The Reserve Bank has decided to undertake a further round of consultation before implementing the second stage of the new regulatory regime for NBDTs with the release of its NBDT Consultation Document: Remaining NBDT regulatory requirements.
The first stage of the new regime (the Reserve Bank of New Zealand Amendment Act 2008) introduced Part 5D into the Reserve Bank of New Zealand Act (RBNZ Act), and implemented the credit rating and prudential requirements, including those relating to capital, related party lending, liquidity, risk management, and corporate governance. It also introduced associated offences, penalties and enforcement powers for the Reserve Bank.
This consultation paper proposes the remaining amendments to the RBNZ Act that the Bank believes are required to fully implement the NBDT regime. In summary, these remaining elements are:
- licensing of NBDTs;
- fit and proper requirements for directors and senior officer holders of NBDTs;
- controls on changes of ownership;
- distress and failure management powers for the Reserve Bank; and,
- refinements to Part 5D of the RBNZ Act.
The consultation period closes on 5 November 2010. The intention is that the legislation to give effect to these changes will come into force in 2011.