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Deposit Takers Act 2023

Crisis management and resolution - Bank may apply to put deposit takers and associated persons into liquidation

422: Liquidation of licensed deposit takers and associated persons

You could also call this:

"What happens when a bank or money keeper has to close down and sort out its finances"

Illustration for Deposit Takers Act 2023

If you are a licensed deposit taker, or connected to one, this law applies to you. You might be in a situation where you need to be put into liquidation. The Bank or a resolution manager can ask the court to put you into liquidation under the Companies Act 1993. This can happen whether you are a company, an association, or an overseas company.

A resolution manager needs the Bank's approval before they can ask the court to put you into liquidation. When the court looks at the application, they treat it like a special kind of application under section 241(2)(c) of the Companies Act 1993, or section 342 for overseas companies. This law does not change or affect other laws that say how to wind up or liquidate a company.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS534972.

Topics:
Money and consumer rights > Banking and loansBusiness > Industry rules
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421: Limitation on application of resolution, statutory management, etc, provisions to covered bond SPV, or

"Rules to help fix troubled companies don't fully apply to special companies called covered bond SPVs."

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423: When court may appoint liquidator, or

"Court can appoint a liquidator if a company can't pay its debts or has broken important rules"

Part 7Crisis management and resolution
Bank may apply to put deposit takers and associated persons into liquidation

422Liquidation of licensed deposit takers and associated persons

  1. This section applies to a person (A) if—

  2. A is a licensed deposit taker (whether or not it is in resolution); or
    1. A—
      1. is an associated person of a licensed deposit taker; and
        1. is in resolution; and
          1. is not itself a licensed deposit taker.

          2. The Bank or a resolution manager may apply to the court under the Companies Act 1993 to put A into liquidation under that Act.

          3. Subsection (2) applies whether A is a company, an association, or an overseas company.

          4. A resolution manager may apply only with the prior approval of the Bank.

          5. An application under this section must be treated as if it were an application under section 241(2)(c) of the Companies Act 1993 (and, in the case of an overseas company, also an application under section 342 of that Act).

          6. This section does not limit or affect any other legislation that provides for the winding up, liquidation, or dissolution of a body corporate or a class of body corporate.

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