Deposit Takers (Moratorium) Exemption Notice 2009

Reprint
as at 1 December 2010

Crest

Deposit Takers (Moratorium) Exemption Notice 2009

(SR 2009/384)

Note

Changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in this reprint.

A general outline of these changes is set out in the notes at the end of this reprint, together with other explanatory material about this reprint.

This notice is administered by the Reserve Bank of New Zealand.

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 (Moratorium) 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 1 March 2013.

4 Application

  • This notice applies to a specified moratorium entity only until the date specified opposite its name in the table in the Schedule.

5 Interpretation

  • (1) In this notice, unless the context otherwise requires,—

    specified moratorium entity means a person specified in the first column of the table in the Schedule.

    (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.

6 Exemption from credit rating requirement

  • A specified moratorium entity is exempted from section 157I of the Act.

    Clause 6: amended, on 1 December 2010, by clause 4 of the Deposit Takers (Moratorium) Exemption Amendment Notice (No 2) 2010 (SR 2010/436).

6A Exemption from certain governance requirements

  • A specified moratorium entity is exempted from section 157L(1) and (3) of the Act.

    Clause 6A: inserted, on 1 December 2010, by clause 5 of the Deposit Takers (Moratorium) Exemption Amendment Notice (No 2) 2010 (SR 2010/436).

6B Exemption from capital ratio requirements

  • (1) A specified moratorium entity is exempted from sections 157T and 157U of the Act.

    (2) The trustee in respect of the debt securities of a specified moratorium entity is exempted from section 157T of the Act in respect of those securities.

    Clause 6B: inserted, on 1 December 2010, by clause 5 of the Deposit Takers (Moratorium) Exemption Amendment Notice (No 2) 2010 (SR 2010/436).

6C Exemption from related party exposures requirements

  • (1) This clause applies to the following specified moratorium entities:

    • (a) a specified moratorium entity with aggregate exposures to related parties that exceed 15% of capital on the day on which this clause comes into force; and

    • (b) a specified moratorium entity with—

      • (i) no exposures to related parties on the day on which this clause comes into force; and

      • (ii) no ability, under the terms of its trust deed, to enter into any contract or arrangement that will result in new exposures to related parties.

    (2) A specified moratorium entity to which this clause applies is exempted from sections 157X and 157Y of the Act.

    (3) The trustee in respect of the debt securities of a specified moratorium entity to which this clause applies is exempted from section 157X of the Act in respect of those securities.

    (4) For the purposes of subclause (1), aggregate exposures to related parties and capital must be determined as set out in regulation 24 of the Deposit Takers (Credit Ratings, Capital Ratios, and Related Party Exposures) Regulations 2010.

    Clause 6C: inserted, on 1 December 2010, by clause 5 of the Deposit Takers (Moratorium) Exemption Amendment Notice (No 2) 2010 (SR 2010/436).

6D Exemption from liquidity requirements

  • (1) A specified moratorium entity is exempted from sections 157ZA and 157ZB of the Act.

    (2) The trustee in respect of the debt securities of a specified moratorium entity is exempted from section 157ZA of the Act in respect of those securities.

    Clause 6D: inserted, on 1 December 2010, by clause 5 of the Deposit Takers (Moratorium) Exemption Amendment Notice (No 2) 2010 (SR 2010/436).

7 Generic conditions of exemptions in clauses 6 to 6D

  • (1) The exemptions in clauses 6 to 6D is subject to the conditions that—

    • (a) no debt securities may be offered for subscription by, or on behalf of, the specified moratorium entity; and

    • (b) the specified moratorium entity must ensure that any Internet site maintained by or on behalf of the entity displays, at all reasonable times and at no cost to the public, a notice to the effect that the entity is exempted, on the basis that it is in moratorium and does not accept any subscriptions from the public for debt securities, from—

      • (i) the requirement in section 157I of the Act to have a credit rating; and

      • (iv) the related party exposures requirements in sections 157X and 157Y of the Act (if clause 6C applies to the specified moratorium entity); and

    • (c) the specified moratorium entity must send a notice in writing to each of its depositors, within 6 months of this notice commencing to apply to the entity, to the effect that the entity is exempted from the requirement to have a credit rating on the basis that it is in moratorium and does not accept any subscriptions from the public for debt securities; and

    • (d) the specified moratorium entity must not disclose 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; and

    • (e) the specified moratorium entity must send a notice in writing to each of its depositors by the close of 1 June 2011 to the effect that the entity is exempted, on the basis that it is in moratorium and does not accept any subscriptions from the public for debt securities, from the requirements specified in paragraph (b).

