The purpose of this Act is—

• (a) to promote the maintenance of a sound and efficient financial system; and

• (b) to avoid significant damage to the financial system that could result from the failure of an NBDT.

(1) In this Act, unless the context otherwise requires,—

(2) In this Act, offer of debt securities to the public must be construed in a manner consistent with the construction and use of offer of securities to the public as set out in section 3 of the Securities Act 1978, but with the modification that references to securities must be taken as being references to debt securities as defined in this Act.

(3) In relation to a debt security that, for the purposes of the Securities Act 1978, is a participatory security, references in this Act to a trustee must be read as references to a statutory supervisor, and references to a trust deed must be read as references to a deed of participation.

(1) In this Act, NBDT means any of the following:

• (a) a person that—

  • (i) offers debt securities to the public in New Zealand; and

  • (ii) carries on the business of borrowing and lending money, or providing financial services, or both:

• (b) a person, or a member of a class of persons (including any person or class of person identified in subsection (2)(a) to (e)), that is declared by regulations made under section 72(1)(c) to be an NBDT for the purposes of this Act:

• (c) a person that, after this Act comes into force, issues debt securities to the public in New Zealand while being a person described in paragraph (a) or (b), and any of those debt securities remain unpaid:

• (d) a person that,—

  • (i) immediately before 3 August 2011 is a deposit taker as defined in Part 5D of the Reserve Bank of New Zealand Act 1989; and

  • (ii) before this Act comes into force, issues debt securities (as defined in that Part) to the public in New Zealand while being a deposit taker and, after this Act comes into force, any of those debt securities remain unpaid.

• (c) a person that—

  • (i) is, or has been at any time since this Act came into force, an NBDT; and

  • (ii) has debt securities that were issued to the public in New Zealand and that remain unpaid:

• (d) a person that—

  • (i) was a deposit taker (as defined in section 157C of the Reserve Bank of New Zealand Act 1999) on or after 3 August 2011 but before this Act came into force; and

  • (ii) has debt securities that were issued to the public in New Zealand before this Act came into force and that remain unpaid.

(2) However, Despite subsection (1), the following are not NBDTs:

• (a) a bank that is a registered bank under the Reserve Bank of New Zealand Act 1989:

• (b) a local authority:

• (c) the Crown (as defined in the Public Finance Act 1989):

• (d) an entity that is in receivership (provided that no debt securities are being offered to the public in New Zealand by, or on behalf of, the entity):

• (e) an entity that is in liquidation (whether under Part 16 of the Companies Act 1993 or under any other enactment):

• (f) a person, or a member of a class of persons, declared by regulations made under section 72(1)(ca) not to be an NBDT for the purposes of this Act.

(1) A person (person A) is a related party of an NBDT in each of the following cases:

• (a) person A is a director or senior officer of the NBDT or of any of its guaranteeing subsidiaries:

• (b) person A is a relative of a director or senior officer of the NBDT or of any of its guaranteeing subsidiaries:

• (c) person A is a subsidiary of the NBDT or of any of its guaranteeing subsidiaries:

• (d) person A has a substantial interest in the NBDT or in any of its guaranteeing subsidiaries:

• (e) person A is a person in which the NBDT or any of its guaranteeing subsidiaries has a substantial interest:

• (f) another person with a substantial interest in the NBDT or any of its guaranteeing subsidiaries has a substantial interest in person A:

• (g) 40% or more of person A's governing body are the same persons as 40% or more of the governing body of—

  • (i) the NBDT or any of its guaranteeing subsidiaries; or

  • (ii) another person that has a substantial interest in the NBDT or any of its guaranteeing subsidiaries:

• (h) person A is a person, or a member of a class of persons, declared by regulations to be a related party.

(2) In this section, a person (person B) has a substantial interest in an entity if—

• (a) person B has control, directly or indirectly, or significant influence over 25% or more of the composition of the governing body of the entity; or

• (b) where the entity is a company,—

  • (i) person B owns, or in any way has the power to control, directly or indirectly, or has the right to acquire, 10% or more of the ordinary shares or the voting rights of the entity; or

  • (ii) person B has, by any other means, 10% or more of the control of the entity; or

• (c) where the entity is not a company,—

  • (i) person B is in a position to control, directly or indirectly, 10% or more of the voting rights in relation to the entity; or

  • (ii) person B has, by any other means, 10% or more of the control of the entity.

The function of the Bank under this Act is to act as the prudential regulator and licensing authority for NBDTs and to perform any other functions imposed by or under this Act.

When performing its functions and exercising its powers under this Act, the Bank must take into account the following principles:

• (a) the desirability of consistency in the treatment of similar institutions, regardless of matters such as their corporate form:

• (b) the importance of recognising—

  • (i) that it is not the purpose of this Act to eliminate all risk in relation to the performance of NBDTs or to limit diversity among NBDTs; and

  • (ii) that depositors are responsible for assessing risk in relation to potential investments and for their own investment choices:

• (c) the desirability of providing to depositors adequate information to enable them to assess risk in relation to potential investments and to distinguish between high-risk and low-risk NBDTs:

• (d) the desirability of sound governance of NBDTs:

• (e) the desirability of effective risk management by NBDTs:

• (f) the need to avoid unnecessary compliance costs:

• (g) the need to maintain competition within the NBDT sector.

(1) The Minister may direct the Bank to have regard to a government policy that relates to the Bank's functions under this Act.

(2) The Bank must have regard to every direction given by the Minister under this section.

(3) The Minister must consult with the Bank before giving a direction.

(4) A direction must—

• (a) be set out in a written statement signed by the Minister; and

• (b) as soon as practicable after it is given, be—

  • (i) presented to the House of Representatives by the Minister; and

  • (ii) published in the Gazette.

(5) The Minister may not give a direction that requires the performance or non-performance of a particular act by the Bank, or by any employee or office holder of the Bank, or the bringing about of a particular result, in respect of a particular person.

(6) A direction may be amended, revoked, or replaced in the same way as it may be given.

This Act binds the Crown.

