This note is not part of the regulations, but is intended to indicate their general effect.
These regulations, which come into force on 1 April 2015, specify certain classes of entity and 1 named entity (Public Trust) and declare that, in certain circumstances (which are different for each class of entity and for Public Trust), an entity within a specified class, or Public Trust, is not an NBDT for the purposes of the Non-bank Deposit Takers Act 2013 (the Act). The classes of entity are—
If the specified circumstances apply to an entity within a specified class, or to Public Trust, the effect of these regulations is that the entity (or Public Trust)—
In the past, the Reserve Bank of New Zealand (the Bank) has exempted by notice a number of entities that will be covered by these regulations, including Public Trust, from most (or all) of the equivalent prudential requirements applying to NBDTs (subject to meeting certain conditions) other than the licensing requirement, which is a new prudential requirement under the Act. These regulations replace or partially replace the following exemption notices:
However, there are some differences between the entities covered by the replaced or partially replaced exemption notices (and the conditions that applied to the exemptions) and the entities covered by these regulations (and the circumstances that must apply in order for an entity to be declared not to be an NBDT for the purposes of the Act (declared out)). These differences include the following:
some exemption notice conditions were ongoing, that is, if an entity no longer met those conditions, the exemption ceased (in the absence of a new notice). Except in the case of Public Trust, these regulations apply to circumstances existing at a point in time. That is, the declaration applies to an entity within a class when the circumstances apply to the entity. If an entity begins or recommences operating in such a way that the circumstances apply to that entity, then from that point, and for so long as the circumstances continue to apply, the entity is within the class declared out:
these regulations allow an intra-group funding vehicle that is a subsidiary to lend funds to or subscribe for equity securities in associates or to persons with whom the intra-group funding vehicle is carrying out a joint venture, and still be declared out under these regulations. (Previous exemption notices required lending to be to, or equity securities to be obtained in, the parent or other group member.):
these regulations do not require any entities to provide investors with written notification of exemptions from the Act (although under the Act, a declared-out entity must not, directly or indirectly, hold out that it is an NBDT. And a transitional provision requires every charity seeking to be declared out by these regulations before 1 October 2015 to include a statement on its Internet site to the effect that it is declared not to be an NBDT for the purposes of the Act):
in the case of Public Trust, the circumstances that must apply are significantly different from those under the relevant pre-existing exemption notice. To be (and remain) declared out under these regulations, Public Trust must not carry on the business of new lending or make any NBDT regulated offers of debt securities, though the latter does not operate to prevent Public Trust from accepting unsolicited requests to renew existing debt securities on the same terms or with minor variations to terms, or from accepting unsolicited subscriptions in existing call accounts.
Regulatory impact statement
The Reserve Bank of New Zealand produced regulatory impact statements in April 2014 and February 2015 to help inform the decisions taken by the Government relating to the contents of this instrument.
Copies of these regulatory impact statements can be found at—
Date of notification in Gazette: 5 February 2015.
These regulations are administered by the Reserve Bank of New Zealand.