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Deposit Takers Act 2023

Crisis management and resolution - Bank may give directions, approve sales, and replace directors - Bank may give directions

267: Scope of directions

You could also call this:

"The Bank can give instructions to businesses that take deposits on how to fix problems or run their business."

Illustration for Deposit Takers Act 2023

The Bank can give directions to a licensed deposit taker or someone connected to it. You might be told to talk to the Bank about your situation and what you plan to do to fix any problems. The Bank can tell you how to run your business, or to stop doing some things. You might be told to remove someone from a management role, or to replace your auditor with someone the Bank approves of.

The Bank can also tell you to take specific action to fix a problem or to follow a plan you already have in place, like your contingency and recovery plans, which are explained in section 89. You might be told to issue shares in a certain way. The Bank's directions can also be about things that need to happen under a bail-in instrument, as mentioned in section 80(4)(a), (b), (c), or (d).

If certain events happen, the Bank's direction can include things that need to happen, as outlined in section 80(4)(a), (b), (c), or (d), and this is connected to what is said in section 80(2)(c) about a bail-in instrument.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS529206.

Topics:
Money and consumer rights > Banking and loansBusiness > Industry rules
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266: Bank may give directions to associated person, or

"The Bank can give orders to people or businesses connected to a deposit taker to help fix problems."

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268: Direction must be in writing and state grounds, or

"A bank must give you a written notice with reasons when giving you a direction."

Part 7Crisis management and resolution
Bank may give directions, approve sales, and replace directors: Bank may give directions

267Scope of directions

  1. A direction given under this subpart may require a licensed deposit taker or an associated person to do 1 or more of the following:

  2. consult the Bank, at the times and in the manner specified by the Bank, about the circumstances of the deposit taker or associated person and the actions or proposed actions to resolve any difficulties facing the deposit taker or associated person:
    1. carry on its business, or any part of its business, in accordance with the direction:
      1. cease to carry on its business, or any part of its business, in accordance with the direction:
        1. ensure that any director, or any senior manager or other employee, of the deposit taker or associated person ceases to take part in the management or conduct of its business except with the permission of the Bank and so far as that permission extends:
          1. remove or replace any of the directors of an associated person of the deposit taker:
            1. remove or replace its auditor or appoint an auditor approved by the Bank:
              1. take the action that is specified in the direction to address a contravention of any prudential obligation:
                1. take the action that is specified in the direction to address any circumstances of financial difficulties:
                  1. implement all, or part, of the deposit taker’s contingency and recovery plans in accordance with the direction (see section 89):
                    1. issue shares in accordance with the direction:
                      1. take the action that is specified in the direction that is necessary or desirable for any matter in section 80(4)(a), (b), (c), or (d) to occur under a bail-in instrument.

                        1. If the events or circumstances referred to in section 80(2)(c) for a bail-in instrument include a direction under this subpart, a direction given under this subpart may provide for a matter in section 80(4)(a), (b), (c), or (d) to occur.