    (2) References in this clause to debt securities do not include debt securities in respect of which the only persons in New Zealand who are able, under the terms of the offer of the securities, to subscribe for the securities are all or any of the following:

    • (a) eligible persons referred to in section 5(2CC) of the Securities Act 1978:

    Clause 7 heading: amended, on 1 December 2010, by clause 6(1) of the Deposit Takers (Moratorium) Exemption Amendment Notice (No 2) 2010 (SR 2010/436).

    Clause 7(1): amended, on 1 December 2010, by clause 6(2) of the Deposit Takers (Moratorium) Exemption Amendment Notice (No 2) 2010 (SR 2010/436).

    Clause 7(1)(b): substituted, on 1 December 2010, by clause 6(3) of the Deposit Takers (Moratorium) Exemption Amendment Notice (No 2) 2010 (SR 2010/436).

    Clause 7(1)(d): amended, on 1 December 2010, by clause 6(4) of the Deposit Takers (Moratorium) Exemption Amendment Notice (No 2) 2010 (SR 2010/436).

    Clause 7(1)(e): added, on 1 December 2010, by clause 6(4) of the Deposit Takers (Moratorium) Exemption Amendment Notice (No 2) 2010 (SR 2010/436).

8 Further conditions of exemption in clause 6C

  • (1) The exemption in clause 6C is subject to the conditions that a specified moratorium entity described in clause 6C(1)(a)—

    • (a) must not increase or renew existing exposures to related parties; and

    • (b) must not create any new exposures to related parties.

    (2) For the purposes of subclause (1), exposures to related parties must be identified and measured as set out in regulations 25 to 27 of the Deposit Takers (Credit Ratings, Capital Ratios, and Related Party Exposures) Regulations 2010.

    Clause 8: added, on 1 December 2010, by clause 7 of the Deposit Takers (Moratorium) Exemption Amendment Notice (No 2) 2010 (SR 2010/436).

Schedule
Entities in moratorium to which this notice applies

cl 4

Name of moratorium entityEnd date for application of this notice
Beneficial Finance Limited1 March 2013
Mortgage Backed Bonds Limited1 March 2013
Orange Finance Limited31 July 2011
Propertyfinance Securities Limited1 March 2013
Structured Finance (NZ) Limited31 October 2011

  • Schedule: amended, on 1 December 2010, by clause 8(1)(a) of the Deposit Takers (Moratorium) Exemption Amendment Notice (No 2) 2010 (SR 2010/436).

  • Schedule: amended, on 1 December 2010, by clause 8(1)(b) of the Deposit Takers (Moratorium) Exemption Amendment Notice (No 2) 2010 (SR 2010/436).

  • Schedule: amended, on 1 December 2010, by clause 8(1)(c) of the Deposit Takers (Moratorium) Exemption Amendment Notice (No 2) 2010 (SR 2010/436).

  • Schedule: amended, on 1 December 2010, by clause 8(1)(d) of the Deposit Takers (Moratorium) Exemption Amendment Notice (No 2) 2010 (SR 2010/436).

  • Schedule: amended, on 1 December 2010, by clause 8(2) of the Deposit Takers (Moratorium) Exemption Amendment Notice (No 2) 2010 (SR 2010/436).

  • Schedule: amended, on 19 February 2010, by clause 4(1) of the Deposit Takers (Moratorium) Exemption Amendment Notice 2010 (SR 2010/14).

  • Schedule: amended, on 19 February 2010, by clause 4(2) of the Deposit Takers (Moratorium) Exemption Amendment Notice 2010 (SR 2010/14).

Dated at Wellington this 10th day of December 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 March 2013. It is an exemption from the requirement to have a credit rating.

The notice will apply to any entity that is listed in the Schedule. Entities that have previously issued debt securities to members of the public, but that are now in a moratorium approved by their stockholders and have not yet repaid all of their depositors, are deemed to be deposit takers under section 157C(3) of the Reserve Bank of New Zealand Act 1989.

The exemption is subject to conditions, for example, the terms of the notice prevent an exempted entity from issuing further debt securities to the public. This restriction does not apply to offers of debt securities that could only be accepted by persons who come within the definition of eligible person in the Securities Act 1978 (which relates to wealthy persons and persons experienced in investing money or experienced in the industry or business to which the security relates) or by persons referred to in section 3(2)(a) of the Securities Act 1978 (to whom an offer of securities would not constitute an offer of securities to the public for the purposes of that Act). It is intended that the generic conditions will apply to any entity in moratorium to which the notice applies.

