Clause 8 provides for the Bank to continue. It is the same body as the Reserve Bank constituted under the 1989 Act.

Clause 9 sets out the Bank’s main objectives. These are—

• the economic objectives of achieving and maintaining stability in the general level of prices over the medium term and supporting maximum sustainable employment (the economic objectives); and

• the financial stability objective of protecting and promoting the stability of New Zealand’s financial system (the financial stability objective); and

• to otherwise act as New Zealand’s central bank in a way that furthers the purposes of this Bill.

When the Bank is acting under prudential or other legislation, it also has the objective of acting in a way that furthers the objectives or purposes of that other legislation.

Clause 10 sets out the functions of the Bank. These include—

• acting as the central bank for New Zealand, including by formulating (through the MPC) and implementing a monetary policy directed to the economic objectives (while recognising the Crown’s right to determine economic policy):

• acting as a prudential regulator and supervisor under prudential legislation:

• monitoring the financial system:

• co-operating with other New Zealand regulators, overseas central banks, and other overseas financial authorities:

• providing, or facilitating the provision of, relevant information:

• keeping under review the law, policies, and practices that are relevant to its other functions:

• performing and exercising the functions or powers conferred or imposed on it by or under other legislation.

Clause 11 allows the Minister to direct the Bank to perform any additional function that is consistent with the Bank’s objectives.

Clauses 12 to 15 set out the Bank’s status and core powers. In summary,—

• the Bank is a body corporate (a separate legal entity):

• the Bank may do anything authorised by legislation. It also may do anything that a natural person of full age and capacity may do (for example, enter into contracts). However, the Bank may act only for the purpose of performing its functions.

This subpart provides that—

• an act of the Bank is invalid if it is an act that is contrary to an Act or is an act that is done otherwise than for the purpose of performing the Bank’s functions. However, in most cases this does not prevent a person (A) who is dealing with the Bank from enforcing a transaction if the Bank is doing a thing that a natural person of full age and capacity could do (for example, entering into a contract):

• it is irrelevant to the validity of an act that the act is not in the best interests of the Bank:

• the Bank may not assert against A that a person held out by the Bank to be an office holder or employee has not been duly appointed or does not have the authority that a person appointed to that position customarily has.

Clauses 24 to 26 provide for—

• the board to be the governing body of the Bank:

• the board to consist of not fewer than 5, and not more than 9, members:

• members to be accountable to the Minister.

Clauses 27 to 40 provide—

• for members of the board to be appointed by the Governor-General on the recommendation of the Minister:

• that the Minister may only recommend a person who, in the Minister’s opinion, has the appropriate knowledge, skills, and experience to assist the Bank to achieve its objectives and perform its functions:

• for the qualifications of members. For example, a member of the board may not be—

  • the Governor, a member of the MPC, or an employee of the Bank; or

  • a director or an employee of an entity that is regulated under the prudential legislation:

• for members to hold office for up to 5 years. A member may be reappointed for 2 further terms:

• for the Governor-General to remove a member from office at any time for just cause. The removal must be on the advice of the Minister given after consultation with the Attorney-General. Just cause includes misconduct, inability to perform the functions of office, neglect of duty, and breach of any of the collective duties of the board or the individual duties of members:

• for when members cease to hold office.

Clauses 41 and 42 provide for the remuneration and expenses of members. Members’ remuneration is determined by the Remuneration Authority in accordance with the Remuneration Authority Act 1977.

Clauses 43 to 47 set out the collective duties of the board, including—

• ensuring that the Bank—

  • acts consistently with its objectives, functions, current statement of intent, and current statement of performance expectations; and

  • performs its functions efficiently and effectively, consistently with the spirit of service to the public, and in collaboration with other public entities; and

  • operates in a financially responsible manner; and

  • complies with requirements relating to subsidiaries; and

• requiring the board to have regard to the financial policy remit when it is acting in relation to the Bank’s prudential strategic intentions and when the Bank is issuing and reviewing prudential standards.

