For investors



I don’t live in New Zealand. Can I open an investor account with you?


You can’t open an investor account on the Catalist website at the moment, if you are living outside New Zealand. However, if you are an existing investor in a business that is listed on the Catalist Public Market or a Catalist Private Market we can help you join the Catalist platform if you contact us. Non-New Zealand residents may be able to invest in financial products through a broker. If you already have a New Zealand broker, ask them whether they currently facilitate trading on Catalist. If not, ask them to get in touch and we can quickly get them set up to allow you to trade.


I don’t have a New Zealand bank account. Can I open an investor account with you?


You can’t open an investor account on the Catalist website at the moment, unless you have a New Zealand bank account. This is because, as part of our security checks, we need to be able to check your payments are coming from an account in your name – and we can only do that with a New Zealand bank account. You may still be able to invest in financial products listed on the Catalist Public Market or a Catalist Private Market through a broker or Authorised Representative. If you already have a New Zealand broker, ask them whether they currently facilitate trading on Catalist. If not, ask them to get in touch and we can quickly get them set up to allow you to trade.


What are financial products?


Financial products are the different types of investment you can trade on Catalist. These include equity, such as shares, and debt securities, such as bonds, notes or loans. They also include ‘managed investment products’ which are interests in a fund that invests in other underlying assets. Your KiwiSaver is a managed investment product, for example.


How much money do I need to start investing?


Catalist doesn’t require any minimum investment amount. However, some financial products may specify a minimum amount you can purchase.

The information page for the relevant financial products will tell you whether there is any minimum purchase amount, in the market section of our website.


Do I have to go through a stockbroker to be an investor, and won’t that be expensive?


No, you don’t need to go through a stockbroker to buy and sell on Catalist. You can open your own account on the Catalist website, and after you’ve completed our anti-money laundering checks, you will be able to buy and sell financial products listed on Catalist.

If you already have a stockbroker, we’re working with stockbrokers to make sure you can invest through them if you prefer. Ask your stockbroker whether they facilitate trading of financial products on the Catalist Public Market.


What does having a “diversified portfolio” mean?


A diversified portfolio means you have lots of different investments, preferably of different types (for example exposure to shares, bonds and property) as well as different sectors of the economy (for example technology, healthcare and agriculture).

This helps spread the risk of your investments and increases your chance of benefiting from growth, if some products or sectors outperform the rest of the market.

If you already have investments in a range of larger businesses, such as in KiwiSaver or a managed fund, you can diversify your portfolio by investing in some additional smaller and medium-sized businesses, listed on the Catalist Public Market.


What is “impact investing”?


Impact investments have the intention of contributing to positive social or environmental impact, as well as generating a positive financial return. This is called a ‘blended return’.

Catalist will classify investments on our markets as ‘impact investments’ if, in our opinion, the business or project has clear social or environmental goals, that are funded by the investment, and the business has committed to transparent data-driven reporting of the impact they are having. Further information about the nature of impact investments can be found on our blog.


Doesn’t periodic trading mean I’ll have less liquidity?


Some investors may perceive periodic trading as a limitation, because when the market is open, they are not able to transact whenever they choose. However, for financial products that do not trade regularly, such as shares in small and medium-sized businesses, periodic auctions tend to produce a fairer price for all investors and therefore may actually encourage more liquidity, according to research by academics, Economides and Schwartz.

In a continuously traded market, the economic costs for investors are very high, if the financial products rarely trade. Investors’ economic costs include large bid-ask spreads, high commission, significant market impact of individual orders, and the susceptibility of orders to ‘front-running’. Front running is where other investors take advantage of the temporary price movement a large order may cause, to the detriment of the investor who made that order. This can discourage investors from trading, making liquidity even worse.

Periodic auctions reduce trading costs for investors by consolidating all order flow, over a period of time, and executing all successful orders at a single price. Consequently, this eliminates bid/offer spreads and the possibility of front-running. The increased ‘fairness’ in pricing can maximise whatever liquidity there is, in any given period.


