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Deposit Takers Act 2023

Crisis management and resolution - Covered bonds - Resolution or statutory management, etc, of issuer

421: Limitation on application of resolution, statutory management, etc, provisions to covered bond SPV

You could also call this:

"Rules to help fix troubled companies don't fully apply to special companies called covered bond SPVs."

Illustration for Deposit Takers Act 2023

When a company is in trouble, the law has special rules to help fix the problem. These rules are in sections like 284(1), 287, 303, 330(1), and 345(1) of the Deposit Takers Act 2023. They are also in section 248 of the Companies Act 1993 and some sections of the Corporations (Investigation and Management) Act 1989.

You need to know that these rules do not stop a covered bond SPV from doing certain things. A covered bond SPV can get the legal title to property in a cover pool from the company that issued the bond. The SPV can also get documents and data about the property, and it can use a power of attorney to make decisions about the property.

The company that issued the bond still has to pay money it collects on behalf of the SPV to the SPV. The SPV can enforce its rights to get this money and to make decisions about the property. But the SPV can only do these things if it owns the property and the covered bond programme is registered under section 412.

A covered bond SPV is not considered an associated person or an associate under certain laws, like the Corporations (Investigation and Management) Act 1989, the Insurance (Prudential Supervision) Act 2010, or the Overseas Investment Act 2005. It is also not a subsidiary or a related company under these laws.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS519210.

Topics:
Money and consumer rights > Banking and loansBusiness > Industry rules
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"A cover pool monitor's job is to check and report on certain things to make sure everything is done correctly."

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Part 7Crisis management and resolution
Covered bonds: Resolution or statutory management, etc, of issuer

421Limitation on application of resolution, statutory management, etc, provisions to covered bond SPV

  1. Subsections (2) and (3) apply in relation to the following provisions:

  2. sections 284(1), 287, 303, 330(1), and 345(1) of this Act:
    1. section 248 of the Companies Act 1993:
      1. sections 42(1), 43(1), 44(1), and 45(2) of the Corporations (Investigation and Management) Act 1989.

        1. Nothing in a provision referred to in subsection (1)—

        2. prevents the transfer of the legal title to property in a cover pool from an issuer to a covered bond SPV:
          1. prevents the transfer, under a contract, of any documentation or data relating to property in a cover pool from the issuer to a covered bond SPV or a person acting on behalf of that SPV:
            1. prevents a covered bond SPV, or a person acting on behalf of that SPV, from exercising a power of attorney granted by the issuer in relation to property in a cover pool:
              1. affects the issuer’s obligation to pay money collected on behalf of, and held on trust for, a covered bond SPV, to that SPV:
                1. prevents the enforcement of any of the above rights by, or on behalf of, a covered bond SPV.

                  1. However, subsection (2) applies only if—

                  2. the covered bond SPV is the owner of the property in the cover pool; and
                    1. the covered bond programme is registered under section 412.

                      1. A covered bond SPV is not—

                      2. an associated person for the purposes of section 38(1)(a) of the Corporations (Investigation and Management) Act 1989 or section 170(1)(b) of the Insurance (Prudential Supervision) Act 2010; or
                        1. an associate of a person for the purposes of section 95(1)(b) of the Overseas Investment Act 2005; or
                          1. a subsidiary for the purposes of section 38(2) of the Corporations (Investigation and Management) Act 1989, section 95(2) of the Overseas Investment Act 2005, or section 170(2) of the Insurance (Prudential Supervision) Act 2010; or
                            1. a related company for the purposes of section 271 of the Companies Act 1993.

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