Plain language law

New Zealand law explained for everyone

Deposit Takers Act 2023

Miscellaneous - Regulations

456: Regulations prescribing classes of persons that are not eligible depositors

You could also call this:

"Rules about who can't get their money back from a deposit taker"

Illustration for Deposit Takers Act 2023

The Minister has to think about the purpose of Part 6, which is explained in section 190, before making some rules. You can find the purpose of Part 6 in section 190 and it is also related to Part 6. The Minister must also be sure that the rules are necessary to stop some people from getting compensation when they should not.

The Minister needs to be satisfied that some people should not get compensation if they try to cheat the system to get more than $100,000 per deposit taker. This also applies if giving them compensation would stop them from being careful when making investment decisions. You can read more about this in section 455(1)(a) and Part 6, which is related to the stability of New Zealand's financial system.

The Minister has to consider all these things to decide who should not be eligible to get compensation. This is to protect New Zealand's financial system and make sure people do not try to cheat. The rules are connected to Part 6 and the Minister's decisions are based on this.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

This page was last updated on

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS519520.

Topics:
Money and consumer rights > Banking and loansBusiness > Industry rules
Previous

455: Regulations relating to depositor compensation scheme, or

"Rules about helping people get their money back if a bank fails"

Next

457: Regulations prescribing matters relating to protected deposits, or

"Rules to Protect Your Money in the Bank"

Part 8Miscellaneous
Regulations

456Regulations prescribing classes of persons that are not eligible depositors

  1. The Minister must, before recommending regulations under section 455(1)(a),—

  2. have regard to the purpose of Part 6 set out in section 190; and
    1. be satisfied that the regulations are necessary or desirable in order to prevent entitlements to compensation under Part 6 from being available to a class of persons where—
      1. those persons have entered into arrangements with a purpose or an effect of circumventing, evading, or defeating the principle that the compensation should be limited to $100,000 per eligible depositor per deposit taker; or
        1. making the compensation available to those persons may reduce incentives for them to prudently assess risk when making investment decisions; or
          1. making the compensation available would otherwise present a risk to the stability of New Zealand’s financial system.