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Deposit Takers Act 2023

Crisis management and resolution - Conduct of resolution - Bank may form body corporate to acquire New Zealand business

316: Body corporate is also subject to resolution

You could also call this:

"A company is also subject to special rules during a financial crisis."

Illustration for Deposit Takers Act 2023

You need to know that a body corporate, referred to as B, is treated as being in resolution. This means the resolution manager of the licensed deposit taker is also the resolution manager of B, as if they were appointed under section 357. The rules in this Part apply to B. You should understand that the Bank can still replace or terminate the resolution manager. The initial moratorium period for B is the same as the licensed deposit taker's, which is found in subpart 5. The Bank can use its power under section 285(2) for B separately from the licensed deposit taker. The rules for B are connected to the licensed deposit taker, but the Bank has some separate powers. The Bank's powers are outlined in the Deposit Takers Act 2023, which you can read more about in section 314 and other related sections. This helps you understand how the body corporate B is treated in resolution.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS533530.

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Money and consumer rights > Banking and loansBusiness > Industry rules
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Part 7Crisis management and resolution
Conduct of resolution: Bank may form body corporate to acquire New Zealand business

316Body corporate is also subject to resolution

  1. The body corporate (B) referred to in section 314 must be treated as being in resolution.

  2. The resolution manager of the licensed deposit taker is the resolution manager of B as if that resolution manager had been appointed under section 357, and the provisions of this Part apply accordingly.

  3. Subsection (2) does not prevent the Bank from exercising a power to terminate a resolution manager’s appointment or to replace a resolution manager.

  4. The period of moratorium under subpart 5 is initially the same as the period of moratorium that applies to the licensed deposit taker.

  5. However, the Bank may exercise a power under section 285(2) in relation to B separately from the licensed deposit taker.

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