Hon Bill English
Government Bill
312—2
As reported from the Finance and Expenditure Committee
Commentary
Key
1 Title
2 Commencement
Part 1Preliminary provisions
3 Purpose
4 Interpretation
5 NBDT defined
6 Related party defined
7 Bank's function under this Act
8 Principles to take into account when exercising powers
8A Bank to have regard to directions about government policy objectives
9 Act binds the Crown
Part 2Licensing and prudential regulation
Subpart 1—Licensing
10 NBDTs to be licensed
11 No holding out
Process for obtaining licence
12 Application for NBDT licence
13 Determining applications for licence
14 Requirements of suitability notices
15 Dealing with suitability notices
16 Grant of licence
Conditions of licence
17 Licence may be subject to conditions
18 Kinds of licence conditions and their effect
19 Changing or removing conditions
Cancellation of licence
20 Grounds for cancelling licence
21 Procedure for cancelling licence
Subpart 2—Prudential obligations
Credit ratings
22 Licensed NBDTs to have current credit rating
23 Regulations relating to credit ratings
Governance requirements
24 Requirement for independent directors
25 Certain provisions in governing document of no effect
Risk management programmes
26 Licensed NBDTs to have and comply with risk management programme
27 Trustee role in risk management programmes
28 Risk management programmes to be reviewed
Minimum capital requirements
29 Regulations relating to minimum capital requirements
30 Ensuring minimum capital requirements included in trust deeds
31 Licensed NBDTs to maintain not less than minimum capital prescribed
Capital ratio requirements
32 Regulations relating to capital ratios
33 Ensuring capital ratio included in trust deeds
34 Licensed NBDTs to maintain required capital ratio
Restrictions on related party exposures
35 Regulations relating to exposure to related parties
36 Ensuring maximum limit on related party exposures included in trust deeds
37 Licensed NBDT not to exceed maximum limit on related party exposures
Liquidity requirements
38 Regulations relating to liquidity requirements
39 Ensuring liquidity requirements included in trust deeds
40 Licensed NBDTs to comply with liquidity requirements
Subpart 3—Other obligations
Notifying Bank of suitability concerns
41 Directors' obligation on becoming aware of suitability concerns
Consent for changes of ownership
42 Bank's consent for change of ownership
Additional obligations of trustees to Bank
43 Bank may require trustee to attest to licensed NBDT’s compliance
44 Trustee to report to Bank on licensed NBDT non-compliance
45 Trustees to disclose certain information about licensed NBDTs to Bank
Part 3Monitoring and enforcement
Provision of information to Bank
46 Bank may require information, etc, from licensed NBDT
47 Bank may require information, etc, from associated persons
48 Bank may require reports for investigation purposes
49 Bank may require trustee to provide information about licensed NBDTs
Powers where offence suspected
50 Bank may require information if offence suspected
51 Power to enter and search
Provisions about information disclosed
52 Privileges where information required to be disclosed
53 Confidentiality of information
54 Application of Official Information Act 1982
Power to give directions
55 Bank directions to licensed NBDTs and associated persons
56 Bank directions to trustees
57 Miscellaneous matters relating to directions
58 Obligation to comply with directions
Power to remove or appoint directors
59 Bank's powers to remove or appoint directors of licensed NBDTs and associated persons
60 Procedures for removal and appointment of directors
Appeals relating to directors and senior officers
61 Appeal against Bank decisions on suitability
62 Appeal to Court of Appeal on question of law
Offences
63 Definition of tier 1, etc, offence
63 Definitions of levels of penalties
64 General offences
65 Offence to disclose giving of direction or notice
66 Defence to charge under Act
67 Liability of directors for offences of NBDTs and associated persons
68 Time for laying information for summary offences
68 Limitation period
68A Provision applying before parts of Criminal Procedure Act 2011 in force
Part 4Miscellaneous provisions
Exemptions
69 Exemptions from Act and regulations
70 Status and publication of exemptions
71 Effect of exemption
Regulations
72 Regulations
73 Extension of regulation-making powers relating to prudential obligations
74 Material incorporated by reference in regulations
75 Bank to consult before recommending regulations
Trustees and trust deeds
76 Protection of trustees
77 Amendments to trust deeds treated as authorised
78 Trustees may execute amendment to trust deeds
Protection from liability and indemnity
79 Protection from liability for Bank, etc
80 Indemnity for Bank, etc
Other miscellaneous provisions
81 Notice and service of documents
82 Power to amend, revoke, or replace notices, etc
83 Obligations under this Act not limited
84 Register of licensed NBDTs
85 Rating agencies
Review of Act
86 Bank to review and report on operation of this Act
Transitional provisions
87 Transitional arrangements for pre-existing NBDTs
88 Exemptions continue in force
88A Transitional references in Reserve Bank of New Zealand Act 1989
FMA to consult with Bank before recommending statutory management of NBDT
89 Amendment to Corporations (Investigation and Management) Act 1989
Consequential and other amendments to Financial Service Providers (Registration and Dispute Resolution) Act 2008
90 Amendments to Financial Service Providers (Registration and Dispute Resolution) Act 2008
Consequential amendments and revocations
91 Consequential amendments in Schedules 2 and 3
92 Consequential revocation of regulations
Schedule 1Material incorporated by reference
Schedule 2Consequential amendments to Reserve Bank of New Zealand Act 1989
Schedule 3Consequential amendments to other enactments
Legislative history
The Parliament of New Zealand enacts as follows: