PURPOSE
These Definitions & Interpretation provisions establish common terminology and interpretation principles for the IDSX Market Rules. Unless a Specific Rule expressly provides otherwise, the definitions in this document apply throughout the IDSX Rulebook. These provisions are intended to promote consistency, legal clarity and coherent interpretation across the IDSX market framework.
APPLICATION
Unless the context otherwise requires:
- (a) a defined term has the same meaning throughout the IDSX Market Rules;
- (b) a definition contained in a Specific Rule applies to that Specific Rule where it differs from or supplements a definition in this document;
- (c) references to an obligation include any applicable conditions, limitations or exceptions associated with that obligation;
- (d) references to IDSX exercising a power include the exercise of that power subject to Applicable Law, regulatory requirements and procedural fairness; and
- (e) references to admission, approval, authorisation or recognition by IDSX do not constitute governmental or regulatory approval unless expressly stated otherwise.
CORE DEFINITIONS
3.1 Applicable Law
“Applicable Law” means any law, regulation, regulatory requirement, licence condition, court order or legally binding obligation applicable to IDSX, an Issuer, a Participant, an investor, a Security or a transaction. Applicable Law may include the law of New Zealand and the law of another jurisdiction where relevant to a particular Issuer, Participant, investor, Security or transaction.
3.2 Applicant
“Applicant” means a person or entity applying to IDSX for admission, approval, authorisation, participation or another status under the IDSX Market Rules.
3.3 Approved Jurisdiction
“Approved Jurisdiction” means a jurisdiction identified by IDSX as a jurisdiction from which an Issuer may, in principle, apply for admission to IDSX. Approved Jurisdiction status does not constitute approval of any particular Issuer, Security, offering or transaction.
3.4 Broker
“Broker” means a person or entity approved by IDSX to provide permitted brokerage, investor access, order transmission or related services in connection with the IDSX market. A Broker is responsible for complying with the Broker Rules and any Applicable Law relevant to its activities.
3.5 Business Day
“Business Day” means a day on which IDSX is open for the relevant business or activity, excluding any day designated by IDSX as a non-Business Day.
3.6 Clearing
“Clearing” means the process by which obligations arising from transactions are determined, confirmed, matched, calculated or otherwise prepared for Settlement. Clearing does not necessarily imply the use of a central counterparty.
3.7 Continuing Obligations
“Continuing Obligations” means obligations applying to an Issuer or Security following admission to IDSX, including disclosure, reporting, corporate action, governance and other continuing requirements.
3.8 Corporate Action
“Corporate Action” means an event initiated by or affecting an Issuer that may alter the rights, economic interests, ownership or treatment of holders of Securities. Corporate Actions may include dividends, distributions, rights issues, share splits, consolidations, reorganisations, mergers, acquisitions, redemptions and similar events.
3.9 Digital Security
“Digital Security” means a digital representation of a Security where distributed-ledger technology, blockchain technology or another digital recordkeeping system is used to record, evidence, facilitate or control ownership, holding, transfer or Settlement. A Digital Security admitted as equity must represent or correspond to legally enforceable rights in the relevant Issuer and must not merely provide synthetic economic exposure where it is represented as direct equity ownership.
3.10 Distributed Ledger Technology or DLT
“Distributed Ledger Technology” or “DLT” means technology involving a shared, replicated or distributed record of information maintained across one or more systems, nodes or participants. DLT includes blockchain-based systems but is not limited to public blockchain networks.
3.11 Eligible Investor
“Eligible Investor” means an investor permitted to acquire, hold or trade a particular Security having regard to Applicable Law, jurisdictional restrictions, investor classification, offering restrictions and IDSX requirements.
3.12 Exchange
“Exchange” means IDSX where the context refers to the proposed market operated under the IDSX framework.
3.13 Financial Product
“Financial Product” has the meaning applicable under Relevant Law, including where applicable the Financial Markets Conduct Act 2013 of New Zealand. The classification of a particular instrument must be determined according to Applicable Law and its substantive legal characteristics.
3.14 General Rules
“General Rules” means the IDSX General Rules forming the overarching foundation of the IDSX Market Rules.
3.15 Guidance
“Guidance” means non-binding explanatory material issued by IDSX to assist persons in understanding or complying with the IDSX Market Rules. Unless expressly provided otherwise, Guidance does not amend or override a Market Rule.
