Under section 65(1)(b) of the Reserve Bank of New Zealand Act 1989, the Reserve Bank of New Zealand gives the following notice of authorisations.

1. Title

This notice is the Reserve Bank of New Zealand Act (Overseas Banks) Class Authorisation Notice 2019.

2. Commencement

This notice comes into force on 23 September 2019.

3. Application

The authorisations in this notice apply to overseas banks that do not have a place of business in New Zealand.

4. Interpretation

(1) In this notice, unless the context otherwise requires,--

Act means the Reserve Bank of New Zealand Act 1989.

bank account means a bank account, including a call/current or deposit account, a term deposit, an overdraft facility, a structured deposit, a client account, a credit card account, a revolving credit facility, a multi-optional facility, a term loan, or a loan account.

derivative has the meaning set out in the FMCA (but disregarding any declaration under subpart 3 of Part 9 of that Act).

eligible overseas bank means an overseas bank to which this notice applies.

FMCA means the Financial Markets Conduct Act 2013.

Kauri bond means an unsubordinated debt security that:

1. is denominated in New Zealand dollars and recorded in a financial products register kept in New Zealand; and
2. is issued by an issuer that is incorporated, formed, or established outside New Zealand.

person has the meaning set out in the FMCA.

RBNZ means the Reserve Bank of New Zealand.

wholesale banking activities means activities carried on by an eligible overseas bank that are associated with providing banking services to a wholesale customer, including any of the following:

1. opening and operating bank accounts:
2. taking deposits:
3. providing cash management products and payment services (being pooling, sweeping, lockbox services, online banking, bulk cash till, branch delivery service, BACS, Bacstel-IP, and Faster Payments):
4. correspondent banking, including the provision of nostro and vostro accounts together with cross currency payment and contingent liabilities:
5. any ancillary activities connected with any of the above activities.

wholesale customer means a person described in at least one of the paragraphs in clause 3(2) or (3) of Schedule 1 to the FMCA, including any entity controlled by such person within the meaning of clause 48 of Schedule 1 to the FMCA.

wholesale lending activities means activities carried on by an eligible overseas bank that is associated with lending or providing credit solely to a wholesale customer, including any of the following:

1. making financial accommodation available:
2. taking and receiving the benefit of guarantees or other credit support:
3. taking, receiving the benefit of, and enforcing security over all types of assets in New Zealand or elsewhere:
4. providing finance leasing or hire purchase:
5. providing trade finance, including documentary collections, import and export letters of credit, stand-by letters of credit, import finance, pre-export finance, commodity borrowing base, shipment finance, and supplier finance:
6. providing receivables financing:
7. acting as a facility agent or security trustee in respect of any of the above activities:
8. any ancillary activities connected with any of the above activities.

(2) 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.

(3) References to “activities” in this notice refers to activities carried on directly or indirectly in New Zealand (whether through an agent or otherwise).

(4) The relevant time, for the purposes of applying Schedule 1 of the FMCA in the definition of wholesale customer, must be treated as the time immediately before the service is received by the customer.

Wholesale Banking Activities

5. Authorisation for Wholesale Banking Activities

(1) Every eligible overseas bank is authorised to use a name or title that includes a restricted word in respect of its wholesale banking activities.

6. Authorisation for Wholesale Lending Activities

(1) Every eligible overseas bank is authorised to use a name or title that includes a restricted word in respect of its wholesale lending activities.

7. Authorisation for Financial Advisory Services

(1) Every eligible overseas bank is authorised to use a name or title that includes a restricted word in respect of activities connected with the provision of financial adviser services for wholesale customers.

Capital Market Activities

8. Authorisation for Involvement in Capital Market Issuances

(1) Every eligible overseas bank is authorised to use a name or title that includes a restricted word in respect of activities connected with the operation of the debt or equity capital markets (including the Kauri bond market), including where it is acting as an issuer, an underwriter, an originator, a manager, an arranger, or a broker or in a similar role on any of the following:

1. a wholesale capital market issuance (regardless of where the issuer or the targeted investors are based):
2. a retail capital market issuance, provided that any selling efforts by the eligible overseas bank are directed only at either or both of the following:
1. investors that are domiciled or resident outside New Zealand:
2. wholesale customers in New Zealand.

(2) The authorisation includes using the eligible overseas bank’s name and logo with the name of any other syndicate member on any terms sheet or offer document distributed in New Zealand in connection with the activities specified in subclause (1).

9. Authorisation for Acting in Roles Supporting Capital Market Issuances

(1) Every eligible overseas bank is authorised to use a name or title that includes a restricted word in respect of activities as a trustee, security trustee, registrar, paying agent, offshore listing agent, or clearing system custodian that is connected with or results from any capital markets issuance.

10. Authorisation for its Own Capital Market Investment Activities

(1) Every eligible overseas bank is authorised to use a name or title that includes a restricted word in respect of activities where it is investing or trading in any New Zealand financial products on its own account.

Foreign Exchange or Derivatives Wholesale Market Activities

11. Authorisation for Acting in Wholesale Foreign Exchange and Derivatives Markets

(1) Every eligible overseas bank is authorised to use a name or title that includes a restricted word in respect of activities that are associated with entering into any foreign exchange, derivative transactions, or transactions relating to an emission unit with wholesale customers, including acting as a broker in respect of foreign exchange, derivative transactions, or transactions relating to an emission unit with wholesale customers.

12. Authorisation for Acting in Roles Supporting the Derivatives Markets

(1) Every eligible overseas bank is authorised to use a name or title that includes a restricted word in respect of activities that are associated with acting as a custodian, a clearing participant, or a prime broker in relation to derivatives (including managing incidental cash accounts) for wholesale customers.

13. Conditions

The authorisations in this notice are subject to the conditions that the eligible overseas bank:

1. notifies the RBNZ, before relying on the authorisations given in this notice, that it intends to carry on activities using a name or title that includes a restricted word on the basis of the authorisations;
2. maintains an authorised agent in New Zealand for the purpose of accepting service of documents;
3. submits to the RBNZ any information requested under section 36 of the Act regarding its authorised activities; and
4. carries on in New Zealand only those activities that are specified in this notice.

14. Revocation

1. The class authorisations in clauses 5, 6, and 8 are revoked on the close of 22 September 2020.
2. The class authorisations in clauses 7 and 9 to 12 are revoked on the close of 22 September 2024.

Dated at Wellington this 23rd day of August 2019.

ANDY WOOD, Head of Supervision.