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Deposit Takers Act 2023

Regulation of deposit takers - Directors’ and New Zealand chief executive officers’ due diligence duty

94: Duty of New Zealand chief executive officers of overseas licensed deposit takers

You could also call this:

"Overseas deposit taker bosses in New Zealand must follow the rules to keep people's money safe"

Illustration for Deposit Takers Act 2023

If you are a chief executive officer of a company that takes deposits from people and your company is based overseas but operates in New Zealand, you have a duty to make sure your company follows the rules. You must be careful and make sure your company does what it is supposed to do, thinking about the size and type of business you have and what your job involves. You can find out what these rules are by looking at what is called a prudential obligation, which is explained in section 6, but it does not include rules about stopping money laundering.

If you do not follow these rules, you might have to pay a penalty, which is explained in subpart 2 of Part 5. You should understand that prudential obligations do not include rules from the Anti-Money Laundering and Countering Financing of Terrorism Act 2009. This means you have to be careful and make sure your company is doing the right thing, according to the rules that apply to it.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS807444.

Topics:
Money and consumer rights > Banking and loansBusiness > Industry rules
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93: Duty of directors of licensed deposit takers, or

"Directors of companies that take deposits must follow rules and make good decisions"

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95: Meaning of due diligence, or

"What 'due diligence' means: taking reasonable steps to ensure a deposit taker follows the rules"

Part 3Regulation of deposit takers
Directors’ and New Zealand chief executive officers’ due diligence duty

94Duty of New Zealand chief executive officers of overseas licensed deposit takers

  1. Every New Zealand chief executive officer of an overseas licensed deposit taker must exercise due diligence to ensure that the deposit taker complies with its prudential obligations.

  2. For the purposes of this section, the New Zealand chief executive officer must exercise the care, diligence, and skill that a reasonable New Zealand chief executive officer would exercise in the same circumstances, taking into account (without limitation)—

  3. the size and nature of the business of the deposit taker; and
    1. the position of the New Zealand chief executive officer and the nature of the responsibilities undertaken by them.

      1. In this section, prudential obligation has the meaning set out in section 6, except that it does not include an obligation imposed by or under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 or regulations made under that Act.

      2. See subpart 2 of Part 5, which provides for a court to impose a pecuniary penalty for a contravention of the duty under this section.