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Deposit Takers Act 2023

Licensing of deposit takers - Issue of licences

17: When licence must be issued

You could also call this:

"When the Bank must give a licence to a business that wants to take deposits"

Illustration for Deposit Takers Act 2023

The Bank must give a licence to an applicant if the Bank is satisfied that the applicant can follow the rules. You need to have a good structure for your business, including how it is owned and governed. Your business must also have suitable owners with enough money to fund it. The people in charge of your business must be trustworthy and good at their jobs. You must register under the Financial Service Providers (Registration and Dispute Resolution) Act 2008 when you start providing services as a licensed deposit taker. If you are from overseas, you must meet the criteria set out in section 18. You must also meet any other criteria set by the regulations. When the Bank checks who owns your business, they look at people who have a lot of control over your business. This includes people who can vote on big decisions or control others who can vote. The Bank also looks at people who work together with the owners or do what the owners want them to do. These people are called connected persons.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS471916.

Topics:
Money and consumer rights > Banking and loansBusiness > Industry rules
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16: Application for licence, or

"How to apply for a licence to be a deposit taker, as set by the Bank"

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18: Additional criteria for overseas applicants, or

"Extra rules for companies from other countries that want to take New Zealanders' money"

Part 2Licensing of deposit takers
Issue of licences

17When licence must be issued

  1. The Bank must, after receiving an application, issue a licence to which the application relates if the Bank is satisfied that—

  2. the applicant has the ability to comply with the prudential obligations (including prudential obligations that the Bank proposes to impose if it issues the licence); and
    1. the applicant’s incorporation and ownership structure and its governance structure are appropriate, having regard to the size and nature of the applicant’s business or proposed business; and
      1. the applicant’s ownership (including the financial strength and source of funding of each person to which subsection (2) applies) is appropriate, having regard to the size and nature of the applicant’s business or proposed business; and
        1. the applicant’s directors, senior managers, and proposed directors and senior managers are fit and proper persons to hold their respective positions; and
          1. the applicant is, or will be, registered under the Financial Service Providers (Registration and Dispute Resolution) Act 2008 on and from commencing to provide the service of being a licensed deposit taker; and
            1. in the case of an applicant that is an overseas person, the criteria set out in section 18 are satisfied; and
              1. the eligibility criteria (if any) that are prescribed by the regulations are satisfied.

                1. For the purposes of subsection (1)(c), a person (A) is a person to which this subsection applies if—

                2. A has the power (whether directly or indirectly) to exercise, or control the exercise of, 25% or more of the voting rights in the applicant; or
                  1. A has, together with 1 or more connected persons, the power (whether directly or indirectly) to exercise, or control the exercise of, 25% or more of the voting rights in the applicant.

                    1. In subsection (2), connected person, in relation to A, means—

                    2. a person who is acting or will act jointly or in concert with A in respect of exercising, or controlling the exercise of, a power referred to in subsection (2)(a) or (b); or
                      1. a person who acts, or is accustomed to acting, in accordance with the wishes of A.