Deposit Takers (New Zealand Baptist Savings & Development Society Incorporated) Exemption Notice 2015

Deposit Takers (New Zealand Baptist Savings & Development Society Incorporated) Exemption Notice 2015 Under section 70 of the Non-bank Deposit Takers Act 2013, the Reserve Bank of New Zealand, after taking into account the principles set out in section 8 of that Act and after satisfying itself as to the matters set out in section 70(2) of that Act gives the following notice (to which is appended a statement of reasons of the Bank). Contents 1 Title Page 1 2 Commencement 3 Revocation 4 Interpretation 5 Exemption from related party exposures requirements Notice

1. Title This notice is the Deposit Takers (New Zealand Baptist Savings & Development Society Incorporated) Exemption Notice 2015.
2. Commencement This notice comes into force on 1 July 2015.
3. Revocation This notice is revoked on the close of 30 June 2020.
4. Interpretation (1) In this notice unless the context otherwise requires ,---- Act means the Non-bank Deposit Takers Act 2013 Incorporation Act means the Baptist Union Incorporation Act 1923 1 2 Regulations mean the Deposit Takers (Credit Ratings, Capital Ratios, and Related Party Exposures) Regulations 2010 Baptist Savings means New Zealand Baptist Savings & Development Society Incorporated, a society incorporated under the Incorporated Societies Act 1908 Baptist Union means The Baptist Union of New Zealand, a body corporate constituted under the Incorporation Act.

2 (2) Any term or expression that is defined in the Act or the Regulations and used, but not defined, in this notice has the same meaning as in the Act or the Regulations. 5. Exemption from related party exposures requirements for certain exposures Baptist Savings is exempted from section 37(1) of the Act to the extent that section requires Baptist Savings, under the Regulations, to incl1Ude in its calculation of related party exposures loans to which Baptist Union is a party in its role as trustee under Schedule 6 of the Incorporation Act of church properties securing the loans. Dated at Wellington this~ ay of ~l.t.- 2015. Statement of reasons Grant Spencer, Deputy Governor. This notice comes into force on 1 July 2015 and is revoked on 30 June 2020. New Zealand Baptist Savings & Development Society Incorporated (Baptist Savings) is a non-bank deposit taker within the meaning of the Non-bank Deposit Takers Act 2013 (the Act). This notice exempts Baptist Savings from the obligation under section 37 ( 1) of the Act to comply with the restrictions on related party exposures in the Deposit Takers (Credit Ratings, Capital Ratios, and Related Party Exposures) Regulations 2010 (Regulations) in respect of certain exposures. The exemption is limited to loans made by Baptist Savings that Baptist Union of New Zealand is party to as trustee under Schedule 6 to the Baptist Union Incorporation Act 1923 of the church properties securing the loans (Exempt Loans). The Reserve Bank of New Zealand, after taking into account the principles set out in section 8 of the Act and satisfying itself as to the matters set out in section 70(2) of the Act, considers it appropriate to grant the exemption because: • the exemption is consistent with the maintenance of a sound and efficient financial system as depositors are afforded better protection than what they might otherwise be able to obtain should the exemption not be available; • compliance with the restrictions on related party exposures in respect of Exempt Loans would be unduly onerous or burdensome in the circumstances. The relevant circumstances include Baptist Union's role being that of trustee of church properties securiing loans an arrangement which decreases the credit risk to Baptist Savings and its depositors. Thus the rationale for restricting related party exposures to reduce the risk of transactions on unfavourable terms does not apply to the Exempt Loans. In addition, Exempt Loans are far in excess of the limits under the Regulations and compliance would require ( 1) the significant modification of governance arrangements to the detriment of the mutuality of interests existing between Baptist Union, Baptist Savings and associated churches or (2) the release of security over Exempt Loans to the detriment of Baptist Savings and its

3 depositors or (3) the conveyance of land held by Baptist Union to an unrelated party contrary to the scheme of the Baptist Union Incorporation Act 1923; • the exemption only relates to Exempt Loans and the obligation to limit other related party exposures is unaffected. In the circumstances, the exemption is not broader than is necessary to address the matters giving rise to the exemption.

