Unlisted, the share trading platform, has been granted an exemption from licensing requirements of the Financial Markets Conduct Act by Commerce Minister Paul Goldsmith.
Unlisted sought an exemption to run its 12-year-old market, owned by Efficient Market Services (EMS), under the Financial Markets Conduct Act, which came into force in December.
Unlisted currently requires minimal disclosure, keeping costs low for the 14 securities that trade on its platform.
"Unlisted will be allowed to continue as a trading platform with a number of conditions in place to help reduce the risks of it operating as an unlicensed market," Mr Goldsmith said in a statement.
"Unlisted has been operating as an alternative market for investors since December 2003 and makes up a small portion of New Zealand's market capitalisation. Without this exemption, it was likely that Unlisted would be forced to shut down or materially change its operating structure."
The ministerial exemption means the market can continue as an unlicensed platform, but its website will be required to make its unlicensed status clear and investors will need to sign a declaration acknowledging the risks involved.
Unlisted faced stiff opposition from New Zealand's only registered stock market operator, NZX, to remain an unlicensed platform.
NZX said in its submission to the Ministry of Business, Innovation and Employment last month that it "strongly opposes" the platform being exempted from new licensing requirements, arguing its lack of basic shareholder protections could tarnish the reputation of the country's capital markets.
Mr Goldsmith said in granting Unlisted an exemption he had considered the "risks and benefits" and said his decision was in line with the purposes of FMCA "which recognises that one size doesn't fit all when it comes to financial markets".
Companies trading on Unlisted include Silver Fern Farms, New Zealand's biggest meat processor and marketer, Queenstown tourism company Skyline Enterprises, and biotechnology company PharmaZen.