Dated at Wellington this 15th day of February 2010.
Grant Spencer,
Deputy Governor.
Statement of reasons
This notice, which comes into force on the day after the date of its notification in the Gazette, amends the Deposit Takers (Moratorium) Exemption Notice 2009, which exempts certain entities from the requirement to have a credit rating. The notice inserts the names of 4 new entities to the list of exempted entities. These are 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, and are deemed to be deposit takers by section 157C(3) of the Reserve Bank of New Zealand Act 1989 (the Act). The notice also omits the names of 3 entities that no longer meet the definition of deposit takers as they do not have any outstanding debt securities.
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 in relation to the 4 new entities because—
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 the 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 is reasonably necessary to address the matters that gave rise to the exemption.