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Deposit Takers Act 2023

Depositor compensation scheme - Entitlement to compensation - Entitlement rules

205: Protected deposit held by or on behalf of 2 or more persons other than jointly

You could also call this:

"Protected deposits shared by two or more people, but not owned together"

Illustration for Deposit Takers Act 2023

If you have a protected deposit with two or more people, but not jointly, this law applies to you. You must be holding the deposit in your own right or for someone else under a special arrangement. This law does not apply if section 204 applies to you.

When the law is working out how much compensation you can get, it looks at your share of the protected deposit. Your share is decided by the records kept by the person in charge, or by what they tell you.

Your share of the deposit is used to calculate how much compensation you can get under section 203, unless the regulations say otherwise. This applies to everyone, even if they are not eligible for compensation.

This law does not change the rights of the people involved when it comes to their relationships with each other. A relevant person is someone who is in charge of the deposit, and this can be the people who own it together or someone prescribed by the regulations.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS581531.

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Part 6Depositor compensation scheme
Entitlement to compensation: Entitlement rules

205Protected deposit held by or on behalf of 2 or more persons other than jointly

  1. This section—

  2. applies if a protected deposit is held—
    1. by 2 or more persons in their own right; or
      1. for, or on behalf of, 2 or more persons under 1 or more relevant arrangements; but
      2. does not apply if section 204 applies.

          1. Example

          A protected deposit is held in a law firm’s trust account for, or on behalf of, 200 clients.

          The deposit is not held on behalf of those clients jointly. Accordingly, section 204 does not apply.

        1. For the purposes of this Part,—

        2. each of the persons must be treated as having—
          1. the share in the protected deposit that is specified in records that are maintained by the relevant person in the manner prescribed by the regulations; or
            1. if such records are not maintained, the share in the protected deposit that is notified by the relevant person in the manner prescribed by the regulations; and
            2. a person’s share in the protected deposit must be taken into account in calculating their entitlement (if any) to compensation under section 203 (except to the extent that the regulations provide otherwise).

              1. Subsection (2) applies whether or not each person is an eligible depositor (but a person who is not an eligible depositor is not eligible to compensation in respect of their share).

              2. This section does not affect the rights of those persons as between themselves.

              3. In this section, relevant person means, in the case of a deposit held—

              4. by 2 or more persons in their own right, those persons acting together:
                1. under 1 or more relevant arrangements, a person of the kind that is prescribed in the regulations.