Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698752580400.pdf (New Zealand)
Reprint as at 2 September 2010 Deposit Takers (Funding Conduits) Exemption Notice 2010 (SR 2010/53) Pursuant to section 157G of the Reserve Bank of New Zealand Act 1989, the Reserve Bank of New Zealand gives the following notice (to which is appended a statement of reasons of the Bank).
Contents Title Commencement Expiry Interpretation Exemption from requirement to have current credit rating Exemption from requirement to have risk management programme Conditions of exemptions in clauses 5 and 6 Further conditions of exemption in clause 5 Further condition of exemption in clause 6 Temporary exemption from requirement to have current credit rating [Expired] Further temporary exemption from requirement to have current credit rating Page 2 2 2 2 3 3 3 4 4 4 4 Note Changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in this reprint.
A general outline of these changes is set out in the notes at the end of this reprint, together with other explanatory material about this reprint.

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

1 cl 1 Deposit Takers (Funding Conduits) Exemption Notice 2010 Reprinted as at 2 September 2010 Schedule Specified funding conduits and specified parents 5 Notice Title This notice is the Deposit Takers (Funding Conduits) Exemp- tion Notice 2010.
Commencement This notice comes into force on the day after the date of its notification in the Gazette.

Expiry Except as provided in clause 10(2) or clause 11(2), this notice expires on the close of 1 September 2014.

Clause 3: amended, on 23 July 2010, by clause 4 of the Deposit Takers (Funding Conduits) Exemption Amendment Notice 2010 (SR 2010/200).
Interpretation In this notice, unless the context otherwise requires,— Act means the Reserve Bank of New Zealand Act 1989 advertisement has the same meaning as in section 2A of the Securities Act 1978 credit rating means a rating of creditworthiness that— (a) complies with the requirements prescribed by regula- tions made under section 157K of the Act; and is given by an approved rating agency (b) group, in relation to a specified funding conduit, means the group comprising the specified funding conduit’s specified parent and the specified parent’s subsidiaries investment statement has the same meaning as in section 38C of the Securities Act 1978 registered prospectus has the same meaning as in section 2(1) of the Securities Act 1978 specified funding conduit means a person whose name ap- pears in the first column of the Schedule 1 2 3 4 (1) 2 Reprinted as at 2 September 2010 Deposit Takers (Funding Conduits) Exemption Notice 2010 cl 7 (2) specified parent, in relation to a specified funding conduit, means the person whose name appears in the second column of the Schedule opposite the specified funding conduit’s name.
In this notice, a reference to a debt security issued by a speci- fied funding conduit is a reference to a debt security issued by the specified funding conduit following an offer of debt secur- ities to the public.

(3) Any term or expression that is defined in the Act and used, but not defined, in this notice has the same meaning as in the Act.

5 6 7 Exemption from requirement to have current credit rating Every specified funding conduit is exempted from section 157I of the Act.
Exemption from requirement to have risk management programme Every specified funding conduit is exempted from section 157M of the Act.
Conditions of exemptions in clauses 5 and 6 The exemptions in clauses 5 and 6 are subject to the conditions that— (a) the specified funding conduit must at all times be a wholly owned subsidiary of its specified parent; and the specified funding conduit must at all times use at least 95% of the subscriptions raised from the issue of debt securities to lend funds to, or to subscribe for or purchase securities in, its specified parent or any mem- ber of its group; and the specified funding conduit’s specified parent must at all times be liable to repay the money owing in respect of every debt security issued by the specified funding conduit, either unconditionally or subject only to the condition that the specified funding conduit or another person has failed to do so.
(b) (c) 3 cl 8 8 9 Deposit Takers (Funding Conduits) Exemption Notice 2010 Reprinted as at 2 September 2010 (b) Further conditions of exemption in clause 5 The exemption in clause 5 is subject to the further conditions that— (a) the specified funding conduit’s specified parent must at all times have a current credit rating; and the specified parent’s current credit rating must be dis- closed in every registered prospectus, investment state- ment, and advertisement that relates to offers of debt securities to the public made by the specified funding conduit on or after the date on which this notice comes into force.
Further condition of exemption in clause 6 The exemption in clause 6 is subject to the further condition that the specified funding conduit’s specified parent or group must at all times have a written programme that sets out the procedures that will be used to effectively identify and manage group credit risk, liquidity risk, market risk, and operational risk in a way that the specified parent considers appropriate for the operations of the group (including the specified funding conduit).
10 Temporary exemption from requirement to have current credit rating [Expired] Clause 10: expired, on 2 September 2010, by clause 10(2).

