1: Title
1: This Act is the Reserve Bank of New Zealand Amendment Act 2003.
2: In this Act, the Reserve Bank of New Zealand Act 1989 the principal Act
2: Commencement
This Act comes into force on the day after the date on which it receives the Royal assent.
1: Amendments to existing provisions
Amendments to section 2
3: Interpretation
1: Section 2(1) banking group section 81 clearing house designated payment system section 156L director
a: a person occupying the position of director by whatever name called:
b: in the case of an entity that does not have directors as such, any trustee, manager, or other person who acts in relation to that entity in the same or a similar fashion as a director would act were that entity a company incorporated in New Zealand under the Companies Act 1993 disclosure statement section 81(2)(a) financial year section 157 home country supervisor Part V home jurisdiction
a: in the case of an overseas person that is a body corporate, the country in which that body is incorporated:
b: in the case of an overseas person that is an unincorporated body, the country in which that body has its head office or principal place of business New Zealand chief executive officer
a: the most senior officer of that bank who is ordinarily resident in New Zealand; or
b: another person who may be nominated by that bank and agreed to in writing by the Bank; or
c: if section 82(3) non-voting security operator
a: a clearing house; or
b: a settlement agent; or
c: any other person that provides clearing, settlement, or processing services to participants in that payment system overseas bank overseas person
a: a body corporate incorporated outside New Zealand; or
b: an unincorporated body that has its head office or principal place of business outside New Zealand parent bank participant
a: means a person that participates in the payment system in accordance with the rules of that payment system; and
b: in the case of a designated payment system, includes an operator of the designated payment system if the designation under section 156M payment system
a: means a system or arrangement for—
i: the clearing or settlement of payment obligations; or
ii: the processing of payment instructions; and
b: includes any instruments, rules, and procedures that relate to the matters referred to in paragraph (a) qualifying interest
a: the legal or beneficial ownership of the specified security; or
b: the power to exercise, or control the exercise of, any voting right attached to the specified security; or
c: the power to acquire or dispose of the specified security; or
d: the power to control the acquisition or disposition of the specified security by another person; or
e: the powers referred to in paragraphs (b) to (d) restricted word
a: means the words ‘bank', ‘banker', and ‘banking'; and
b: includes—
i: any of those words as part of any other word:
ii: a translation of those words into another language (whether or not the translation of those words is part of any other word) significant influence
a: the ability to directly or indirectly appoint 25% or more of the board of directors (or other persons exercising powers of management, however described) of the registered bank; or
b: a direct or indirect qualifying interest in 10% or more of the voting securities issued or allotted by the registered bank specified security regulation 2(1) of the Overseas Investment Regulations 1995 trade mark section 5(1) of the Trade Marks Act 2002 voting right
a: means a currently exercisable right to cast a vote at meetings of shareholders or members of that body; but
b: does not include a right to vote that is exercisable only in 1 or more of the following circumstances:
i: during a period in which a payment or distribution (or part of a payment or distribution) in respect of the security that confers the voting right is in arrears or some other default exists:
ii: on a proposal that affects rights attached to the security that confers the voting right:
iii: on a proposal to put the body into liquidation:
iv: on a proposal for the disposal of the whole, or a material part, of the property, business, or undertaking of the body:
v: during the liquidation, receivership, bankruptcy, or statutory management of the body; and
c: does not include a right to vote that is exercisable only for a special, immaterial, or remote matter that is inconsequential to the control of the body voting security
2: Section 2 subsection (2)
2: For the purposes of section 36, Parts 4 and 5, and sections 179 and 179A associated person
a: that person directly or indirectly controls the management of the financial institution or registered bank; or
b: that person has a direct or indirect qualifying interest in 20% or more of the voting or non-voting securities issued by the financial institution or registered bank; or
c: that financial institution or registered bank directly or indirectly controls the management of that person; or
d: that financial institution or registered bank has a direct or indirect qualifying interest in 20% or more of the voting or non-voting securities issued by that person.
3: For the purposes of section 77A transaction
a: sale or transfer of property or securities; and
b: issue or allotment of securities; and
c: entering into, or giving effect to a provision in, a contract or arrangement; and
d: arriving at, or giving effect to, an understanding.
4: For the purposes of Part 5 substantial interest
a: that holding company directly or indirectly controls the management of that body; or
b: that holding company has a direct or indirect qualifying interest in 20% or more of the voting securities issued by that body. Amendments to Part 3
4: Incapacity of Governor and Deputy Chief Executive
Section 47 subsection (5)
5: While any of the following persons is acting as Governor in accordance with this section, he or she must be taken to be a director of the Bank:
a: the Deputy Chief Executive:
b: a person appointed to act as Governor, but who is not a director of the Bank.
5: Removal of Deputy Governor from office by Order in Council
Section 50(2) paragraph (a)
6: New
section 53A The principal Act is amended by inserting, after section 53
53A: Board must prepare annual report
1: The Board must prepare, for each financial year, a report setting out the Board's assessment of the matters referred to in section 53(1)
2: The report must—
a: be signed by the chairperson and 1 other non-executive director; and
b: be delivered to the Minister within 3 months after the end of the financial year.
3: The report stands referred, by virtue of this section, to—
a: the House of Representatives; and
b: the committee of the House of Representatives that is responsible for the review of government finance and the Crown's financial statements.
7: New
section 54 The principal Act is amended by repealing section 54
54: Membership of Board
1: The Board must consist of—
a: not less than 5, and not more than 7, non-executive directors appointed by the Minister; and
b: the Governor.
2: The appointment of every non-executive director must be notified in the Gazette
3: The Governor is the only person employed in the service of the Bank who may be a director of the Bank.
4: The validity of any act of the Board is not affected by—
a: any vacancy in its membership; or
b: any defect in the appointment of a director; or
c: the fact that any non-executive director is disqualified from appointment under section 58
5: Subsection (3) sections 47 and 48
8: New
section 59A The principal Act is amended by inserting, after section 59
59A: Chairperson of Board
1: The non-executive directors of the Bank must appoint 1 of their number, by majority vote, to be chairperson of the Board.
2: A chairperson holds that office for a term of 12 months unless he or she—
a: resigns from that office; or
b: is removed from that office, at any time, by a majority vote of the non-executive directors; or
c: ceases to be a non-executive director.
3: A chairperson whose term of office has expired—
a: is eligible for reappointment so long as he or she continues to be a non-executive director; and
b: continues to hold that office until a successor is appointed.
4: A vacancy in the office of chairperson must be filled as soon as practicable in the manner set out in subsection (1)
9: New
sections 60 to 60C The principal Act is amended by repealing section 60
60: Meetings of Board
1: The Board may meet as often as necessary, but must meet at least 6 times each financial year.
2: The chairperson, or any 2 directors, may, at any time, call a meeting of the Board.
3: At any meeting of the Board, the quorum necessary for the transaction of business is 4 directors.
4: All questions arising at any meeting of the Board that cannot be resolved by consensus must be decided by a majority of the votes cast by the directors present.
5: If a vote is tied, the chairperson or, if the chairperson is not present, the director presiding at the meeting has a casting vote.
6: Subject to this Act, the Board may regulate its own procedure.
60A: Teleconference meeting
A resolution is as valid and effectual as if it had been passed at a meeting of the Board duly called and constituted if—
a: a telephone or video conference of at least 4 directors is held; and
b: notice of the conference has been given under section 60B
c: each director who participates in the conference is able to individually express his or her views, and vote, on any question arising during the meeting; and
d: the resolution is assented to by a majority of the directors participating in the conference.
60B: Directors to be notified of meetings
1: The person or persons calling a meeting must ensure that each director is given—
a: at least 2 days' notice of a meeting; or
b: if a meeting is to be convened as a matter of urgency, reasonable notice of the meeting.
2: The notice must—
a: indicate the business to be transacted at the meeting; and
b: be given in writing or, if the director to whom the notice is to be given agrees, orally.
3: A notice in writing may be given by personal delivery, by post, or by electronic transmission (for example, by fax or email).
4: At a meeting of the Board, any director may, with the leave of the chairperson or the majority of the directors present, raise any matter for the consideration of the Board, even though that matter has not been included in the notice of meeting under subsection (2)(a)
5: For the purposes of subsection (1)
60C: Who presides at meetings of Board
1: At all meetings of the Board, the chairperson presides if he or she is present and willing to do so.
2: The non-executive directors present must appoint 1 of their number to be the chairperson for the meeting if—
a: the chairperson is not present; or
b: there is no chairperson; or
c: the chairperson is present, but is unwilling or unable to preside.
