Gazette.govt.nzThe Rt Hon Dame PATSY REDDY, gnzm, qso, Governor-General
Order in Council
At Wellington this 19th day of February 2018
Present:
Her Excellency the Governor General Presiding in Council
Pursuant to section 81 of the Reserve Bank of New Zealand Act 1989, Her Excellency the Governor-General, acting on the advice and with the consent of the Executive Council and on the advice of the Minister of Finance given in accordance with a recommendation of the Reserve Bank of New Zealand, makes the following Order.
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Order
1. Title
This order is the Registered Bank Disclosure Statements (New Zealand Incorporated Registered Banks) Order 2014 Amendment Order 2018.
2. Commencement
This order comes into force on 31 March 2018.
3. Principal order amended
This order amends the Registered Bank Disclosure Statements (New Zealand Incorporated Registered Banks) Order 2014, as published in the New Zealand Gazette, 21 February 2014, No. 21, page 452.
4. Interpretation
(1) This clause amends subclause 4(1).
(2) In the definitions of “Additional Tier 1 Capital”, “buffer ratio”, “Common Equity Tier 1 capital ratio”, “Tier 1 capital”, “Tier 1 capital ratio”, “Tier 2 capital”, “Total capital” and “Total capital ratio”,—
(a) replace “in Schedules 9 and 10” with “in Schedule 9”; and
(b) replace “in Schedules 11 and 12” with “in Schedule 11”.
(3) After the definition of “applicable financial reporting standard” insert:
“bank means a registered bank or an overseas bank”.
(4) Replace the definition of “Common Equity Tier 1 capital” with:
“Common Equity Tier 1 capital,—
(a) for a registered bank that is subject to a condition of registration requiring it to maintain minimum capital ratios calculated in accordance with Capital Adequacy Framework (Standardised Approach) (BS2A), has the same meaning as in Capital Adequacy Framework (Standardised Approach) (BS2A); and
(b) for a registered bank that is subject to a condition of registration requiring it to maintain minimum capital ratios calculated in accordance with Capital Adequacy Framework (Internal Models Based Approach) (BS2B), has the same meaning as in Capital Adequacy Framework (Internal Models Based Approach) (BS2B)”
(5) Replace the definition of “fair value” with:
“fair value has the same meaning as in NZ IFRS 13”
(6) After the definition of “NZ IFRS 9” insert:
“NZ IFRS 13 means New Zealand Equivalent to International Financial Reporting Standard 13 (Fair Value Measurement), approved under the Financial Reporting Act 2013”
(7) Repeal the definition of “qualifying revolving retail exposures”.
(8) After the definition of “premises” insert:
“quasi-sovereign agency refers to an overseas national or state-government level institution that is not the sovereign national government but that is of equivalent credit quality, and that is included in the list of quasi-sovereign agencies and supranationals provided on the Reserve Bank website”
(9) After the definition of “responsible person” insert:
“signing date means the date recorded on the disclosure statement in order to comply with section 82, being the date of the last signature on the statement”
(10) After the definition of “subsidiary” insert:
“supranational means an entity that is formed by two or more sovereign states to promote economic development for the member countries and that is included in the list of quasi-sovereign agencies and supranationals provided on the Reserve Bank website”
5. Clause 5 amended
(1) In subclause 5(3)(b), replace “subclause (8)” with “subclause (4)”.
(2) Repeal subclauses 5(4), 5(5), 5(6) and 5(7).
(3) Replace subclause 5(8) with:
“(4) If subclause (1)(b) applies, the Reserve Bank may, after consultation with the registered bank, determine the length of the half year accounting period in the shorter or longer full year accounting period.”
6. Clause 6 replaced
Replace clause 6 with:
“6 General requirements for disclosure statements
(1) A disclosure statement may be—
(a) a full year disclosure statement;
(b) a half year disclosure statement; or
(c) a first disclosure statement.
(2) Subject to subclause (4), a registered bank must produce—
(a) a full year disclosure statement for each full year accounting period; and
(b) a half year disclosure statement for each half year accounting period.
(3) When registered as a registered bank, a registered bank must produce a first disclosure statement.
