Deposit Takers (Moratorium) Exemption Amendment Notice (No 2) 2010

  • revoked
  • Deposit Takers (Moratorium) Exemption Amendment Notice (No 2) 2010: revoked, on 1 March 2013, pursuant to clause 11 of the Deposit Takers (Propertyfinance Securities Limited) Exemption Notice 2013 (SR 2013/11).

Reprint
as at 1 March 2013

Coat of Arms of New Zealand

Deposit Takers (Moratorium) Exemption Amendment Notice  (No 2) 2010

(SR 2010/436)

  • Deposit Takers (Moratorium) Exemption Amendment Notice (No 2) 2010: revoked, on 1 March 2013, pursuant to clause 11 of the Deposit Takers (Propertyfinance Securities Limited) Exemption Notice 2013 (SR 2013/11).


Note

Changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in this reprint.

A general outline of these changes is set out in the notes at the end of this reprint, together with other explanatory material about this reprint.

This notice is administered by the Reserve Bank of New Zealand.


Pursuant to section 157G of the Reserve Bank of New Zealand Act 1989, the Reserve Bank of New Zealand gives the following notice (to which is appended a statement of reasons of the Bank).

Notice

1 Title
  • This notice is the Deposit Takers (Moratorium) Exemption Amendment Notice (No 2) 2010.

2 Commencement
  • This notice comes into force on 1 December 2010.

3 Principal notice amended
4 Exemption from credit rating requirement
  • Clause 6 is amended by omitting Each and substituting A.

5 New clauses 6A to 6D inserted
  • The following clauses are inserted after clause 6:

    6A Exemption from certain governance requirements
    • A specified moratorium entity is exempted from section 157L(1) and (3) of the Act.

    6B Exemption from capital ratio requirements
    • (1) A specified moratorium entity is exempted from sections 157T and 157U of the Act.

      (2) The trustee in respect of the debt securities of a specified moratorium entity is exempted from section 157T of the Act in respect of those securities.

    6C Exemption from related party exposures requirements
    • (1) This clause applies to the following specified moratorium entities:

      • (a) a specified moratorium entity with aggregate exposures to related parties that exceed 15% of capital on the day on which this clause comes into force; and

      • (b) a specified moratorium entity with—

        • (i) no exposures to related parties on the day on which this clause comes into force; and

        • (ii) no ability, under the terms of its trust deed, to enter into any contract or arrangement that will result in new exposures to related parties.

      (2) A specified moratorium entity to which this clause applies is exempted from sections 157X and 157Y of the Act.

      (3) The trustee in respect of the debt securities of a specified moratorium entity to which this clause applies is exempted from section 157X of the Act in respect of those securities.

      (4) For the purposes of subclause (1), aggregate exposures to related parties and capital must be determined as set out in regulation 24 of the Deposit Takers (Credit Ratings, Capital Ratios, and Related Party Exposures) Regulations 2010.

    6D Exemption from liquidity requirements
    • (1) A specified moratorium entity is exempted from sections 157ZA and 157ZB of the Act.

      (2) The trustee in respect of the debt securities of a specified moratorium entity is exempted from section 157ZA of the Act in respect of those securities.

6 Generic conditions of exemption in clause 6
  • (1) The heading to clause 7 is amended by omitting exemption in clause 6 and substituting exemptions in clauses 6 to 6D.

    (2) Clause 7(1) is amended by omitting exemption in clause 6 and substituting exemptions in clauses 6 to 6D.

    (3) Clause 7(1) is amended by revoking paragraph (b) and substituting the following paragraph:

    • (b) the specified moratorium entity must ensure that any Internet site maintained by or on behalf of the entity displays, at all reasonable times and at no cost to the public, a notice to the effect that the entity is exempted, on the basis that it is in moratorium and does not accept any subscriptions from the public for debt securities, from—

      • (i) the requirement in section 157I of the Act to have a credit rating; and

      • (ii) the governance requirements in section 157L(1) and (3) of the Act; and

      • (iii) the capital ratio requirements in sections 157T and 157U of the Act; and

      • (iv) the related party exposures requirements in sections 157X and 157Y of the Act (if clause 6C applies to the specified moratorium entity); and

      • (v) the liquidity requirements in sections 157ZA and 157ZB of the Act; and.

    (4) Clause 7(1) is amended by adding ; and and also by adding the following paragraph:

    • (e) the specified moratorium entity must send a notice in writing to each of its depositors by the close of 1 June 2011 to the effect that the entity is exempted, on the basis that it is in moratorium and does not accept any subscriptions from the public for debt securities, from the requirements specified in paragraph (b).

7 New clause 8 inserted
  • The following clause is inserted after clause 7:

    8 Further conditions of exemption in clause 6C
    • (1) The exemption in clause 6C is subject to the conditions that a specified moratorium entity described in clause 6C(1)(a)—

      • (a) must not increase or renew existing exposures to related parties; and

      • (b) must not create any new exposures to related parties.

      (2) For the purposes of subclause (1), exposures to related parties must be identified and measured as set out in regulations 25 to 27 of the Deposit Takers (Credit Ratings, Capital Ratios, and Related Party Exposures) Regulations 2010.

8 Schedule amended
  • (1) The Schedule is amended by omitting the following items:

    • (a) the item relating to Dorchester Finance Limited:

    • (b) the item relating to North South Finance Limited:

    • (c) the item relating to St Laurence Limited:

    • (d) the item relating to Strategic Finance Limited.

    (2) The Schedule is amended by inserting the following item in its appropriate alphabetical order:

     Beneficial Finance Limited1 March 2013

Dated at Wellington this 22nd day of November 2010.

Grant Spencer,
Deputy Governor.


Statement of reasons

This notice, which comes into force on 1 December 2010, amends the Deposit Takers (Moratorium) Exemption Notice 2009 (the principal notice). The effect of the amendments is to—

  • grant further exemptions to specified moratorium entities from certain sections of the Reserve Bank of New Zealand Act 1989 (the Act), namely sections 157L(1) and (3) (governance requirements), 157T and 157U (capital ratio requirements), 157X and 157Y (related party exposures requirements), and 157ZA and 157ZB (liquidity requirements); and

  • remove Dorchester Finance Limited, North South Finance Limited, St Laurence Limited, and Strategic Finance Limited from the list of specified moratorium entities to which the principal notice applies; and

  • add Beneficial Finance Limited to the list of specified moratorium entities to which the principal notice applies.

The principal notice already exempts specified moratorium entities from section 157I of the Act (requirement to have a credit rating).

The Reserve Bank of New Zealand (the Bank), after taking into account the principles set out in section 157F of the Act and satisfying itself as to the matters set out in section 157G(2) of the Act, considers it appropriate to grant the exemptions because—

  • the Bank is satisfied that the exemptions are consistent with the maintenance of a sound and efficient financial system, in that a specified moratorium entity will be prevented from accepting deposits from the public:

  • the additional direct and indirect costs of obtaining a credit rating, maintaining a minimum capital ratio, reducing related party exposures below 15% of capital, the governance requirements in section 157L(1) and (3) of the Act, and the liquidity requirements are unduly onerous and burdensome in the circumstances. The relevant circumstances are that a specified moratorium entity is unable to accept deposits from the general public as a condition of the exemptions, and existing depositors have agreed not to withdraw their deposits until they fall due under the arrangement. In these circumstances the credit rating, governance (section 157L(1) and (3) of the Act), capital ratio, related party exposures, and liquidity requirements are not likely to provide material additional benefits to depositors:

  • the exemptions are conditional on a specified moratorium entity not issuing any further debt securities to the public, but at the same time do not preclude the possibility of investment (for example, by a wealthy or experienced investor) that may assist an entity in moratorium; therefore, the exemptions are not broader than is reasonably necessary to address the matters that gave rise to the exemptions.