3: The person appointed under subsection (2) New Part 4 substituted
10: New
Part 4 The principal Act is amended by repealing Part 4
4: Use of words
bank banker banking Limit on use of restricted words in name or title
64: Limit on use of restricted words in name or title
1: No person may—
a: be formed, incorporated, or registered using a name or title that includes a restricted word; or
b: change a person's name or title to a name or title that includes a restricted word; or
c: carry on any activity directly or indirectly in New Zealand (whether through an agent or otherwise) using a name or title that includes a restricted word.
2: Subsection (1)
a: the Bank; or
b: a registered bank; or
c: any person who is authorised by the Bank under section 65
d: any person who is exempted under section 66
3: Despite subsection 2(b) section 65(1)(e) Unit Trusts Act 1960
4: Subsection 2(b)
5: A person commits an offence if the person contravenes this section.
6: The penalty for an offence against this section is set out in section 66M
7: In this section (except subsection (1)(a) to (c) sections 65 and 66 use subsection (1)(a) to (c)
65: Bank may authorise use of restricted words in name or title
1: The Bank may authorise any of the following persons to use a name or title that includes a restricted word:
a: a person licensed or registered as a bank in a country other than New Zealand:
b: a class of persons licensed or registered as banks in a country other than New Zealand:
c: a person that is formed, incorporated, or registered to represent the interests of—
i: any registered bank; or
ii: any person connected with a registered bank:
d: an associated person of a registered bank:
e: a registered bank or an associated person of a registered bank that intends to use a name or title that includes a restricted word in respect of a unit trust of which the registered bank or the associated person is a trustee or manager within the meaning of the Unit Trusts Act 1960
f: a person that is not a financial institution.
2: In the case of an authorisation under subsection (1)(a)
a: give the authorisation by notice in writing to the person; and
b: impose both of the following conditions:
i: the condition that the person use a particular name or title approved by the Bank; and
ii: the condition that the person carry on in New Zealand only those activities specified by the Bank in the notice.
3: In the case of an authorisation under subsection (1)(b)
a: give the authorisation by notice in the Gazette
b: impose the condition that each member of the class of persons carries on in New Zealand only those activities specified by the Bank in the notice in the Gazette
4: In the case of an authorisation under subsection (1)(c) to (f)
a: give the authorisation by notice in writing to the person; and
b: impose the condition that the person uses a particular name or title approved by the Bank.
5: Nothing in subsections (2) to (4)
6: The Bank may, at any time, revoke an authorisation, or vary or remove a condition of an authorisation, or add a condition of an authorisation, by,—
a: in the case of an authorisation that relates to a person, notice in writing to the person; or
b: in the case of an authorisation that relates to a class of persons, notice in the Gazette
7: Any authorisation given under this section applies to any other person (for example, the Registrar of Companies), but only to the extent that the acts of that person are necessary to allow the person to whom the authorisation is given to have the benefit of that authorisation.
66: Certain persons exempt from application of
section 64 Nothing in section 64(1)
a: the restricted word signifies a geographic place name or the name of a natural person; and
b: the name or title is not used in respect of a financial institution, or could not reasonably be mistaken for the name or title of a financial institution.
66A: Application of
Companies Act 1993 Nothing in sections 65 and 66 Companies Act 1993
a: sections 20 to 24
b: section 333 Limit on use of restricted words in advertisement
66B: Limit on use of restricted words in advertisement
1: No specified person may use a restricted word in any advertisement unless the advertisement contains a statement that complies with subsection (2)
2: The statement must—
a: state that the specified person is not a registered bank; and
b: be communicated in a manner that ensures, as far as is reasonably practicable, that the statement attracts the attention of the persons to whom the advertisement is directed.
3: A specified person commits an offence if the specified person contravenes this section.
4: The penalty for an offence against this section is set out in section 66M
5: In this section and sections 66D and 66M advertisement
a: means any thing used to promote—
i: the interests of a specified person; or
ii: the services or products of that person; and
b: includes a trade mark of a specified person; but
c: does not include the name or title of a specified person specified person
a: is a financial institution; and
b: is not a registered bank. Powers of Bank in relation to use of restricted words
66C: Power to obtain information
1: If the Bank believes or has reasonable grounds for believing that there has been a contravention of section 64 or section 66B
a: produce to the Bank a document in the person's possession, custody, or control:
b: supply the Bank with information or an explanation about any information.
2: The Bank may exercise the power in subsection (1)
3: A person to whom a notice is given must comply with the notice within the period of time specified by the Bank (which period must be reasonable in the circumstances).
4: A person commits an offence if, without lawful justification or excuse, the person fails to comply with this section.
5: The penalty for an offence against this section is set out in section 66M
66D: Power to require change of name, etc
1: If the Bank is satisfied on reasonable grounds that a person has contravened, or is contravening, section 64 or section 66B
a: change that person's name or title to a name or title that does not include a restricted word:
b: cease using a restricted word in an advertisement:
c: cease carrying on any activity using a name or title that includes a restricted word.
2: The Bank may require any person to whom a notice is given to supply the Bank with information or documents that may be necessary for the Bank to verify that the notice has been complied with.
3: A person must comply with a requirement of the Bank under this section within the period of time specified by the Bank (which period must be reasonable in the circumstances).
4: A person commits an offence if the person fails to comply with this section.
5: The penalty for an offence against this section is set out in section 66M
66E: Power to appoint person to enter and search premises
1: This section applies if the Bank has reasonable cause to believe—
a: that any information or documents supplied to the Bank under section 66C or section 66D(2)
b: that a person has failed to comply with any requirement to supply information or documents under section 66C or section 66D(2)
2: If this section applies, the Bank may appoint, in writing, any suitably qualified person to enter and search any premises.
3: A person appointed under subsection (2)
a: inspect, remove, and take copies of any documents relating to the use of a restricted word that may be in the possession, custody, or control of any person; and
b: if necessary, require the reproduction in usable form of any information recorded or stored in those documents.
4: A person commits an offence if, without lawful justification or excuse, the person hinders, obstructs, or delays the conduct of any search by a person appointed under subsection (2)
5: The penalty for an offence against this section is set out in section 66M
66F: Requirements on entering and searching premises
1: A person appointed under section 66E(2)
a: the occupier of the premises, or the person who has possession, custody, or control of the documents, agrees; or
b: the person appointed under section 66E(2) section 66I
2: A person authorised to enter and search any premises under a warrant must, on first entering those premises and, if requested, at any subsequent time, produce—
a: evidence of that person's authority to enter the premises; and
b: evidence of that person's identity.
66G: Confidentiality of information or documents
1: This section applies to information or documents supplied or disclosed to, or obtained by, the Bank for the purposes of, or in connection with, the exercise of powers conferred by this Part.
2: The Bank, any officer or employee of the Bank, or a person appointed under section 66E(2)
a: with the consent of the person to whom the information relates or of the person to whom the information is confidential; or
b: to the extent that the information is available to the public under any Act, including the Official Information Act 1982
c: for the purposes of, or in connection with, the exercise of powers conferred by this Part; or
d: in connection with any investigation or inquiry (whether or not preliminary to any proceedings) in respect of, or any proceedings for, an offence against this Act or any other Act; or
e: to any central bank, authority, or body in any other country that exercises functions that correspond with, or are similar to, those conferred on the Bank under this Act for the purposes of the exercise by that central bank, authority, or body of those functions; or
f: to any person who the Bank is satisfied has a proper interest in receiving the information.
3: The Bank, any officer or employee of the Bank, or a person appointed under section 66E(2) subsection (2)(e) or (f)
4: A person referred to in subsection (5)
5: The persons are—
a: any officer or employee of the Bank; or
b: a person appointed under section 66E(2)
6: The penalty for an offence against this section is set out in section 66M
66H: Limits on further disclosure of information or documents published or disclosed under
section 66G
1: A person to whom any information or documents are published or disclosed under section 66G
a: in the case of a publication or disclosure under section 66G(2)(a)
b: in the case of a publication or disclosure under section 66G(2)(c)
i: for the purposes of, or in connection with, the exercise of powers conferred by this Part; and
ii: in accordance with any conditions that the Bank may have imposed:
c: in the case of a publication or disclosure under section 66G(2)(f)
i: authorised by the Bank and in accordance with any conditions that the Bank may have imposed; or
ii: necessary or desirable for the performance of any function or exercise of any power conferred by any enactment.
2: A person commits an offence if the person contravenes this section.