3.16 Holder
“Holder” means a person recorded or recognised as holding a Security or an interest in a Security under the applicable legal, registry, custody or settlement arrangement. The legal status of a Holder may depend on the structure of the relevant Security and Applicable Law.
3.17 IDSX
“IDSX” means the proposed International Digital Securities Exchange and, where appropriate, the entity responsible for operating or administering the proposed IDSX market. Before the commencement of a licensed market, references to IDSX describe the proposed market framework and proposed market operator arrangements.
3.18 IDSX Market Rules
“IDSX Market Rules” or “Market Rules” means the General Rules and all Specific Rules, procedures, standards and other binding requirements forming part of the IDSX Rulebook. Guidance and explanatory materials are not Market Rules unless expressly designated as binding.
3.19 Investor
“Investor” means a natural person, body corporate or other legal person that acquires, holds, disposes of or seeks to acquire, hold or dispose of Securities admitted to IDSX. An Investor does not become a Participant solely by investing in Securities through an approved Broker.
3.20 Issuer
“Issuer” means the legal entity whose Securities are admitted, or proposed to be admitted, to IDSX. Where Digital Securities are used, the Issuer remains the entity whose underlying legal securities and shareholder rights are represented by or associated with those Digital Securities.
3.21 Listing
“Listing” means admission of a Security to the Official List or other designated market maintained by IDSX. Listing does not necessarily constitute or imply a public offer of Securities in any jurisdiction.
3.22 Listing Applicant
“Listing Applicant” means an Issuer seeking admission of its Securities to IDSX.
3.23 Market
“Market” means the market, trading facility or other organised trading environment proposed to be operated by IDSX.
3.24 Market Maker
“Market Maker” means a Participant approved by IDSX to provide continuous or periodic bid and offer quotations in accordance with the Market Maker Rules. A Market Maker acts in accordance with its own trading obligations and does not guarantee the price or liquidity of a Security.
3.25 Market Operator
“Market Operator” means the entity legally responsible for operating the IDSX market following the commencement of licensed market operations. References to the Market Operator before licensing refer to the proposed operator of IDSX.
3.26 Market Participant
“Market Participant” or “Participant” means a person or entity admitted or approved by IDSX to perform a designated function within the IDSX market. Participants may include Brokers, Market Makers, Sponsors, Underwriters and other categories designated by IDSX. An Issuer or Investor is not necessarily a Market Participant solely because it is subject to certain IDSX Rules.
3.27 Market Rules
See “IDSX Market Rules”.
3.28 Official List
“Official List” means the official record maintained by IDSX of Securities admitted to the market.
3.29 Order
“Order” means an instruction to buy, sell or otherwise execute a transaction in a Security through the IDSX trading system.
3.30 Participant
See “Market Participant”.
3.31 Person
“Person” includes a natural person, body corporate, partnership, trust, government body or other legal or organisational entity where permitted by Applicable Law.
3.32 Procedure
“Procedure” means a binding operational process issued under or pursuant to the IDSX Market Rules. A Procedure must be consistent with the Market Rules and must not amend substantive rights or obligations beyond the authority provided by those Rules.
3.33 Regulatory Authority
“Regulatory Authority” means any governmental, statutory, supervisory, law-enforcement or regulatory body having authority over IDSX, a Participant, Issuer, investor, Security or relevant activity. This may include the Financial Markets Authority of New Zealand and overseas regulatory authorities where applicable.
3.34 Relevant Law
“Relevant Law” means the body of law relevant to the matter being considered and forms part of Applicable Law.
3.35 Security
“Security” means an equity security or other financial product eligible for admission to IDSX under the Market Rules. Unless expressly permitted under the applicable IDSX Rules, the term Security does not include an unregulated cryptoasset merely because it is represented using blockchain or distributed-ledger technology.
3.36 Settlement
“Settlement” means the completion of a transaction through the transfer of Securities and, where applicable, corresponding consideration between the relevant parties. Settlement may use conventional financial infrastructure, distributed-ledger infrastructure or another arrangement approved by IDSX.
3.37 Settlement Asset
“Settlement Asset” means cash, a regulated payment instrument, another approved financial asset or other asset permitted by IDSX for Settlement of an eligible transaction. Approval of a Settlement Asset by IDSX does not alter the legal or regulatory classification of that asset.
