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Crown Entities Act 2004
Crown entity reporting and financial obligations
Other provisions for financial accountability
Acquisition of financial products, borrowing, guarantees, indemnities, and derivatives
164: Restrictions on use of derivatives

Part 1:
Preliminary provisions

3Purpose 4Application of Acts to Crown entities 5Application of this Act to school boards 6Application of this Act to tertiary education institutions 7Meaning of Crown entity and categories of Crown entities 7AMeaning of multi-parent subsidiary 8Meaning of parent Crown entity 9Power to amend Schedules 1 and 2 10Interpretation 10AProvisions affecting application of amendments to this Act 10BStatus of examples 11Act binds the Crown 12Outline of main Crown entity provisions

Part 2:
Establishment and governance of Crown entities

Statutory entities

Crown entity companies

Formation and shareholding of Crown entity companies

79Formation and acquisition of shares in Crown entity companies 80Restrictions relating to shares in Crown entity companies 81Crown entity company must have constitution stating it is Crown entity 82Constitution must be presented to House of Representatives 83Shares to be held by person holding office as Minister 84Appointment of representative of shareholding Minister 85Interface with Companies Act 1993 and other Acts

Role and accountability of members

86Board's role 87Accountability of members to shareholding Ministers

Shareholding Ministers' role

88Shareholding Ministers' role

Monitor's role

88AMonitor's role

Appointment and removal of members

89Criteria for appointments by shareholding Minister 90Members must disclose interests before appointment 91No compensation for removal from office

Collective duties of board

92Duty to act consistently with objectives, functions, statement of intent, and statement of performance expectations 93Subsidiaries 94Accountability for collective board duties

Individual duty of members

95Duty to comply with this Act and entity's Act

Crown entity subsidiaries

Formation and shareholding of Crown entity subsidiaries

96Acquisition of subsidiaries 97Subsidiaries: rules applying to all Crown entities 98Subsidiaries: rules applying only to statutory entities 99Application to multi-parent subsidiaries 100Acquisition of shares or interests in companies, trusts, and partnerships, etc 101Corporation sole may not acquire interests in bodies corporate 102Interface with Companies Act 1993 and other Acts

Part 3:
Operation of Crown entities

Provisions applying generally to Crown entities

Directions to statutory entities and Crown entity companies

103Power to direct Crown agents to give effect to government policy 104Power to direct autonomous Crown entities to have regard to government policy 105No power to direct independent Crown entities or Crown entity companies on government policy unless provided in another Act 106Directions to members and office holders of entities 107Directions to support whole of government approach 108Process for giving directions under section 107 109House of Representatives may resolve to disapply direction under section 107 110Obligation to give effect to direction 111Publication of direction under section 107 112Power to add functions if authorised by entity's Act or constitution 113Safeguarding independence of Crown entities

Government directions to Crown entities

114Crown entities must comply with directions given under statutory power of direction 115Procedure for ministerial directions on government policy 115AReview and expiry of all directions

Employees

116Employment of employees 117Employment of chief executive 118Crown entity to be good employer 119Application of clauses 12 to 14 of Schedule 8 of the Public Service Act 2020

Statutory entities

Protections from liability of members, office holders, and employees

120Protections from liabilities of statutory entity 121Immunity from civil liability 122Indemnities in relation to excluded act or omission 123Insurance for liability of member, office holder, or employee 124Saving of judicial protections from liability 125Breach of indemnity and insurance limits 126Definitions for protections from liability

Dealings with third parties by statutory entities

127Method of contracting 128Seal 129Attorneys 130Address for service

Miscellaneous provisions

131Application of Ombudsmen Act 1975 and Official Information Act 1982 132Review of Crown entity's operations and performance 133Power to request information 134Good reasons for refusing to supply requested information 135Members, office holders, and employees are officials

Part 4:
Crown entity reporting and financial obligations

Interpretation for this Part

136Interpretation for this Part

Reporting obligations

137Application of this subpart

Planning: statement of intent

Planning: statement of performance expectations

Reporting: annual report

150Obligation to prepare, present, and publish annual report 150ASpecial annual reporting requirements 151Form and content of annual report 152Disclosure of payments in respect of members, committee members, and employees 153Form and content of statement of performance 154Annual financial statements 155Statement of responsibility 156Audit report

Application of this subpart to Crown entity groups

156AApplication of this subpart to Crown entity groups 156BMinister of Finance may require additional reporting

Multi-parent subsidiaries: exemptions from reporting requirements under this subpart

157Multi-parent subsidiaries part-owned by school board 157AOther multi-parent subsidiaries

Other provisions for financial accountability

Bank accounts

158Bank accounts of Crown entities

Acquisition of financial products, borrowing, guarantees, indemnities, and derivatives

159Application of acquisition of financial products, borrowing, guarantees, indemnities, and derivatives rules 160Further provision relating to acquisition of financial products, borrowing, guarantees, indemnities, and derivatives rules 161Restrictions on acquisition of financial products 162Restrictions on borrowing 163Restrictions on giving of guarantees and indemnities 164Restrictions on use of derivatives

Miscellaneous

165Net surplus payable by certain statutory entities and Crown entity companies 166Capital charge payable by certain statutory entities 167Gifts 168Accounting records to be kept

Miscellaneous

169Taxation of statutory entities 170Responsible Minister may set standards, terms, and conditions in respect of certain classes of outputs 171Offences 172Penalties for offences 173Regulations under this Part 174Minister of Finance instructions 175Consultation with House of Representatives on reporting standards 176Application of provisions of Public Finance Act 1989

Part 5:
Miscellaneous provisions

Miscellaneous

177Application of liquidation provisions of Companies Act 1993 to statutory entities 178Application of Archives Act 1957 179Public Bodies Contracts Act 1959 does not apply to Crown entities 180Local Authorities (Members' Interests) Act 1968 does not apply to Crown entities 181Administration of Crown entity provisions

Transitional and savings provisions

182Existing members exempt from qualification requirements 183Term of office of existing members other than ex officio members 184Term of office of existing ex officio members 185Term of office of existing chairpersons and deputy chairpersons 186Continuation of existing board committees 187Continuation of existing employment 188Existing compensation provision 189Existing protection from liability provisions 190Existing insurance cover 191Existing rights under Government Superannuation Fund Act 1956 unaffected 192Existing delegations and directions to continue 193Other existing things protected 194Existing shareholdings in Crown entity subsidiaries 195Existing bank accounts 196Existing law on securities, borrowing, guarantees, indemnities, and derivative transactions continues to apply until 1 April 2005 197Continuation of pre-1 April 2005 securities, borrowing, guarantees, indemnities, and derivative transactions 198Reporting obligations in respect of financial years ending before 1 July 2006 199Regulations for transitional, savings, and general purposes 199AApplication, savings, and transitional provisions relating to amendments to Act

Amendments to other enactments

200Amendments to other enactments 201Amendment to Gas Amendment Act 2004

Schedule 1AAA:
Application, savings, and transitional provisions relating to amendments made to Act after 1 January 2013

Schedule 1:
Statutory entities

Schedule 2:
Crown entity companies

Schedule 3:
Application of Crown Entities Act 2004 to school boards

Schedule 4:
Application of Crown Entities Act 2004 to tertiary education institutions

Schedule 5:
Appointment of chairperson, etc, and board procedure for statutory entities (other than corporations sole)

Schedule 6:
Amendments to other Acts arising from Crown entity reforms

Crown Entities Act 2004

Crown entity reporting and financial obligations - Other provisions for financial accountability - Acquisition of financial products, borrowing, guarantees, indemnities, and derivatives

164: Restrictions on use of derivatives

You could also call this:

"Crown entities have rules about using derivatives to manage money risks"

Illustration for Crown Entities Act 2004

If you are a Crown entity, you must not agree to a derivative or change its terms, except as allowed in section 160. This rule applies to you when you are dealing with derivatives. You have to follow this rule to stay within the law.

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This page was last updated on 18 July 2025

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM330569.

Topics:

Government and voting > Government departmentsBusiness > Industry rules

163: Restrictions on giving of guarantees and indemnities, or

"Crown entities have rules about when they can promise to pay for someone else's debts or mistakes"

165: Net surplus payable by certain statutory entities and Crown entity companies, or

"When companies owned by the government make a profit, they might have to give some money back to the government."

Part 4Crown entity reporting and financial obligations
Other provisions for financial accountability: Acquisition of financial products, borrowing, guarantees, indemnities, and derivatives

164Restrictions on use of derivatives

A Crown entity must not enter into an agreement constituting a derivative, or amend the terms of that agreement, other than as provided in section 160.

Notes

Section 164: replaced, on 1 December 2014, by section 150 of the Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70).

Crown Entities Act 2004

Crown entity reporting and financial obligations - Other provisions for financial accountability - Acquisition of financial products, borrowing, guarantees, indemnities, and derivatives

164: Restrictions on use of derivatives

"Crown entities have rules about using derivatives to manage money risks"

Part 4Crown entity reporting and financial obligationsOther provisions for financial accountability: Acquisition of financial products, borrowing, guarantees, indemnities, and derivatives

164Restrictions on use of derivatives

Part 4Crown entity reporting and financial obligations
Other provisions for financial accountability: Acquisition of financial products, borrowing, guarantees, indemnities, and derivatives