3: The penalty for an offence against this section is set out in section 66M
66I: Procedure for obtaining warrants
A Judge of the High Court may issue a warrant to a person appointed under section 66E(2)
a: that any information or documents supplied to the Bank under section 66C or section 66D(2)
b: that a person has failed to comply with any requirement to supply information or documents under section 66C or section 66D(2)
66J: Effect of warrant
1: A warrant authorises the person named in it, at any time and, if necessary, by force, to—
a: enter and search the premises specified in the warrant:
b: inspect, remove, and take copies of documents that the person executing the warrant believes on reasonable grounds may be relevant:
c: if necessary, require any information recorded or stored in those documents to be reproduced in usable form.
2: The warrant continues in force for a period of 1 month or until the purpose for which it was granted has been satisfied, whichever is the lesser.
3: Every person named in the warrant must, as soon as practicable after removing any documents from any premises, supply a copy of the documents to the person from whose possession, custody, or control the documents were removed.
66K: Effect of proceedings
1: If any person commences any proceedings in any court in respect of the exercise of any powers conferred by section 66E
2: This section applies despite the provisions of any other Act or any rule of law.
66L: Effect of final decision that exercise of powers under
section 66E
1: This section applies if—
a: any power conferred by section 66E
b: that exercise has been declared to be unlawful in a final decision given in proceedings in respect of the exercise of that power.
2: The Bank must ensure that, as soon as practicable after the decision is given,—
a: any information supplied by a person and any documents or records obtained as a result of the unlawful exercise of the power are returned to the person previously having possession, custody, or control of those documents or records, and any copies of those documents or records are destroyed:
b: any documents or records derived from, or based on, the documents or records are destroyed.
3: No information, documents, or records obtained as a result of the unlawful exercise of the power are admissible in evidence in any proceedings. Penalty for offences against this Part
66M: Penalty for offences
1: A person who commits an offence against any of the provisions listed in subsection (2)
a: in the case of an individual, to imprisonment for a term not exceeding 12 months or to a fine not exceeding $100,000; and
b: in the case of a body corporate, to a fine not exceeding $1,000,000.
2: The provisions are—
a: section 64
b: section 66B
c: section 66C
d: section 66D
e: section 66E
f: section 66G
g: section 66H Amendments to Part 5
11: Application for registration
Section 70
4: A person commits an offence if the person provides false or misleading information to the Bank for the purposes of an application.
5: The penalty for an offence against this section is set out in section 156AC
12: Voluntary removal of name from register
Section 71 subsection (3)
3: The Bank must—
a: remove the name of the registered bank from the register on the date specified in the notice; and
b: within 7 days after that date, arrange for the publication in the Gazette
13: New
section 72 The principal Act is amended by repealing section 72
72: Offence for person who is not registered bank to hold itself out to be registered bank
1: A person commits an offence if the person—
a: is not a registered bank; and
b: uses any name, title, trade mark, style, designation, or description that represents or implies that the person is a registered bank.
2: The penalty for an offence against this section is set out in section 156AC
14: Determination of applications
Section 73 subsection (2)
2: In determining an application under section 70
a: the incorporation and ownership structure of the applicant; and
b: the size and nature of the applicant's business or proposed business, or any part of the applicant's business or proposed business; and
c: the ability of the applicant to carry on its business or proposed business in a prudent manner; and
d: the standing of the applicant in the financial markets; and
e: the suitability for their positions of the directors and senior managers of the applicant; and
f: the standing of the owner of the applicant in the financial markets; and
g: any other matters that may be prescribed in regulations.
15: New
sections 73A 73B The principal Act is amended by inserting, after section 73
73A: Further matters to which Bank must have regard if applicant is overseas person
In determining an application from an overseas person, the Bank must, in addition to the matters set out in section 73(2)
a: the law and regulatory requirements of the applicant's home jurisdiction that relate to—
i: the recognition and priorities of claims of creditors or classes of creditors in the event of the insolvency of the applicant; and
ii: the disclosure by the applicant of financial and other information of the kind that a registered bank must disclose under section 81
iii: the accounting and auditing standards applicable to the applicant; and
iv: the duties and powers of directors of the applicant; and
v: the licensing, registration, authorisation, and supervision of the applicant; and
b: the nature and extent of the financial and other information disclosed to the public by the applicant.
73B: Further matters to which Bank must have regard if applicant is subsidiary of overseas person
In determining an application from a subsidiary of an overseas person, the Bank must, in addition to the matters set out in section 73(2)
a: the law and regulatory requirements of the home jurisdiction of the overseas person that relate to—
i: the disclosure by the overseas person of financial and other information of the kind that a registered bank must disclose under section 81
ii: the accounting and auditing standards applicable to the overseas person; and
iii: the duties and powers of the directors of the overseas person; and
iv: the licensing, registration, authorisation, and supervision of the overseas person; and
b: the nature and extent of the financial and other information disclosed to the public by the overseas person.
16: New
section 74 The principal Act is amended by repealing section 74
74: Conditions of registration
1: A person may be registered as a registered bank unconditionally or subject to any conditions that the Bank may impose.
2: The Bank may, by notice in writing to a registered bank,—
a: impose conditions of registration (whether or not the registration of the bank is subject to conditions); or
b: vary, remove, add to, or substitute any conditions of registration.
3: The Bank must not exercise a power referred to in subsection (2)
a: the Bank gives the registered bank not less than 7 days' notice in writing of the Bank's intention to do so; and
b: the notice contains, or is accompanied by, a statement of the Bank's reasons; and
c: the registered bank has a reasonable opportunity to make submissions to the Bank; and
d: the Bank has regard to those submissions.
4: The Bank may impose conditions that relate to any of the following matters:
a: the matters to which the Bank must have regard under sections 73 to 73B section 73(2)(g)
b: the matters referred to in section 78
c: the matters referred to in section 81
5: A registered bank commits an offence if the registered bank fails to comply with a condition of registration imposed by the Bank under this section.
6: The penalty for an offence against this section is set out in section 156AB
17: Cancellation of registration
1: The principal Act is amended by repealing section 77(1)
1: The Minister may, by notice in writing to the Bank given in accordance with a recommendation of the Bank, direct the Bank to cancel the registration of a registered bank.
2: Section 77(2) paragraph (b)
b: that, in relation to a registered bank,—
i: there has been a change in any of the matters to which the Bank must have regard under section 73 section 73(2)(g)
ii: the Bank considers the change to be materially adverse to the registered bank's standing or financial position; or
ba: that, in relation to a registered bank,—
i: there has been a transfer of direct or indirect control of the registered bank; and
ii: the Bank considers the transfer to be materially adverse to the registered bank's standing or financial position; or
bb: that, in relation to a registered bank,—
i: there has been a change in any of the matters to which the Bank must have regard under section 73A or section 73B
ii: the Bank considers the change to be materially adverse; or .
3: Section 77(2)
a: repealing paragraph (d)
b: adding to paragraph (g) or imposed by regulations made under this Act
4: Section 77 subsection (5)
5: The Bank must, as soon as practicable after receiving a notice from the Minister under subsection (1)
a: inform the registered bank in writing of—
i: the fact that the Minister has directed the Bank to cancel the registration of the registered bank; and
ii: the grounds on which the Bank's recommendation to cancel the registration of the registered bank was made; and
iii: the date of cancellation of the registration of the registered bank; and
b: publish a notice of the cancellation in the Gazette
18: New
sections 77A 77B The principal Act is amended by inserting, after section 77
77A: Changes of ownership
1: A person must obtain the written consent of the Bank before giving effect to a transaction if,—
a: in the case of a person who does not have a significant influence over a registered bank, the transaction would result in that person acquiring a significant influence over that registered bank; or
b: in the case of a person who has, with the consent of the Bank, acquired a significant influence over a registered bank, the transaction would result in that person increasing the level of the person's significant influence over that registered bank beyond the level permitted in the existing consent; or
c: in the case of a person who acquired a significant influence over a registered bank before the commencement of the Reserve Bank of New Zealand Amendment Act 2003, the transaction would result in that person increasing the person's significant influence over that registered bank beyond the existing level.
2: The Bank may, in giving its consent,—
a: specify the level of significant influence that a person may have or acquire over any registered bank without the need for a further consent; and
b: impose any terms and conditions the Bank thinks fit.
3: The Bank may, at any time, by notice in writing, vary or revoke—
a: a consent given under this section; or
b: any term or condition of a consent.
4: A person commits an offence if the person fails to comply with subsection (1)
5: The penalty for an offence against this section is set out in section 156AA
6: For the purposes of this section, a reference to a registered bank is a reference to a registered bank that is not an overseas person.