3.38 Shareholder
“Shareholder” means a person recognised under Applicable Law as a shareholder or member of an Issuer. A person holding a Digital Security is not necessarily the legally recognised Shareholder unless the applicable legal and registry structure gives that person such status.
3.39 Specific Rule
“Specific Rule” means a Market Rule applying to a particular subject, activity, person, Participant category, Security or market function. Specific Rules include, among others, Listing Rules, Broker Rules, Sponsor Rules, Market Maker Rules, Underwriter Rules, Trading Rules, Clearing and Settlement Rules, Digital Securities Rules, Disclosure Rules, Market Surveillance Rules and other rules designated by IDSX.
3.40 Sponsor
“Sponsor” means a person or entity approved by IDSX to assist an Issuer in connection with admission to IDSX and to perform the responsibilities specified in the Sponsor Rules. Approval as a Sponsor does not transfer responsibility for the accuracy of Issuer information or compliance obligations from the Issuer to the Sponsor except to the extent expressly provided in the Market Rules.
3.41 Standard
“Standard” means a technical, operational, security or other requirement issued by IDSX pursuant to authority contained in the Market Rules. A Standard must remain consistent with the Market Rules.
3.42 Trading Day
“Trading Day” means a day on which the IDSX market is scheduled to be open for trading in the relevant Security.
3.43 Trading System
“Trading System” means the systems, software, protocols and infrastructure used or approved by IDSX for the submission, management, matching, execution, recording or reporting of Orders and transactions.
3.44 Underwriter
“Underwriter” means a person or entity approved or accepted under the IDSX framework to undertake permitted underwriting or distribution activities in connection with an issuance of Securities. An Underwriter remains responsible for any licences, permissions or regulatory requirements applicable to its activities.
3.45 Wallet
“Wallet” means a technological mechanism, account, address or interface used to hold, control, receive, transfer or interact with Digital Securities or other approved digital assets. A Wallet does not, by itself, determine legal ownership of a Security.
3.46 Wallet Address
“Wallet Address” means a blockchain, distributed-ledger or other digital address associated with a Wallet and used for recording or facilitating transfers or holdings.
3.47 Whitelisted Wallet
“Whitelisted Wallet” means a Wallet Address approved under IDSX or Participant controls for a specified purpose, Security or investor. Whitelisting does not by itself establish legal ownership, investor eligibility or compliance with Applicable Law.
INTERPRETATION OF DIGITAL SECURITIES TERMINOLOGY
The use of technological terminology in the IDSX Market Rules does not determine the legal classification of an instrument, transaction or activity. In particular:
- (a) describing an instrument as a token, Digital Security, blockchain security or digital asset does not alter its legal character;
- (b) the legal rights attached to a Security are determined by Applicable Law, the constitutional and issuance documents of the Issuer and the applicable legal structure;
- (c) a blockchain or distributed ledger may operate as a technological record without necessarily constituting the legally recognised register of shareholders;
- (d) possession or control of a private key does not necessarily establish legal ownership of a Security;
- (e) the transfer of a Digital Security on a blockchain does not necessarily constitute a legally effective transfer of the underlying Security unless the relevant legal requirements have also been satisfied; and
- (f) IDSX may require additional legal, registry or technical arrangements to ensure consistency between digital records and legally recognised ownership records.
INTERPRETATION OF APPROVAL
Where the IDSX Market Rules refer to a person, Issuer, Security, jurisdiction, Wallet, Participant or arrangement being “approved”, “accepted”, “admitted”, “authorised” or “recognised” by IDSX, that status applies only for the purposes specified by IDSX. Such status does not constitute approval by a Regulatory Authority, a representation that the person or activity is lawful in every jurisdiction, an endorsement of investment merit, a guarantee of financial performance, liquidity or against loss, or a waiver of any requirement under Applicable Law.
INTERPRETATION OF ADMISSION AND LISTING
Admission or Listing of a Security means that IDSX has accepted the Security for participation in the relevant IDSX market in accordance with the applicable Market Rules. Admission or Listing does not mean that IDSX recommends the Security, guarantees the accuracy of all Issuer information, the Issuer’s financial condition, future trading liquidity, value of the Security or compliance by the Issuer with Applicable Law.