Clauses 48 to 52 impose individual duties on board members, including duties—

• to not contravene, or cause the contravention of, or agree to the Bank contravening, relevant legislation; and

• to act with honesty and integrity; and

• to act in good faith and not at expense of the Bank’s interests; and

• to act with reasonable care, diligence, and skill; and

• to comply with requirements relating to the disclosure of information.

Clauses 53 and 54 provide that—

• the collective duties of the board are owed to the Minister; and

• an individual member is not liable for a breach of a collective duty. However, the member may be removed from office in certain circumstances (for example, where they failed to take all reasonable steps to prevent the breach).

Clauses 55 and 56 provide that—

• the individual duties of the members are owed to the Minister and the Bank; and

• if a member breaches an individual duty, the member may be removed from office and the Bank may bring an action against them. A member is otherwise not liable for a breach of an individual duty.

Clause 57 allows—

• the Minister or a member of the board to apply to a court for an order restraining the board or a member from contravening a statutory requirement; and

• the Minister to apply to a court for an order requiring the board or a member to take an action under this Bill or other relevant legislation.

Clause 58 allows a member to rely on information and advice given by certain persons (for example, the Governor). The member must still act in good faith, make proper inquiries, and have no knowledge that the reliance is unwarranted.

Clauses 59 to 70 set out rules that require a member who is interested in a matter relating to the Bank to disclose the interest. The interests include, for example, where the member or a relative may derive a financial benefit, or suffer a financial loss, from a matter or has a financial interest in a person to whom the matter relates. In summary,—

• the nature and extent of the interest must be disclosed in an interests register as soon as practicable after the member becomes aware that they are interested; and

• the member must not vote or take part in any discussion or decision about the matter or otherwise participate in any activity of the Bank that relates to the matter (unless the chairperson, a deputy chairperson, or the Minister, in the public interest, gives permission to act); and

• the Bank may avoid certain acts done in breach of the rules. However, the Bank may not avoid an act if the Bank receives fair value; and

• the rights of certain innocent third parties are protected if the Bank avoids a matter.

Clauses 71 to 74 allow the board to delegate any of the functions or powers of the Bank or the board, either generally or specifically, to certain persons (for example, to the Governor or an employee of the Bank).

Clause 75 provides that a vacancy in the board’s membership does not affect its powers or functions.

Clause 76 provides that matters relating to the chairperson and board procedure are set out in Schedule 2. These matters include—

• the appointment of the chairperson; and

• meeting procedures; and

• the appointment of committees (other than the MPC).

This subpart allows the Minister to appoint a department as the monitor of the Bank. The monitor’s role is to assist the Minister to carry out their role (see clause 22) and to perform or exercise certain functions or powers, including administering appropriations and legislation and tendering advice to Ministers.

This subpart provides for the Governor of the Bank to be its chief executive. In summary,—

• the Governor must be appointed by the Minister on the recommendation of the board:

• the Governor is not an employee of the Bank:

• the Governor is appointed for a 5-year term and may be reappointed for 1 further term:

• the Governor’s remuneration is determined by the Remuneration Authority under the Remuneration Authority Act 1977. The board determines the Governor’s other terms and conditions by agreement with the Governor:

• certain persons are disqualified from being the Governor (for example, a director or an employee of an entity that is regulated under the prudential legislation):

• the Governor-General may, at any time for just cause, on the advice of the Minister given after consultation with the Attorney-General, remove the Governor from office. Just cause includes misconduct, inability to perform the functions of office, neglect of duty, and certain failures to adequately perform or exercise functions or powers as the chairperson and a member of the MPC.

Clause 93 continues the monetary policy committee.

Clause 94 provides that the MPC must perform the function of formulating monetary policy in accordance with this Bill.

Clause 95 requires the board to regularly review the performance of the MPC and its members.

Clause 96 provides for the MPC to have between 5 and 7 members, including the Governor, 2 or 3 employees of the Bank (the internal members), and 2 or 3 other persons (the external members).

