Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698837603347.pdf (New Zealand)
Non-bank Deposit Takers (Credit Ratings Minimum Threshold) Exemption Amendment Notice 2020 (LI 2020/4) Pursuant to section 70 of the Non-bank Deposit Takers Act 2013, the Reserve Bank of New Zealand, being satisfied of the matters set out in section 70(2) of that Act, gives the following notice.
Contents Title Commencement Principal notice Clause 3 amended (Expiry and revocation) Clause 4 amended (Application) Clause 6 amended (Interpretation) Page 1 1 1 1 1 2 Title Notice This notice is the Non-bank Deposit Takers (Credit Ratings Minimum Thresh- old) Exemption Amendment Notice 2020.

Commencement This notice comes into force on 28 February 2020.
Principal notice This notice amends the Non-bank Deposit Takers (Credit Ratings Minimum Threshold) Exemption Notice 2016 (the principal notice).

Clause 3 amended (Expiry and revocation) In clause 3, replace “2020” with “2024”.

Clause 4 amended (Application) In clause 4(b), replace “2019” with “2023”.
1 cl 6 Non-bank Deposit Takers (Credit Ratings Minimum Threshold) Exemption Amendment Notice 2020 Reprinted as at 14 February 2020 6 Clause 6 amended (Interpretation) In clause 6(1), replace the definition of generally accepted accounting prac- tice with: generally accepted accounting practice has the same meaning as in section 8 of the Financial Reporting Act 2013 Dated at Wellington this 14th day of February 2020.

Geoff Bascand, Deputy Governor.


Statement of reasons This note is not part of the notice, but is intended to indicate its general effect.

This notice, which comes into force on 28 February 2020, amends the Non-bank Deposit Takers (Credit Ratings Minimum Threshold) Exemption Notice 2016 (the principal notice).
As a result of the amendments in this notice, the exemptions for non-bank deposit takers (NBDT) from the requirement in section 23 of the Non-bank Deposit Takers Act 2013 (the Act) are extended for a further 4 years to 29 February 2024.

Section 23 requires a licensed NBDT to have a current credit rating.

This notice also revokes a redundant provision in the principal notice.
The Reserve Bank of New Zealand (the Bank), after taking into account the prin- ciples set out in section 8 of the Act, and satisfying itself as to the matters set out in section 70(2) of the Act, considers it appropriate to extend the exemptions in the prin- cipal notice as the reasons for the exemptions in that notice remain valid and relevant, namely that— the Bank is satisfied that the exemptions are consistent with the maintenance of a sound and efficient financial system in that the liabilities of exempt entities represent a very small percentage of the total liabilities of the NBDT sector, and the requirement for exempt entities to maintain a capital ratio of either 10% or 12% compensates for those entities not having a credit rating: the additional direct and indirect costs of obtaining a credit rating are unduly onerous when compared with the balance sheet size and average profitability of the exempted NBDTs: the benefits of the exemptions are that unnecessary compliance costs are avoi- ded and potential barriers to entry are removed, therefore maintaining competi- tion in the NBDT sector: the benefits outweigh the costs of inconsistent treatment between small and larger NBDTs and outweigh the loss of information for investors: • • • • 2 Reprinted as at 14 February 2020 Non-bank Deposit Takers (Credit Ratings Minimum Threshold) Exemption Amendment Notice 2020 Statement of reasons • the conditions of the exemptions, by imposing disclosure requirements and additional capital requirements on exempted NBDTs, manage the risks posed by the absence of a credit rating, and therefore the extent of the exemptions is not broader than is reasonably necessary to address the matters that gave rise to the exemptions.
Issued under the authority of the Legislation Act 2012.

Date of notification in Gazette: 19 February 2020.

This notice is administered by the Reserve Bank of New Zealand.

Wellington, New Zealand: Published under the authority of the New Zealand Government—2020 3