11 Further temporary exemption from requirement to have current credit rating (1) GPG Finance plc is exempted from section 157I of the Act.

This clause expires on the close of 31 December 2010.

(2) Clause 11: added, on 23 July 2010, by clause 5 of the Deposit Takers (Funding Conduits) Exemption Amendment Notice 2010 (SR 2010/200).
4 Reprinted as at 2 September 2010 Deposit Takers (Funding Conduits) Exemption Notice 2010 Statement of reasons Schedule Specified funding conduits and specified parents cl 4(1) Specified funding conduit Fletcher Building Finance Limited Specified parent Fletcher Building Limited GPG Finance plc, a company incorporated in England and Wales TCNZ Finance Limited Transpower Finance Limited Works Finance (NZ) Limited Guinness Peat Group plc, a company incorporated in England and Wales Telecom Corporation of New Zealand Limited Transpower New Zealand Limited Downer EDI Limited, a company incorporated in Australia Schedule: amended, on 23 July 2010, by clause 6 of the Deposit Takers (Funding Con- duits) Exemption Amendment Notice 2010 (SR 2010/200).
Dated at Wellington this 9th day of March 2010.

Grant Spencer, Deputy Governor.


Statement of reasons Note: The following statement of reasons should be read in con- junction with the statement of reasons appended to the: • (Funding Conduits) Exemption Deposit Amendment Notice 2010 Takers This notice, which comes into force on the day after its notification in the Gazette, exempts the deposit takers listed in the Schedule (speci- fied funding conduits) from sections 157I and 157M of the Reserve Bank of New Zealand Act 1989 (the Act).
The exemptions are sub- ject to conditions, although clause 10 exempts 2 specified funding conduits temporarily from section 157I of the Act unconditionally.

5 Statement of reasons Deposit Takers (Funding Conduits) Exemption Notice 2010 Reprinted as at 2 September 2010 The notice expires on 1 September 2014, except for clause 10, which expires on 1 September 2010.

Section 157I of the Act requires deposit takers to have a current credit rating.
Section 157M requires deposit takers to have a risk manage- ment programme.

Although the specified funding conduits are de- posit takers under Part 5D of the Act, they raise funds solely or sub- stantially in order to fund their parent companies and other members of their group.
The Reserve Bank of New Zealand, after taking into account the prin- ciples set out in section 157F of the Act and satisfying itself as to the matters set out in section 157G(2), considers it appropriate to grant the exemptions because— • requiring a specified funding conduit to incur the additional costs of complying with the requirements to have a current credit rating and a risk management programme in isolation from the specified funding conduit’s group is unduly onerous in circumstances where— • the specified funding conduit’s parent unconditionally guarantees debt securities issued by the specified fund- ing conduit: the specified funding conduit uses the funds it receives from depositors solely or substantially to fund its parent or members of its group: the specified funding conduit’s risk profile is indistin- guishable from that of its parent, and its parent is not a deposit taker: • • • the exemptions are available only to those deposit takers that are listed in the Schedule and that continue to satisfy the strict conditions in clause 7.
Accordingly, the exemptions are not broader than reasonably necessary to address the matters that gave rise to the need for them and are consistent with the main- tenance of a sound and efficient financial system.
Note: The preceding statement of reasons should be read in con- junction with the statement of reasons appended to the: • (Funding Conduits) Exemption Deposit Amendment Notice 2010 Takers 6 Reprinted as at 2 September 2010 Deposit Takers (Funding Conduits) Exemption Notice 2010 Issued under the authority of the Acts and Regulations Publication Act 1989.

Date of notification in Gazette: 11 March 2010.


