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Deposit Takers Act 2023

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

96: Use of information and advice

You could also call this:

"Trusting information to help you make good decisions as a deposit taker boss"

Illustration for Deposit Takers Act 2023

When you are a director of a licensed deposit taker or a New Zealand chief executive officer of an overseas licensed deposit taker, you have certain duties. You can rely on information and advice from people you believe are reliable and competent. This includes employees, professional advisers, or other directors who have the right skills and knowledge.

You can use reports, statements, and financial data from these people to help you make decisions. However, you must act in good faith, ask questions when you need to, and not ignore any warnings that the information might be wrong.

If you follow these rules, you can trust the information and advice you get from these people to help you do your job.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS823131.

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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"

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

96Use of information and advice

  1. This section applies to each of the following persons (A) when they are performing duties under this subpart:

  2. a director of a licensed deposit taker:
    1. a New Zealand chief executive officer of an overseas licensed deposit taker.

      1. A may rely on reports, statements, and financial data and other information prepared or supplied, and on professional or expert advice given, by any of the following persons:

      2. an employee of the licensed deposit taker whom A believes on reasonable grounds to be reliable and competent in relation to the matters concerned:
        1. a professional adviser or expert in relation to matters which A believes on reasonable grounds to be within the person’s professional or expert competence:
          1. in the case of a director, any other director or committee of directors upon which A did not serve in relation to matters within the other director’s or committee’s designated authority.

            1. However, subsection (2) applies to A only if they—

            2. act in good faith; and
              1. make proper inquiry where the need for inquiry is indicated by the circumstances; and
                1. have no knowledge that such reliance is unwarranted.