77B: Effect of
section 77A Nothing in section 77A
19: Carrying on business in prudent manner
1: Section 78(1)(b) section 77(2)(f) or section 113(1)(e)
2: Section 78(1) paragraph (f)
fa: risk management systems and policies or proposed risk management systems and policies:
fb: arrangements for any business, or functions relating to any business, of the applicant or registered bank to be carried on by any person other than the applicant or the registered bank:
20: New
section 80 The principal Act is amended by repealing section 80
80: Credit rating of registered banks
1: The Bank may, by notice in writing to any registered bank or to all registered banks or to all members of any class of registered banks, require each of those banks to—
a: obtain a rating of its creditworthiness or financial condition by a person or organisation nominated or approved by the Bank; and
b: maintain a current rating of the type referred to in paragraph (a)
2: The Bank may require a registered bank to publish the registered bank's current rating, and all the qualifications to that rating, in the manner and with the frequency that the Bank directs.
3: A person commits an offence if the person fails to comply with this section.
4: The penalty for an offence against this section is set out in section 156AC
21: New
sections 81 to 81AC The principal Act is amended by repealing section 81
81: Public disclosure of information or data by registered banks
1: The Governor-General may, by Order in Council made on the advice of the Minister that is given in accordance with a recommendation of the Bank, prescribe information or data that must be published by
a: all registered banks; or
b: any class of registered banks specified in the order.
2: A registered bank to which an Order in Council applies must publish the information or data specified in the order—
a: in a document to be known as a disclosure statement; and
b: in the manner and with the frequency specified in the order.
3: The information or data that may be prescribed in an Order in Council includes, without limitation, information or data about—
a: the corporate matters of a registered bank; and
b: the financial matters of a registered bank; and
c: the prudential matters of a registered bank; and
d: any other matters relating to the business, operation, and management of a registered bank.
4: The Order in Council must be published in the Gazette
5: The Regulations (Disallowance) Act 1989 section 2 of that Act
81AA: Further matters that may be prescribed
1: An Order in Council made under section 81 section 81(3)
a: about an associated person of the registered bank if the associated person is incorporated, domiciled, or resident in New Zealand:
b: about an associated person of the registered bank if the information or data is publicly available in the country in which the associated person is incorporated, domiciled, or resident and if that country is not New Zealand:
c: about any individual member of its banking group, whether or not the member is incorporated, domiciled, or resident in New Zealand:
d: about a body incorporated in New Zealand, or an overseas company registered under section 337 of the Companies Act 1993
2: An Order in Council made under section 81
a: prescribe the information that is required to be contained in accordance with generally accepted accounting practice (within the meaning of section 3 of the Financial Reporting Act 1993
b: require the publication of financial statements and notes to those statements for any period or periods specified in the order:
c: require the information to be published in consolidated form:
d: require financial information that is required to be published to be taken from audited financial statements:
e: require the information that is required to be published to be audited and to be accompanied by an auditor's report:
f: require a disclosure statement to contain any statements specified in the order that are made by—
i: the directors of the registered bank or persons authorised in writing by the directors of the bank; and
ii: in the case of an overseas incorporated registered bank, its New Zealand chief executive officer.
81AB: Disclosure statement not required to include information or data about customers or clients of registered banks
1: Despite sections 81 and 81AA
a: the registered bank; or
b: an associated person of the registered bank; or
c: a company in which a holding company of the registered bank has a substantial interest.
2: Nothing in subsection (1)
a: the registered bank; or
b: an associated person of the registered bank; or
c: a company in which a holding company of the registered bank has a substantial interest.
3: Subsection (1)
a: the amount of any loan or risk exposure (without disclosing the identity of the particular customer or client to whom it relates); or
b: the number of loans or risk exposures that fall within a specified range of amounts and the actual amounts of those loans or risk exposures; or
c: the number of loans or risk exposures that fall within a specified range of percentages or are above a specified percentage, as the case may be, of the capital or equity of the registered bank, or an associated person of the registered bank, or the banking group or a company in which a holding company of a registered bank has a substantial interest, and the actual amounts involved.
81AC: Duty to supply information or data to registered bank
1: This section applies to—
a: an associated person of a registered bank; and
b: a body incorporated in New Zealand, or an overseas company registered under section 337 of the Companies Act 1993
2: A person to whom this section applies must, on being required by a registered bank to do so for the purpose of enabling the registered bank to comply with an Order in Council made under section 81 section 81AA
a: is in the possession, custody, or control of that person; and
b: is not in the possession, custody, or control of the registered bank.
3: A person to whom this section applies commits an offence if, without lawful justification or excuse, the person fails to comply with a requirement of a registered bank under this section.
4: The penalty for an offence against this section is set out in section 156AC
22: New
section 82 The principal Act is amended by repealing section 82
82: Disclosure statements must be signed
1: Every disclosure statement that a registered bank is required to publish under section 81
a: in the case of a body corporate, by every director of the body corporate or by each director's agent authorised in writing to do so; and
b: in the case of an overseas incorporated registered bank, by its New Zealand chief executive officer or that person's agent authorised in writing to do so.
2: Every overseas incorporated registered bank must notify the Bank in writing of the name and address of its New Zealand chief executive officer and any subsequent changes to those details.
3: If an overseas incorporated registered bank fails to comply with subsection (2)
4: If the Bank exercises the power conferred by subsection (3)
23: New
sections 89 to 89C The principal Act is amended by repealing section 89
89: Offence to fail to publish required information in disclosure statement
1: A registered bank commits an offence if, without lawful justification or excuse, the registered bank fails to publish information that it is required to publish in a disclosure statement under section 81
2: The penalty for an offence against this section is set out in section 156AC
89A: Offence to publish false or misleading disclosure statements
1: If a disclosure statement that includes information that is false or misleading is published by a registered bank, all of the following persons commit an offence:
a: the registered bank; and
b: every director of the registered bank who signed the disclosure statement or on whose behalf the disclosure statement was signed; and
c: in the case of an overseas incorporated registered bank, the New Zealand chief executive officer who signed the disclosure statement or on whose behalf the disclosure statement was signed.
2: It is a defence to a prosecution for an offence against this section if—
a: the defendant proves that the information was immaterial; or
b: in the case of a defendant who is director of a registered bank or a New Zealand chief executive officer of an overseas incorporated registered bank, that defendant proves that he or she had reasonable grounds to believe, and believed, up to the publication of the disclosure statement, that the information was true.
3: The penalty for an offence against this section is set out in section 156AC
89B: Offence to fail to make most recent disclosure statement publicly available
1: A registered bank commits an offence if, without lawful justification or excuse, the registered bank fails to make its most recent disclosure statement publicly available in the manner set out in an Order in Council made under section 81
2: The penalty for an offence against this section is set out in section 156AB
89C: Other offences in relation to disclosure statements
1: A registered bank commits an offence if the registered bank fails to comply with a requirement of the Bank under section 83
a: publish a disclosure statement that does not contain false or misleading information; or
b: publish a disclosure statement that contains information that was previously omitted; or
c: take the corrective action specified by the Bank in a notice given under that section.
2: The penalty for an offence against this section is set out in section 156AC
24: Civil liability
Section 90 paragraphs (a) (b)
a: the registered bank; and
b: every person holding office as a director of the registered bank at the time of the publication of the disclosure statement; and
c: the New Zealand chief executive officer of an overseas incorporated registered bank at the time of the publication of the disclosure statement.
25: New
sections 93 to 95A The principal Act is amended by repealing sections 93 to 95
93: Supply of information by registered banks for purposes of prudential supervision
1: For the purposes of this Part, the Bank may, by notice in writing to any registered bank or by notice in the Gazette
a: the corporate matters of the registered bank:
b: the financial matters of the registered bank:
c: the prudential matters of the registered bank:
d: any other matters relating to the business, operation, or management of the registered bank.
2: A registered bank may be required to supply information, data, or forecasts—
a: relating to business earned on by the registered bank in New Zealand or elsewhere (whether that business is carried on as principal, broker, agent, or intermediary); and
b: in a consolidated form (if specified by the Bank).
3: A notice may specify—
a: the periods for which, and the form in which, the information, data, or forecasts must be supplied; and
b: the time by which, and the place in New Zealand at which, the information, data, or forecasts must be supplied.
4: The Bank may, by a subsequent notice, vary, revoke, or amend a notice.
5: A registered bank commits an offence if, without lawful justification or excuse, the registered bank—
a: fails to comply in any respect with any requirements of the Bank under this section; or
b: supplies information or data that the registered bank is required to supply under this section that is false or misleading in a material particular.
6: The penalty for an offence against this section is set out in section 156AB
93A: Scope of notice under
section 93 The Bank may, by notice under section 93
a: any associated person of a registered bank; or
b: a body incorporated in New Zealand, or an overseas company registered under section 337 of the Companies Act 1993
93B: Certain persons may be required to supply information to registered banks
1: A person referred to in section 93A(a) or (b) section 93
2: A person commits an offence if, without lawful justification or excuse, the person fails to comply with this section.
3: The penalty for an offence against this section is set out in section 156AB
93C: Supply of information by other persons for purposes of prudential supervision
1: If the Bank has reasonable grounds to believe that a person has information, data, or forecasts that the Bank could require a registered bank or a class of registered banks to supply under section 93
2: A notice may specify—
a: the periods for which, and the form in which, the information, data, or forecasts must be supplied; and
b: the time by which, and the place in New Zealand at which, the information, data, or forecasts must be supplied.
3: The Bank may, by a subsequent notice, vary, revoke, or amend a notice.
4: A person commits an offence if, without lawful justification or excuse, the person—
a: fails to comply with any requirements of the Bank under this section; or
b: supplies information or data that the person is required to supply under this section that is false or misleading in a material particular.
5: The penalty for an offence against this section is set out in section 156AB
94: Requirement that information, data, or forecasts be audited
1: The Bank may, by notice in writing, require a registered bank or other person to obtain an audit, by an auditor approved by the Bank, of any information, data, or forecasts that the registered bank or other person, as the case may be, is required to supply under section 93 or section 93C
2: A person commits an offence if, without lawful justification or excuse, the person fails to comply with this section.
3: The penalty for an offence against this section is set out in section 156AA
95: Bank may require report relating to registered banks, etc
1: The Bank may, by notice in writing to a registered bank, require that registered bank to supply the Bank with a report or series of reports, prepared by a person approved by the Bank, on—
a: the corporate matters of the registered bank:
b: the financial matters of the registered bank:
c: the prudential matters of the registered bank:
d: any other matters relating to the business, operation, or management of the registered bank:
e: any of the matters referred to in paragraphs (a) to (d)
i: any associated person of the registered bank:
ii: a body incorporated in New Zealand, or an overseas company registered under section 337 of the Companies Act 1993
2: A person referred to in subsection (1)(e)(i) or (e)(ii)
3: A person commits an offence if, without lawful justification or excuse, the person fails to comply with this section.
4: The penalty for an offence against this section is set out in section 156AC
95A: Bank may require report under
section 95
1: The Bank may, by notice in writing to a registered bank, require that the report or series of reports, as the case may be, that has been prepared under section 95
2: A registered bank commits an offence if, without lawful justification or excuse, the registered bank fails to comply with this section.
3: The penalty for an offence against this section is set out in section 156AC
26: New heading and
sections 98A 98B The principal Act is amended by inserting, after section 98 Access to information by home country supervisor
98A: Access to information by home country supervisor
1: This section applies to—
a: a registered bank; and
b: any member of the registered bank's banking group (being a member that has a physical presence in New Zealand).
2: For the purpose of the exercise by a home country supervisor of its supervisory functions, the Bank may authorise a home country supervisor to—
a: conduct an inspection of any person to whom this section applies; or
b: require any person to whom this section applies to supply to the home country supervisor any information, data, or forecasts relating to that person.
3: The information, data, or forecasts that a home country supervisor may be authorised to obtain may include, without limitation, information about the affairs of a particular customer or client of a person to whom this section applies.
4: The Bank may grant an authorisation only if it is satisfied that sufficient provision exists to protect the confidentiality of the information, data, or forecasts obtained or required by the home country supervisor.
5: An authorisation may be—
a: granted for the period or periods that the Bank thinks fit; and
b: varied, revoked, or amended by the Bank at any time.
6: The Bank must give notice in writing to a person to whom this section applies if the Bank—
a: grants an authorisation in relation to that person; or
b: varies, revokes, or amends that authorisation.
7: This section has effect despite anything to the contrary in any other enactment or rule of law.
8: For the purposes of this section, a member of a registered bank's banking group has a physical presence in New Zealand if that member—
a: has an office in New Zealand; or
b: has an agent in New Zealand.
98B: Duties of person on receipt of notice under
section 98A
1: A person to whom section 98A
a: permitting the home country supervisor to conduct an inspection of that person; or
b: supplying the home country supervisor with the required information, data, or forecasts within the time, and at the place, specified in the notice.
2: A person commits an offence if, without lawful justification or excuse, the person—
a: fails to comply in any respect with any requirements notified by the Bank under this section; or
b: supplies any information or data that the person is required to supply under this section that is false or misleading in a material particular.
3: The penalty for an offence against this section is set out in section 156AA
27: New
section 99 The principal Act is amended by repealing section 99
99: Powers to obtain information and documents
1: This section applies if the Bank has reasonable cause to believe—
a: that any information or data published in a disclosure statement by a registered bank under section 81 or section 83
b: that a registered bank has failed to publish information or data that it is required to publish in a disclosure statement under section 81 or section 83
c: that any information or data supplied to the Bank by a registered bank under section 93
d: that any information or data supplied by a person to a registered bank under section 93B section 93C
e: that a registered bank or a person, as the case may be, has failed to comply with any requirement to supply information, data, or forecasts under section 93 or section 93B or section 93C
f: that a registered bank has failed to comply with section 95
2: If this section applies, the Bank may,—
a: by notice in writing to the registered bank or person, require that registered bank or person to supply to the Bank, within the time specified in the notice, the information or data specified in the notice; or
b: appoint, in writing, any suitably qualified person to enter and search any premises and inspect, remove, and take copies of any documents in the possession, custody, or control of any person and, if necessary, require the reproduction in usable form of any information recorded or stored in those documents.
3: A person commits an offence if, without lawful justification or excuse, the person hinders, obstructs, or delays, in the conduct of an inspection under this section, any person duly authorised to make that inspection.
4: A registered bank or person commits an offence if, without lawful justification or excuse, the registered bank or person—
a: fails to comply with any requirement of the Bank under subsection (2)(a)
b: supplies any information or data that is required to be supplied under subsection (2)(a)
5: The penalty for an offence against this section is set out,—
a: in the case of an offence against subsection (3) section 156AB
b: in the case of an offence against subsection (4) section 156AC
28: Procedure for obtaining warrants
1: Section 106(1) paragraph (a)
aaa: that any information or data published in a disclosure statement by a registered bank under section 81 or section 83
aa: that a registered bank has failed to publish information that it is required to publish in a disclosure statement under section 81 or section 83 .
2: Section 106(1) paragraph (b)
ba: that any information or data supplied by a person to a registered bank under section 93B section 93C
bb: that a person has failed to comply with any requirement to supply information, data, or forecasts to a registered bank under section 93B section 93C .
3: Section 106(1) 99(1)(e) 99(2)(b)
4: Section 106(2) 111 113
5: Section 106 subsection (3)
3: A warrant issued under subsection (1)
29: Heading above
section 111 sections 111 112 The principal Act is amended by repealing the heading above section 111 111 112 Reserve Bank may give directions
30: New
sections 113 to 113B The principal Act is amended by repealing section 113
113: Bank may give directions
1: The Bank may give a registered bank or an associated person of a registered bank a direction, in writing, if it has reasonable grounds to believe that—
a: the registered bank or associated person is insolvent or is likely to become insolvent; or
b: the registered bank or associated person is about to suspend payment or is unable to meet its obligations as and when they fall due; or
c: the affairs of the registered bank or associated person are being conducted in a manner prejudicial to the soundness of the financial system; or
d: the circumstances of the registered bank or associated person are such as to be prejudicial to the soundness of the financial system; or
e: the business of the registered bank has not been, or is not being, conducted in a prudent manner; or
f: any of the following persons has failed to comply with any requirement imposed by or under this Act or regulations made under this Act:
i: the registered bank:
ii: a director of the registered bank:
iii: in the case of an overseas incorporated registered bank, its New Zealand chief executive officer; or
g: any of the following persons has been convicted of an offence against this Act:
i: the registered bank:
ii: a director of the registered bank:
iii: in the case of an overseas incorporated registered bank, its New Zealand chief executive officer; or
h: the registered bank has failed to comply with a condition of its registration.
2: The Bank must obtain the consent of the Minister before giving a direction under this section.
3: A direction given under this section must state the grounds on which it is given.
4: The Bank may, with the consent of the Minister,—
a: amend or modify a direction; or
b: replace a direction with another direction; or
c: revoke a direction.
