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Deposit Takers Act 2023

Miscellaneous - Regulations

459: Regulations providing for licensed deposit takers that do not issue protected deposits

You could also call this:

"Rules for deposit takers that don't offer protected deposits, to keep the system fair and safe"

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The Minister has to make sure some rules are followed before making new regulations. You need to understand that the Minister must be satisfied the regulations are not inconsistent with the purposes set out in section 3. The Minister also has to make sure the regulations will not cause significant problems with public confidence in the depositor compensation scheme. The Minister has to consider whether applying Part 6 to certain deposit takers is unnecessary or unreasonable. You should know that a wholesale client is someone who is defined in section 49(2) of the Financial Service Providers 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=LMS712340.

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Part 8Miscellaneous
Regulations

459Regulations providing for licensed deposit takers that do not issue protected deposits

  1. The Minister must, before recommending regulations under section 455(1)(e),—

  2. be satisfied that the regulations—
    1. are not inconsistent with the purposes set out in section 3; and
      1. are not likely to cause significant detriment to public confidence in the depositor compensation scheme; and
      2. be satisfied of either or both of the following:
        1. that, having regard to the matters set out in subsection (2), applying Part 6 in relation to the deposit takers to which the regulations relate is unnecessary or unreasonable in the circumstances:
          1. that there are arrangements (other than under Part 6) for protecting relevant investors that are satisfactory in the circumstances.

          2. For the purposes of subsection (1)(b)(i), the Minister must have regard to—

          3. the nature of the businesses carried out by the deposit takers to which the regulations relate (and, in particular, whether those deposit takers do not generally issue debt securities that would otherwise be protected deposits and whether the issue of any debt securities that would otherwise be protected deposits is only an incidental part of the businesses of those deposit takers); and
            1. the kinds of clients of the deposit takers to which the regulations relate (and, in particular, whether the deposit takers mainly provide services to wholesale clients that are unlikely to need the benefit of compensation under Part 6).

              1. In this section,—

                relevant investor means a person who—

                1. is a holder of a debt security issued by a deposit taker to which the regulations relate or a person on whose behalf such a debt security is held; and
                  1. would be an eligible depositor under Part 6 in respect of that debt security if the regulations were not in force

                    wholesale client has the same meaning as in section 49(2) of the Financial Service Providers (Registration and Dispute Resolution) Act 2008.