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 (Payment Facility Providers) Exemption Notice 2009.

2 Commencement

This notice comes into force on the day after the date of its notification in the Gazette.

3 Expiry

This notice expires on the close of 31 March 2015.

Clause 3: amended, on 1 September 2014, by clause 3 of the Deposit Takers (Extension of Terms) Exemption Notice 2014 (LI 2014/353).

4 Interpretation

(1)

In this notice, unless the context otherwise requires,—

Act means the Reserve Bank of New Zealand Act 1989

advertisement has the same meaning as in section 2A of the Securities Act 1978

investment statement has the same meaning as in section 38C of the Securities Act 1978

payment facility provider means a person specified in the first column of the table in the Schedule

registered prospectus has the same meaning as in section 2(1) of the Securities Act 1978

security holder means a member of the public in New Zealand who has subscribed for specified securities

specified securities, in respect of a payment facility provider, means the securities referred to in the second column of the table in the Schedule opposite its name.

(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 requirement to have credit rating

A payment facility provider is exempted from section 157I of the Act.

Clause 5: substituted, on 1 December 2010, by clause 4 of the Deposit Takers (Payment Facility Providers) Exemption Amendment Notice 2010 (SR 2010/437).

6 Exemption from governance requirements

A payment facility provider is exempted from section 157L of the Act.

Clause 6: substituted, on 1 December 2010, by clause 4 of the Deposit Takers (Payment Facility Providers) Exemption Amendment Notice 2010 (SR 2010/437).

7 Exemption from risk management programme requirements

A payment facility provider is exempted from section 157M of the Act.

Clause 7: substituted, on 1 December 2010, by clause 4 of the Deposit Takers (Payment Facility Providers) Exemption Amendment Notice 2010 (SR 2010/437).

8 Exemption from capital ratio requirements

(1)

A payment facility provider is exempted from sections 157T and 157U of the Act.

(2)

The trustee in respect of the debt securities of a payment facility provider is exempted from section 157T of the Act in respect of those securities.

Clause 8: added, on 1 December 2010, by clause 4 of the Deposit Takers (Payment Facility Providers) Exemption Amendment Notice 2010 (SR 2010/437).

9 Exemption from related party exposures requirements

(1)

A payment facility provider is exempted from sections 157X and 157Y of the Act.

(2)

The trustee in respect of the debt securities of a payment facility provider is exempted from section 157X of the Act in respect of those securities.

Clause 9: added, on 1 December 2010, by clause 4 of the Deposit Takers (Payment Facility Providers) Exemption Amendment Notice 2010 (SR 2010/437).

10 Exemption from liquidity requirements

(1)

A payment facility provider is exempted from sections 157ZA and 157ZB of the Act.

(2)

The trustee in respect of the debt securities of a payment facility provider is exempted from section 157ZA of the Act in respect of those securities.

Clause 10: added, on 1 December 2010, by clause 4 of the Deposit Takers (Payment Facility Providers) Exemption Amendment Notice 2010 (SR 2010/437).

11 Generic conditions of exemptions in clauses 5 to 10

(1)

The exemptions in clauses 5 to 10 are subject to the following conditions:

(a)

the payment facility provider must not provide any financial services in New Zealand other than the specified securities; and

(b)

the payment facility provider must not pay interest, or any consideration in the nature of interest, to security holders in respect of the specified securities; and

(c)

the payment facility provider must not disclose, in any registered prospectus, investment statement, or advertisement relating to an offer of its specified securities, 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.

(2)

The exemptions in clauses 5 to 10 are subject to a further condition that the payment facility provider must not allot any debt security on or after 1 February 2011 unless the subscriber has, before subscription, received written notification that—

(a)

states that the payment facility provider is exempted, until 31 March 2015, from—

(i)

the requirement in section 157I of the Act to have a credit rating; and

(ii)

the governance requirements in section 157L of the Act; and

(iii)

the risk management programme requirements in section 157M of the Act; and

(iv)

the capital ratio requirements in sections 157T and 157U of the Act; and

(v)

the related party exposures requirements in sections 157X and 157Y of the Act; and

(vi)

the liquidity requirements in sections 157ZA and 157ZB of the Act; and

(b)

accurately and clearly describes all risks associated with subscriptions for the specified securities.

Clause 11: added, on 1 December 2010, by clause 4 of the Deposit Takers (Payment Facility Providers) Exemption Amendment Notice 2010 (SR 2010/437).

Clause 11(2)(a): amended, on 1 September 2014, by clause 3 of the Deposit Takers (Extension of Terms) Exemption Notice 2014 (LI 2014/353).

12 Individual conditions of exemptions in clauses 5 to 10

(1)

This clause applies to the following payment facility providers:

(a)

Interpayment Services Limited:

(b)

Travelex Card Services Limited.

(2)

The exemptions in clauses 5 to 10 are subject to the further conditions that the payment facility provider—

(a)

must maintain a trust account with a bank that is supervised and regulated by the Financial Services Authority (UK) (or any successor regulatory body); and

(b)

must hold the net amount in that trust account on trust for security holders.