(1) The Bank may, by notice in writing to a licensed NBDT, require the NBDT to supply to the Bank any information, data, or forecasts about any of the following matters as they relate to the NBDT or its guaranteeing subsidiaries:

• (a) corporate matters:

• (b) financial matters:

• (c) prudential matters:

• (d) any other matters relating to the business, operation, or management of the NBDT or its guaranteeing subsidiaries.

(2) The notice may require that the information, data, or forecasts, or any of it, relate to business carried on by the NBDT or its guaranteeing subsidiaries in New Zealand or elsewhere.

(2) The notice may require information, data, or forecasts relating to any business carried on by the NBDT or its guaranteeing subsidiaries, whether the business is carried on in New Zealand or elsewhere.

(3) The notice may also require any or all of the information, data, or forecasts, or any of it, to—

• (a) be in consolidated form; and

• (b) be audited, or reviewed in a specified manner, by a person approved by the Bank; and

• (c) relate to specified periods; and

• (d) be supplied by a specified time, or within a specified period; and

• (e) be provided in a specified form; and

• (f) be provided to a specified place.

(4) A licensed NBDT commits a tier 2 an offence if it fails to comply with a notice given under this section and is liable on conviction to a level 3 penalty.

(1) The Bank may, by notice in writing to an associated person of a licensed NBDT, require the associated person to supply to the Bank any information, data, or forecasts about any of the following matters as they relate to the associated person:

• (a) corporate matters:

• (b) financial matters:

• (c) prudential matters:

• (d) any other matters relating to the business, operation, or management of the associated person.

(2) The notice may require that the information, data, or forecasts, or any of it, relate to the business carried on by the associated person in New Zealand or elsewhere.

(2) The notice may require information, data, or forecasts relating to any business carried on by the associated person, whether the business is carried on in New Zealand or elsewhere.

(3) Section 46(3) applies to the notice any notice given under subsection (1).

(4) An associated person commits a tier 2 an offence if it fails to comply with a notice given under this section and is liable on conviction to a level 3 penalty.

(1) For the purpose of investigating whether a licensed NBDT is complying with this Act or the regulations, the Bank may, by notice to the NBDT or any associated person, require the NBDT or associated person to supply the Bank with a report (which may comprise a series of reports), prepared by an approved person, on matters relating to the business, operation, or management of the NBDT or any associated person.

(2) The notice must contain a statement of the reasons why the Bank wants the report to be supplied.

(3) The NBDT or associated person must provide the approved person with access to its accounting and other records and must supply information relating to those records if the approved person requests the NBDT or associated person to do so for the purposes of the report.

(4) The NBDT or associated person is liable for the cost of every report that it is required to supply to the Bank under this section.

(5) In this section, approved person means a person approved or appointed by the Bank for the purposes of this section.

(6) A licensed NBDT or an associated person commits a tier 2 an offence, and is liable on conviction to a level 3 penalty, if it—

• (a) fails to supply a report to the Bank if required to do so under this section; or

• (b) fails to supply provide access to its accounting and other records, or fails to provide information relating to those records if requested to do so for the purposes of a report under this section.

(1) If the Bank, by notice in writing to a trustee, requires the trustee to obtain information from a licensed NBDT relating to the business, operation, or management of the NBDT, the trustee—

• (a) is, despite anything in any enactment, instrument, or rule of law, entitled to require the NBDT to supply the trustee with that information; and

• (b) must require the NBDT to supply the information; and

• (c) must supply any information so provided to the Bank.

(2) A trustee that fails to comply with subsection (1)(b) or (c) commits a tier 4 offence an offence and is liable on conviction to a level 1 penalty.

(1) If the Bank has reasonable cause to believe that a licensed NBDT or an associated person has committed an offence under this Act, the Bank may, by notice in writing, do either or both of the following:

• (a) require the NBDT or associated person to supply to the Bank the information, documents, or things specified in the notice, within the time specified in the notice:

• (b) appoint a suitably qualified person to enter and search a place under a warrant issued under section 51.

(2) A licensed NBDT or associated person that fails to comply with a notice given under subsection (1)(a) commits a tier 2 offence an offence and is liable on conviction to a level 3 penalty.

(1) A person appointed under section 50(1)(b) may, for the purpose of investigating whether a person is committing or has committed an offence under this Act, enter and search any place if—

• (a) the occupier of the place consents; or

• (b) he or she obtains a warrant under this section.

(2) A Judge of the High Court of New Zealand or a District Court Judge may issue a warrant to a Bank officer in relation to a place if the Judge is satisfied that there are reasonable grounds—

• (a) to suspect that a person is committing or has committed an offence under this Act; and

• (b) to believe that a search will find evidential material at the place.

(3) Schedule 2 of the Insurance (Prudential Supervision) Act 2010 applies in relation to a warrant and a search under this section, as if—

• (a) references in that schedule to applicants were references to employees of the Bank or any persons appointed by the Bank under section 50(1)(b); and

• (b) references to investigations were references to investigations by the Bank into the commission, or possible commission, of an offence under this Act by a licensed NBDT or associated person.

(1) If a person could, in a criminal proceeding, assert a privilege under sections 54 to 57 of the Evidence Act 2006 in respect of any communication or information, the person is taken to have the same privilege for the purposes of—

• (a) a request under section 48(3) to supply access to accounting and other records of a licensed NBDT or provide information relating to those records; and

• (b) a notice under section 50(1)(a); and

• (c) a warrant issued under section 51.

(2) A person who has a privilege under this section has the right—

• (a) to refuse to disclose a communication or information to which the privilege would apply if it were sought to be disclosed in a criminal proceeding; and

• (b) to prevent the search of any such communication or information; and

• (c) to require the return of such communication or information if it is seized by a person exercising a power of search pending determination of the claim to privilege.

(3) If a person refuses to disclose a communication or information on the ground that it is privileged under this section, the Governor may apply to a District Court Judge for an order determining whether the claim of privilege is valid; and, for the purpose of determining any such application, the District Court Judge may require the communication or information to be produced to him or her.