Clauses 97 to 102 provide for a charter for the MPC. In summary,—

• the charter sets out requirements to promote transparency and accountability in connection with the performance of the MPC’s functions and sets out decision-making procedures:

• the Minister and the MPC may agree to replace the charter at any time:

• the charter must be published on the Bank’s Internet site.

Clause 102 clarifies that a charter is neither a legislative instrument nor a disallowable instrument for the purposes of the Legislation Act 2012. The charter does not have significant legislative effect under that Act because it does not determine or alter the content of the law applying to the public or a class of the public.

Clauses 103 to 105 provide for a code of minimum standards of conduct that must be demonstrated by members of the MPC. This includes rules for managing and avoiding conflicts of interest, rules for maintaining confidentiality, and other minimum standards of ethical behaviour.

The code must be published on the Bank’s Internet site.

The code is neither a legislative instrument nor a disallowable instrument for the purposes of the Legislation Act 2012. The code does not have significant legislative effect under that Act because it does not determine or alter the content of the law applying to the public or a class of the public.

Clause 106 provides for matters relating to the MPC and its members to be set out in Part 2 of Schedule 3. This includes providing for—

• the appointment of internal and external members by the Minister; and

• the term of appointment. An internal member is appointed for a term of up to 5 years and may be reappointed for 2 further terms. An external member is appointed for a term of up to 4 years and may be reappointed for 1 further term. The Minister can extend the term by up to 6 months; and

• who may be appointed. The Minister may only appoint as an internal or external member a person who, in the Minister’s opinion, has the appropriate knowledge, skills, and experience to assist the MPC to perform its functions (for example, in economics, banking, or public policy); and

• when members cease to hold office. This includes where the Governor-General, on the advice of the Minister given after consultation with the Attorney-General, removes an internal or external member from office. A member may be removed if, for example, the member has breached an individual duty, has been guilty of misconduct, or has obstructed or hindered the MPC or the board from discharging their responsibilities; and

• a Treasury observer to be nominated by the Secretary to the Treasury. The Treasury observer has the same rights to attend and speak at a meeting of the MPC as a member but has no right to vote on any question before the MPC; and

• the Governor to be the chairperson of the MPC; and

• collective duties of members. These include a duty to formulate monetary policy in accordance with clause 115 (which requires the MPC to formulate monetary policy in a manner consistent with the economic objectives and the MPC remit). There is also a collective duty to comply with the charter; and

• individual duties of members. These include duties to act in good faith, with honesty and integrity, and with reasonable care, diligence, and skill; and

• meeting procedures and other procedures; and

• the Bank to publish a summary record of each meeting of the MPC on its Internet site. The summary record must include the information required by the charter; and

• the remuneration of external members.

Clause 107 requires the Bank to give notice to the Minister if it is to acquire or form a subsidiary.

Clauses 108 and 109 impose various duties on the Bank. These include ensuring that each subsidiary—

• does not do anything that the Bank itself does not have the power to do; and

• acts consistently with the Bank’s objectives and statement of intent; and

• exercises its powers only for the purpose of performing, or assisting the Bank to perform, the Bank’s functions; and

• performs its functions efficiently and effectively, in a manner consistent with the spirit of service to the public, and in collaboration with other public entities.

Clause 110 provides for when the Bank may acquire a significant interest in other entities (other than subsidiaries).

Clause 111 provides that, generally speaking, both the Companies Act 1993 and this Bill apply to a subsidiary of the Bank.

This subpart provides for the Bank to act as the central bank for New Zealand. The central bank functions include—

• formulating (through the MPC) and implementing a monetary policy directed to the economic objectives (see clause 10(1)(a)(i) and subpart 2); and

• managing foreign reserves and otherwise dealing in foreign exchange (see subpart 3); and

• issuing bank notes and coins (see subpart 4); and

• providing liquidity facilities in order to manage liquidity in the financial system or protect or promote the stability of the financial system; and

• providing settlement accounts for persons approved by the Bank; and

• operating or otherwise participating in payments and settlement systems; and

• liaising and co-operating with other central banks and relevant international institutions; and

• carrying out any other central banking activities that are consistent with the Bank’s objectives and the purposes of this Bill.

