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Deposit Takers Act 2023

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

95: Meaning of due diligence

You could also call this:

"What 'due diligence' means: taking reasonable steps to ensure a deposit taker follows the rules"

Illustration for Deposit Takers Act 2023

When you think about due diligence, it means taking reasonable steps to make sure a deposit taker is doing the right thing. You do this by making sure the deposit taker's employees and agents follow certain procedures, or by using automated procedures, to comply with important rules. You also need to have ways to find out if these procedures are not working well and fix any problems you find.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS497963.

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Money and consumer rights > Banking and loansBusiness > Industry rules
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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"

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96: Use of information and advice, or

"Trusting information to help you make good decisions as a deposit taker boss"

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

95Meaning of due diligence

  1. In this subpart, due diligence includes taking reasonable steps to ensure that the deposit taker—

  2. requires its employees and agents to follow procedures, or has implemented automated procedures, that are designed to ensure compliance with the prudential obligations; and
    1. has in place methods for systematically identifying deficiencies in the effectiveness of the procedures for compliance; and
      1. promptly remedies any deficiencies discovered.