Deposit Takers (Mortgage Backed Bonds Limited) Exemption Notice 2013

  • revoked
  • Deposit Takers (Mortgage Backed Bonds Limited) Exemption Notice 2013: revoked, on 2 March 2014, by clause 3.

Reprint
as at 2 March 2014

Coat of Arms of New Zealand

Deposit Takers (Mortgage Backed Bonds Limited) Exemption Notice 2013

(SR 2013/12)

  • Deposit Takers (Mortgage Backed Bonds Limited) Exemption Notice 2013: revoked, on 2 March 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 (Mortgage Backed Bonds Limited) Exemption Notice 2013.

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

3 Revocation
  • This notice is revoked on the close of 1 March 2014.

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

    MBBL means Mortgage Backed Bonds 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
  • MBBL is exempted from section 157I of the Act.

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

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

8 Exemption from related party exposures requirements
  • (1) MBBL is exempted from sections 157X and 157Y of the Act.

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

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

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

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

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

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

      • (iv) the related party exposures requirements in sections 157X and 157Y of the Act; and

    • (c) MBBL 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) MBBL must send a notice in writing to each of its depositors, by the close of 30 April 2013, to the effect that MBBL 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).

    (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:

11 Further conditions of exemption in clause 8
  • (1) The exemption in clause 8 is subject to the conditions that MBBL—

    • (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.

Dated at Wellington this 25th day of February 2013.

Grant Spencer,
Deputy Governor.


Statement of reasons

This notice, which comes into force on 1 March 2013 and is revoked on the close of 1 March 2014, exempts Mortgage Backed Bonds Limited (MBBL) from certain requirements of Part 5D of the Reserve Bank of New Zealand Act 1989 (the Act). MBBL is an entity that previously issued debt securities to members of the public, but is now in a moratorium approved by its depositors and has not yet repaid all of its depositors. MBBL is deemed to be a deposit taker under section 157C(3) of the Act.

MBBL 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, MBBL. 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 MBBL 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, 157X, 157Y, 157ZA, and 157ZB of the Act:

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

  • that MBBL does not increase or renew existing exposures to related parties or create any new exposures to related parties.

The Deposit Takers (Moratorium) Exemption Notice 2009 applied to several entities in moratorium, including MBBL. Many of the exemptions and conditions to those exemptions contained in this notice have been carried over from that class notice. That class notice is now being revoked by a sibling exemption notice being granted to the other entity to which that class notice applied, Propertyfinance Securities Limited.

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 MBBL 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, governance, and related party exposures requirements are unduly onerous and burdensome in the circumstances. MBBL 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 MBBL 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 MBBL 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 (Mortgage Backed Bonds 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 (Mortgage Backed Bonds Limited) Exemption Notice 2013 (SR 2013/12): clause 3