Dated at Wellington this 5th day of October 2009.
Statement of reasons
Note: The following statement of reasons should be read in conjunction with the statement(s) of reasons appended to the:
This notice comes into force on the day after the date of its notification in the Gazette.
Section 157I of the Reserve Bank of New Zealand Act 1989 (the Act) requires entities that are deposit takers for the purposes of Part 5D of the Act to have a credit rating by an approved rating agency on and after 1 March 2010, and section 157M of the Act requires these entities to have and comply with a risk management programme on and after 1 September 2009. This notice exempts entities from these requirements if—
they are in receivership and no longer offering deposits, except deposits that could only be accepted by persons who come within the definition of eligible person in the Securities Act 1978 (which relates to wealthy persons and persons experienced in investing money or experienced in the industry or business to which the security relates) or by persons referred to in section 3(2)(a) of the Securities Act 1978 (to whom an offer of securities would not constitute an offer of securities to the public for the purposes of that Act):
they are in liquidation.
The Reserve Bank, after taking into account the principles in section 157F of the Act and satisfying itself as to the matters set out in section 157G(2) of the Act, considers it is appropriate to grant the exemption because—
the Bank is satisfied that the exemption is consistent with the maintenance of a sound and efficient financial system:
the additional direct and indirect costs of obtaining a credit rating or a risk management plan are unduly onerous or burdensome in the circumstances. The relevant circumstances are that the deposit taker is subject to external management intended to realise its assets for the benefit of existing creditors. The value of a credit rating or risk management plan is premised on the entity being a going concern:
limiting this exemption only to deposit takers in liquidation or those in receivership that are not offering deposits to the general public ensures that this exemption is not broader than necessary in that it only applies to entities that have no, or little likelihood of, ongoing viability; but at the same time it does not preclude the possibility of investment, for example by a wealthy or experienced investor, that may assist an entity in receivership.
Note: The preceding statement of reasons should be read in conjunction with the statement(s) of reasons appended to the: