Reserve Bank of New Zealand Act 2021

Schedule 1: Transitional, savings, and related provisions

You could also call this:

"Changes when the new Reserve Bank law starts"

Illustration for Reserve Bank of New Zealand Act 2021

When the Reserve Bank of New Zealand Act 2021 starts, some things will change. You need to know what these changes are. The Act has a schedule that explains these changes. The schedule is called "Transitional, savings, and related provisions". The schedule explains what happens to the old board of directors and the Governor of the Reserve Bank. It also explains what happens to the bank notes and coins that are already in use. The schedule says that the old board of directors will be disestablished, and the Governor will keep their job. The bank notes and coins will still be legal tender. The schedule also explains what happens to the funding agreements and the foreign exchange directions. It says that these agreements and directions will still be in force, but they can be changed or cancelled. The Minister of Finance will give the first notice of their expectations under section 81 as soon as possible after the main commencement date. The schedule has many other provisions that explain what happens to different things when the Act starts. It explains what happens to the charter, the code of conduct, and the MPC remit. It also explains what happens to the foreign reserves management and co-ordination framework. You can read the schedule to learn more about these changes. The Act also has provisions that relate to the Legislation Act 2019. These provisions explain how the Act will be applied until the main commencement date. They also explain how standards will be issued and published. The Minister of Finance can give instructions, and these instructions must be presented to the House of Representatives. You can read the Act to learn more about these provisions.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS287370.

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300: Other legislation amended, or

"Changes to other New Zealand laws"

Schedule 2: Appointment of chairperson, etc, and board procedure, or

"How the Reserve Bank board chooses its leaders and makes decisions"

1Transitional, savings, and related provisions Empowered by s 6

1Provisions relating to this Act as enacted

1Interpretation

In this Part, unless the context otherwise requires,—
1989 Act means the Act previously called the Reserve Bank of New Zealand Act 1989
main commencement date means the date on which section 8 comes into force.

2References to previous Title of 1989 Act

On and after the main commencement date, every reference in any legislation and in any document to the Reserve Bank of New Zealand Act 1989 must, unless the context otherwise requires, be read as a reference to the Banking (Prudential Supervision) Act 1989.

3Board under 1989 Act disestablished

On the main commencement date, the board of directors of the Bank under the 1989 Act is disestablished and each of those directors ceases to hold office.
A director of the Bank is not entitled to any compensation or other payment or benefit relating to their ceasing to hold office as a director.

4Other officeholders

The person holding office as the Governor of the Reserve Bank immediately before the main commencement date—
must be treated as continuing to hold that office for the balance of the term for which that person was appointed (and may be reappointed under section 82 for 1 further term of up to 5 years); and
is entitled to terms and conditions of appointment no less favourable than the terms and conditions applying to the person immediately before the main commencement date.

The person holding office as the Deputy Governor of the Reserve Bank immediately before the main commencement date—
ceases to hold that office on that date but must be treated on and after that date as being an employee of the Bank for a fixed term that is equal to the balance of the term for which that person was appointed as Deputy Governor; and
must be treated as continuing to hold office as an internal member of the MPC for the balance of the term for which that person was appointed as Deputy Governor (and may be reappointed under clause 17(1) of Schedule 3 for 2 further terms of up to 5 years); and
is entitled to terms and conditions of employment no less favourable than the terms and conditions applying to the person immediately before the main commencement date.

Each person who holds office as an internal member or an external member of the MPC immediately before the main commencement date must be treated as continuing to hold that office for the balance of the term for which that person was appointed.
Subclauses (1) to (3) do not limit any provision of this Act under which a person referred to in those subclauses may be removed from office or under which that person otherwise ceases to hold office.

5Governor’s acts to have continuing effect

This clause applies in relation to a provision (provision A) in the 1989 Act or any other legislation—
that imposes or confers a function or power on the Governor; and
that—
1. has been amended by this Act to impose or confer the function or power (or substantially the same function or power) on the Bank or the board; or
2. with or without modification, has been replaced by this Act by a provision (the provision B) that imposes or confers the function or power (or substantially the same function or power) on the Bank or the board.

Unless the context otherwise requires, anything done by the Governor in the performance or exercise of a function or a power under provision A, and that is in effect immediately before the main commencement date, continues to have effect as if it had been performed or exercised by the Bank or the board under provision A (as amended) or provision B.

6First notice of Minister’s expectations under section 81

The Minister must give the first notice under section 81 as soon as practicable after the main commencement date.

7Existing charter continues in force

The charter that is in force under the 1989 Act immediately before the main commencement date—
continues in force as if it were issued under this Act; and
may be replaced under section 103 of this Act.

8Existing code of conduct continues in force

The code of conduct that is in force under the 1989 Act immediately before the main commencement date—
continues in force as if it had been approved under section 106 of this Act; and
may be amended or replaced under that section.

