Plain language law

New Zealand law explained for everyone

Deposit Takers Act 2023

Crisis management and resolution - Resolution of licensed deposit takers and associated persons

275: Resolution of subsidiaries

You could also call this:

"What happens to subsidiaries when a deposit taker has financial problems"

Illustration for Deposit Takers Act 2023

When a licensed deposit taker enters resolution, its subsidiaries also enter resolution. You need to know that this does not happen if the subsidiary is declared to be exempt under section 274. This means the subsidiary does not enter resolution.

If a licensed deposit taker acquires a new subsidiary after it enters resolution, the new subsidiary is also in resolution. However, this does not happen if an Order in Council is made before the acquisition, declaring the subsidiary is not in resolution. This Order in Council can change the status of the subsidiary.

The person in charge of resolving the issues of the licensed deposit taker also takes care of its subsidiaries in resolution. You should look at section 357 to see if there are any exceptions to this rule. This person helps to manage the subsidiaries that are in resolution.

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 It might be out of date or be missing some parts.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=LMS529898.

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

274: Resolution of licensed deposit takers and associated persons, or

"What happens when a company looking after people's money gets into trouble"

Next

276: Resolution for overseas persons, or

"Rules for overseas businesses in trouble in New Zealand"

Part 7Crisis management and resolution
Resolution of licensed deposit takers and associated persons

275Resolution of subsidiaries

  1. If a licensed deposit taker (A) enters resolution, every subsidiary of A also enters resolution unless the subsidiary is declared to be a subsidiary to which the order under section 274 does not apply.

  2. If A acquires a subsidiary after it enters resolution, the subsidiary is also in resolution unless an Order in Council is made before the acquisition that declares that the subsidiary to be acquired is not in resolution.

  3. A person that holds office as the resolution manager in respect of A also holds office as the resolution manager in respect of the subsidiaries that are in resolution (unless a notice under section 357 provides otherwise).

Compare