Chapman Tripp
Added: Feb 8, 2012
On the face of it, little in the Non-Bank Deposit Takers Bill (NBDT Bill) would excite the non-specialist. But the prudential regime it envisages goes well beyond the finance companies it was designed to regulate.
The Bill, which was introduced into the last Parliament and released for submissions late last year, will replace Part 5D of the Reserve Bank of New Zealand Act 1989 (RBNZ Act) and so provides an important opportunity to deal with Part 5D’s defects.
Instead, it carries them over into the new legislation.
Unless remedial action is taken the NBDT regime’s reach will continue to extend well beyond the finance companies which were the intended target and will continue to discourage highly rated and high quality issuers from going into the retail bond market. This will reduce choice to investors, the exact opposite of what this reform was meant to achieve.