(4) A District Court Judge may, on the application of the Governor, disallow a privilege claimed under this section if the Judge is satisfied that the claim to privilege would, under section 67(1) of the Evidence Act 2006, be disallowed in a proceeding.

(5) Subsection (6) applies to documents that are books of account or accounting records referred to in section 55(1) of the Evidence Act 2006.

(6) The application by subsection (1) of section 54 of the Evidence Act 2006 (which relates to the privilege for communications with legal advisers) does not prevent, limit, or affect—

• (a) the issue of, or the obligation to comply with, a notice under section 50(1)(a) in respect of a document to which this subsection applies; or

• (b) the issue or execution of a search warrant under section 51 in respect of a document to which this subsection applies; or

• (c) the admissibility, in a criminal proceeding under this Act, of any evidence that relates to the contents of a document obtained as a result of a notice under section 50(1)(a) or a search warrant issued under section 51.

(7) Section 65 of the Evidence Act 2006 (which relates to waiver of privilege) applies in respect of any privilege under this section.

(8) Nothing in this section affects the application of section 60 of the Evidence Act 2006.

(1) This section applies to—

• (a) information supplied or disclosed to, or obtained by,—

  • (i) the Bank, under or for the purposes of, or in connection with, the exercise of powers conferred by this Act; and

  • (ii) any person appointed by the Bank under section 50(1)(b) to enter and search a place under warrant:

• (b) information derived from, or based on, information referred to in paragraph (a):

• (c) information relating to the exercise, or possible exercise, of the powers conferred by this Act.

(2) The Bank, any employee of the Bank, and any person appointed by the Bank under section 50(1)(b) may publish or disclose information to which this section applies only—

• (a) with the consent of the person to whom the information relates; or

• (b) in statistical or summary form, arranged in a manner that prevents any information published or disclosed from being identified by any person as relating to a particular person; or

• (c) to the extent that the information is available to the public under any Act (other than the Official Information Act 1982) or in a public document; or

• (d) for the purposes of this Act or in connection with the exercise of powers under this Act; or

• (e) in connection with any proceedings for an offence against this Act; or

• (f) to the Registrar of the Companies Office or the Financial Markets Authority; or

• (g) to a trustee of the NBDT to whom the information relates; or

• (h) to any person who the Bank is satisfied has a proper interest in receiving the information.

(3) A person to whom information to which this section applies is published or disclosed under subsection (2)(d) must not publish, disclose, or use the information except—

• (a) for the purposes of this Act or in connection with the exercise of powers conferred by this Act; or

• (b) in accordance with any conditions that may be specified by the Bank.

(4) Information to which this section applies must not be published or disclosed under subsection (2)(g) or (h) unless the Bank is satisfied that satisfactory provision exists to protect the confidentiality of the information published or disclosed.

(5) A person to whom information to which this section applies is disclosed under subsection (2)(f), (g), or (h) must not publish, disclose, or use the information unless the publication, disclosure, or use is—

• (a) authorised by the Bank; or

• (b) necessary or desirable in connection with the exercise of any function or power conferred by any enactment.

(6) A person who breaches this section commits a tier 3 offence an offence and is liable on conviction to a level 2 penalty.

Nothing in the Official Information Act 1982 applies to information to which section 53 applies, whether or not the information has been published or disclosed to any person pursuant to that section.

(1) The Bank may give a licensed NBDT or an associated person a direction under this section if it the Bank has reasonable grounds to believe any of the following:

• (a) that the NBDT or any associated person is unable, or likely to be unable, to pay its debts as they become due in the normal course of business:

• (b) that the NBDT or any associated person, or any director or senior officer of the NBDT or any associated person, is failing, has failed, or is likely to fail, to comply with—

  • (i) this Act or the regulations; or

  • (ii) the Securities Act 1978 or regulations made under that Act; or

  • (iii) any condition of the NBDT's licence:

• (c) that the circumstances of the NBDT or any associated person, or the manner in which the affairs of the NBDT or associated person are being conducted, are prejudicial to the solvency of the NBDT or its ability to comply with the things listed in paragraph (b).

(2) A direction to an NBDT under this section may require the NBDT to do any of the following:

• (a) consult with the Bank, at the times and in the manner specified by the Bank, about the circumstances of the NBDT or any associated person, or about the methods of resolving any financial or other difficulties facing the NBDT or any associated person:

• (b) take any specified action to address any circumstances of financial or other difficulties of the NBDT or any associated person:

• (c) take, or refrain from taking, any specified action to address a failure, or potential failure, by the NBDT or any associated person to comply with the things listed in subsection (1)(b):

• (d) ensure that any senior officer or other employee of the NBDT ceases to take part in the management or conduct of the NBDT's business, except with the permission of the Bank and so far as that permission extends:

• (e) suspend or cease carrying on any part of its business:

• (f) carry on its business, or any part of its business, in accordance with the direction:

• (g) remove or replace its auditor, or appoint an auditor approved by the Bank.

• (g) replace its auditor with an auditor approved by the Bank (in which case the NBDT has the power to give effect to the direction despite any enactment, rule of law, or the governing document of the NBDT).

(3) A direction to an associated person under this section may require the associated person to do any of the following:

• (a) consult with the Bank, at the times and in the manner specified by the Bank, about the circumstances of the NBDT or the associated person, or about the methods of resolving any financial or other difficulties facing the NBDT or the associated person:

• (b) take any specified action to address any circumstances of financial or other difficulties of the NBDT or the associated person:

• (c) take, or refrain from taking, any specified action to address a failure, or potential failure, by the NBDT or the associated person to comply with the things listed in subsection (1)(b):

• (d) ensure that any senior officer or other employee of the associated person ceases to take part in the management or conduct of its business, except with the permission of the Bank and so far as that permission extends:

• (e) suspend or cease carrying on any part of its business:

• (f) carry on its business, or any part of its business, in accordance with the direction:

• (g) replace its auditor with an auditor approved by the Bank (in which case the associated person has the power to give effect to the direction despite any enactment, rule of law, or the governing document of the associated person).