5: To avoid doubt, the Bank may exercise the power conferred by subsection (1)
113A: Scope of directions
A direction given under section 113
a: consult with the Bank immediately, and from time to time, about the circumstances of the registered bank or of an associated person of the registered bank and the methods of resolving any difficulties facing the registered bank or the associated person; or
b: carry on business, or any part of its business, in accordance with the direction; or
c: cease to carry on its business, or any part of its business, in accordance with the direction; or
d: ensure that any officer or employee of the registered bank or associated person ceases to take part in the management or conduct of its business except with the permission of the Bank and so far as that permission extends; or
e: remove or replace any of the directors of an associated person of the registered bank; or
f: remove or replace its auditor or appoint an auditor approved by the Bank; or
g: take the action that is specified in the direction to address a breach of any condition of its registration; or
h: take the action that is specified in the direction to address any circumstances of financial difficulties; or
i: take any other action that may be specified in the direction.
113B: Power to remove, replace, or appoint directors
1: This section applies if the Bank has reasonable grounds to believe that—
a: any of the circumstances referred to in section 113(1)
b: it is necessary to remove, replace, or appoint a director of a registered bank or of an associated person of a registered bank.
2: If this section applies, the Bank may—
a: remove or replace a director of any registered bank or of an associated person of any registered bank; or
b: appoint any person as a director of any registered bank or of an associated person of any registered bank.
3: The Bank must—
a: obtain the consent of the Minister before exercising the power conferred by subsection (2)
b: exercise that power by giving notice in writing to—
i: the director or the person concerned; and
ii: if applicable, the Registrar of Companies.
4: A notice given under subsection (3)(b)(ii) section 159 of the Companies Act 1993 section 152 of that Act
5: This section has effect despite any enactment, rule of law, or the terms of the constitution of, or the instrument or contract creating, a registered bank or an associated person of a registered bank.
31: New
section 116 The principal Act is amended by repealing section 116
116: Miscellaneous provisions with respect to directions and dispositions
1: A direction given under section 113
2: If the Bank has reasonable grounds to believe that 1 or more of the circumstances listed in section 113(1)
3: If the Bank grants an approval under subsection (2)
4: For the purposes of this section, address for service section 81
32: Statutory management of registered banks and associated persons
1: Section 117 subsection (1)
1A: If any question arises as to whether, on the date on which a statutory manager was appointed, an act was done or a transaction was entered into or effected before or after the appointment, that act or transaction must, in the absence of proof to the contrary, be treated as having been done or entered into or effected, as the case may be, after the appointment of the statutory manager.
2: Section 117(1)(b) for a specified period
3: Section 117 subsection (2)
2: If an Order in Council is made under subsection (1)
2A: If a registered bank acquires a subsidiary after it has been declared to be subject to statutory management under subsection (1)
4: Section 117
6: A person appointed under subsection (1)(b) section 101 section 101
a: section 102
b: section 103
c: section 104
33: Grounds on which registered bank may be declared to be subject to statutory management
Section 118 subsection (1)
1: The Bank must not make a recommendation under section 117
a: it is satisfied on reasonable grounds that 1 or more of the circumstances listed in section 113(1)(a) to (e)
b: a registered bank or an associated person of a registered bank has failed to comply with a direction given under section 113
34: Considerations affecting exercise of powers by statutory manager
1: Section 121(2) paragraph (b)
b: provide the reports that the Bank may require as to the state of the affairs, business, and statutory management of the registered bank to persons specified by the Bank (including, but not limited to, the Bank) in the form and with the frequency that the Bank may require:
c: provide the information that an advisory committee appointed under section 119
2: Section 121
3: A statutory manager may refuse to supply information to an advisory committee under subsection (2)(c)
35: Moratorium
1: Section 122 subsections (5) (6)
5: Nothing in subsection (1)(a), (b), and (d) to (h)
2: Section 122(7) paragraph (c)
c: nothing in subsection (1) paragraphs (d) to (f) of that subsection section 310A of the Companies Act 1993
3: Section 122
8: In the case of netting under the rules of a designated payment system,—
a: nothing in subsection (1)
b: nothing in subsection (1) paragraphs (d) to (f) of that subsection
i: is provided under the rules of the designated payment system; and
ii: has been granted to secure, or to assist in securing, the due performance, by that registered bank, of obligations entered into by that registered bank under those rules.
9: For the purpose of subsection (8) netted balance netting section 156L
36: Statutory manager may suspend payment of money owing
1: Section 127 subsections (1) (2)
1: The statutory manager of a registered bank may, despite the terms of any contract,—
a: suspend in whole or in part the repayment of any deposit, or the payment of any debt, or the discharge of any obligation, to any person; and
b: cancel the obligation to provide funding to any person.
2: A suspension or cancellation by a statutory manager under subsection (1)
2: Section 127(3) obligation , or the cancellation by the statutory manager of any obligation to provide funding,
3: Section 127(4) section 93C of the Insolvency Act 1967 or section 156R
37: New
section 143A The principal Act is amended by inserting, after section 143
143A: Continuation of statutory management
1: This section applies to a registered bank, an associated person of a registered bank, or a subsidiary of a registered bank, that has been removed from the New Zealand register under section 317 of the Companies Act 1993
2: If a person to whom this section applies is restored to the New Zealand register under section 328 of the Companies Act 1993
38: New
section 145 The principal Act is amended by repealing section 145
145: Obligations incurred by statutory manager
1: Any obligations incurred by a statutory manager of a registered bank in the course of his or her duties as statutory manager are incurred by that statutory manager on behalf of the registered bank, and the statutory manager does not incur personal liability for those obligations.
2: In the winding up or liquidation of a registered bank or an associated person of a registered bank or a subsidiary of a registered bank, all amounts required to satisfy obligations incurred by the statutory manager on behalf of the registered bank, associated person, or subsidiary must be paid in priority to all other debts.
39: Section 146 The principal Act is amended by repealing section 146
40: New heading and
sections 156AA to 156AC The principal Act is amended by inserting, after section 156 Penalties for offences against this Part
156AA: Penalty for miscellaneous offences
1: A person who commits an offence under any of the provisions listed in subsection (2)
a: in the case of an individual, to imprisonment for a term not exceeding 3 months or to a fine not exceeding $50,000:
b: in the case of a body corporate, to a fine not exceeding $500,000.
2: The provisions are—
a: section 77A
b: section 94
c: section 98B(2)(a)
d: section 98B(2)(b)
e: section 105
f: section 115
156AB: Penalty for offences relating to supply of information, etc
1: A person who commits an offence under any of the provisions listed in subsection (2)
a: in the case of an individual, to imprisonment for a term not exceeding 12 months or to a fine not exceeding $100,000:
b: in the case of a body corporate, to a fine not exceeding $1,000,000.
2: The provisions are—
a: section 74
b: section 89B
c: section 93
d: section 93B section 93
e: section 93C
f: section 99(3)
156AC: Penalty for offences relating to registration of banks, disclosure statements, prudential supervision of registered banks, etc
1: A person who commits an offence under any of the provisions listed in subsection (2)
a: in the case of an individual, to imprisonment for a term not exceeding 18 months or to a fine not exceeding $200,000:
b: in the case of a body corporate, to a fine not exceeding $2,000,000.
2: The provisions are—
a: section 70
b: section 72
c: section 80
d: section 81AC section 81
e: section 89
f: section 89A
g: section 89C(1)(a) section 83
h: section 89C(1)(b) section 83
i: section 89C(1)(c) section 83
j: section 95
k: section 95A section 95
1: section 99(4)
m: section 103(1)
n: section 103(2)
o: section 114(1)
p: section 114(2)
q: section 126
r: section 150
s: section 151(1)(a)
t: section 151(1)(b)
41: Other amendments to
Part 5 Part 5 Schedule 1
2: New
Parts 5B 5C
42: New
Parts 5B 5C The principal Act is amended by inserting, after Part 5A
5B: Oversight of payment systems
General
156B: Exercise of powers under this Part
The powers conferred on the Bank by this Part must be exercised for the purpose of promoting the maintenance of a sound and efficient financial system. Supply of information relating to payment systems
156C: Requirement to supply information relating to payment system
1: The Bank may, by notice in writing to any person referred to in subsection (2)
2: A notice may be given to—
a: an operator of a payment system; or
b: any person who is wholly or partly responsible for the operation of a payment system; or
c: a participant in a payment system.
3: A notice may specify—
a: the periods for which, and the form in which, the information or data must be supplied; and
b: the time by which, and the place in New Zealand at which, the information or data must be supplied.
4: The Bank may, by a subsequent notice, vary, revoke, or amend a notice.