Clauses 114 to 116 provide that—

• the Bank, acting through the MPC, has the function of formulating a monetary policy directed to the economic objectives of achieving and maintaining stability in the general level of prices over the medium term and supporting maximum sustainable employment; and

• the MPC must formulate monetary policy in a manner consistent with those economic objectives (or the objectives in an Order in Council in force under clause 121) and the MPC remit; and

• the MPC must have regard to the importance of protecting and promoting the stability of New Zealand’s financial system and any matter provided for in the MPC remit.

Clause 117 gives the Bank the function of implementing the monetary policy formulated by the MPC.

Clauses 118 to 120 provide for the Minister to issue a remit for the MPC. The remit sets out operational objectives for carrying out the function of formulating monetary policy (for example, specifying or providing for a target or targets for an economic objective, a framework for weighting the economic objectives, and the defining of any matters in connection with an economic objective).

Part 1 of Schedule 3 provides for other matters relating to the remit, including—

• requiring the Bank to give advice on a new MPC remit before it is issued; and

• requiring the Bank, in developing the remit advice, to consult the MPC, to seek the views of members of the public, and to consult the Minister on the scope of the advice; and

• the period during which an MPC remit is in force. Generally, this is 5 years; and

• the presentation of an MPC remit to the House of Representatives and its publication on the Bank’s Internet site; and

• specifying that a remit is neither a legislative instrument nor a disallowable instrument for the purposes of the Legislation Act 2012. The remit does not have significant legislative effect under that Act because it does not determine or alter the content of the law applying to the public or a class of the public.

Clauses 121 to 125 recognise the Crown’s right to determine economic policy. In particular, they provide for—

• the Governor-General, by Order in Council, to direct the MPC to formulate, and the Bank to implement, monetary policy for the economic objectives specified in the order for a period not exceeding 12 months. The order is made on the advice of the Minister; and

• the order to include a replacement MPC remit; and

• the order to be extended on 1 or more further occasions in each case for a further period not exceeding 12 months.

Clauses 126 and 127 require the Bank to regularly report on monetary policy (at least 4 times a year). The report must specify the approach by which the MPC intends to achieve the operational objectives, its reasons for that approach, and other information required by the charter.

Clauses 128 and 129 require the Bank to review and assess the formulation and implementation of monetary policy at least every 5 years and to report on that review. The report must contain the information required by the charter.

Clause 130 provides for the Bank to deal in foreign exchange for the purposes of furthering its objectives.

Clause 131 allows the Minister to direct the Bank to deal in foreign exchange within guidelines for the purpose of influencing the exchange rate or exchange rate trends.

Clause 132 allows the Minister to defer publishing the direction in the Gazette and presenting it to the House of Representatives. The Minister may do this if the Minister is satisfied that complying with those requirements would, or is likely to, prejudice how efficiently and effectively the Bank can give effect to the direction. See also clause 145, which requires the Bank to defer publishing certain information when the Minister is acting under clause 132.

Clauses 133 and 134 allow the Bank to give a notice to the Minister if the Bank is satisfied that giving effect to the direction would be inconsistent with operational objectives set out in the MPC remit. In that case, the Minister must either withdraw the direction or arrange for the operational objectives to be amended or replaced.

Clauses 135 and 136 allow the Bank to advise the Minister that the MPC and the Bank do not propose to give effect to the direction. This may be done if the Bank considers that giving effect to the direction would be inconsistent with the economic objectives of monetary policy. In this case, the MPC and the Bank are not required to comply unless an Order in Council is made that requires the MPC to formulate, and the Bank to implement, monetary policy in accordance with 1 or more economic objectives that are consistent with the direction.