(1) The Bank may give a direction under this section to a trustee of a licensed NBDT if it has reasonable grounds to believe that the NBDT or the trustee is failing, has failed, or is likely to fail to comply with this Act or the regulations.

(2) A direction under this section may require a trustee to do any of the following:

• (a) consult with the Bank, at the times and in the manner specified by the Bank, about the circumstances of the NBDT or trustee and the actions or proposed actions of the NBDT or trustee:

• (b) make changes to a trust deed:

• (c) arrange for a review and report on the NBDT's risk management programme.

(1) A direction given under section 55 or 56 must state the grounds on which it is given and the reasons for the direction.

(2) A direction to a licensed NBDT, associated person, or trustee is taken to have been given on delivery to the head office, registered office, principal place of business in New Zealand, or address for service of the NBDT, associated person, or trustee (as the case may be).

(1) Every person to whom a direction is given under section 55 or 56 must comply with the direction.

(2) A person (other than a trustee) commits a tier 1 offence an offence, and is liable on conviction to a level 4 penalty, if the person—

• (a) fails to comply with a direction given under section 55; or

• (b) obstructs, hinders, or prevents an NBDT, associated person, or trustee from giving effect to a direction under this subpart.

(3) A trustee commits a tier 4 offence an offence, and is liable on conviction to a level 1 penalty, if the trustee—

• (a) fails to comply with a direction given under section 56; or

• (b) obstructs, hinders, or prevents an NBDT, associated person, or trustee from giving effect to a direction under this subpart.

(1) The Bank may remove a director of a licensed NBDT, by notice in writing to the director, if—

• (a) any of the following apply and, in the opinion of the Bank, it is necessary to remove or replace the director:

  • (i) the NBDT or any associated person is unable, or likely to be unable, to pay its debts as they become due in the normal course of business:

  • (ii) the director has failed, or is failing, or is likely to fail, to comply with this Act or the regulations:

  • (iii) the circumstances of the NBDT or any associated person, or the manner in which its affairs are being conducted, are prejudicial to the solvency of the NBDT or its ability to comply with this Act, the regulations, the Securities Act 1978, or regulations made under that Act; or

• (b) a suitability notice given in respect of the director was false or misleading in a material respect; or

• (c) the director raises suitability concerns and the Bank has not issued a notice of non-objection for the person in respect of that position; or

• (d) the information on which the Bank issued a notice of non-objection in relation to the director was false or misleading in a material respect; or

• (e) since the NBDT was granted a licence, or since the director was appointed, any 1 or more of the suitability concerns applies to the director and the Bank does not propose to issue a notice of non-objection in relation to the director.

(1A) The Bank may, by notice to a person, appoint the person as a director of a licensed NBDT if—

• (a) the Bank has exercised, or is exercising, the power in subsection (1) to remove a director and it is necessary to appoint a person to replace the removed director; or

• (b) in the opinion of the Bank, it is necessary to appoint a person as an additional director because—

  • (i) the NBDT is failing or has failed to comply with this Act or the regulations; or

  • (ii) either of the grounds in subsection (1)(a)(i) or (iii) applies.

(2) The Bank may remove a director of an associated person of a licensed NBDT, by notice in writing to the director, if any of the following apply and it is necessary, in the opinion of the Bank, to remove or replace the director:

• (a) the NBDT or associated person is unable, or likely to be unable, to pay its debts as they become due in the normal course of business:

• (b) the director has failed, or is failing, or is likely to fail, to comply with this Act or the regulations:

• (c) the circumstances of the associated person, or the manner in which its affairs are being conducted, are prejudicial to the solvency of the NBDT or its ability to comply with this Act, the regulations, the Securities Act 1978, or regulations made under that Act.

(3) The Bank may, by notice in writing to a person, appoint the person as a director of an NBDT or associated person if the Bank has exercised, or is exercising, the power in subsection (1) or (2) to remove a director and it is necessary to appoint a person to replace the removed director.

(3) The Bank may, by notice to a person, appoint the person as an additional director of an associated person if—

• (a) the Bank has exercised, or is exercising, the power in subsection (2) to remove a director and it is necessary to appoint a person to replace the removed director; or

• (b) in the opinion of the Bank, it is necessary to appoint a person as an additional director because—

  • (i) the associated person is failing or has failed to comply with this Act or the regulations; or

  • (ii) either of the grounds in subsection (2)(a) or (c) applies.

(4) This section doesSubsections (1) to (3) do not apply in respect of a director of an overseas person.

(5) This section has effect despite any enactment, rule of law, or the terms of the governing document of the NBDT or associated person.

(1) The Bank must not exercise the power in section 59(1) or (2) to remove a director unless—

• (a) the Bank has given at least 7 days' notice in writing of the Bank's intention to exercise the power to—

  • (i) the director who is to be removed; and

  • (ii) the licensed NBDT or associated person of which the person is a director; and

  • (iii) if a director of a licensed NBDT is being removed, the trustee of the NBDT; and

• (b) the notice sets out the reasons for the proposed action; and

• (c) the director and the relevant NBDT or associated person have a reasonable opportunity to make submissions to the Bank; and

• (d) the Bank has regard to those submissions.

(2) The Bank must not exercise the power in section 59(1A) or (3) to appoint a director unless—

• (a) the Bank has given at least 7 days' notice in writing of the Bank's intention to the licensed NBDT or associated person to whom the director is to be appointed; and

• (b) the notice sets out the reasons for the proposed action; and

• (c) the NBDT or associated person has a reasonable opportunity to make submissions to the Bank; and

• (d) the Bank has regard to those submissions; and

• (e) the person whom the Bank proposes to appoint agrees to the appointment.

(3) On exercising a power under section 59 to remove or appoint a director, the Bank must give written notice of the exercise of the power to,—

• (a) in the case of a director of a licensed NBDT, the NBDT and eachthe trustee; and

• (b) in the case of a director of an associated person, the associated person and the licensed NBDT; and

• (c) in every case, the Registrar of Companies or, in the case of a non-company NBDT or associated person whose director is being removed or appointed, whichever other registrar (if any) is appropriate.

