Financial Markets (Derivatives Margin and Benchmarking) Reform Amendment Bill

  • enacted
20G Section 30 amended (Preferential claims)

(1)

After section 30(1)(c), insert:

(d)

is not a security interest referred to in subsection (6).

(2)

After section 30(2)(b)(ii), insert:

(iii)

a security interest referred to in subsection (6) that is over all or any of those assets; and

(3)

After section 30(5), insert:

(6)

For the purposes of subsections (1)(d) and (2)(b)(iii), the security interest is a security interest over accounts receivable, inventory, or both to the extent that the security interest secures payment or performance of an obligation under or in relation to a qualifying derivative and

(a)

the counterparties to the derivative are

(i)

2 qualifying counterparties; or

(ii)

a qualifying counterparty and an overseas person; and

(b)

before enforcement of the security interest, the collateral is transferred or otherwise dealt with so as to be in the possession or under the control of

(i)

the enforcing counterparty; or

(ii)

another person (who is not the company that granted the security interest) on behalf of the enforcing counterparty, under the terms of an arrangement evidenced in writing.

(7)

Terms and expressions defined in section 122A of the Reserve Bank of New Zealand Act 1989 and used in subsection (6) have in that subsection the same meanings as in that section.

(8)

Section 122AB of the Reserve Bank of New Zealand Act 1989 applies with all necessary modifications for the purposes of subsection (6)(b) (and those modifications include treating references to section 122(9A)(ab) of that Act as references to subsection (6)(b) of this section and treating references to the grantor as references to the company that granted the security interest).