Clause 137 requires the Bank to pay foreign exchange gains into a Crown Bank Account. The Minister must, without further appropriation, pay to the Bank foreign exchange losses out of a Crown Bank Account.

Clauses 138 to 145 require the Bank to hold and manage foreign reserves in accordance with a foreign reserves management and co-ordination framework. In summary,—

• the purpose of the framework is to facilitate the Bank’s ability to achieve its main objectives and comply with directions under clause 131; and

• the Minister and the Bank must agree on the framework; and

• the framework must be published on the Bank’s Internet site; and

• the Minister must have regard to the framework when issuing directions under clause 131; and

• the Bank and the Treasury must review the framework at least every 5 years.

Clause 146 gives the Bank the sole right to issue bank notes and coins in New Zealand.

Clauses 147 and 148 allow the Bank to call in any bank notes or coins, at which point they cease to be legal tender. However, the Bank continues to be liable to pay any such bank note or coin on presentation at the head office of the Bank.

Clause 149 states that a bank note is legal tender for the amount expressed in the note.

Clause 150 states that coins are legal tender for the payment of certain amounts.

Clauses 151 to 153 provide for offences relating to currency. These include—

• wilfully defacing, disfiguring, or mutilating a bank note; and

• making or issuing any bank note or coin (other than a note or coin issued under the Bill); and

• making, designing, using, issuing, or publishing any reproduction or imitation currency.

Clause 154 allows the court to order any reproduction or imitation currency, and things that may be used in connection with an offence under clause 153, to be destroyed.

Clause 155 allows a charging document for an offence under clause 151 or 153 to be filed within 3 years after the offence is committed.

This subpart relates to machines that automatically accept, count, sort, or dispense bank notes and that determine, without human assistance, whether a note is genuine and of sufficient quality to be used and circulated as currency. In summary,—

• the Bank may issue standards to provide reasonable assurance that a machine dispenses a note, or prepares a note for sale, only if it is a genuine bank note issued by the Bank and is at least of a minimum quality; and

• the Bank may issue a notice to an operator of a machine that requires the operator to test it to verify that it meets the standards; and

• the Bank may issue a notice to an operator of a machine to cease using a machine that the Bank considers does not, or may not, meet the standards; and

• infringement offences apply for failures to comply with notices issued by the Bank; and

• it is an offence to intentionally or recklessly fail to comply with a notice to cease using a machine; and

• the District Court may make forfeiture and certain other orders if an operator continues to use a machine in breach of notices issued by the Bank.

This subpart requires the Bank, at least twice in every year, to deliver a financial stability report to the Minister and to publish it on the Bank’s Internet site.

The Bank must report on the stability of New Zealand’s financial system and include in the report enough information to allow an assessment to be made of the effectiveness of the Bank’s use of its powers to promote the stability of New Zealand’s financial system and achieve its prudential objective under clause 9(3).

The Minister must present the report to the House of Representatives.

This subpart—

• requires the Minister to issue a financial policy remit. Under clause 47, the board is required to have regard to the remit when it is acting in relation to the Bank’s prudential strategic intentions and prudential standards. This includes when the Bank is setting its prudential strategic intentions in its statement of intent, when it is making significant policy decisions about how to achieve those intentions, and when it is monitoring and reporting on the Bank’s performance in achieving those intentions; and

• provides that the remit may contain matters that the Minister considers are desirable for the Bank to have regard to in relation to achieving the financial stability objective, acting in a way that furthers the purposes of the prudential legislation, or performing the Bank’s prudential functions. The remit must not be inconsistent with those objectives or purposes or the prudential legislation; and

• requires the remit to be published on the Bank’s Internet site, notified in the Gazette, and presented to the House of Representatives; and

• requires the remit to be reviewed at least every 5 years; and

• provides that the Minister is not authorised to require the performance or nonperformance of a particular act by the Bank, or the bringing about of a particular result, in respect of a particular person; and

• provides that the remit is neither a legislative instrument nor a disallowable instrument for the purposes of the Legislation Act 2012. The remit does not have significant legislative effect under that Act because it does not determine or alter the content of the law applying to the public or a class of the public.

