More regulation for non finance firms

The Government is introducing further legislation to tighten the rules for non-bank deposit takers (NBDTs) in an attempt to lift investor confidence in financial institutions.

The primary purpose of the Non-Bank Deposit Takers Bill is to implement the final components of the new regime for the prudential regulation of non-bank deposit takers (NBDTs). The bill introduces licensing requirements and strengthens the Reserve Bank's powers and will be introduced to Parliament next week.

The bill will impose additional requirements including licensing, suitability assessments of directors and senior officers, and restrictions on changes in ownership. It will give the Reserve Bank increased powers to detect and manage NBDT distress and failure.

"This is part of a suite of measures designed to lift investor confidence in our finance sector and capital markets - we've established the Financial Markets Authority, put in place a new regime for financial advisers, required licensing of trustees and auditors and strengthened disclosure requirements," Finance Minister Bill English says.

"We've also outlined our plans to extend the mixed ownership model to some state-owned enterprises to further lift confidence and invigorate our markets by providing fresh opportunities for Kiwi investors," Mr English says.

The bill is expected to become fully effective on 1 June 2013, after a one-year transition period to enable existing NBDTs to meet the new licensing rules.

For more information, please contact:

Struan McOmish, Partner, Auckland
d +64 9 374 7172
m +64 21 222 2895
struan.mcomish@duncancotterill.com

Disclaimer: the content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.

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