(4) If a full year disclosure statement and a half year disclosure statement are required in respect of the same accounting period, the registered bank is only required to produce the full year disclosure statement.
(5) Further details are set out—
(a) for full year and half year disclosure statements in Part 2 and in the Schedules of this Order; and
(b) for first disclosure statements in clause 12.”
7. Clause 9 amended
(1) Insert “and” after subclause 9(1)(a).
(2) In subclause 9(1)(b)(ii) replace “disclosure statement; and” with “disclosure statement.”.
(3) Repeal subclause 9(1)(c).
8. Clause 11 amended
(1) In subclause 11(3)(b), after “subsequent half year” delete “or off quarter”.
(2) In subclause 11(5)(b), after “subsequent half year” delete “or off quarter”.
9. Clause 17 replaced
Replace clause 17 with:
“17 Disclosure statement not to contain offer of financial products
A disclosure statement must not contain any offer of financial products within the meaning of the Financial Markets Conduct Act 2013.”
10. Clause 23 repealed
Repeal clause 23.
11. Clause 24 amended
Replace subclause 24(2) with:
“(2) The financial statements referred to in subclause (1) must be prepared in accordance with the requirements of the Financial Markets Conduct Act 2013 as if every reference in that Act to a group were a reference to the registered bank’s banking group.”
12. Clause 25 amended
(1) Replace the title of clause 25 with “Financial statements for half year accounting period”.
(2) Replace subclause 25(1) with:
“(1) A half year disclosure statement of a registered bank must contain or be accompanied by interim financial statements of the registered bank’s banking group prepared in accordance with NZ IAS 34.”
(3) Repeal subclause 25(2).
(4) Renumber subclause 25(3) as subclause 25(2).
13. Clause 2 of Schedule 1 amended
(1) Replace subclause 2(1)(j) of Schedule 1 with:
“(j) if the registered bank meets the condition in clause 21(1)(c) of Part 2, for the information relating to capital adequacy and regulatory liquidity requirements that is required to be disclosed under Schedule 9—
(i) that the information has been examined by the auditor;
(ii) whether or not anything has come to the auditor’s attention which would cause the auditor to believe that the information is not in all material respects disclosed in accordance with Schedule 9;”
(2) Replace subclause 2(1)(k) of Schedule 1 with:
“(k) if the registered bank meets the condition in clause 21(1)(d) of Part 2, for the information relating to capital adequacy and regulatory liquidity requirements that is required to be disclosed under Schedule 11—
(i) that the information has been examined by the auditor;
(ii) whether or not anything has come to the auditor’s attention which would cause the auditor to believe that the information is not in all material respects disclosed in accordance with Schedule 11; and”
(3) Replace subclause 2(1)(l) of Schedule 1 with:
“(l) if the registered bank meets the condition in clause 21(1)(e) of Part 2, for the information relating to capital adequacy and regulatory liquidity requirements that is required to be disclosed under applicable clauses of Schedules 9 and 11—
(i) that the information has been examined by the auditor;
(ii) whether or not anything has come to the auditor’s attention which would cause the auditor to believe that the information is not in all material respects disclosed in accordance with the applicable clauses of Schedules 9 and 11.”
14. Clause 3 of Schedule 1 amended
(1) Replace subclause 3(c) of Schedule 1 with:
“(c) if the registered bank meets the condition in clause 21(1)(c) of Part 2, for the information relating to capital adequacy and regulatory liquidity requirements that is required to be disclosed under Schedule 9, state—
(i) that the information has been examined by the auditor;
(ii) whether or not anything has come to the auditor’s attention which would cause the auditor to believe that the information is not in all material respects disclosed in accordance with Schedule 9;”
(2) Replace subclause 3(d) of Schedule 1 with:
“(d) if the registered bank meets the condition in clause 21(1)(d) of Part 2, for the information relating to capital adequacy and regulatory liquidity requirements that is required to be disclosed under Schedule11, state—
(i) that the information has been examined by the auditor;
(ii) whether or not anything has come to the auditor’s attention which would cause the auditor to believe that the information is not in all material respects disclosed in accordance with Schedule 11; and”
(3) Replace subclause 3(e) of Schedule 1 with:
“(e) if the registered bank meets the condition in clause 21(1)(e) of Part 2, for the information relating to capital adequacy and regulatory liquidity requirements that is required to be disclosed under applicable clauses of Schedules 9 and 11, state—
(i) that the information has been examined by the auditor;
(ii) whether or not anything has come to the auditor’s attention which would cause the auditor to believe that the information is not in all material respects disclosed in accordance with the applicable clauses of Schedules 9 and 11.”