(3)

In this clause, net amount means, in relation to specified securities issued by the payment facility provider and a particular day, an amount equal to the reported net balance of all specified securities outstanding on the previous day.

Clause 12: added, on 1 December 2010, by clause 4 of the Deposit Takers (Payment Facility Providers) Exemption Amendment Notice 2010 (SR 2010/437).

13 Individual conditions of exemptions in clauses 5 to 10 in respect of Fundzi Limited

(1)

The exemptions in clauses 5 to 10 are subject, in the case of Fundzi Limited, to the further conditions that Fundzi Limited—

(a)

must maintain a trust account with a registered bank; and

(b)

must hold an amount that equals or exceeds the net amount in that trust account on trust for security holders.

(2)

In this clause,—

Fundzi Limited’s terms and conditions means the terms and conditions available on Fundzi Limited’s Internet site relating to the specified securities

net amount means, in relation to specified securities issued by Fundzi Limited, an amount equal to the face value of all specified securities less any amounts that have been cancelled, redeemed, or forfeited in accordance with Fundzi Limited’s terms and conditions.

Clause 13: inserted, on 26 March 2012, by clause 4 of the Deposit Takers (Payment Facility Providers) Exemption Amendment Notice 2012 (SR 2012/39).

Schedule Payment facility providers to which this notice applies

cl 4(1)

Name of payment facility provider		Specified securities
Fundzi Limited, a company incorporated in New Zealand		Call debt securities (as defined in regulation 46(1) of the Securities Regulations 2009) in the form of pre-paid instruments issued by the company in New Zealand in favour of security holders
Interpayment Services Limited, a company incorporated in England		Call debt securities (as defined in regulation 46(1) of the Securities Regulations 2009) in the form of pre-paid instruments issued by the company in New Zealand in favour of security holders
Travelex Card Services Limited, a company incorporated in Hong Kong		Call debt securities (as defined in regulation 46(1) of the Securities Regulations 2009) in the form of pre-paid instruments issued by the company in New Zealand in favour of security holders

Schedule: amended, on 26 March 2012, by clause 5 of the Deposit Takers (Payment Facility Providers) Exemption Amendment Notice 2012 (SR 2012/39).

Schedule: amended, on 3 June 2011, by clause 4 of the Deposit Takers (Payment Facility Providers) Exemption Amendment Notice 2011 (SR 2011/203).

Schedule: amended, on 1 December 2010, by clause 5 of the Deposit Takers (Payment Facility Providers) Exemption Amendment Notice 2010 (SR 2010/437).

Dated at Wellington this 12th day of October 2009.

Grant Spencer,
Deputy Governor.

Statement of reasons

Note: The following statement of reasons should be read in conjunction with the statement(s) of reasons appended to the:

This notice comes into force on the day after the date of its notification in the Gazette and expires on 1 September 2014. It exempts payment facility providers from the requirements to have a credit rating and a risk management programme.

Currently, the notice only applies to Interpayment Services Limited, which is a deposit taker to which Part 5D of the Act applies only by reason of issuing certain debt securities known as Travelex Cash Passports.

The notice is subject to conditions. It is intended that the generic conditions will apply to any payment facility provider to which the notice applies. In addition, clause 7 contains conditions that are individually tailored to Interpayment Services Limited.

The 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 exemptions because—

the Bank does not consider that there are material benefits or additional protections that customers would gain if deposit takers who are payment facility providers have a credit rating or a risk management programme:
the additional direct and indirect costs of complying with these obligations are unduly onerous and burdensome in the circumstances. The relevant circumstances are that these products are not offered as investments to customers, and the other financial service activities of the deposit taker are restricted if the deposit taker is to benefit from the exemption. Therefore, compliance with the credit rating and risk management programme obligations would provide little additional benefit to that already in place through the specific conditions applying to the exempted deposit takers:
the generic conditions are narrowly drafted to ensure that the extent of the exemptions is not broader than necessary to address the matters that gave rise to the exemptions, and therefore the exemptions are consistent with the maintenance of a sound and efficient financial system.

Note: The preceding statement of reasons should be read in conjunction with the statement(s) of reasons appended to the:

Issued under the authority of the Legislation Act 2012.

Date of notification in Gazette: 15 October 2009.

Reprints notes

1 General

This is a reprint of the Deposit Takers (Payment Facility Providers) Exemption Notice 2009 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

Editorial and format changes to reprints are made using the powers under sections 24 to 26 of the Legislation Act 2012. See also http://www.pco.parliament.govt.nz/editorial-conventions/.

4 Amendments incorporated in this reprint

Deposit Takers (Payment Facility Providers) Exemption Notice 2009 (SR 2009/307): clause 3

Deposit Takers (Extension of Terms) Exemption Notice 2014 (LI 2014/353): clause 3

Deposit Takers (Payment Facility Providers) Exemption Amendment Notice 2012 (SR 2012/39)

Deposit Takers (Payment Facility Providers) Exemption Amendment Notice 2011 (SR 2011/203)

Deposit Takers (Payment Facility Providers) Exemption Amendment Notice 2010 (SR 2010/437)

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Deposit Takers (Payment Facility Providers) Exemption Notice 2009