156D: Offence to fail to supply information
1: A person commits an offence if the person, without lawful justification or excuse,—
a: fails to supply information or data in accordance with section 156C
b: supplies information or data in accordance with section 156C
2: The penalty for an offence against this section is set out in section 156J
156E: Requirement that information be audited
1: The Bank may, by notice in writing to any person referred to in section 156C(2) section 156C
2: Every audit must be conducted by a suitably qualified independent person who is approved by the Bank.
156F: Offence not to comply with requirement for audit
1: A person commits an offence if the person fails, without lawful justification or excuse, to comply with a requirement under section 156E(1)
2: The penalty for an offence against this section is set out in section 156J Disclosure of information relating to payment systems
156G: Disclosure of information
1: The Bank may publish or disclose any information or data supplied in accordance with section 156C
a: the information or data is available to the public under any Act or is otherwise publicly available information; or
b: the information or data is in a statistical or summary form; or
c: the publication or disclosure of the information or data is for the purposes of, or in connection with, the exercise of powers conferred by this Act; or
d: the publication or disclosure of the information or data is to any central bank, authority, or body in any other country that exercises functions that correspond with, or are similar to, those conferred on the Bank under this Act, and the Bank is satisfied that the information or data will be used by that central bank, authority, or body for the purpose of exercising those functions; or
e: the publication or disclosure of the information or data is to any person who the Bank is satisfied has a proper interest in receiving the information; or
f: the publication or disclosure of the information or data is with the consent of the person to whom the information relates or of the person to whom the information is confidential.
2: The Bank must not publish or disclose information or data under subsection (1)(d) or (e)
3: An officer or employee of the Bank must not publish or disclose any information or data supplied in accordance with section 156C
4: An officer or employee of the Bank commits an offence if the officer or employee contravenes this section.
5: The penalty for an offence against this section is set out in section 156J
156H: Limits on further disclosure of information
1: A person to whom any information or data is published or disclosed must not publish, disclose, or use that information or data unless the publication, disclosure, or use is,—
a: in the case of a publication or disclosure under section 156G(1)(c)
i: for the purposes of, or in connection with, the exercise of powers conferred by this Act; and
ii: in accordance with any conditions that may be imposed by the Bank:
b: in the case of a publication or disclosure under section 156G(1)(e)
i: authorised by the Bank and in accordance with any conditions that the Bank may have imposed; or
ii: necessary or desirable for the exercise of any function or power conferred by any enactment:
c: in the case of a publication or disclosure under section 156G(1)(f)
2: A person commits an offence if the person contravenes this section.
3: The penalty for an offence against this section is set out in section 156J
156I: Application of other enactments to information published or disclosed under
section 156G Nothing in any Act, other than this Act or the Official Information Act 1982 section 156G Penalties for offences against this Part
156J: Penalties for offences
1: A person who commits an offence under any of the provisions listed in subsection (2)
a: in the case of an individual, to imprisonment for a term not exceeding 3 months or to a fine not exceeding $50,000; and
b: in the case of a body corporate, to a fine not exceeding $500,000.
2: The provisions are—
a: section 156D
b: section 156F
c: section 156G section 156C
d: section 156H
5C: Designated payment systems
General
156K: Exercise of powers under this Part
The powers conferred on the Governor-General, the Minister, and the Bank by this Part must be exercised for the purposes of—
a: promoting the maintenance of a sound and efficient financial system; or
b: avoiding significant damage to the financial system that could result from the failure of a participant in a payment system.
156L: Definitions for this Part
In this Part, unless the context otherwise requires,— contact person section 156M(2)(c) designated payment system section 156M insolvency
a: in the case of a company or other body corporate,—
i: liquidation under Part XVI of the Companies Act 1993
ii: statutory management under Part III of the Corporations (Investigation and Management) Act 1989
iii: statutory management under Part V
iv: liquidation, winding up, statutory management, or other similar process under any other enactment or rule of law (whether of New Zealand or of another country); and
b: in the case of an individual, being adjudged a bankrupt under the Insolvency Act 1967 netted balance netting
a: whether on a bilateral or multilateral basis; and
b: whether or not through the interposition of an operator of the payment system; and
c: whether or not the obligations or claims constitute mutual credits, mutual debts, or other mutual dealings; and
d: whether or not the obligations or claims are denominated in New Zealand currency payment instruction
a: that is made in accordance with the rules of that payment system; and
b: that results, or is intended to result, in 1 or more settlements being effected rules
a: in relation to a payment system, means the rules of the payment system (whether made under bylaws, agreements, procedures, contracts, or other documents) that are evidenced in writing and that provide, among other things, for—
i: the basis on which payment instructions are given; and
ii: the basis on which payments are calculated; and
iii: the basis on which settlements are effected (either on a gross basis or using netting); and
iv: any action to be taken if a participant in the payment system is unable, or likely to become unable, to meet the participant's obligations to any or all of the following:
A: an operator of the payment system:
B: another participant in the payment system:
C: any other party to those rules; and
b: in the case of a designated payment system, means the rules of that payment system that are contained in documents specified in the designation under section 156M settlement
a: the making of a payment—
i: that is done in accordance with a payment instruction; and
ii: that is on a gross basis or that uses netting; and
iii: whether by way of book entry on the accounts of a central bank or the operator of a designated payment system or otherwise; or
b: any other act that discharges a payment obligation in accordance with a payment instruction. Designation
156M: Designation of payment system
1: The Governor-General may, by Order in Council, on the advice of the Minister given in accordance with a recommendation of the Bank, declare any payment system to be a designated payment system.
2: The order must specify—
a: the payment system that is the subject of the designation; and
b: the documents that evidence the rules of that payment system; and
c: the name or title of a person to whom notices relating to the designation must be given (the contact person).
3: The order may also specify—
a: conditions to which the designation is subject; and
b: that a particular operator is a participant in the payment system that is the subject of the designation.
156N: Bank's recommendation subject to procedure in
sections 156V to 156X The procedure set out in sections 156V to 156X section 156M(1) Effect of designation
156O: Rules of designated payment system are valid and enforceable
1: The rules of a designated payment system are valid and enforceable despite any enactment or rule of law to the contrary.
2: However, subsection (1)
a: the basis on which payment instructions are given; and
b: the basis on which payments are calculated; and
c: the basis on which settlements are effected (either on a gross basis or using netting); and
d: any action to be taken if a participant in the designated payment system is unable, or likely to become unable, to meet the participant's obligations to any or all of the following:
i: an operator of the designated payment system:
ii: another participant in the designated payment system:
iii: any other party to those rules.
156P: Settlements must not be reversed, etc
1: A settlement that is effected under the rules of a designated payment system must not, whether in whole or in part, be reversed, repaid, recovered, or set aside despite any enactment or rule of law to the contrary.
2: Subsection (1)
156Q: Limits on application of
section 156P(1)
1: Section 156P(1)
a: a participant in the designated payment system in respect of whom the settlement is effected becomes insolvent; and
b: the settlement is effected after the commencement of that insolvency.
2: Despite subsection (1), section 156P(1)
a: the settlement is effected within 24 hours of the commencement of the insolvency; and
b: the contact person can demonstrate that the contact person did not have notice of the commencement of the insolvency at the time that the settlement was effected.
3: For the purposes of subsection (2)
a: the contact person fails to make any inquiries into the matter that an honest and reasonable person would have made in the circumstances; or
b: the contact person fails to have regard to any public notice of the commencement of the insolvency that an honest and reasonable person would have had regard to in the circumstances.
156R: Netting is valid and enforceable
If the rules of a designated payment system provide for netting, any netting under those rules is valid and enforceable despite any enactment or rule of law to the contrary.
156S: Certain provisions of
Companies Act 1993 and of Insolvency Act 1967 The following provisions do not apply to any netting under the rules of a designated payment system:
a: sections 310A to 310O of the Companies Act 1993
b: sections 93A to 93H of the Insolvency Act 1967
156T: Limits on effect of
section 156O or section 156P or section 156R
1: Nothing in section 156O or section 156P or section 156R
a: the operation of any enactment or rule of law in relation to an underlying transaction (including, without limitation, sections 56, 292, 297, and 298 of the Companies Act 1993 section 56 of the Insolvency Act 1967
b: any party from taking action against another party that has acted fraudulently or dishonestly so long as the remedy sought or obtained in respect of that action does not affect the application of section 156O or section 156P or section 156R
2: If a person brings an action under any enactment or rule of law in relation to an underlying transaction (including, without limitation, sections 56, 292, 297, and 298 of the Companies Act 1993 section 56 of the Insolvency Act 1967
a: a participant received value by means of that settlement; and
b: the value received was an element of the underlying transaction.