15. Clause 5 of Schedule 2 amended
(1) Replace subclause 5(4)(b) of Schedule 2 with:
“(b) the rating applying on the signing date, and all qualifications to that rating;”
(2) In subclause 5(4)(c) of Schedule 2 replace “balance” with “signing”.
16. Clause 7 of Schedule 2 amended
(1) Replace subclause 7(5)(b) of Schedule 2 with:
“(b) the rating applying on the signing date, and all qualifications to that rating;”
(2) In subclause 7(5)(c) of Schedule 2 replace “balance” with “signing”.
17. Clause 14 of Schedule 2 amended
(1) Replace subclause 14(c) of Schedule 2 with:
“(c) the rating applying on the signing date, and all qualifications to that rating;”
(2) In subclause 14(d) of Schedule 2 replace “balance” with “signing”.
18. Title of Schedule 3 amended
In the title of Schedule 3, delete “and off quarters”.
19. Clause 3 of Schedule 3 amended
Replace subclause 3(3)(b) of Schedule 3 with:
“(b) the rating applying on the signing date, and all qualifications to that rating.”
20. Clause 8 of Schedule 3 amended
In subclause 8(2) of Schedule 3 delete “or off quarter accounting period as applicable”.
21. Clause 10 of Schedule 3 amended
Replace subclause 10(c) of Schedule 3 with:
“(c) the rating applying on the signing date, and all qualifications to that rating.”
22. Clause 12 of Schedule 3 amended
In subclause 12(2) of Schedule 3 delete “or the off quarter accounting period as applicable”.
23. Clause 13 of Schedule 3 amended
(1) Replace subclause 13(1) of Schedule 3 with:
“A copy of the auditor’s report or review statement referred to in clause 20(2) of Part 2.”
(2) Repeal subclause 13(2) of Schedule 3.
24. Clause 4 of Schedule 4 amended
Replace clause 4 of Schedule 4 with:
“4 Additional information on liquidity risk
In disclosing the maturity analyses of financial liabilities required by paragraphs 39(a) and (b) of NZ IFRS 7, the registered bank must include an “on demand” time band.”
25. Clause 6 of Schedule 5 amended
Repeal subclauses 6(2), 6(3) and 6(4) of Schedule 5 and replace with with:
“(2) In disclosing the information required by subclause (1), the registered bank must include an “on demand” time band in the maturity analyses of the registered bank’s banking group’s financial liabilities.
(3) An analysis of financial assets held by the registered bank’s banking group for the purpose of managing liquidity risk, presented on a basis that is consistent with any such information disclosed in the financial statements for the most recent full year accounting period and that complies with NZ IFRS 7.”
26. Schedule 6 repealed
Repeal Schedule 6.
27. Schedule 8 repealed
Repeal Schedule 8.
28. Title of Schedule 9 amended
In the title of Schedule 9, after “approach” insert “, and regulatory liquidity ratios”.
29. Clause 1 of Schedule 9 amended
In the table referred to in subclause 1(2) of Schedule 9—
(a) In the first row below the sub-heading “Additional Tier 1 (“AT1”) capital”, delete “not subject to phase-out from AT1 capital under the Reserve Bank of New Zealand’s Basel III transitional arrangements”.
(b) Delete the second row below the heading “Additional Tier 1 (“AT1”) capital”.
(c) In the first row below the heading “Tier 2 capital”, delete “not subject to phase-out from Tier 2 capital under the Reserve Bank of New Zealand’s Basel III transitional arrangements”.
(d) Delete the second row below the heading “Tier 2 capital”.
30. Clause 2 of Schedule 9 amended
(1) Repeal subclause 2(2)(b) of Schedule 9.
