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Deposit Takers Act 2023

Depositor compensation scheme - Levies for depositor compensation scheme

238: Levy regulations

You could also call this:

"Rules about how banks pay their share of costs to the government"

Illustration for Deposit Takers Act 2023

The Governor-General can make rules about levies on the Minister's advice. You need to know that the Minister thinks about how the levies should cover costs over time. These costs include paying people who are owed money, helping banks in trouble, and paying for the Bank's work.

The Minister also thinks about the costs of the government getting ready to help banks, and paying back any money borrowed to help banks. You should be aware that the costs of collecting the levies are also considered. The rules can say how much each bank must pay, and how the payment is made.

The rules can also say how often the banks must pay, and what happens if they do not pay on time. If a bank does not pay, it might have to pay extra money as a penalty, as stated in section 237. The rules can be made to apply to banks from a certain date, even if that date has already passed.

The government can also decide to reduce or waive the levies for some banks, depending on the circumstances. You can find more information about these rules in Part 3 of the Legislation Act 2019.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS501298.

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Part 6Depositor compensation scheme
Levies for depositor compensation scheme

238Levy regulations

  1. The Governor-General may, by Order in Council, on the recommendation of the Minister, make regulations providing for the levies.

  2. The Minister must, before making a recommendation, have regard to the principle that it is desirable for the levies to be prescribed on the basis that the following costs should, over time, be met fully out of the fund:

  3. the costs of entitlements to compensation under this Part, including the cost of establishing and maintaining the fund (taking into account any money recovered under subpart 4); and
    1. the costs of supporting a resolution measure under subpart 5; and
      1. the costs of the Bank in performing or exercising its functions, powers, or duties under this Part; and
        1. the costs of the Crown in connection with the Minister performing, or preparing to perform, the Minister’s duties under subpart 8 (for example, the costs incurred in holding additional liquidity in preparation for performing those duties); and
          1. the costs of repaying any money provided to the fund under subpart 8 and any interest or fees, charges, or costs in connection with the money provided to the fund; and
            1. the costs of collecting the levy money.

              1. The regulations may—

              2. provide different levies for different classes of licensed deposit taker:
                1. specify the amount of levies, or the method of calculating or ascertaining the amount of levies for each class:
                  1. include in levies, or provide for the inclusion in levies of, any shortfall in recovering the costs (including the costs referred to in subsection (2)(e)):
                    1. provide for the payment and collection of levies (which may include providing for instalment payments):
                      1. provide for interest under section 237:
                        1. specify the financial year or part financial year to which a levy applies, and apply that levy to that financial year or part financial year and each subsequent financial year until the levy is revoked or replaced:
                          1. require payment of a levy for a financial year or part financial year, irrespective of the fact that the regulations may be made after that financial year has commenced:
                            1. provide for waivers, discounts, or refunds of the whole or any part of a levy for any case or class of cases.

                              1. Regulations made under this section are secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements).

                              Notes