(4) A notice given under subsection (3)(c) with respect to the appointment of a director is sufficient compliance with section 159 of the Companies Act 1993 (or other equivalent provision) as long as the notice is accompanied by the form of consent and certificate required under section 152 of that Act (or other equivalent required documentation).

(1) A director or senior officer, or former director or senior officer, of a licensed NBDT may appeal to the High Court against any decision of the Bank concerning—

• (a) the person's suitability to be a director or senior officer of the NBDT; or

• (b) the information on which a decision regarding suitability was made.

(1) Any of the following may appeal to the High Court against any decision of the Bank concerning the person's suitability to be a director or senior officer of an NBDT:

• (a) a director or senior officer of a licensed NBDT:

• (b) a former director or senior officer of a licensed NBDT:

• (c) a person who was proposed to be a director or senior officer of a licensed NBDT.

(2) An appeal under this section is by way of rehearing.

(3) A decision against which an appeal is lodged continues in force pending the determination of the appeal unless the High Court orders otherwise.

(1) Any party to an appeal under section 61 who is dissatisfied with any determination of the High Court in the proceedings as being erroneous in point of law may, with the leave of the High Court (or, if the High Court refuses leave, with the leave of the Court of Appeal, ) appeal to the Court of Appeal against the determination on a question of law; and section 66 of the Judicature Act 1908 applies to any such appeal.

(2) In determining whether to grant leave to appeal, the Court of Appeal must have regard to whether the question of law involved in the appeal is one that, by reason of its general or public importance or for any other reason, ought to be submitted to the Court of Appeal for its decision.

(3) The Court of Appeal, in granting leave, may impose the conditions that it thinks fit, whether as to costs or otherwise.

(4) The decision of the Court of Appeal on any application for leave to appeal, or on an appeal under this section, is final.

(1) A tier 1 offence is an offence for which the defendant is liable, on summary conviction,—

• (a) in the case of an individual, to imprisonment for a term not exceeding 18 months, a fine not exceeding $200,000, or both; and

• (b) in any other case, to a fine not exceeding $2 million.

(2) A tier 2 offence is an offence for which the defendant is liable, on summary conviction,—

• (a) in the case of an individual, to imprisonment for a term not exceeding 12 months, a fine not exceeding $100,000, or both; and

• (b) in any other case, to a fine not exceeding $1 million.

(3) A tier 3 offence is an offence for which the defendant is liable, on summary conviction,—

• (a) in the case of an individual, to imprisonment for a term not exceeding 3 months, a fine not exceeding $50,000, or both; and

• (b) in any other case, to a fine not exceeding $500,000.

(4) A tier 4 offence is an offence for which the defendant is liable, on summary conviction, to a fine not exceeding $200,000.

(1) A level 4 penalty for conviction for an offence against this Act is,—

• (a) in the case of an individual, imprisonment for a term not exceeding 18 months, a fine not exceeding $200,000, or both; and

• (b) in any other case, a fine not exceeding $2 million.

(2) A level 3 penalty for conviction for an offence against this Act is,—

• (a) in the case of an individual, imprisonment for a term not exceeding 12 months, a fine not exceeding $100,000, or both; and

• (b) in any other case, a fine not exceeding $1 million.

(3) A level 2 penalty for conviction for an offence against this Act is,—

• (a) in the case of an individual, imprisonment for a term not exceeding 3 months, a fine not exceeding $50,000, or both; and

• (b) in any other case, a fine not exceeding $500,000.

(4) A level 1 penalty for conviction for an offence against this Act is a fine not exceeding $200,000.

A licensed NBDT, associated person, or trustee commits a tier 2 offence an offence, and is liable on conviction to a level 3 penalty, if it—

• (a) makes any statement or application, or supplies any document or thing, to the Bank knowing that it is false or misleading in a material respect; or

• (b) without reasonable excuse, obstructs or hinders an authorised person in the execution of any powers conferred on the person by or under this Act or the regulations.

(1) Every person commits a tier 2 offence who an offence, and is liable on conviction to a level 3 penalty, if the person discloses that the Bank has given a direction under section 55 or 56, or has issued a notice under section 59, requiring the removal or appointment of a director.

(2) Nothing in subsection (1) applies to the disclosure or publication of the fact that a direction has been given, or a notice has been issued, if the disclosure or publication is made—

• (a) to any director, senior officer, or professional or financial adviser of the NBDT or to an associated person or trustee of an NBDT to which the direction or notice relates; or

• (b) with the written consent of the Bank; or

• (c) by, or on behalf of, the Bank or with the written consent of the Bank,—

  • (i) to the public or any class of the public; or

  • (ii) to any person who has a proper interest in knowing that the direction or notice has been given.

(3) Nothing in subsection (1) applies to the disclosure or publication of the fact that a direction has been given requiring the actions set out in section 55(2)(d) for the purpose of giving effect to that direction.

(1) In any prosecution of a licensed NBDT, associated person, or trustee or former licensed NBDT, associated person, or trustee (the defendant) for an offence under this Act, it is a defence if the defendant proves that—

• (a) the contravention was due to the act or omission of another person, or some other cause beyond the defendant's control; and

• (b) the defendant took reasonable precautions and exercised due diligence to avoid the contravention.

(2) For the purposes of subsection (1)(a), another person does not include a director, employee, or agent of the defendant.

(3) A defendant is not, without the leave of the court, entitled as part of a defence provided by this section to rely on any of the matters specified in subsection (1)(a) unless it has, not later than 7 working days before the date on which the hearing of the proceedings commences, served on the prosecution a notice in writing identifying the act, omission, or cause relied on by the defendant.

(1) If an NBDT or associated person commits an offence under this Act, each director of the NBDT or associated person commits the same offence, and is liable for the same penalty to the penalty applicable to an individual for that offence, if it is proved—

• (a) that the act that constituted the offence took place with the authority, permission, or consent of the director; or

• (b) that the director—

  • (i) knew, or could reasonably be expected to have known, that the offence was to be or was being committed; and

  • (ii) failed to take reasonable steps to prevent or stop it.

