Deposit Takers (Propertyfinance Securities Limited) Exemption Notice 2013

  • revoked
  • Deposit Takers (Propertyfinance Securities Limited) Exemption Notice 2013: revoked, on 31 July 2014, by clause 3.

Reprint
as at 31 July 2014

Coat of Arms of New Zealand

Deposit Takers (Propertyfinance Securities Limited) Exemption Notice 2013

(SR 2013/11)

  • Deposit Takers (Propertyfinance Securities Limited) Exemption Notice 2013: revoked, on 31 July 2014, by clause 3.


Note

Changes authorised by subpart 2 of Part 2 of the Legislation Act 2012 have been made in this official reprint.

Note 4 at the end of this reprint provides a list of the amendments incorporated.

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 (Propertyfinance Securities Limited) Exemption Notice 2013.

2 Commencement
  • This notice comes into force on 1 March 2013.

3 Revocation
  • This notice is revoked on the earlier of the following:

    • (a) the close of 30 July 2014; or

    • (b) the first anniversary of the date on which Part 2 of the Non-bank Deposit Takers Act 2013 comes into force.

4 Interpretation
  • (1) In this notice, unless the context otherwise requires,—

    PSL means Propertyfinance Securities Limited.

    (2) Any term or expression that is defined in the Act and used, but not defined, in this notice has the same meaning as in the Act.

5 Exemption from credit rating requirement
6 Exemption from certain governance requirements
7 Exemption from capital ratio requirements
  • (1) PSL is exempted from sections 157T and 157U of the Act.

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

8 Exemption from liquidity requirements
  • (1) PSL is exempted from sections 157ZA and 157ZB of the Act.

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

9 Conditions of exemptions in clauses 5 to 8
  • (1) The exemptions in clauses 5 to 8 are subject to the conditions that—

    • (a) no debt securities may be offered for subscription by, or on behalf of, PSL; and

    • (b) PSL must ensure that any Internet site maintained by or on behalf of it displays, at all reasonable times and at no cost to the public, a notice to the effect that PSL 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

    • (c) PSL must not disclose an assessment of its creditworthiness that is in substance a credit rating (whether called a rating, grading, scoring, ranking, or by any other name) issued by an agency that is not approved by the Bank under section 157J of the Act; and

    • (d) PSL must send a notice in writing to each of its depositors, by the close of 30 April 2013, to the effect that PSL 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 referred to in paragraph (b); and

    • (e) PSL must not increase or renew existing exposures to related parties or create any new exposures to related parties.

    (2) References in this clause to debt securities do not include debt securities in respect of which the only persons in New Zealand who are able, under the terms of the offer of the securities, to subscribe for the securities are all or any of the following:

    • (a) eligible persons referred to in section 5(2CC) of the Securities Act 1978:

    (3) For the purposes of subclause (1)(e), 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.

10 Further condition of exemption in clause 6
  • (1) The exemption in clause 6 is subject to the condition that the governing body of PSL must include at least 1 director who is an independent director.

    (2) For the purposes of this clause, independent director means a director who—

    • (a) is not an employee of either PSL or a related party; and

    • (b) is not a director of a related party other than a related party that is a guaranteeing subsidiary; and

    • (c) does not, directly or indirectly, have a qualifying interest in more than 10% of the voting securities of PSL or a related party.

11 Revocation

Dated at Wellington this 25th day of February 2013.

Grant Spencer,
Deputy Governor.


Statement of reasons

This notice comes into force on 1 March 2013 and is revoked on the earlier of the close of 30 July 2014 or 12 months after Part 2 of the Non-bank Deposit Takers Act 2013 comes into force. That Act has not yet been passed, and is currently before Parliament.

This notice exempts Propertyfinance Securities Limited (PSL) from certain requirements of Part 5D of the Reserve Bank of New Zealand Act 1989 (the Act). PSL is an entity that previously issued debt securities to members of the public, but is now in a moratorium approved by its shareholders and has not yet repaid all of its depositors. PSL is deemed to be a deposit taker under section 157C(3) of the Act.

PSL is exempted from the following:

The exemptions are subject to conditions that include the following:

  • that no debt securities are offered for subscription by, or on behalf of, PSL. This restriction does not apply to offers of debt securities 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):

  • that PSL ensures that any Internet site maintained by or on behalf of it displays a notice to the effect that it is exempted from sections 157I, 157L(1) and (3), 157T, 157U, 157ZA, and 157ZB of the Act:

  • that PSL does not disclose an assessment of its creditworthiness that is in substance a credit rating:

  • that at least 1 of the directors of PSL is an independent director:

  • that PSL must not increase or renew existing exposures to related parties or create any new exposures to related parties.

This notice revokes the Deposit Takers (Moratorium) Exemption Notice 2009. That notice applied to several entities in moratorium, including PSL. Many of the exemptions and conditions to those exemptions contained in this notice have been carried over from that notice.

The Reserve 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 exemption because—

  • the Bank is satisfied that the exemption is consistent with the maintenance of a sound and efficient financial system in that PSL 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, and complying with the liquidity and governance requirements are unduly onerous and burdensome in the circumstances. PSL is unable to accept deposits from the general public as a condition of this exemption, and existing depositors have agreed not to withdraw their deposits until they fall due under the new arrangement. In these circumstances, compliance with the requirements is not likely to provide material additional benefits to depositors:

  • the exemption is conditional on PSL not issuing any further debt securities to the public, but at the same time it does not preclude the possibility of investment, for example by a wealthy or experienced investor, that may assist PSL in moratorium; therefore the exemption is not broader than reasonably necessary to address the matters that gave rise to the exemption.


Issued under the authority of the Legislation Act 2012.

Date of notification in Gazette: 28 February 2013.


Reprints notes
1 General
  • This is a reprint of the Deposit Takers (Propertyfinance Securities Limited) Exemption Notice 2013 that incorporates all the amendments to that notice as at the date of the last amendment to it.

2 Legal status
  • Reprints are presumed to correctly state, as at the date of the reprint, the law enacted by the principal enactment and by any amendments to that enactment. Section 18 of the Legislation Act 2012 provides that this reprint, published in electronic form, has the status of an official version under section 17 of that Act. A printed version of the reprint produced directly from this official electronic version also has official status.

3 Editorial and format changes
4 Amendments incorporated in this reprint
  • Deposit Takers (Propertyfinance Securities Limited) Exemption Notice 2013 (SR 2013/11): clause 3