Deposit Takers (New Zealand Baptist Savings & Development Society Incorporated) Exemption Notice 2015 Under section 70 of the Non-bank Deposit Takers. Act 2013, the Reserve Bank of New Zealand, after taking into account the principles set out in section 8 of that Act and after satisfying itself as to the matters set out in section 70(2) of that Act gives the following notice (to which is appended a statement of reasons of the Bank). Contents 1 Title Page 1 2 Commencement 3 Revocation 4 Interpretation 5 Exemption from related party exposures requirements Notice

1. Title This notice is the Deposit Takers (New Zealand Baptist Savings & Development Society Incorporated) Exemption Notice 2015.
2. Commencement This notice comes into force on 1 July 2015.
3. Revocation This notice is revoked on the close of 30 June 2020.
4. Interpretation (1) In this notice unless the context otherwise requires ,---- Act means the Non-bank Deposit Takers Act 2013 Incorporation Act means the Baptist Union Incorporation Act 1923 1 2 Regulations mean the Deposit Takers (Credit Ratings, Capital Ratios, and Related Party Exposures) Regulations 2010 Baptist Savings means New Zealand Baptist Savings & Development Society Incorporated, a society incorporated under the Incorporated Societies Act 1908 Baptist Union means The Baptist Union of New Zealand , a body corporate constituted under the Incorporation Act.

2 (2) Any term or expression that is defined in the Act or the Regulations and used, but not defined, in this notice has the same meaning as in the Act or the Regulations. 5. Exemption from related party exposures requirements for certain exposures Baptist Savings is exempted from section 37(1) of the Act to the extent that section requires Baptist Savings, under the Regulations, to include in its calculation of related party exposures loans to which Baptist Union is a pariy in its role as trustee under Schedule 6 of the Incorporation Act of church properties securing the loans. Dated at Wellington this~ ay of ~I\L- 2015. Statement of reasons Grant Spencer, Deputy Governor. This notice comes into force on 1 July 2015 and is revoked on 30 June 2020. New Zealand Baptist Savings & Development Society Incorporated (Baptist Savings) is a non-bank deposit taker within the meaning of the Non-bank Deposit Takers Act 2013 (the Act). This notice exempts Baptist Savings from the obligation under section 37(1) of the Act to comply with the restrictions on related party exposures in the Deposit Takers (Credit Ratings, Capital Ratios, and Related Party Exposures) Regulations 2010 (Regulations) in respect of certain exposures. The exemption is limited to loans made by Baptist Savings that Baptist Union of New Zealand is party to as trustee under Schedule 6 to the Baptist Union Incorporation Act 1923 of the church properties securing the loans (Exempt Loans). The Reserve Bank of New Zealand, after taking into account the principles set out in section 8 of the Act and satisfying itself as to the matters set out in section 70(2) of the Act, considers it appropriate to grant the exemption because: • the exemption is consistent with the maintenance of a sound and efficient financial system as depositors are afforded better protection than what they might otherwise be able to obtain should the exemption not be available; • compliance with the restrictions on related party exposures in respect of Exempt Loans would be unduly onerous or burdensome in the circumstances. The relevant circumstances include Baptist Union's role being that of trustee of church properties securing loans an arrangement which decreases the credit risk to Baptist Savings and its depositors. Thus the rationale for restricting related party exposures to reduce the risk of transactions on unfavourable terms does not apply to the Exempt Loans. In addition, Exempt Loans are far in excess of the limits under the Regulations and compliance would require (1) the significant modification of governance arrangements to the detriment of the mutuality of interests existing between Baptist Union, Baptist Savings and associated churches or (2) the release of security over Exempt Loans to the detriment of Baptist Savings and its

3 depositors or (3) the conveyance of land held by Baptist Union to an unrelated party contrary to the scheme of the Baptist Union Incorporation Act 1923; • the exemption only relates to Exempt Loans and the obligation to limit other related party exposures is unaffected. In the circumstances, the exemption is not broader than is necessary to address the matters giving rise to the exemption.