(2) A director of an NBDT or of an associated person may be convicted of an offence as a result of the operation of this section even though the NBDT or associated person has not been charged with that offence.

(1) An information for an offence under this Act that is punishable on summary conviction may be laid at any time within 6 years after the date of the offence.

(2) Subsection (1) applies despite section 14 of, or anything else to the contrary in, the Summary Proceedings Act 1957.

Despite anything to the contrary in section 25 of the Criminal Procedure Act 2011, the limitation period in respect of an offence against this Act ends on the date that is 6 years after the date on which the offence was committed.

Until the date appointed under section 2(2) of the Criminal Procedure Act 2011 as the commencement date (or, if no such date is appointed, the date provided in section 2(3) of that Act),—

• (a) section 68 must be read as if it provided that an information for an offence under this Act that is punishable on summary conviction may be laid at any time within 6 years after the date of the offence, despite section 14 of, or anything else to the contrary in, the Summary Proceedings Act 1957; and

• (b) references in this Act to liability on conviction must be taken to be references to liability on summary conviction.

(1) The Bank may exempt any licensed NBDT, class of licensed NBDTs, or trustee from compliance with any provision of—

• (a) this Act (except the requirement to be licensed); or

• (b) the regulations.

(2) The Bank must not grant an exemption under this section unless it is satisfied that—

• (a) the exemption will be consistent with the maintenance of a sound and efficient financial system; and

• (b) compliance with the relevant provision or provisions would, in the circumstances, require the licensed NBDT, class of licensed NBDTs, or trustee to comply with requirements that are unduly onerous or burdensome; and

• (c) the extent of the exemption is not broader than is reasonably necessary to address the matters that gave rise to the exemption.

(3) An exemption may be granted on any terms and conditions that the Bank thinks fit, including terms and conditions, in relation to a licensed NBDT, relating to the following:

• (a) risk management:

• (b) governance issues:

• (c) disclosures relating to the NBDT's creditworthiness:

• (d) the minimum capital ratio or minimal level of capital that the NBDT must have minimum capital requirements:

• (e) the NBDT's exposures to related parties:

• (f) the liquidity of the NBDT.

(4) The Bank may amend or revoke an exemption in the same way as an exemption may be granted, and section 70 applies to any amendment or revocation as if it were an exemption.

(1) Every exemption granted under section 69 must—

• (a) state the date on which it comes into force, which must be a date after the date on which the exemption is granted; and

• (b) include a statement of the Bank's reasons for granting the exemption (including why the exemption is appropriate).

(2) Every exemption granted under section 69—

• (a) is a regulation for the purpose of the Regulations (Disallowance) Act 1989; and

• (b) must be presented to the House of Representatives under section 4 of that Act.

(3) An exemption that applies to a class of licensed NBDTs (a class exemption) is also a regulation for the purposes of the Acts and Regulations Publications Act 1989.

(4) An exemption that is not a class exemption must, as soon as practicable after it is granted,—

• (a) be published on an Internet site maintained by or on behalf of the Bank; and

• (b) be published in full in the Gazette; and

• (c) be made available in printed form for purchase on request by members of the public.

A person does not breach a requirement of this Act if—

• (a) an exemption from the requirement applies to that person; and

• (b) the person complies with the terms and conditions of the exemption.

(1) The Governor-General may, by Order in Council, on the advice of the Minister given in accordance with a recommendation of the Bank, make regulations for all or any of the following purposes:

• (a) declaring a person or class of persons to be a related party:

• (b) declaring a class of persons to be, or not to be, senior officers:

• (c) declaring a person or class of persons to be, or not to be, an NBDT (but see subsection (2)):

• (c) declaring any person or class of persons (other than a person referred to in section 5(2)(a) to (c)) to be an NBDT for the purposes of this Act, or declaring that, in certain specified circumstances, such a person or class of persons is an NBDT for the purposes of this Act:

• (ca) declaring any person or class of persons that meets the definition of NBDT in section 5(1)(a), (c), or (d) not to be an NBDT for the purposes of this Act, or declaring that, in certain specified circumstances, such a person or class of persons is not an NBDT for the purposes of this Act:

• (d) declaring certain securities to be debt securities for the purpose of this Act:

• (e) prescribing the matters, circumstances, or conditions that are suitability concerns:

• (f) prescribing the application fee for a licence, or a method of calculating that fee:

• (g) prescribing additional matters to which the Bank must have regard in determining an application for a licence:

• (h) prescribing additional matters to which the conditions on licences may relate:

• (i) prescribing grounds, additional to those in section 20, on which the Bank may cancel a licence:

• (j) providing for any other matter contemplated by this Act, necessary for its administration, or necessary for giving it full effect.

(2) In considering whether to advise and recommend the making of regulations under subsection (1)(c) or (ca), the Minister and the Bank must have regard to—

• (a) the nature of the business activities carried on by the person or class of persons and the extent to which those activities—

  • (i) are similar in substance to the activities of an NBDT; or

  • (ii) involve activities as an NBDT; and

• (b) the public interest; and

• (c) any other matters the Minister or the Bank considers relevant.

(3) The Bank must not recommend the making of regulations under subsection (1)(d), declaring certain securities to be debt securities, unless it is satisfied that the securities are similar in substance to debt securities.

Regulations made under section 23, 29, 32, 35, or 38 may—

• (a) prescribe clauses relating to all or any of the matters referred to in those sections that are deemed to be contained in, or adopted by, trust deeds; and

• (b) prescribe requirements or clauses that apply to all licensed NBDTs; and

• (c) prescribe different requirements or clauses for different classes of licensed NBDTs; and

• (d) prescribe different requirements or clauses for particular licensed NBDTs.

(1) Any regulations made under this Act may incorporate material by reference, being material that is a framework, standard, specification, or requirement that is published by or on behalf of any body or person in any country.

