This note is not part of the regulations, but is intended to indicate their general effect.
These regulations, which come into force on 1 May 2014, are made under the Non-bank Deposit Takers Act 2013 (the Act).
Regulation 4 declares specified securities to be debt securities for the purposes of the Act. The specified shares of a building society are in substance debt-like because they entitle the holder to participate in the society's assets on liquidation as part of, and not (as with equity securities) only after, the payment of all its liabilities. Under the Securities Act 1978 and the Securities Act (Building Societies) Exemption Notice 2013, the specified shares are subject to trustee, trust deed, and other requirements appropriate for debt securities, not to the statutory supervisor, deed of participation, and other requirements for participatory securities. The deposit takers prudential supervision regime in Part 5D of the Reserve Bank of New Zealand Act 1989 applied to all building societies (except some not issuing debt securities to the public in New Zealand and declared by regulations not to be deposit takers). Regulation 4 ensures, therefore, that building societies offering the specified shares to the public in New Zealand, and meeting all other requirements of the definition of a non-bank deposit taker (NBDT) in section 5 of the Act, are also covered by the Act's new regime for every NBDT.
Regulation 5 and the Schedule prescribe matters, circumstances, or conditions that are suitability concerns if 1 or more of them applies or apply to a person who is a director or senior officer, or a proposed director or senior officer, of an NBDT or a proposed NBDT. The Act requires the fact or possibility of suitability concerns to be notified to the Bank. Suitability concerns may prevent the licensing of a proposed NBDT, or enable the removal of a director of a licensed NBDT.
Date of notification in Gazette: 20 February 2014.
These regulations are administered by the Reserve Bank of New Zealand.