Issued under the authority of the Acts and Regulations Publication Act 1989.

Date of notification in Gazette: 25 November 2010.


Contents

  • 1General

  • 2Status of reprints

  • 3How reprints are prepared

  • 4Changes made under section 17C of the Acts and Regulations Publication Act 1989

  • 5List of amendments incorporated in this reprint (most recent first)


Notes
1 General
  • This is a reprint of the Deposit Takers (Moratorium) Exemption Amendment Notice (No 2) 2010. The reprint incorporates all the amendments to the notice as at 1 March 2013, as specified in the list of amendments at the end of these notes.

    Relevant provisions of any amending enactments that contain transitional, savings, or application provisions that cannot be compiled in the reprint are also included, after the principal enactment, in chronological order. For more information, see http://www.pco.parliament.govt.nz/reprints/ .

2 Status of reprints
  • Under section 16D of the Acts and Regulations Publication Act 1989, reprints are presumed to correctly state, as at the date of the reprint, the law enacted by the principal enactment and by the amendments to that enactment. This presumption applies even though editorial changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in the reprint.

    This presumption may be rebutted by producing the official volumes of statutes or statutory regulations in which the principal enactment and its amendments are contained.

3 How reprints are prepared
  • A number of editorial conventions are followed in the preparation of reprints. For example, the enacting words are not included in Acts, and provisions that are repealed or revoked are omitted. For a detailed list of the editorial conventions, see http://www.pco.parliament.govt.nz/editorial-conventions/ or Part 8 of the Tables of New Zealand Acts and Ordinances and Statutory Regulations and Deemed Regulations in Force.

4 Changes made under section 17C of the Acts and Regulations Publication Act 1989
  • Section 17C of the Acts and Regulations Publication Act 1989 authorises the making of editorial changes in a reprint as set out in sections 17D and 17E of that Act so that, to the extent permitted, the format and style of the reprinted enactment is consistent with current legislative drafting practice. Changes that would alter the effect of the legislation are not permitted.

    A new format of legislation was introduced on 1 January 2000. Changes to legislative drafting style have also been made since 1997, and are ongoing. To the extent permitted by section 17C of the Acts and Regulations Publication Act 1989, all legislation reprinted after 1 January 2000 is in the new format for legislation and reflects current drafting practice at the time of the reprint.

    In outline, the editorial changes made in reprints under the authority of section 17C of the Acts and Regulations Publication Act 1989 are set out below, and they have been applied, where relevant, in the preparation of this reprint:

    • omission of unnecessary referential words (such as of this section and of this Act)

    • typeface and type size (Times Roman, generally in 11.5 point)

    • layout of provisions, including:

      • indentation

      • position of section headings (eg, the number and heading now appear above the section)

    • format of definitions (eg, the defined term now appears in bold type, without quotation marks)

    • format of dates (eg, a date formerly expressed as the 1st day of January 1999 is now expressed as 1 January 1999)

    • position of the date of assent (it now appears on the front page of each Act)

    • punctuation (eg, colons are not used after definitions)

    • Parts numbered with roman numerals are replaced with arabic numerals, and all cross-references are changed accordingly

    • case and appearance of letters and words, including:

      • format of headings (eg, headings where each word formerly appeared with an initial capital letter followed by small capital letters are amended so that the heading appears in bold, with only the first word (and any proper nouns) appearing with an initial capital letter)

      • small capital letters in section and subsection references are now capital letters

    • schedules are renumbered (eg, Schedule 1 replaces First Schedule), and all cross-references are changed accordingly

    • running heads (the information that appears at the top of each page)

    • format of two-column schedules of consequential amendments, and schedules of repeals (eg, they are rearranged into alphabetical order, rather than chronological).

5 List of amendments incorporated in this reprint (most recent first)
  • Deposit Takers (Propertyfinance Securities Limited) Exemption Notice 2013 (SR 2013/11): clause 11