INTERPRETATION OF INVESTOR ELIGIBILITY
Eligibility of an Issuer or Security for admission is separate from eligibility of an Investor to acquire, hold or trade that Security. IDSX may admit a Security while restricting access to particular Investors, jurisdictions, investor categories, Wallets or transaction types. Investor eligibility may vary between Securities and change over time.
INTERPRETATION OF JURISDICTION
A reference to a “jurisdiction” may refer to a country, territory, state, province, special administrative region, financial centre or other legally distinct regulatory territory. Where necessary, IDSX may distinguish between different legal or regulatory regions within the same sovereign state.
SINGULAR AND PLURAL
Unless the context otherwise requires, the singular includes the plural, the plural includes the singular, words referring to one gender include all genders, and references to a person include legal entities where appropriate.
HEADINGS
Headings and section titles are included for convenience and do not limit or alter the meaning of a provision.
REFERENCES TO DOCUMENTS
A reference to a Rule, law, regulation, document, standard or procedure includes that item as amended, replaced or reissued from time to time, unless the context requires otherwise.
REFERENCES TO LEGISLATION
A reference to legislation includes regulations made under it, amendments, replacement legislation and subordinate instruments, to the extent relevant to the matter being considered.
INCLUDING
The words “including”, “includes” and similar expressions are illustrative and do not limit the meaning of the words preceding them.
WRITING AND ELECTRONIC COMMUNICATIONS
A requirement for a notice, application, submission, record or communication to be “in writing” includes an electronic communication or electronic record where permitted by IDSX and Applicable Law.
TIME
Where a period of time is specified, IDSX may prescribe its method of calculation and time zone; trading-related times are determined by the official time maintained or designated by IDSX; and IDSX may extend, shorten or modify a procedural period where permitted by the Market Rules and reasonably necessary.
BUSINESS DAYS
Where an obligation must be performed within a specified number of Business Days, only Business Days are counted unless expressly stated otherwise. IDSX may publish a market calendar identifying Trading Days, Business Days and market holidays.
DISCRETION
Where the Market Rules provide IDSX with discretion, IDSX must exercise it consistently with Applicable Law, the purposes of the Market Rules, investor protection, fair, orderly and transparent markets, market integrity, proportionality and procedural fairness where applicable.
MAY AND MUST
“Must” indicates a mandatory requirement; “must not” indicates a prohibition; “may” indicates a discretion or permission; and “should” normally indicates guidance or an expected practice rather than a mandatory obligation unless the context expressly provides otherwise.
CONFLICT BETWEEN RULES
Where two IDSX provisions appear inconsistent, they must, where reasonably possible, be interpreted so both can operate. Where a genuine inconsistency remains, Applicable Law and regulatory requirements prevail; the General Rules prevail over subordinate procedures, standards and guidance; a Specific Rule prevails over a more general Rule for its particular subject matter; a Procedure or Standard cannot override a Market Rule unless expressly permitted; and Guidance cannot override a binding Market Rule.
LANGUAGE
IDSX may publish the Market Rules in more than one language. Unless IDSX expressly designates otherwise, the English version is authoritative for legal and interpretative purposes. Translations are provided for accessibility and convenience; where inconsistent, the English version prevails.
QUESTIONS OF INTERPRETATION
IDSX may issue Guidance, interpretations, notices or explanatory materials concerning the meaning or application of the Market Rules. Any IDSX interpretation remains subject to Applicable Law and any determination of a court, tribunal or Regulatory Authority having jurisdiction.
AMENDMENT OF DEFINITIONS
IDSX may amend, add or remove definitions where necessary to reflect changes to the Market Rules, Applicable Law, market structure, new financial products, technological developments, regulatory requirements or market practice. Material amendments will be made in accordance with the rule amendment framework applicable to IDSX.
STATUS OF THIS DOCUMENT
This document forms part of the proposed IDSX market framework and has been prepared for regulatory discussion, legal review and market design purposes. IDSX is currently a proposed financial product market and has not commenced operation as a licensed financial product market. Nothing in this document should be interpreted as representing that IDSX, its proposed Market Rules, definitions, systems or operating arrangements have been approved, authorised or endorsed by the Financial Markets Authority or any other Regulatory Authority. These provisions may be amended as the IDSX regulatory and operating framework develops.