7 Notes Deposit Takers (Funding Conduits) Exemption Notice 2010 Reprinted as at 2 September 2010 Contents 1 2 3 4 General Status of reprints How reprints are prepared Changes made under section 17C of the Acts and Regulations Publication Act 1989 List of amendments incorporated in this reprint (most recent first) General This is a reprint of the Deposit Takers (Funding Conduits) Ex- emption Notice 2010.
The reprint incorporates all the amend- ments to the notice as at 2 September 2010, as specified in the list of amendments at the end of these notes.

Relevant provisions of any amending enactments that contain transitional, savings, or application provisions that cannot be compiled in the reprint are also included, after the principal enactment, in chronological order.

For more information, see http://www.pco.parliament.govt.nz/reprints/.
Status of reprints Under section 16D of the Acts and Regulations Publication Act 1989, reprints are presumed to correctly state, as at the date of the reprint, the law enacted by the principal enactment and by the amendments to that enactment.

This presumption applies even though editorial changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in the reprint.
This presumption may be rebutted by producing the official volumes of statutes or statutory regulations in which the prin- cipal enactment and its amendments are contained.

How reprints are prepared A number of editorial conventions are followed in the prep- aration of reprints.

For example, the enacting words are not included in Acts, and provisions that are repealed or revoked 5 Notes 1 2 3 8 Reprinted as at 2 September 2010 Deposit Takers (Funding Conduits) Exemption Notice 2010 Notes are omitted.
For a detailed list of the editorial conventions, see http://www.pco.parliament.govt.nz/editorial-conventions/ or Part 8 of the Tables of New Zealand Acts and Ordinances and Statutory Regulations and Deemed Regulations in Force.
4 Changes made under section 17C of the Acts and Regulations Publication Act 1989 Section 17C of the Acts and Regulations Publication Act 1989 authorises the making of editorial changes in a reprint as set out in sections 17D and 17E of that Act so that, to the extent permitted, the format and style of the reprinted enactment is consistent with current legislative drafting practice.

Changes that would alter the effect of the legislation are not permitted.
A new format of legislation was introduced on 1 January 2000.

Changes to legislative drafting style have also been made since 1997, and are ongoing.

To the extent permitted by section 17C of the Acts and Regulations Publication Act 1989, all legisla- tion reprinted after 1 January 2000 is in the new format for legislation and reflects current drafting practice at the time of the reprint.
In outline, the editorial changes made in reprints under the au- thority of section 17C of the Acts and Regulations Publication Act 1989 are set out below, and they have been applied, where relevant, in the preparation of this reprint: • omission of unnecessary referential words (such as “of this section” and “of this Act”) typeface and type size (Times Roman, generally in 11.5 point) layout of provisions, including: • • indentation position of section headings (eg, the number and heading now appear above the section) format of definitions (eg, the defined term now appears in bold type, without quotation marks) format of dates (eg, a date formerly expressed as “the 1st day of January 1999” is now expressed as “1 January 1999”) 9 • • • • Notes Deposit Takers (Funding Conduits) Exemption Notice 2010 Reprinted as at 2 September 2010 • • • • • • • position of the date of assent (it now appears on the front page of each Act) punctuation (eg, colons are not used after definitions) Parts numbered with roman numerals are replaced with arabic numerals, and all cross-references are changed accordingly case and appearance of letters and words, including: • format of headings (eg, headings where each word formerly appeared with an initial cap- ital letter followed by small capital letters are amended so that the heading appears in bold, with only the first word (and any proper nouns) appearing with an initial capital letter) small capital letters in section and subsection ref- erences are now capital letters • schedules are renumbered (eg, Schedule 1 replaces First Schedule), and all cross-references are changed accord- ingly running heads (the information that appears at the top of each page) format of two-column schedules of consequential amendments, and schedules of repeals (eg, they are rearranged into alphabetical order, rather than chrono- logical).
List of amendments incorporated in this reprint (most recent first) Deposit Takers (Funding Conduits) Exemption Amendment Notice 2010 (SR 2010/200) Deposit Takers (Funding Conduits) Exemption Notice 2010 (SR 2010/53): clause 10(2) Wellington, New Zealand: Published under the authority of the New Zealand Government—2010 5 12 10