Clauses 206 to 209—

• require the Minister and the Bank to enter into a funding agreement that specifies the amounts that may be paid or applied in meeting the Bank’s operating or capital expenditure (but excluding certain items of expenditure). Excluded expenditure includes, for example, interest expenditure and foreign exchange losses. A funding agreement must apply for every financial year, and each funding agreement must apply to a period that comprises 5 consecutive financial years; and

• set out what a funding agreement must or may contain; and

• require the Bank to publish a funding agreement on its Internet site and the Minister to present a copy to the House of Representatives.

Clauses 210 and 211 require the Bank, after each financial year, to recommend to the Minister the amount appropriately payable by the Bank to the Crown as an annual dividend. The Minister must then determine the amount that the Bank must pay to the Crown as an annual dividend for the financial year. The Bank must publish information about the annual dividend in its annual report.

Clause 212 defines terms used in this subpart.

Clauses 213 to 224 provide for a statement of intent for the Bank. In summary,—

• the purpose of a statement of intent is to promote the public accountability of the Bank by enabling the Crown to participate in the process of setting the Bank’s strategic intentions and medium-term undertakings, by setting out for the House of Representatives those intentions and undertakings, and by providing a base against which the Bank’s actual performance can later be assessed; and

• the Bank must prepare a statement of intent for each forthcoming financial year and at least the following 3 financial years; and

• the Minister may require the Bank to prepare a new statement of intent at any time; and

• the statement of intent must set out the strategic objectives that the Bank intends to achieve or contribute to; and

• a statement of intent must also explain, for example,—

  • the nature and scope of the Bank’s functions and intended operations; and

  • how the Bank intends to manage its functions and operations to meet its strategic intentions; and

  • how the Bank proposes to manage its organisational health and capability; and

  • how the Bank proposes to assess its performance; and

• the Minister may participate in determining the content of statements of intent by agreeing to information additional to that required by clause 217 being included, by specifying a form in which information must be disclosed, and by making comments on a draft statement of intent; and

• the Bank may amend its final statement of intent; and

• the Bank must publish a statement of intent on its Internet site, and the Minister must present a copy to the House of Representatives.

Clauses 225 to 235 provide for a statement of performance expectations for the Bank. In summary,—

• the purpose of a statement of performance expectations is to enable the Minister to participate in the process of setting annual performance expectations, to enable the House of Representatives to be informed of those expectations, and to provide a base against which actual performance can be assessed; and

• the Bank must prepare a statement of performance expectations for each financial year; and

• a statement of performance expectations must identify each reportable class of outputs and contain a forecast statement of comprehensive revenue and expense; and

• the Minister of Finance may exempt a class of outputs from a statement of performance expectations; and

• a forecast statement of comprehensive revenue and expense must be prepared in accordance with generally accepted accounting practice and include a statement of significant assumptions and any additional information and explanations needed to fairly reflect the forecast financial operations of the Bank. The statement must be prepared in a manner that allows for a comparison with actual revenues and output expenses; and

• the Minister may participate in determining the contents of statements of performance expectations by agreeing to information additional to that required by clause 227 being included, by specifying a form in which information must be disclosed, and by making comments on a draft statement; and

• the Bank may amend its final statement of performance expectations; and

• the Bank must publish a statement of performance expectations on its Internet site, and the Minister must present a copy to the House of Representatives.

Clauses 236 to 244 provide for an annual report for the Bank. In summary,—

• the Bank must provide to the Minister an annual report on the affairs of the Bank after each financial year; and

• the Minister must present the annual report to the House of Representatives; and

• the Bank must publish the annual report; and

• the annual report must include various information and reports, including—

  • information on its operations; and

  • a statement of performance and annual financial statements (and an audit report on those annual financial statements); and

  • the current statement of financial risk management; and

  • information about ministerial directions; and

  • information about payments to members, the Governor, external members of the MPC, committee members, and employees during that financial year and details about insurance and indemnities; and

  • a statement as to whether, in the board’s opinion, the MPC and the members of the MPC have adequately discharged their respective responsibilities; and

• the annual report must provide the information that is necessary to enable an informed assessment to be made of the Bank’s operations and performance; and

• a statement of performance and annual financial statements must be prepared in accordance with generally accepted accounting practice; and

• the Auditor-General must audit the Bank’s annual financial statements and statement of performance.