(2) The material may be incorporated—

• (a) in whole or in part; and

• (b) with any modifications, additions, or variations specified in the regulations.

(3) Schedule 1 applies to any material incorporated by reference in regulations.

(1) The Bank must consult with the following before making a recommendation for the making of any regulations under this Act:

• (a) the Financial Markets Authority; and

• (b) if reasonably practicable, other persons, or the representatives of those persons, who the Bank considers will be substantially affected by the regulations made in accordance with the recommendation.

(2) Failure to comply with subsection (1) does not affect the validity of regulations.

(1) No civil, criminal, or disciplinary proceedings lie against a trustee arising from the disclosure in good faith of information to the Bank under any of sections 43, 44, 45, and 49 49, and 56.

(2) No person may terminate the appointment of a trustee by reason of the trustee disclosing information to the Bank in good faith under any of sections 43, 44, 45, and 49 49, and 56.

(3) No tribunal, body, or authority, having jurisdiction in respect of the professional conduct of a trustee, may make an order against, or do any act in relation to, that person in respect of the fact of that disclosure.

(1) If this Act or the regulations, or the Bank acting under this Act or the regulations, requires a licensed NBDT or a trustee, or both a licensed NBDT and a trustee, to ensure that a matter is included in or excluded from a trust deed, an amendment to a trust deed in compliance with that requirement—

• (a) must be treated for all purposes as if it were authorised to be made and were made in accordance with the provisions of the trust deed before the amendment was made; and

• (b) applies despite any defect in the form or mode of execution of the amendment.

(2) Subsection (1) applies despite there being no power of variation in the trust deed or, and despite anything to the contrary in the trust deed or other any enactment, rule of law, or agreement.

(1) This section applies if—

• (a) this Act or the regulations require a trustee, or both a licensed NBDT and a trustee, to ensure that a matter is included in or excluded from a trust deed; and

• (b) it is necessary to amend the trust deed within a certain time in order to comply with that requirement; and

• (c) the trustee has made reasonable efforts, in good faith, to negotiate with the NBDT for the purpose of agreeing to an amendment to the trust deed to ensure compliance with the requirement; and

• (d) the trustee has not, within a reasonable period before the expiry of the time allowed for amending the trust deed, been able to reach an agreement with the NBDT about the amendment to be made to the trust deed.

(2) If this section applies, the trustee may execute a deed amending the trust deed without the consent or agreement of the NBDT or any other person in order to ensure that the trust deed complies with this Act and the regulations.

(3) The deed amending the trust deed—

• (a) has effect despite there being no consent or agreement of the NBDT or any other person; and

• (b) must be treated for all purposes as if it were authorised to be made and were made in accordance with the provisions of the trust deed before the amendment was made; and

• (c) applies despite any defect in its form or mode of execution.

(4) Subsection (3) applies despite there being no power of variation in the trust deed or, and despite anything to the contrary in the trust deed or other any enactment, rule of law, or agreement.

(1) This section applies to the Bank, every director, officer, and employee of the Bank, and any person appointed by the Bank under section 50(1)(b).

(2) No person to whom this section applies is liable for an act done or omitted to be done in the performance or exercise in good faith of the person's functions, duties, or powers under this Act.

(3) This section and section 80 are subject to clauses 29 and 30 of Schedule 2 of the Insurance (Prudential Supervision) Act 2010 (as applied to this Act by section 51(3)) and which provide, (which provide for immunities in relation to the exercise of entry and search powers).

(1) The Crown indemnifies the persons referred to in section 79(1) for any liability that arises from the exercise or purported exercise of, or omission to exercise, any power conferred by this Act unless it is shown that the exercise, or purported exercise of, or omission to exercise, the power was in bad faith.

(2) Any money required for the purposes of this section must be paid out of a Crown Bank Account without further authority than this section.

(3) The indemnity conferred by subsection (1) extends to legal costs incurred in defending a proceeding.

(4) Within 12 sitting days after making a payment under this section, the Minister must present to the House of Representatives a report that contains the details of the circumstances giving rise to the liability of the Crown, the amount of the payment, the person to whom the payment was made, and any other relevant matters.

(1) Unless this Act provides otherwise, if a provision of this Act requires or authorises a notice, document, or notification to be given to a person, the notice, document, or notification must be in writing and must,—

• (a) if given to an individual, be given—

  • (i) by delivering it personally or by an agent to the person; or

  • (ii) by sending it by post addressed to the person at the person's usual or last known place of residence or business; or

  • (iii) by sending it by fax or email to the person's fax number or email address provided by the person for the purpose; or

• (b) if given to a company within the meaning of the Companies Act 1993, be served in a manner provided for in section 387(1) or 388 of that Act; or

• (c) if given to an overseas company, be served in a manner provided for in section 389(1) or 390 of the Companies Act 1993; or

• (d) if given to any other body corporate, be served in a manner in which it could be given or served if the body corporate were a company within the meaning of the Companies Act 1993.

(2) In the absence of proof to the contrary, a notice, document, or notification given to an individual must be treated,—

• (a) in the case of delivery by post under subsection (1)(a)(ii), as having been given or provided to the person when it would have been delivered in the ordinary course of post; and, in proving the delivery, it is sufficient to prove that the letter was properly addressed and posted:

• (b) in the case of delivery by fax or email under subsection (1)(a)(iii), as having been given or provided to the person on the second working day after the day on which it is sent.

(3) Section 392 of the Companies Act 1993 applies for the purposes of subsection (1)(b) to (d).

(4) If a person is absent from New Zealand, a notice, document, or notification given to the person's agent in New Zealand in accordance with subsection (1) must be treated as having been given or provided to the person.

(5) If the person has died, the notice, document, or notification may be given, in accordance with subsection (1), to his or her personal representative.

(1) The Bank may amend, revoke, or replace any notice, direction, or consent that it is entitled to give under this Act or the regulations.

(2) Any requirement relating to the giving of a notice, direction, or consent applies also to the amendment, revocation, or replacement of the notice, direction, or consent.