3: In this section, underlying transaction
a: means a transaction that gives rise to—
i: a payment; or
ii: a payment obligation; but
b: does not include—
i: a payment instruction; or
ii: a settlement in accordance with the rules of a designated payment system.
156U: Certain enactments prevail over
sections 156O, 156P, and 156R The following enactments prevail over sections 156O, 156P, and 156R
a: sections 122(8) and 127(4)
b: sections 42(8) and 44(4) of the Corporations (Investigation and Management) Act 1989 Procedure for making designation
156V: Application for designation
1: A person who wishes to have a payment system declared as a designated payment system may apply to the Bank.
2: An application must be accompanied by—
a: a copy of the rules of the payment system and any information required by the Bank; and
b: the application fee (if any) that is determined by the Bank and approved by the Minister by notice in the Gazette
156W: Consideration of application
1: The Bank must consider any application made in accordance with section 156V
2: In considering an application, the Bank may have regard to any or all of the following matters:
a: the purpose and scope of the payment system:
b: the rules of the payment system:
c: any laws or regulatory requirements relating to the operation of the payment system and the extent to which the payment system complies with those laws or regulatory requirements:
d: the importance of the payment system to the financial system:
e: any other matters that the Bank considers appropriate.
156X: Decision on application
1: After considering an application, the Bank may—
a: make a recommendation to the Minister that the payment system to which the application relates be declared to be a designated payment system under section 156M
b: refuse to make that recommendation.
2: If subsection (1)(b)
a: that the Bank refuses to make a recommendation that the payment system to which the application relates be declared to be a designated payment system under section 156M
b: the reasons for the refusal. Further provisions relating to designation
156Y: Variation of designation
The Governor-General may, by Order in Council, on the advice of the Minister given in accordance with a recommendation of the Bank, vary any designation made under section 156M
a: by amending any of the matters referred to in section 156M(2)(b) and (c) and (3)(b)
b: by revoking or amending any condition to which the designation is subject; or
c: by making the designation subject to a new condition.
156Z: Revocation of designation
The Governor-General may, by Order in Council, on the advice of the Minister given in accordance with a recommendation of the Bank, revoke any designation made under section 156M
156ZA: Settlement and netting not affected by variation or revocation of designation
The variation or revocation of a designation made under section 156M sections 156O, 156P, and 156R
156ZB: Matters Bank may have regard to in recommending variation or revocation of designation
In determining whether to make a recommendation that any designation made under section 156M
a: the purpose and scope of the designated payment system:
b: the rules of the designated payment system:
c: any laws or regulatory requirements relating to the operation of the designated payment system and the extent to which the designated payment system complies with those laws or regulatory requirements:
d: the importance of the designated payment system to the financial system:
e: any failure to comply with any condition to which the designation is subject:
f: any other matters that the Bank considers appropriate.
156ZC: Procedure for variation or revocation of designation
1: Before making a recommendation that any designation made under section 156M
a: give the contact person notice of—
i: the reasons for proposing to vary or revoke the designation; and
ii: the fact that the contact person may make submissions to the Bank in relation to the proposed variation or revocation; and
b: give the contact person an opportunity to make those submissions within a time period that the Bank considers reasonable in the circumstances; and
c: consider any submissions made by the contact person during that time period.
2: The notice referred to in subsection (1)(a) Supply of information
156ZD: Supply of information relating to designated payment system
1: The Bank may, by notice in writing, require any or all of the following persons to supply the Bank with any information relating to any designated payment system:
a: an operator of the designated payment system:
b: a participant in the designated payment system:
c: the contact person of the designated payment system.
2: The Bank may exercise the power conferred by subsection (1)
3: A notice under subsection (1)
a: the periods for which, and the form in which, the information must be supplied; and
b: the manner in which the information must be verified.
4: A person commits an offence if the person, without lawful justification or excuse, fails to supply information in accordance with this section and is liable, on summary conviction,—
a: in the case of an individual, to imprisonment for a term not exceeding 12 months or to a fine not exceeding $100,000:
b: in the case of a body corporate, to a fine not exceeding $1,000,000.
156ZE: Contact person must be notified of insolvency
1: This section applies if—
a: a participant in a designated payment system ( participant A
b: any other participant whose settlements are effected by participant A through that designated payment system becomes insolvent.
2: If this section applies, participant A must, as soon as practicable after becoming aware of the insolvency, notify that fact to the contact person of that designated payment system.
3: It is sufficient compliance with the requirement to notify the contact person under subsection (2)
a: participant A takes all reasonable steps to comply with that requirement; or
b: the contact person was already aware of the commencement of the insolvency by the time participant A had to notify the contact person under that subsection.
3: Miscellaneous
Consequential amendment to Part 6
43: Funding agreements
Section 159(1) paragraph (d)
da: Part 5B
db: Part 5C Consequential amendments to Part 7
44: New
sections 175A 175B The principal Act is amended by inserting, after section 175
175A: Privilege against self-incrimination no excuse
A person is not excused from answering any question, supplying any information, producing any document, or providing any explanation under this Act on the ground that to do so would or might incriminate or tend to incriminate that person.
175B: Admissibility of self-incriminating statements
1: A self-incriminating statement made orally by a person (whether or not the statement is recorded in writing) in the course of answering any question, or supplying any information, or producing any document, or providing any explanation, may be used in evidence against that person only in a prosecution for any offence where the person gives evidence inconsistent with the statement.
2: Despite subsection (1)
a: a refusal or failure to answer any question, supply any information, produce any document, provide any explanation, or comply with any other requirement may be used in evidence against that person in a prosecution for any offence under this Act arising from that refusal or failure:
b: the answering of any question in a way that is false or misleading in a material particular, or the supply of any information, or the production of any document, or the provision of any explanation that is false or misleading in a material particular, may be used in evidence against that person in a prosecution for any offence under this Act arising from that act.
45: New
section 177 The principal Act is amended by repealing section 177
177: Time limit for prosecutions
Despite section 14 of the Summary Proceedings Act 1957
a: in the case of an offence against section 28 or section 30
b: in any other case, within 6 years from the time when the matter of the information arose.
46: Section 179 The principal Act is amended by repealing section 179
179: Protection from liability
1: This section applies to—
a: every statutory manager of a registered bank or of an associated person of a registered bank; and
b: every officer or employee of the Bank; and
c: every person appointed under section 66E or section 99 or section 101
2: No person to whom this section applies is personally liable for an act done or omitted to be done in the exercise or performance in good faith of that person's functions, duties, or powers under this Act.
47: New
section 179A The principal Act is amended by inserting, after section 179
179A: Indemnity
1: The Crown indemnifies the persons listed in subsection (2)
2: The persons are—
a: every statutory manager of a registered bank or of an associated person of a registered bank:
b: every officer or employee of the Bank:
c: every person appointed under section 66E or section 99 or section 101
d: every member of an advisory committee:
e: the Bank.
3: Any money required for the purposes of this section must be paid out of the Crown Bank Account without further appropriation than this section.
4: The indemnity conferred by subsection (1)
5: Within 12 sitting days of the making of any payment under this section, the Minister must present to the House of Representatives a report which contains details of the circumstances giving rise to the liability of the Crown, the amount of the payment, the person to whom the payment was made and any other relevant matters. Amendments to other Acts and revocation
48: Amendments to other Acts and revocation
1: The Acts specified in Schedule 2
2: The Reserve Bank of New Zealand (Registration of Banks) Regulations (No 2) 2001 (SR 2001/32) Transitional provisions
49: Deputy Governors cease to be directors of Bank on commencement of this Act
1: On the commencement of this Act, every Deputy Governor ceases to hold office as a director of the Bank.
2: A Deputy Governor is not entitled to any compensation for—
a: loss of office as a director; or
b: any change in his or her conditions of employment arising from that loss of office.
50: Savings relating to authorisations or consents under
Part 4 Any authorisations or consents relating to the use of a restricted word that were granted under section 65
51: Temporary exemption from
Part 4
1: This section applies to any person who,—
a: immediately before the commencement of this Act, was lawfully entitled to use, or was lawfully using, a name or title that included a restricted word; and
b: after the commencement of this Act, can no longer lawfully use that name or title.
2: A person to whom this section applies may, despite anything in Part 4
52: Existing applications
An application for registration as a registered bank under the principal Act that has been made, but not determined or withdrawn, before the date of commencement of this Act must continue to be dealt with in accordance with the principal Act and any regulations made under that Act as if this Act had not been enacted.