How is the price set for financial products?


Unless the auction page says the financial products have a fixed price, the price is set by assessing all the current valid bids and offers at any one auction. Essentially this is like looking for the price at which the supply (people willing to sell) and demand (people willing to buy) intersects.

It is calculated by looking for the price at which the largest volume of financial products would successfully trade.

There is further detailed information on how the auction sets the price for financial products, in differing circumstances, which you can read about here.


How do I know that the person selling a financial product actually owns it?


Catalist maintains a record of who owns the financial products on our platform. Investors are unable to submit offers to sell financial products, unless our platform records them as the legal owner, or entitled to act on behalf of the legal owner.

This means you can be confident that, if you submit a successful bid to buy financial products, you will receive ownership of the financial products, in accordance with our settlement rules.


How do I know what price to submit a bid or offer at?


First you should read all the information provided about the business and the financial product you wish to buy or sell. This should help you understand the value the business believes their financial products should have.

If there are enough investors that have already submitted bids and offers, our platform will tell you, in real time, what the price of the financial products would be, if the auction were to close at that moment. This is just an indicative price – it can change as other investors submit or withdraw their offers. However, you will be able to see if your bids and offers are likely to be successful.

Consider the highest price you’d pay if you are buying, or the lowest price you’d accept if you are selling. This is your most ‘competitive’ price, which is the price you are most likely to be successful at, if you submit it in the auction. However, at the end of the auction, all investors get the same price based on everyone’s most competitive bids and offers. This means you can even get a price that is better than your bid or offer price.

Remember that your bids and offers will be binding and cannot be cancelled when the ‘open’ period has ended. Further information about submitting bids and offers and their priority is available here.


What sorts of investments can I buy and sell through Catalist?


All the products available to buy and sell are listed in the market section of our website. Here, you can buy equity (for example shares), debt securities (for example loans or bonds) and managed investment products (for example managed funds), and can even sort them by their characteristics.


I’m an existing shareholder in a business, from before they listed on Catalist. How can I get the financial products I already own to show up in my Catalist account?


When a new business lists on Catalist, existing owners are given a code by the business to claim their existing financial products. You should sign up for a Catalist account and after you have completed your identity verification form you should go to “My Account” to submit the code to claim your financial products.

If your existing financial products are held in a trust, nominee company, or other holding structure, we may need to ask for additional verification documentation before we can allocate your financial products to your account.

If you don’t have a code to claim your financial products, please contact the business that issued those financial products in the first instance, or contact us.

Your Catalist account will only show you investments that are listed on the Catalist Public Market, listed on a Catalist Private Market (if you’ve been granted access by the businesses who runs the private market), or that use the Catalist Registry service. Your account will not show investments that do not use the Catalist platform.


Do you charge for having an account with Catalist?


No, we do not charge to open a Catalist investor account. You will only pay a fee if you successfully buy or sell financial products through our platform. The fees are set out here.


What does it cost to trade on Catalist?


You will only pay a fee if you successfully buy or sell financial products through our platform. The fees are set out here.


Do you hold my investments for me?


No. You are registered directly on the legal register of the listed business. This means you are the legal owner of any financial products you buy through Catalist and we don’t hold them on your behalf.

If you would like your existing broker or adviser to hold your investments on your behalf, ask them whether they can facilitate investment on the Catalist Public Market – we have a simple secure integration process to allow brokers to trade on your behalf.


Why do I need to pre-pay for bids?


Seeing as the price paid for financial products is determined by the total of all bids to buy and offers to sell, it is important that anyone bidding to buy is able to complete that transaction.

For this reason we require you to pay for your bids by the time the 'open’ period of the auction closes. You will receive information about how to pay when you submit your bid.


What happens to my money if I prepay for a financial product but the price ends up lower than I had prepaid?


If you prepay for a bid that is successful, but the financial product sells at a lower price than your bid price, we will transfer your excess funds back to you. You pay the same price for the financial product as every other buyer in the auction, alongside the fees that are displayed at the time you submit your bid. You should see any overpaid funds back in your bank account within 24 hours of the payment being made by us. Payments are only completed on days when the major banks are open for business in New Zealand.


