NZX kind of likes social media announcements
New Zealand listed businesses must now make the NZX aware of company announcements via social media, differing from a more relaxed American protocol.
The move means companies can no longer jump on Facebook and Twitter to disclose information, instead notifying the NZX must take priority.
In a world of immediate news, especially via social media, Kiwi listed companies will have to change habits or risk being in breach of listing rules.
But with Securities and Exchange Commission (SEC) in America encouraging businesses to use Facebook, Twitter and co to release news, is New Zealand airing on the side of caution?
"With a social media campaign you could destroy the brand of a business very quickly, or have an impact by putting up rumour, gossip, false interpretation or half-news, and it's very hard as a company because you just can't go and defend yourself," says Rod Drury, CEO and founder, Xero, to Stuff website.
"It's a double-edged sword - social media's all about engagement and talking, it can lift the bar of discussion and it's a positive thing.
"But then there's whole sections of even the business media where you can't go in and engage because it just gets pretty vile pretty quickly."
Boiling down to investor awareness, the SEC believes social media announces are fine providing those concerned are alerted to where the news is released.
“One set of shareholders should not be able to get a jump on other shareholders just because the company is selectively disclosing important information,” said George Canellos, acting director, SEC’s Division of Enforcement at the time.
“Most social media are perfectly suitable methods for communicating with investors, but not if the access is restricted or if investors don’t know that’s where they need to turn to get the latest news.”
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