Memorandum of Understanding

PUBLICITY

The Commission and NZSE recognise the confidentiality and market sensitivity of information concerning active investigations by either body.

The Commission and NZSE agree that in general no public comment will be made about regulatory or enforcement matters at the time of referral from one body to the other. Where public comment by either body is appropriate in an individual case NZSE and the Commission will where possible consult prior to public comment being made by either party. Where prior consultation is not possible the party commenting will inform the other party of the public comment made as soon as practicable after commenting.

Where either NZSE or the Commission decides to comment publicly or issue a report, including as a result of any inquiry held following a referral by the other party, it will consult with the other on the form and timing of this.

Where either the Commission or NZSE intends to refer to the other in any public comment in relation to a specific regulatory matter it will consult with the other prior to making that public comment. In the case of NZSE any consultation will be with the General Counsel or Chief Executive Officer and in the case of the Commission consultation will be with the General Counsel or Chairman.

The Commission and NZSE agree to acknowledge the work of each other in any public comment made resulting from a matter under referral.

LIMITATIONS ON EXCHANGE AND USE OF INFORMATION

The provision of information by NZSE or the Commission to the other under this agreement is subject to any relevant legal considerations or constraints. Without limitation this includes legal professional privilege, natural justice, and confidentiality.

Some information provided to NZSE by the Commission may be subject to a confidentiality order made under the Securities Act.

Any information provided to the Commission may be used by the Commission in performing its statutory functions or exercising its statutory powers including, without limitation, by publication of any report or comment under section 28A of the Securities Act or by referral to another regulatory or law enforcement agency.

NZSE and the Commission agree that information obtained in confidence under this agreement will not be disclosed to any third party without prior consultation with the other party, unless such disclosure is required by law.

STRATEGIC GROUP

The parties will establish a Strategic Group (the "Strategic Group") who will:

(a)	Ensure the co-regulatory environment is functioning appropriately; and
(b)	Discuss regulatory issues concerning the market which are of mutual concern to the parties.

The Strategic Group will comprise the personnel set out in Annex B.

The Strategic Group will meet at once every 6 months. In addition to the six monthly meeting, the Strategic Group will convene at the written request of either party where a party considers that such a meeting is necessary because:

(a)	The co-regulatory environment does not appear to be functioning appropriately; or
(b)	A regulatory issue has arisen that requires discussion,

and the party calling the meeting provides the other with reasons supporting its request.

MOU TERM AND REVIEW

This MOU has an initial term of twelve months ("Initial Term") and thereafter shall automatically renew for further terms of twelve months ("Subsequent Term") unless either party provides the other with notice under clause 12.2.

Either party may terminate this MOU by providing the other party with three months written notice of its intention to terminate.

The parties will meet annually, three months prior to the expiry to the Initial Term or Subsequent Term, as the case may be, to discuss this MOU and the need for changes to its terms (the "Annual Review").

At the Annual Review the parties will consider any recommendations made by the Operations Group and/or the Strategic Group.

Any amendments to the MOU will be evidenced in writing.

Dated 27 February 2003