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 exemption because—

  • the Bank is satisfied that the exemption is consistent with the maintenance of a sound and efficient financial system in that an exempted entity will be prevented from accepting deposits from the public:

  • the additional direct and indirect costs of obtaining a credit rating are unduly onerous and burdensome in the circumstances. The relevant circumstances are that the deposit taker is unable to accept deposits from the general public as a condition of this exemption, and existing depositors have agreed not to withdraw their deposits until they fall due under the new arrangement. In these circumstances, a credit rating is not likely to provide material additional benefits to depositors:

  • the exemption is conditional on the exempted deposit taker not issuing any further debt securities to the public, but at the same time it does not preclude the possibility of investment, for example by a wealthy or experienced investor, that may assist an entity in moratorium; therefore the exemption is not broader than reasonably necessary to address the matters that gave rise to the exemption.

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 Acts and Regulations Publication Act 1989.

Date of notification in Gazette: 17 December 2009.

Contents

  • 1General

  • 2Status of reprints

  • 3How reprints are prepared

  • 4Changes made under section 17C of the Acts and Regulations Publication Act 1989

  • 5List of amendments incorporated in this reprint (most recent first)

Notes
1 General

  • This is a reprint of the Deposit Takers (Moratorium) Exemption Notice 2009. The reprint incorporates all the amendments to the notice as at 1 December 2010, as specified in the list of amendments at the end of these notes.

    Relevant provisions of any amending enactments that contain transitional, savings, or application provisions that cannot be compiled in the reprint are also included, after the principal enactment, in chronological order. For more information, see http://www.pco.parliament.govt.nz/reprints/ .

2 Status of reprints

  • Under section 16D of the Acts and Regulations Publication Act 1989, reprints are presumed to correctly state, as at the date of the reprint, the law enacted by the principal enactment and by the amendments to that enactment. This presumption applies even though editorial changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in the reprint.

    This presumption may be rebutted by producing the official volumes of statutes or statutory regulations in which the principal enactment and its amendments are contained.

3 How reprints are prepared

  • A number of editorial conventions are followed in the preparation of reprints. For example, the enacting words are not included in Acts, and provisions that are repealed or revoked are omitted. For a detailed list of the editorial conventions, see http://www.pco.parliament.govt.nz/editorial-conventions/ or Part 8 of the Tables of New Zealand Acts and Ordinances and Statutory Regulations and Deemed Regulations in Force.

4 Changes made under section 17C of the Acts and Regulations Publication Act 1989

  • Section 17C of the Acts and Regulations Publication Act 1989 authorises the making of editorial changes in a reprint as set out in sections 17D and 17E of that Act so that, to the extent permitted, the format and style of the reprinted enactment is consistent with current legislative drafting practice. Changes that would alter the effect of the legislation are not permitted.

    A new format of legislation was introduced on 1 January 2000. Changes to legislative drafting style have also been made since 1997, and are ongoing. To the extent permitted by section 17C of the Acts and Regulations Publication Act 1989, all legislation reprinted after 1 January 2000 is in the new format for legislation and reflects current drafting practice at the time of the reprint.

    In outline, the editorial changes made in reprints under the authority of section 17C of the Acts and Regulations Publication Act 1989 are set out below, and they have been applied, where relevant, in the preparation of this reprint:

    • •omission of unnecessary referential words (such as “of this section” and “of this Act”)

    • •typeface and type size (Times Roman, generally in 11.5 point)

    • •layout of provisions, including:

      • •indentation

      • •position of section headings (eg, the number and heading now appear above the section)

    • •format of definitions (eg, the defined term now appears in bold type, without quotation marks)

    • •format of dates (eg, a date formerly expressed as “the 1st day of January 1999” is now expressed as “1 January 1999”)

    • •position of the date of assent (it now appears on the front page of each Act)

    • •punctuation (eg, colons are not used after definitions)

    • •Parts numbered with roman numerals are replaced with arabic numerals, and all cross-references are changed accordingly

    • •case and appearance of letters and words, including:

      • •format of headings (eg, headings where each word formerly appeared with an initial capital letter followed by small capital letters are amended so that the heading appears in bold, with only the first word (and any proper nouns) appearing with an initial capital letter)

      • •small capital letters in section and subsection references are now capital letters

    • •schedules are renumbered (eg, Schedule 1 replaces First Schedule), and all cross-references are changed accordingly

    • •running heads (the information that appears at the top of each page)

    • •format of two-column schedules of consequential amendments, and schedules of repeals (eg, they are rearranged into alphabetical order, rather than chronological).

5 List of amendments incorporated in this reprint (most recent first)