(2) In subclause 2(2) of Schedule 9 renumber subclauses (c) to (f) as subclauses (b) to (e).
31. New clause added to Schedule 9
Insert after clause 14 of Schedule 9:
“15 Regulatory liquidity ratios
(1) The information in subclause (2) in respect of the registered bank’s banking group.
(2) The average values of each of the following regulatory liquidity ratios over each of the periods referred to in subclause (3), using the averaging method set out in subclause (4):
(a) the one-week mismatch ratio;
(b) the one-month mismatch ratio; and
(c) the core funding ratio.
(3) The periods referred to in subclause (2) are:
(a) the three month period ending on the reporting date; and
(b) the three month period ending on the date three months before the reporting date.
(4) To calculate the average value of a ratio specified in subclause (2) over a period specified in subclause (3), the bank must calculate the ratio at the close of each working day in the period in accordance with the conditions of registration relating to liquidity-risk management, and calculate the arithmetic average of all of the daily ratio figures.”
32. Schedule 10 repealed
Repeal Schedule 10.
33. Title of Schedule 11 amended
In the title of Schedule 11, after “approach” insert “, and regulatory liquidity ratios”.
34. Clause 1 of Schedule 11 amended
In the table referred to in subclause 1(2) of Schedule 11—
(a) In the first row below the sub-heading “Additional Tier 1 (“AT1”) capital”, delete “not subject to phase-out from AT1 capital under the Reserve Bank of New Zealand’s Basel III transitional arrangements”.
(b) Delete the second row below the heading “Additional Tier 1 (“AT1”) capital”.
(c) In the first row below the heading “Tier 2 capital”, delete “not subject to phase-out from Tier 2 capital under the Reserve Bank of New Zealand’s Basel III transitional arrangements”.
(d) Delete the second row below the heading “Tier 2 capital”.
35. Clause 2 of Schedule 11 amended
(1) Repeal subclause 2(2)(b) of Schedule 11.
(2) In subclause 2(2) of Schedule 11 renumber subclauses (c) to (f) as subclauses (b) to (e).
36. Clause 3 of Schedule 11 amended
Replace subclause 3(5) of Schedule 11 with:
“(5) For the purpose of the disclosure required by subclauses (2) and (4) the exposure classes to be disclosed are those defined in Capital Adequacy Framework (Internal Models Based Approach) (BS2B) except that the retail exposure class must be disclosed as if the following two exposure sub-classes of the retail exposure class were each a separate exposure class:
(a) exposures secured by residential mortgages; and
(b) all other retail lending.”
37. Clause 4 of Schedule 11 amended
In subclause 4(3)(b) of Schedule 11, after “capital calculation” insert “(except that, when incorporating any off-balance sheet exposures in the loan value, the registered bank may apply a credit conversion factor of 100% rather than using its own EAD estimates)”
38. Clause 7 of Schedule 11 amended
In the table referred to in subclause 7(2) of Schedule 11, replace the heading of the second column with:
“For portfolios subject to the standardised approach: total value of exposures covered by eligible financial collateral (after haircutting)”
39. New clause added to Schedule 11
Insert after clause 18 of Schedule 11:
“19 Regulatory liquidity ratios
(1) The information in subclause (2) in respect of the registered bank’s banking group.
(2) The average values of each of the following regulatory liquidity ratios over each of the periods referred to in subclause (3), using the averaging method set out in subclause (4):
(a) the one-week mismatch ratio;
(b) the one-month mismatch ratio; and
(c) the core funding ratio.
(3) The periods referred to in subclause (2) are:
(a) the three month period ending on the reporting date; and
(b) the three month period ending on the date three months before the reporting date.
(4) To calculate the average value of a ratio specified in subclause (2) over a period specified in subclause (3), the bank must calculate the ratio at the close of each working day in the period in accordance with the conditions of registration relating to liquidity-risk management, and calculate the arithmetic average of all of the daily ratio figures.”
40. Schedule 12 repealed
Repeal Schedule 12.
41. Clause 2 of Schedule 13 amended
(1) In subclause 2(c) of Schedule 13, insert “or central bank” after “central government”.