Clauses 245 and 246 apply if the Bank has subsidiaries. Generally speaking, the Bank is required to provide reporting information on a consolidated basis in respect of the Bank and its subsidiaries (rather than information in respect of the Bank only). However, the Minister of Finance may require the Bank or a subsidiary to prepare statements or reports as if it were not a member of a group.

Clauses 247 to 249 require the Bank to prepare and keep up to date a statement of financial risk management and to publish it on its Internet site. The statement reports on the Bank’s management of financial risks. It ensures the accountability of the Bank for its management of those risks and facilitates the role of the monitor.

The statement is also required to include a statement of principles relating to the Bank’s annual dividend. These principles must be agreed by the Minister and the Bank.

Clauses 250 and 251 require the Bank to prepare and keep up to date 1 or more statements of prudential policy and to publish those statements on its Internet site. The statements provide transparency about how the Bank acts, or proposes to act, when performing the function under clause 10(1)(b) (which relates to acting as a prudential regulator and supervisor under the prudential legislation). The statements also promote public awareness and understanding of the Bank’s activities and operations under the prudential legislation.

Clauses 252 to 254 require the Bank to—

• assess the expected regulatory impacts of proposed policies under the prudential legislation; and

• regularly assess the regulatory impacts of the policies it has adopted under that legislation; and

• give reports on the assessments to the Minister; and

• publish reports on its Internet site.

Clause 255 requires the Board to ensure that proper accounting records are kept.

Clauses 256 and 257 allow the Minister of Finance to issue instructions to the Bank that prescribe minimum requirements concerning the Bank’s annual report, statement of intent, or statement of performance expectations and that prescribe non-financial reporting standards that apply to other information that must be presented to the House of Representatives under the Bill.

Clause 258 defines terms used in the subpart.

Clauses 259 to 261 give the Bank the power to require certain persons to supply information or data when the Bank considers that it is necessary or desirable in connection with its central banking and financial system oversight functions. In summary,—

• the persons who may be required to supply information or data include financial service providers under the Financial Service Providers (Registration and Dispute Resolution) Act 2008 and persons who are involved in the transportation, storage, or distribution of bank notes and coins:

• the power is subject to a restriction that prevents the supply of information or data relating to the affairs of a particular customer, client, or natural person:

• persons who are required to supply information or data have the same privileges as witnesses in court.

Clauses 262 and 263 provide for offences relating to the information-gathering power as follows:

• a failure to comply with a requirement to supply information or data is an infringement offence. The infringement fee is $1,000 in the case of an individual or $3,000 in any other case. A fine imposed by a court for the offence must not exceed $3,000 in the case of an individual or $9,000 in any other case:

• in addition, there is a more serious offence of intentionally or recklessly failing to comply with a notice to supply information or data or of knowingly or recklessly supplying materially false or misleading information or data. The fine for this offence is a fine not exceeding $50,000 in the case of an individual or $200,000 in any other case.

Clauses 264 and 265 give the Bank a power to require information or data supplied under the subpart to be independently reviewed. The Bank may exercise the power if the Bank has reasonable grounds to believe that the information or data is inadequate or inaccurate. A failure to comply is an offence with a maximum fine of $50,000 in the case of an individual or $200,000 in any other case.

