The corporate watchdog has issued a stern message to Australia’s alternate stock market, telling the National Stock Exchange (NSX) to pull up its socks in a number of areas.

The securities commission today released an assessment report on the listing standards of the NSX.

Touted as ‘Australia’s market for growth companies’, the NSX is an alternate stockmarket formed by a merger of the two of the oldest stock exchanges in the country, Bendigo and Newcastle. The NSX had 14 new listings last year compared to about 100 on the ASX.

“The report concludes that NSX should make a number of changes to improve compliance with its statutory obligations,” ASIC said.

Under an agreement, NSX had agreed to ensure associated interests were “of good repute”, floats were conducted “with legitimate motives” and the market operated “with integrity and its users are informed”.

It comes after claims by the regulator that a number of nominations to lead the board,  “appeared to have limited knowledge of Australian law, the Australian financial market and the rules of the NSX market”.

ASIC also raised “serious questions about the rationale for some foreign listings on NSX”.

“Listing standards are critical to the integrity of the Australian equities market, and the trust and confidence investors have in it,” the Australian Securities & Investments Commissioner Cathie Armour said.

An ASIC spokesperson told Stockhead: “We cannot speculate on what effect the findings will have on the market’s trading, however, ASIC will continue to closely monitor NSX’s listing arrangements and its progress in addressing the agreed actions.”

The NSX has been contacted for comment.