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Deposit Takers Act 2023

Regulation of deposit takers - Directors’ and New Zealand chief executive officers’ due diligence duty

93: Duty of directors of licensed deposit takers

You could also call this:

"Directors of companies that take deposits must follow rules and make good decisions"

Illustration for Deposit Takers Act 2023

If you are a director of a company that people deposit money with, you must make sure the company follows the rules. You have to be careful and make good decisions to ensure the company does what it is supposed to do. The rules the company must follow are called prudential obligations, which are explained in section 6, but do not include rules about stopping money laundering.

When making decisions, you must think about the size and type of business the company does, and what your role is in the company. You can find more information about what happens if you do not follow these rules in subpart 2 of Part 5. If the company is based overseas, this section does not apply to you, but you can look at section 94 instead.

The company must comply with many rules, but it does not have to follow the rules in the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 or the regulations made under that Act.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS495636.

Topics:
Money and consumer rights > Banking and loansBusiness > Industry rules
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92: Standards may provide for matters to be specified by conditions, or

"Rules can be tailored to fit each deposit taker's situation using special conditions."

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94: Duty of New Zealand chief executive officers of overseas licensed deposit takers, or

"Overseas deposit taker bosses in New Zealand must follow the rules to keep people's money safe"

Part 3Regulation of deposit takers
Directors’ and New Zealand chief executive officers’ due diligence duty

93Duty of directors of licensed deposit takers

  1. Every director of a licensed deposit taker must exercise due diligence to ensure that the deposit taker complies with its prudential obligations.

  2. For the purposes of this section, the director must exercise the care, diligence, and skill that a reasonable director would exercise in the same circumstances, taking into account (without limitation)—

  3. the size and nature of the business of the deposit taker; and
    1. the position of the director and the nature of the responsibilities undertaken by the director.

      1. In this section, prudential obligation has the meaning set out in section 6, except that it does not include an obligation imposed by or under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 or regulations made under that Act.

      2. This section does not apply in relation to an overseas licensed deposit taker (see instead section 94).

      3. See subpart 2 of Part 5, which provides for a court to impose a pecuniary penalty for a contravention of the duty under this section.

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