This notice comes into force on the day after the date of its notification in the Gazette and is revoked at the close of 30 September 2019. The notice exempts 9 of the 10 members of the New Zealand Association of Credit Unions (which trades under the name Co-op Money NZ) from requirements under the Deposit Takers (Credit Ratings, Capital Ratios, and Related Party Exposures) Regulations 2010 (the regulations). The regulations require each of the member credit unions to include in its trust deed a maximum limit on aggregate related party exposures, which must not exceed 15% of the credit union’s capital. The effect of the exemptions is that the member credit unions are not required to include exposures to Co-op Money NZ when calculating the maximum limit, or when calculating whether or not they are exceeding the maximum limit.

The Reserve Bank of New Zealand, after taking into account the principles in section 8 of the Non-bank Deposit Takers Act 2013 and satisfying itself as to the matters set out in section 70(2) of that Act, considers it appropriate to grant the exemptions because—

• the exemptions are consistent with the maintenance of a sound and efficient financial system because they would prevent disruption in the credit union sector and enable the credit union members to continue to offer existing products and services to their customers:

• the credit union members are no longer compliant with regulations relating to the maximum limit on related party exposures due to a reduction in the membership base of Co-op Money NZ that was outside of the control of the members of Co-op Money NZ. The members rely on services from Co-op Money NZ to provide existing products and services to their customers, and, in the circumstances, it would be unduly onerous and burdensome to require the members to comply with regulations relating to the maximum limit (which would mean diverting funds from Co-op Money NZ and negotiating new facilities arrangements over a short period):

• Co-op Money NZ is proposing to restructure its business operations with effect from the middle of 2019, which will remove the compliance issue that gave rise to the exemptions. The notice is revoked at the close of 30 September 2019 and only exempts the credit union members from regulations relating to the maximum limit on aggregate related party exposures to the extent that the regulations require the members to include exposures to Co-op Money NZ in their calculations. Therefore, the notice is not broader than is reasonably necessary to address the matters that gave rise to the exemptions.