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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

You need to know what happens to subsidiaries when a licensed deposit taker enters resolution. If a licensed deposit taker enters resolution, its subsidiaries also enter resolution, unless the law says they do not have to. This can happen if there is an order under section 274 that says the subsidiary is exempt. If a licensed deposit taker buys a new subsidiary after it enters resolution, the new subsidiary is also in resolution, unless the government makes an Order in Council before the purchase. The person in charge of resolving the licensed deposit taker's problems also looks after its subsidiaries that are in resolution. However, there can be a notice under section 357 that says someone else is in charge of a subsidiary.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS529898.

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Money and consumer rights > Banking and loansBusiness > Industry rules
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274: Resolution of licensed deposit takers and associated persons, or

"What happens when a bank or similar business gets into trouble and needs to be sorted out"

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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).

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