind, all of which brought 400,000 new shareholders. Maybe smaller ones, $50, $100, but that's the base. And I've been in the market for 35 years myself. And I do believe every country requires a very robust stock exchange. And to get that, I think you should also have companies coming to the stock exchange. Otherwise, there's nothing to invest. But I hope that this doesn't become a black sheep like what happened 10 years ago at NZX. I think you were the Chairman probably that time when we had the CEO, young CEO came and we had a very tough time at NZX, if you remember. If I recall his name, Mr. Weldon, is it? Mr. Weldon.

Yes.

So I'm coming to that. So I don't want any repeat of that because I'm a long-term investor, 10 years, and I take all your words today, what you say, but I need to raise my points. And I think I raised enough. And I think -- yes, you're on the line. The Board is on the line today.

Yes. No, you've raised some good points from what's happened and read. I saw another question. No, there's a question down there.

My name is [ McLeod, ] shareholder. My question relates to marketing, Mr. Chairman. Some time ago, you had great exposure here in New Zealand in your daily trades through New Zealand television. When I talk about use Television, the main channels, 1, 2, 3 and 4. Now what's happened over the last few years is a big question. The only reporting now done by New Zealand television is through Prime, and they only devote seconds, only seconds as regard to the days trade. At one time, most of the channels, 1, 2 or whatever, would spend minutes on reporting, and even made comments on the success of one company compared with another. Now this brought in a lot of retail investors, young people even from investment closer, maybe [indiscernible]. Now what has happened that there's only one channel now, Prime reporting and they don't do it every day, unfortunately. Thank you.

I am going to hand it over to Mark because I've got no idea.

Certainly, marketing is on our mind and obviously awareness of activity, whether it's companies coming to market, capital being raised or trading activity is front and center for us. Unfortunately, we can't quite control exactly what the TV puts on screen. So try as we might or as much as we would like to think that they will showcase us on Prime News or TV ONE news, it's -- that's actually up to them. But what we are doing is we are doing a lot of work to ensure that through channels, social media channels as many mechanisms as possible is that as wider investor base can understand the progress of companies and the performance of businesses we're doing as much as we can in that regard. And to some extent, it's part of the reason why we've actually got this floor too because we're intending to do more of that. We want to get CEOs and CFOs, and we are doing the 30-minute clips, put the video up on to the social media channels out through LinkedIn, so that everybody who is connected to that can actually see and hear exactly what businesses are up to. So we've got quite a range of things planned in that regard. We've also got the idea that every Wednesday, we're looking to open the trading with something interesting, something new from this office here, and we want to get that out through as many channels as possible. So a lot of marketing activity is really around showcasing New Zealand businesses and activity. Obviously, there's a range of news websites that take all our pricing data, and we've made a lot of effort there to actually get that inserted into various areas. BusinessDesk is one. And then you've got all the brokers that actually present it as well. So your theme, if you like, around getting the awareness out, we absolutely endorse and we're doing a lot around it. It's a little bit tricky, I guess, just to try and control that, the TV channels. That's all.

[indiscernible] Mr. Wilson?

O vaguely, yes.

I believe he is still there. Okay. You should really work on it because when you're on television, everybody sees you, everybody hears you. You can have all these other additives, they help. You can't beat television, believe me. Work on it.

Thank you.

Okay. Let's just see if there's one last question from the room. Yes. Robert.

So 2, 3 years ago, you put in the stock exchange, put in a new regulation where you have to have $1,000 worth of shares in a company or the company can sell the shares from under you. There's no problem if the share price keeps going up. I recently had one company, I've put thousands of dollars into. It was Moa Brewing and, of course, they changed direction. The shareholders -- when the brewery was sold for a fraction of the price we paid for it, the shareholders have no rights after the sale of it. And as a company, we're now allowed to sell it share from under you if you don't have $1,000 worth, and I just put into rights -- another rights issue a few weeks before. And it's not right that people with $1,000 worth into a company can suddenly just had their shares sold.

Yes. Elaine, do you want to give this a crack?

Yes. And so I may also call on you. There's always been minimum holdings and the listing rules. It's not a new rule requirement. The listing have always had a minimum holding level. So yes, if you'd need to comment if and when we changed that rule.

The $1,000 level, that's a problem.

Sorry.

It's a $1,000 dollar one. A lot of us bought shares, a lot of shares when we were allowed to at $500. And that particular company, I couldn't even get the shares I wanted in the float. They kept doing the rights issues. And they sold the brewery without us, I mean, any rights at all as the sale. And then they -- the share price went right down. In the sale we've got at least $1,000 worth now, and we're going to sell them from Monday, which they did. And he's going to put into these figures of the stocks anymore, that's going to happen to them.

I'm Joost van Amelsfort, CEO of NZX RegCo. So just to take your question in 2 parts. The change that you may be referring to in terms of that $1,000 reference was a new component of the listing rules relating to eligibility criteria of companies coming to market. So the way that they determine the minimum number of shareholders, they need to have on their books to come to market with a 100 -- with shareholders having that minimum parcel. The point that Elaine made as well, I'll just reinforce that point, the mechanism within the listing rules is to manage smaller parcels of securities.

[indiscernible].

So we set in that scenario for the company to provide shareholders of the smaller end for spectrum options. Those options being either to increase their holding to what they view as the minimum functional parcel, but it's going to be one of it. And otherwise, usually to provide mechanisms to sell those smaller parcels on their behalf through a mechanism that's funded by the issuances.