What happens to my money if I prepay for a financial product but I’m not successful in an auction?


If you prepay for a bid that is not successful, we will transfer that money back to you. We complete the transfers within 24 hours of confirming whether your bid has been successful or not and you should see the funds back in your bank account within 24 hours of the payment being made by us. Payments are only completed on days when the major banks are open for business in New Zealand.


Does Catalist hold client money in a trust account separate from its own money?


Yes. All client money is held in a Client Trust Account with ASB Bank until the transactions are completed.


What are ‘certified documents’ and do I need to get my identity documents certified?


A certified document is a copy of an original document that has been signed to confirm it is a true copy. We only need you to have copies of your identity documents certified if we are not able to electronically verify your identity through your passport or New Zealand driver’s licence number. You can get your documents certified by the following people:

Justice of the Peace
Registered Medical Doctor
Member of the Police
Registered Teacher
Lawyer/Solicitor
Notary Public
Minister of Religion
Member of Parliament
Chartered Accountant
Kaumatua

If you are not in New Zealand, documents must be certified by a person authorised by law in your country to take statutory declarations or the equivalent.

The certifier must not be related to you, or be a spouse or partner, or live at your address. Certification must be written on the document and include the name, position or qualification and signature of the certifier, as well as the date of certification. The certifier must see the original document and provide a signed statement that the copies provided are a true copy and represent your identity. This certification must have been carried out within the last three months.

Here is an example of a certification statement:

“I certify that this is a true and correct copy of the original document, that I have sighted, and the document represents the identity of the named individual.
Signature of signatory: _______________
Name of signatory: _______________
Position/qualification of signatory: _______________
Date: _______________ ”

What is a wholesale investor?


Some financial products offered through Catalist may only be available to those who are registered with us as a wholesale investor. A wholesale investor is essentially someone with a good understanding of different types of investments and how they work. To be considered a wholesale investor, you have to meet one of the below categories, as outlined in the Financial Markets Conduct Act 2013.

You are an ‘eligible investor’, which means you have signed a certificate in front of an authorised financial adviser, a qualified statutory accountant, or a lawyer, confirming you have previous experience in buying or selling financial products of a certain type. This experience means you can take responsibility for your own investment decisions and due diligence, allowing you to assess the merits of the transaction, the adequacy of the information available and your own information needs. We can provide a format for an eligible investor certificate on request.
You will invest at least $750,000 in the relevant financial products.
You own, or have owned, at any time during the 2-year period before investing with Catalist, a portfolio of ‘specified financial products’ valued at least $1 million in total.
You have, during the 2-year period before investing with Catalist, carried out 1 or more transactions to buy ‘specified financial products’, for an amount of at least $1 million (not including transactions where you are related to the seller).
You have been employed or engaged in an investment business, within the last 10 years before investing with Catalist, and have participated in the investment decisions made by that business, for at least 2 years, during that 10-year period.
On the last day of each of the 2 previous financial years before investing with Catalist, your net assets and net assets of the entities controlled by you exceeded $5 million.
During each of the 2 previous financial years before investing with Catalist, your total turnover and the total turnover of entities controlled by you exceeded $5 million.

If you tell us you are a wholesale investor we, or the business issuing the relevant financial products, may ask for further evidence, or a signed certificate as evidence.

For businesses (Catalist Public Market)



Do we need 3 years audited financials before we can list?


It isn’t compulsory to have three years’ worth of audited financial accounts before you can list on the Catalist Public Market. However, if you have audited accounts for the last three years, it will help investors understand your business and will likely make any capital raising easier.

We recognise it may not be possible to fully audit historic financial information if it was not audited at the time. In any event, you will need to appoint an auditor going forwards and, as a minimum, your auditor will need to review your most recent financial information to set a baseline for their future audits. Publishing historic financial information that has been reviewed by your auditor can still give investors greater confidence in your business.

