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Deposit Takers Act 2023

Crisis management and resolution - Conduct of resolution - Bank may dispose of business undertaking or property, rights, or liabilities

321: Body corporate is also subject to resolution

You could also call this:

"Companies can be treated like failed banks and have to follow special rules"

Illustration for Deposit Takers Act 2023

If you are part of a body corporate, you need to know that it can be treated as being in resolution. This means the body corporate is subject to certain rules. You can find out more about this in section 320. The Bank can decide not to apply these rules if it publishes a notice in the Gazette before the body corporate is formed. This notice must say that the Bank intends to form a body corporate, what the body corporate's name will be, and that these rules will not apply.

If these rules do apply, the same person who manages the resolution of the licensed deposit taker will also manage the resolution of the body corporate. This is as if they were appointed under section 357. The Bank can still decide to end the appointment of this manager or replace them.

When the body corporate is first treated as being in resolution, it will have the same period of moratorium as the licensed deposit taker. You can find out more about the period of moratorium in subpart 5. However, the Bank can make decisions about the body corporate's moratorium separately from the licensed deposit taker, using its power under section 285(2).

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS539589.

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Money and consumer rights > Banking and loansBusiness > Industry rules
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320: Bank may dispose of business undertaking, etc, to bridge institution or asset management vehicle, or

"The Bank can sell its business to a new company to help it stay afloat."

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322: Consents not required under other legislation or agreement, and transactions do not constitute breach, or

"Selling a business doesn't always need extra approvals from others under certain laws or agreements."

Part 7Crisis management and resolution
Conduct of resolution: Bank may dispose of business undertaking or property, rights, or liabilities

321Body corporate is also subject to resolution

  1. The body corporate (B) referred to in section 320 must be treated as being in resolution.

  2. However, subsection (1) does not apply if, before B is formed and registered, the Bank publishes a notice in the Gazette that states—

  3. that the Bank intends to form and register a body corporate under section 320; and
    1. B’s proposed name; and
      1. that subsection (1) will not apply to B.

        1. If subsection (1) applies, 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.

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

        3. If subsection (1) applies, the period of moratorium for B under subpart 5 is initially the same as the period of moratorium that applies to the licensed deposit taker.

        4. 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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