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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 set up by a bank is also controlled by a special manager during difficult times."

Illustration for Deposit Takers Act 2023

When a bank forms a body corporate to acquire a New Zealand business, you need to know that this body corporate is also subject to resolution. The body corporate is treated as being in resolution, which means it is managed by a resolution manager. This resolution manager is the same one who manages the licensed deposit taker, as if they were appointed under section 357.

The resolution manager's appointment can be terminated or replaced by the Bank. The period of moratorium, which is like a time-out for the body corporate, is initially the same as the period of moratorium for the licensed deposit taker. However, the Bank can make decisions about the body corporate's moratorium separately from the licensed deposit taker, using powers under section 285(2).

The body corporate's moratorium period can be found in subpart 5, and the Bank's powers are outlined in the Deposit Takers Act 2023. You can find more information about how this works by looking at section 314 and section 357. The Bank has the power to make decisions about the body corporate, including terminating or replacing the resolution manager, as stated in the Act.

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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.

Topics:
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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