9Existing MPC remit continues in force

The following applies to the remit for the MPC that is in force under the 1989 Act immediately before the main commencement date:
the remit continues in force as the MPC remit as if it were issued under this Act:
the remit may not be amended:
the remit is revoked on the earlier of the following:
1. the close of 13 February 2024:
2. the close of a date specified under subclause (2).

The Minister may publish a notice in the Gazette that specifies a date for the purposes of subclause (1)(c)(ii).
The Minister must send a copy of that notice to the Parliamentary Counsel Office.
See section 122, which provides for the Minister to issue an MPC remit that replaces the remit referred to in subclause (1).

Notes

10First remit advice

The Bank must give the first remit advice under clause 2 of Schedule 3 on or before 13 November 2023.

11Order providing for different economic objective or objectives

An Order in Council made under section 12 of the 1989 Act, and that is in force immediately before the main commencement date,—
continues in force as if it had been made under section 125 of this Act; and
may be amended or revoked as if made under that section.

12Existing foreign exchange direction continues in force

A direction that is in force under section 17 of the 1989 Act immediately before the main commencement date—
continues in force as if it were given under section 134; and
may be amended or replaced under that section.

13First foreign reserves management and co-ordination framework

The Minister and the Bank must take all reasonable steps to ensure that the first foreign reserves management and co-ordination framework is agreed and signed under sections 143 and 144 within 6 months after the main commencement date.

14Foreign reserve determinations under section 24 of 1989 Act

Section 24(1) of the 1989 Act continues to apply until the first foreign reserves management and co-ordination framework agreed and signed under sections 143 and 144 comes into force (whether or not section 24(1) of that Act has been previously repealed).
The Bank must continue to hold and maintain foreign reserves at the level or within those levels determined under section 24(1) of the 1989 Act until the first foreign reserves management and co-ordination framework comes into force.

15Bank notes and coins continue as legal tender

Every bank note and every coin issued by the Bank before the main commencement date, and every coin issued by the Minister under the Decimal Currency Act 1964 or under the Coinage Act 1933 by virtue of the Decimal Currency Act 1964, that is legal tender immediately before the main commencement date must be treated for all purposes to have been made or issued under this Act.

Compare

1989 No 157 s 25(3)

16Bank continues to be liable to pay bank notes or coins that have ceased to be legal tender

This clause applies to any bank note or coin issued before the main commencement date that ceased to be legal tender before that date and that the Bank was, immediately before that date, liable to pay.
The Bank continues to be liable to pay the bank note or coin on presentation of the bank note or coin at the head office of the Bank.

Compare

1989 No 157 s 26(4), (5)

17First financial policy remit

The Minister must take all reasonable steps to ensure that the first financial policy remit comes into force on the main commencement date.
The Minister must, before issuing the first financial policy remit under section 203, consult the Governor and the appointed members.
In this clause, appointed member, at the time of consultation under subclause (2), means a person who has been appointed as a member of the board under section 27, whether or not the appointment has taken effect (see also section 43 of the Legislation Act 2019).
This clause does not limit the Minister’s duty to consult the Bank under section 203.

18Current funding agreement continues

A funding agreement that is in force immediately before the main commencement date under section 159 of the 1989 Act must be treated as continuing in force as a funding agreement under sections 209 to 212 of this Act (and may be varied or terminated under section 209(4)).
However,—
the content of the funding agreement described in subclause (1) (whether or not it is varied) must continue to comply with section 160 of the 1989 Act as in force immediately before its repeal instead of section 210 of this Act; and
section 211(3) of this Act does not apply to the funding agreement or a variation of the funding agreement.

19Determination of annual dividend for financial year that starts on 1 July 2021

Section 213 (instead of section 162 of the 1989 Act) applies to the annual dividend for the financial year that starts on 1 July 2021.
The Bank must make a recommendation under section 213 for the financial year that starts on 1 July 2021 as soon as practicable after a statement of financial risk management is first published under section 251.
Subclause (2) applies despite anything to the contrary in section 213.

20Former statement of intent requirements cease to apply

Sections 162A and 162C of the 1989 Act cease to apply on 31 December 2021.
However, section 162B of the 1989 Act continues to apply for the purposes of any amendment under section 162D of that Act.

21First statement of intent under this Act

This clause applies to the first statement of intent under sections 216 to 227 (despite anything to the contrary in those sections).
The Bank must provide to the Minister—
a draft of the statement of intent as soon as practicable after the main commencement date; and
the final statement of intent as soon as practicable after receiving the comments (if any) provided under section 223(2)(b).

The statement of intent must relate to the financial year that starts on 1 July 2022 and at least the following 3 financial years.
The Minister must present a copy of the final statement of intent to the House of Representatives as soon as practicable after receiving it under subclause (2)(b).
Section 223(2)(a) and (c)(i) and 226(3) do not apply to the statement of intent.

22First statement of performance expectations under this Act

This clause applies to the first statement of performance expectations under sections 228 to 238 (despite anything to the contrary in those sections).
The Bank must provide to the Minister—
a draft of the statement of performance expectations as soon as practicable after the main commencement date; and
the final statement of performance expectations as soon as practicable after receiving the comments (if any) provided under section 234(2)(b).