If you do not have financial information for at least the last three years, you will need to provide any key financial information, that is reliable, and explain why other information is not available. For example, information may not be available if your business is less than three years old.


Do we have to provide prospective financial information?


No, you don’t have to provide prospective financial information, but we encourage you to consider providing projections for the next three years or for a period of time that is relevant to your business. Projections may show ranges rather than fixed targets, if this reflects your business planning.

Remember, you have a fundamental obligation to provide investors with all material information that might affect the value of the financial products going forwards, so if you manage your business by focusing on key financial targets, this will need to be explained in your Information Memorandum (IM). We provide IM guidance to businesses prior to their listing and this guidance has further information on recommended financial disclosures.


How should we report against any previous financial guidance or forecasts given?


If you have described specific financial targets in your Information Memorandum or updates provided to the market, we would expect you to provide some commentary at each auction to disclose how you are doing, in relation to those targets.

Under our Issuer Rules, you have a fundamental obligation to provide ‘all material information’, so an overview of how your business is doing, compared to its targets, will likely be required, even if it is just affirming that you’re still on track.

The detail required will depend on the nature of your business and what might reasonably be expected to affect the price of the financial products, or investors’ decisions to buy or sell the financial products.


What is an independent director? Are there any stand-down periods for previous professional advisers etc?


An independent director is someone who is not an employee of your listed business and who does not have any business or other relationship with your business, or your directors or senior managers, or other circumstance, that may reasonably be interpreted to materially interfere with the exercise of that director’s independent judgment.

Independent directors may hold a small shareholding in your business, provided it is not a material amount. Normally, someone who owns a substantial shareholding (over 5%) is not considered to be independent.

People who have previously been professional advisers of your business, such as accountants or legal advisers, can often make good directors, but care needs to be taken to ensure they are sufficiently independent from your business, if you wish them to count as an independent director.

We do not specify a ‘stand-down period’ for professional advisers. Your business will need to decide whether an ex-professional adviser is sufficiently independent, based on the nature of your business and the relationship with that adviser. You’ll also need to explain your reasoning to investors. However, an adviser who has been heavily involved in key day-to-day aspects of your business normally would not be considered independent for at least 6 months, after having ceased to provide such services.


Do we need to set a price for the securities that are traded?


No, where your business is raising new capital by selling new securities, you can either choose to sell these at a specified price, or set a minimum price and use the auction algorithm to set the price, based on demand.

For secondary market trading, where investors sell amongst themselves, the supply and demand from investors sets the price. However, your business is encouraged to include information in your information disclosures about the price or range of prices you would expect the securities to trade at, and your reasoning.


What information do directors and senior managers of my business have to disclose?


Directors and senior managers need to disclose their relevant interests in their businesses that are listed on the Catalist Public Market. This involves, for example, disclosing information about how many shares in the business they own, or any interest in the shares they have through a derivative contract, such as a share option.

Directors and senior managers will also need to inform your business, prior to each auction, if they intend to buy or sell any financial products at that auction. This will allow your business to disclose that information in its information update, as required under the Issuer Rules.

If you’d like more information on this, we have produced guidance on the relevant interest disclosures obligations.


Why do directors and senior managers need to disclose their interests and trading intentions?


The Catalist Public Market Issuer Rules require your business to disclose if your directors or senior managers will buy or sell financial products at a particular auction. The FMC Act also requires directors and senior managers to disclose their relevant interests in your business. This is because many investors see this information as a signal of business health and the transparency helps to give investors confidence that the trading is fair and there is no insider trading.

As businesses are normally required to disclose ‘all material information’ prior to each auction, directors and senior managers shouldn’t have access to any relevant information that investors don’t also have access to. However, if your business is relying on the exemption in Issuer Rule 6.2 (Exceptions to the fundamental rule), the individuals who are aware of the undisclosed information may not buy or sell shares at that auction.

FAQs

If you have a question that isn’t answered here, send us an email and we’ll get back to you as soon as we can.
We’ll continue to add to our FAQs, as we encounter new questions.

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