Clauses 266 to 270 impose restrictions on the Bank’s power to disclose or publish information or data supplied under the subpart. In summary,—

• the Bank may publish or disclose the information or data only on certain grounds. These grounds include if it is already publicly available, it is in a statistical form, the disclosure is for a statutory purposes, or the disclosure is to a person who the Bank is satisfied has a proper interest in receiving it:

• a member, the Governor, any other office holder of the Bank, or any employee of the Bank who intentionally discloses information in contravention of the restrictions commits an offence. The offence has a maximum fine of $50,000:

• the Bank may impose conditions relating to the disclosure of the information or data. Persons to whom the information or data is disclosed may also be subject to further restrictions relating to the use of the information or data. A person who intentionally discloses or uses information in contravention of these requirements commits an offence. The offence has a maximum fine of $50,000 in the case of an individual or $200,000 in any other case.

Clause 271 provides that the subpart does not limit the Privacy Act 2020.

This subpart sets out procedural matters for infringement offences under the Bill. The infringement offences include—

• an offence under clause 163 (which relates to failing to comply with a notice issued by the Bank concerning bank note handling machines):

• an offence under clause 262 (which relates to failing to comply with a notice issued by the Bank that requires information or data to be supplied).

This subpart allows the Bank to share information that it holds with certain law enforcement or regulatory agencies (such as the Financial Markets Authority), overseas central banks, and other overseas bodies that perform similar functions to those of the Bank. In summary,—

• the information may be shared if, for example, the Bank considers that the information may assist the recipient to perform or exercise their functions, responsibilities, or powers; and

• the Bank may provide information to an overseas person or agency only if the Bank is satisfied that appropriate protections are or will be in place for the purpose of maintaining the confidentiality of anything provided; and

• the Bank may impose conditions in relation to providing the information (for example, to maintain the confidentiality of anything provided).

If information is provided to a person or an agency, the person or agency may disclose or use the information only if the disclosure or use is authorised by the Bank or is for the purposes of, or in connection with, the functions or powers of a person under any legislation.

This subpart continues the Council of Financial Regulators. The council facilitates co-operation and co-ordination between its members to support effective and responsive regulation of the financial system in New Zealand. The members of the council include the Bank, the Financial Markets Authority, the Treasury, and the Ministry of Business, Innovation, and Employment.

This subpart provides for general offences, including—

• refusing or failing to produce information in relation to the management, performance, or operations of the Bank when required to do so:

• resisting or obstructing a Minister or the monitor when they are acting under this Act:

• making a false or misleading statement or declaration.

Clause 288 provides for regulations to be made that, for example, prescribe information to be included in infringement notices and reminder notices and the form of notices.

Clause 289 provides for regulations to prescribe fees, charges, and costs in connection with the Bank performing or exercising its functions or powers under the Bill or any other legislation.

Clauses 290 to 294 provide for a levy that will cover a portion of the Bank’s costs in performing or exercising its functions or powers under the prudential legislation (and the costs of collecting the levy money). In summary,—

• the levy is payable by entities regulated by the Bank (that is, registered banks, licensed insurers, licensed NBDTs, and operators of designated settlement systems); and

• the levy is prescribed by regulations. Those regulations may provide different levies for different classes of regulated entities; and

• the Bank must consult about proposed levy regulations if required by the Minister.

This subpart provides for amendments to other legislation.

The main amendments are to the Reserve Bank of New Zealand Act 1989, including—

• changing the name of the 1989 Act to the Banking (Prudential Supervision) Act 1989. This reflects the remaining focus of the 1989 Act (as detailed below); and

• repealing provisions that deal with matters that will now be dealt with by this Bill. This includes provisions that constitute the Bank, set out its core functions and powers, provide for the management of the Bank, and provide for financial and accountability matters (see Parts 1 to 3 and 6 of the 1989 Act).

The 1989 Act will continue to relate primarily to the registration of banks and the prudential supervision of registered banks (see Parts 4 to 5A of the 1989 Act).

The 1989 Act will also continue to relate to the oversight of payment systems and the designation of settlement systems (see Parts 5B and 5C of the 1989 Act). However, those provisions will be replaced by the Financial Market Infrastructures Bill (if it is enacted).