An obligation imposed on a person by any other Act or instrument does not prevent or excuse the person from complying with any provision of this Act or the regulations or with any direction, notice, or condition given or imposed under that provision.

(1) The Bank must keep a public register of licensed NBDTs.

(2) The Bank must determine the form of the register and may amend the form from time to time as it considers necessary.

(3) The Bank must take all reasonable steps to ensure that the information contained in the public register is available to members of the public at all reasonable times.

(1) The Bank may approve a person as a rating agency for the purposes of this Act.

(2) In deciding whether to approve a person as a rating agency, the Bank must have regard to the following:

• (a) the independence of the rating agency:

• (b) the adequacy of resources available to the rating agency:

• (c) the credibility and objectivity of the rating agency's methodology:

• (d) the consistency and comparability of the rating agency's ratings when assessed against ratings industry practice:

• (e) the adequacy of the rating agency's disclosure of information, including information about its processes, experience, and ownership:

• (f) relevant international standards, codes, and recommended practices relating to the ratings industry.

(3) The Bank may, at any time, review the approval of a person as a rating agency, and in conducting the review the Bank must have regard to the matters in subsection (2).

(4) If, after conducting the review, the Bank considers that the person should no longer be an approved rating agency, it may revoke the approval.

(5) On request by an approved rating agency, the Bank may revoke its approval, without the need for a prior review.

(6) A credit rating given by an approved credit agency does not cease to be a credit rating merely as a consequence of the credit rating agency ceasing to be an approved credit rating agency.

(7) The Bank must publish and keep up to date a list of approved rating agencies on an Internet site, maintained by or on behalf of the Bank, that is publicly accessible at all reasonable times.

(1) The Bank must, no later than 9 September 2013 (which is 5 years after the date on which section 157ZZ of the Reserve Bank of New Zealand Act 1989 came into force),—

• (a) review the operation of this Act; and

• (b) prepare a report on the review for the Minister.

(2) The report on the review must include recommendations to the Minister on whether any amendments to this Act are necessary or desirable.

(3) As soon as practicable after receiving the report, the Minister must present a copy of it to the House of Representatives.

(1) This section applies to every NBDT that—

• (a) was a deposit taker within the meaning of section 157C of the Reserve Bank of New Zealand Act 1989 immediately before this Act comes into force; and

• (b) is an NBDT within the meaning of this Act on the date on which this Act comes into force.

(2) In this section, the transition period means, in relation to an NBDT, the period between the date on which this Act comes into force and the earliest of the following:

• (a) the date that is 1 year after the date on which this Act comes into force:

• (b) the date on which the NBDT becomes a licensed NBDT:

• (c) the date on which the NBDT ceases to be an NBDT.

(3) During the transition period, the following apply to every NBDT to whom this section applies as if the NBDT were a licensed NBDT:

• (a) this Act, except section 10 (licensing requirements), section 41 (directors' obligation to notify suitability concerns), section 42 (consent for change of ownership), and section 59 (Bank's power to remove and appoint directors):

• (b) the Deposit Takers (Credit Ratings, Capital Ratios, and Related Party Exposures) Regulations 2010:

• (c) the Deposit Takers (Liquidity Requirements) Regulations 2010.

• (d) the Reserve Bank of New Zealand Act 1989.

(1) An exemption granted under section 157G of the Reserve Bank of New Zealand Act 1989 that is in force immediately before this section comes into force—

• (a) continues in force as if it were granted under section 69 of this Act; and

• (b) may be amended or revoked as if it were granted under that section.

(1A) Any amendment to or revocation of the following exemption notices granted under section 157G of the Reserve Bank of New Zealand Act 1989 must be treated as being an amendment to or revocation of a class exemption, and therefore be treated as a regulation for the purposes of the Acts and Regulations Publications Act 1989:

• (a) Deposit Takers (Charitable and Religious Organisations) Exemption Notice 2010:

• (b) Deposit Takers (Credit Ratings Minimum Threshold) Exemption Notice 2009:

• (c) Deposit Takers (Non-trustee Entities Risk Management) Exemption Notice 2009.

(1B) Any amendment to or revocation of any other exemption granted under section 157G of the Reserve Bank of New Zealand Act 1989 need not be treated as a regulation for the purposes of the Acts and Regulations Publications Act 1989.

(2) A reference in an exemption granted under section 157G of the Reserve Bank of New Zealand Act 1989 to any provision in Part 5D of the Reserve Bank of New Zealand Act 1989 (ie, to any of sections 157A to 157ZZ of that Act) must be taken as a reference to a provision in this Act that corresponds (with or without modification) to that provision.

Until the end of the transition period referred to in section 87, the following provisions of the Reserve Bank of New Zealand Act 1989 (all of which are amended by Schedule 2 of this Act) must be read as if the references in them to a licensed NBDT were references to an NBDT:

• (a) section 46(1)(b):

• (b) section 49(2)(h)(iii):

• (c) section 50(2)(d)(iii):

• (d) section 53(3)(f)(iii):

• (e) section 58(b).

(1) This section amends the Corporations (Investigation and Management) Act 1989.

(2) Section 8(3) is amended by inserting “, non-bank deposit taker licensed under the Non-bank Deposit Takers Act 2011,” after “licensed insurer”.

(1) This section amends the Financial Service Providers (Registration and Dispute Resolution) Act 2008.

(1A) Section 5 is amended by repealing paragraph (b) and substituting the following paragraph:

(2) Section 15(2) is amended by adding “, unless otherwise agreed by the relevant licensing authority and the Registrar”.

(3) Schedule 2 is amended by adding the following item to the table:

(1) The Reserve Bank of New Zealand Act 1989 is consequentially amended in the manner set out in Schedule 2.

(2) Other enactments are consequentially amended in the manner set out in Schedule 3.

The following regulations are revoked:

• (a) Deposit Takers (In Receivership or Liquidation) Exemption Notice 2009 (SR 2009/299):

• (b) Deposit Takers (Persons Declared Not to be Deposit Takers) Regulations 2011 (SR 2011/359).