The statement of performance expectations must relate to the financial year that starts on 1 July 2022.
The Minister must present a copy of the final statement of performance expectations to the House of Representatives as soon as practicable after receiving it under subclause (2)(b).
The following do not apply to the statement of performance expectations:
section 229 to the extent that it requires the statement of performance expectations to be prepared before the start of the financial year to which it relates:
section 234(2)(a):
section 234(2)(c) to the extent that it requires the final statement of performance expectations to be provided to the Minister before the start of the financial year to which the statement of performance expectations relates:
section 237(3).

23First annual report

This clause applies to the first annual report under sections 239 to 247 (despite anything to the contrary in those sections).
The annual report must relate to the financial year that starts on 1 July 2021 (and, accordingly, sections 163, 164, and 165 of the 1989 Act do not apply to that financial year).
The Bank must provide to the Minister the annual report under section 239 before the later of the following:
1 October 2022:
the date that is 3 months after the main commencement date.

The statements and information referred to in section 247(1) that will be included in the annual report must be forwarded to the Auditor-General under that section before the later of the following:
1 September 2022:
the date that is 2 months after the main commencement date.

The annual report does not have to contain information under section 240(1)(b), (f), (l), (m), and (n).
Despite section 214, the Bank may, but is not required to, include the information referred to in that section in the annual report. If the information is not included in the annual report, the Bank must instead publish the information on an Internet site maintained by, or on behalf of, the Bank.
The financial statements for the financial year to which the annual report relates are not required to contain the forecast statement referred to in section 244(2)(c).
For the purpose of including in the annual report the information required by section 242, references in that section to a member of the board include each person who was a director of the Bank under the 1989 Act at any time during the financial year to which the annual report relates.
Section 246 does not apply to the extent that it relates to a statement of performance.

24Former board of directors must report on matters not included in annual report

The board of directors of the Bank under the 1989 Act must provide to the Minister—
a statement as to whether, in the board’s opinion, the MPC, the Governor, the Deputy Governor, and the other members of the MPC have adequately discharged their respective responsibilities during the financial year to which the annual report under clause 23 relates; and
a description of how the board has assessed the matter under paragraph (a).

The information must be provided before the board is disestablished under clause 3 but not earlier than 20 working days before that disestablishment.
The information is not required to cover any period after the information is provided.
The annual report for the financial year referred to in subclause (1) must be accompanied by the information provided under this clause when it is presented under section 239(2) and when it is published under section 239(3).

25First statement of financial risk management

This clause applies to the statement of financial risk management under sections 250 to 252 (despite anything to the contrary in those sections).
Section 251(2)(a)(ii), (c), and (d)(i) applies only to financial years that start on or after the main commencement date.
The first statement of financial risk management must be prepared and published under section 251(1) as soon as practicable after the main commencement date.

26First statement of prudential policy

This clause applies to the first statement of prudential policy under sections 253 and 254 (despite anything to the contrary in those sections).
The statement of prudential policy must be prepared and published under section 254(1) as soon as practicable after the main commencement date.

27Fees regulations continue in force under this Act

This clause applies to regulations made under any of the following that are in force immediately before the main commencement date:
section 237(1)(u) or (6) of the Insurance (Prudential Supervision) Act 2010:
section 73(1)(g) of the Non-bank Deposit Takers Act 2013:
section 173(1)(i) of the 1989 Act.

The regulations—
continue in force as if made under section 292 of this Act; and
may be amended or revoked as if made under that section.

28References to designated FMIs

This clause applies until the repeal date (as defined in clause 1 of Schedule 1 of the Financial Market Infrastructures Act 2021).
A reference in this Act to a designated FMI must be treated as a reference to a designated settlement system within the meaning of section 156M of the 1989 Act.

2Provisions relating to Legislation Act 2019

29Application of this Part

This Part applies until the main commencement date (as defined in clause 2 of Schedule 1 of the Legislation Act 2019).

30Standards: status and publication

A standard issued under section 160 is a disallowable instrument, but not a legislative instrument, for the purposes of the Legislation Act 2012 and must be presented to the House of Representatives under section 41 of that Act.
The Bank must give notice of the issue of a standard in the Gazette.
The notice in the Gazette—
must—
1. state the name of the standard; and
2. briefly describe the nature of the standard; and
3. state where copies of the standard are available for inspection and purchase; but
need not contain the text of the standard.

The Bank must make a standard available to the public by making copies of it available—
for inspection at all reasonable times, free of charge,—
1. at the head office of the Bank; and
2. on an Internet site maintained by, or on behalf of, the Bank; and
for purchase at all reasonable times and at a reasonable price.

31Minister of Finance instructions

An instruction issued under section 259 is a disallowable instrument, but not a legislative instrument, for the purposes of the Legislation Act 2012 and must be presented to the House of Representatives under section 41 of that Act.
The Minister must notify the instruction in the Gazette, and publish it on the Internet, as soon as practicable after issuing it.