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Local Government Act 2002

Planning, decision-making, and accountability - Borrowing and security - Miscellaneous provisions

122: Disclosure document and loan documents to contain statement that the Crown does not guarantee financial products or loan

You could also call this:

“Documents must state that the government doesn't guarantee local government loans or investments”

If a local government is named as the issuer in a disclosure document, or agrees to be named in it, the document must say that the Crown (the government) doesn’t guarantee the financial products being offered. This rule doesn’t apply if the Crown has explicitly guaranteed the products under the Public Finance Act 1989.

A disclosure document can be a product disclosure statement or a disclosure document as defined in the Financial Markets Conduct Act 2013.

When a local government makes a loan agreement or a similar arrangement, it must include a statement that the Crown doesn’t guarantee the loan or any other responsibilities in the arrangement.

This rule about loan agreements doesn’t apply to certain types of money described in section 49 of the Public Finance Act 1989.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM172907.

Topics:
Government and voting > Local councils
Money and consumer rights > Banking and loans
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Part 6 Planning, decision-making, and accountability
Borrowing and security: Miscellaneous provisions

122Disclosure document and loan documents to contain statement that the Crown does not guarantee financial products or loan

  1. If a local authority is named as the issuer, or is otherwise named with its consent, in a disclosure document, that disclosure document must, unless the financial products being offered under the disclosure document are expressly guaranteed by the Crown under the Public Finance Act 1989, contain a statement that the financial products being offered under the disclosure document are not guaranteed by the Crown.

  2. In subsection (1), disclosure document means a product disclosure statement (within the meaning of section 6(1) of the Financial Markets Conduct Act 2013) or a disclosure document under clause 26 of Schedule 1 of that Act.

  3. If a local authority enters into any loan agreement or incidental arrangement, that agreement or arrangement must include a statement that the loan or other liability under the incidental arrangement is not guaranteed by the Crown.

  4. Subsection (3) does not apply in relation to liability for any sum of a kind described in section 49 of the Public Finance Act 1989.

Notes
  • Section 122: replaced, on , by section 150 of the Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70).