(2) Replace subclause 2(d) of Schedule 13 with:
“(d) exclude credit exposures to any supranational or quasi-sovereign agency with a long-term credit rating of A- or A3 or above, or its equivalent.”
42. Clause 3 of Schedule 13 amended
(1) In subclause 3(1)(b) of Schedule 13, replace “equity” with “Common Equity Tier 1 capital” in both places where it occurs.
(2) Replace subclause 3(2) of Schedule 13 with:
“(2) The number of bank counterparties described by subclause (3) to which the registered bank’s banking group has an aggregate credit exposure that equals or exceeds 10% of the registered bank’s banking group’s Common Equity Tier 1 capital, showing separately—
(a) those counterparties that have a long-term credit rating of A- or A3 or above, or its equivalent;
(b) those counterparties that have a long-term credit rating of at least BBB- or Baa3, or its equivalent, and at most BBB+ or Baa1, or its equivalent; and
(c) if applicable—
(i) those counterparties that have a long-term credit rating lower than BBB- or Baa3, or its equivalent; and
(ii) those counterparties that do not have a long-term credit rating.”
(3) In subclause 3(4) of Schedule 13, replace “equity” with “Common Equity Tier 1 capital”.
43. Clause 4 of Schedule 13 amended
(1) In subclause 4(1)(b) of Schedule 13, replace “equity” with “Common Equity Tier 1 capital” in both places where it occurs.
(2) Replace subclause 4(2) of Schedule 13 with:
“(2) The number of bank counterparties described by subclause (3) to which the registered bank’s banking group has a peak end-of-day aggregate credit exposure that equals or exceeds 10% of the registered bank’s banking group’s Common Equity Tier 1 capital, showing separately—
(a) those counterparties that have a long-term credit rating of A- or A3 or above, or its equivalent;
(b) those counterparties that have a long-term credit rating of at least BBB- or Baa3, or its equivalent, and at most BBB+ or Baa1, or its equivalent; and
(c) if applicable—
(i) those counterparties that have a long-term credit rating lower than BBB- or Baa3, or its equivalent; and
(ii) those counterparties that do not have a long-term credit rating.”
(3) In subclause 4(4) of Schedule 13, replace “equity” with “Common Equity Tier 1 capital”.
44. Clause 5 of Schedule 13 amended
In clause 5 of Schedule 13, replace “equity” with “Common Equity Tier 1 capital”.
45. Title of Schedule 16 amended
In the title of Schedule 16, delete “and off quarters”.
46. Clause 5 of Schedule 16 amended
In clause 5 of Schedule 16, delete “or off quarter accounting period as applicable,”.
47. Clause 6 of Schedule 16 amended
In clause 6 of Schedule 16, delete “or off quarter accounting period as applicable,”.
48. Clause 8 of Schedule 17 amended
(1) In subclause 8(1) of Schedule 17, delete “the Foundation Internal Ratings Based (IRB) approach or”.
(2) In subclause 8(1)(a) of Schedule 17, delete “, Foundation,”.
(3) In subclause 8(2) of Schedule 17, delete “Foundation IRB approach or”.
49. Clause 10 of Schedule 17 amended
In clause 10 of Schedule 17, delete “or Foundation IRB approach”.
50. Title of Schedule 18 amended
In the title of Schedule 18, delete “and off quarters”.
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MICHAEL WEBSTER, Clerk of the Executive Council.
Explanatory note
This note is not part of the order, but is intended to indicate its general effect.
This order comes into force on 31 March 2018. It amends the Registered Bank Disclosure Statements (New Zealand Incorporated Registered Banks) Order 2014, published in a Supplement to the New Zealand Gazette, 21 February 2014, No. 21, page 452. The purpose of this order is to update disclosure requirements for New Zealand-incorporated registered banks. It removes the requirement for a New Zealand-incorporated bank to publish off-quarter disclosure statements. The order also adds a requirement to publish regulatory liquidity ratios, makes some amendments to the disclosure of individual large credit exposures, makes a few minor changes to other required disclosure, and removes or updates some expired cross-references.
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This order is administered by the Reserve Bank of New Zealand