I might just stop here because I've got another 5 questions online, and I'll never finish this meeting. So...

Okay. The first question we have which I think was also raised from the floor earlier, but not specifically answered was, will the dividend be kept at current levels in the future?

Do you want to give a go?

You referring to me?

Yes, give it a go, mate.

Thanks. My name is Graham Law. I'm the CFO. The dividend policy is to have a payment that's in a dividend payout ratio of between 80% and 110% over time. When management made the recommendation to the Board for the dividend levels, we look at over time being how we've gone over the last few years versus where we think we'll go over the few years, where we're currently at, the dividend ratio for FY '21 was just over 110%. For 2020, it was just under 98% with 2022 having had the rights issue and the earnings guidance range that we have given, we do expect the dividend payout ratio if the dividend stayed at $0.061 per share to be over 110%. But what we do see beyond that is the growth initiatives that we're investing into last year and this year, generating revenue coming through in 2022 and then fully in '23, that our expectation at this point in time is the ratio would come back down in 2023, which then gives us the confidence to, at this point, be expecting the dividend to stay at the level that it's at. And that is, of course, I'll caveat myself subject to the normal market movements that are certainly in the slide that we used for the earnings guidance. So I hope that answers the question.

Perfect. okay. What was the next one?

The next two questions are really, one question and a follow-on question from [ Andrew Ott ] in relation to the IT systems. Could you please outline the cycle of upgrading and replacing IT systems such as how will the new trading platform -- how long will the new trading platform be expected to last before needing to be replaced and upgraded? And as a follow-on, in relation to CapEx, are you able to outline the long-term expectations of CapEx? Are there expected cycles for upgrades? And what would the time frame of such cycles be?

Yes.

So maybe I'll answer the first question and I might ask Graham to come back and talk on our CapEx profile. What you might see in the investor presentation, if you look at Page 33, is effectively some cycles of activity that we spend our CapEx on. Technology is one of them. And if we drill into the technology area, generally speaking, the most material elements are the trading system upgrades and the clearing system upgrades. We've got another couple of elements of technology but a good proportion of that is actually built by our staff, and that's obviously constantly improving. But when we talk about trading system and clearing systems, generally, they work on 8-year cycles. So we don't let them go any longer than that because obviously they would get passed to use by date. But what you see on the CapEx side is probably for a couple of years earlier than the time that with which we replace them, we would start a project to actually look to replace. So you'll see CapEx coming through in those sorts of proportions. The 8-year cycle is the key thing to take away from the question. And maybe, Graham, if you want to talk about long-term CapEx.

Yes, the Investor Presentation that we released on the 17th of February, Slide 33, I have a graph there that's trying to illustrate the patterns that we have in CapEx. There is a standard IT annual replacement cycle that has a base level of CapEx? And then on top of that, as Mark has alluded to, the too many systems trading and clearing run on the year cycle, which we try and have 4 years, 4 years, 4 years, so you do see a pattern over time of a large CapEx amount for those systems, largely being upgraded as opposed to replaced. And when we look back at the history, it's implementation of the clearing system when you look back at earlier years, so it's a higher number. But fundamentally, the pattern is 4 years, 4 years, 4 years, 4 years with the 2 systems. And we then layer on top of that, our wealth technology platform, which investors will know, we acquired about 5 years ago. And have been developing the platform and migrating new clients onto that platform. It's in a fees where there are large numbers of migrations, which get capitalized and amortized over the life of those clients. That pattern will continue at a high level for the foreseeable future as we migrate more clients. But at some point, that migration of clients ceases, and there's an easing off in the capital expenditure in the wealth technologies area. It will never fully go away as one of our selling points is to keep the currency of the platform up to date, especially with tax changes, so -- but it will reduce to an ongoing level. Then to a lesser degree, in our funds management business, there is a push to digitalize some of the services. When we talk to that business in the investor presentations, the number of members that we have in our KiwiSaver schemes and superannuation schemes have skyrocketed through winning the KiwiSaver default fund status, added 37,000 members on to approximately 27,000 members that we already had. And then acquiring the ASB Superannuation Master Trust added about 17,000 on. So there's been a large increase in the number of members, which we can really only service if we use digital assets to service them digital tools. So the intention has been to create digital tools, first of all, for KiwiSaver default, then to roll those tools out across the rest of the product range that, that business has. And there, the -- effectively, the 4 or 5 categories of CapEx we have that are different patterns, different profiles, but I highlight them on Slide 33 of the report.

Thank you, Graham. And Sara, I think you've got 2 kind of statements towards the end, and then we'll wrap up.

Yes. We have one comment from [ Phoebe Marbella ] who agree totally with what the gentleman here in the front was saying, and she said she didn't want to ask a question, but she just wanted to endorse the comments that he made. And then [ Grant Dugel ] has made a comment around ASM date and time conflicts. Companies should ensure and respect shareholders' ability to attend ASMs. Therefore, there should be a method to minimize date and time conflicts. NZX could establish a first come first serve ASM calendar, where companies are required to register the date and time. Well-governed company should be able to establish a date and time well ahead of the ASM. SSMs are often short notice and so should be excluded. There are enough dates and times even at the meeting season's heights to eliminate or minimize conflicts.

We're not going to argue about that. So someone on the team can take that away.

Yes.

[indiscernible]

Yes. I think we've raised that point, but thank you. Look, ladies and gentlemen, this brings us to the end of the formal business of the NZX 2022 Annual Shareholders Meeting. That brings the meeting to a close and thank you.