RESERVE BANK OF NEW ZEALAND TE PŪTEA MATUA

Non-bank Deposit Takers (UDC Finance Limited) Exemption Notice 2016

Under section 70 of the Non-bank Deposit Takers Act 2013, the Reserve Bank of New Zealand gives the following notice (to which is appended a statement of reasons of the Bank).

---

Notice

1 Title This notice is the Non-bank Deposit Takers (UDC Finance Limited) Exemption Notice 2016.

2 Commencement This notice comes into force on 2 September 2016.

3 Revocation This notice is revoked on the close of 1 September 2021.

4 Interpretation (1) In this notice, unless the context otherwise requires,— Act means the Non-bank Deposit Takers Act 2013 ANZ means ANZ Bank New Zealand Limited Bank means the Reserve Bank of New Zealand Regulations means the Deposit Takers (Credit Ratings, Capital Ratios, and Related Party Exposures) Regulations 2010 UDC means UDC Finance Limited (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 UDC is exempted from regulation 23(3)(b) of the Regulations.

6 Conditions of exemption in clause 5 The exemption in clauses 5 is subject to the conditions that— (a) UDC remains a wholly owned subsidiary of ANZ: (b) ANZ remains a registered bank:

Ref #6605574 v1.1

---

2

(c) UDC must not issue any debt security unless the investor has, before investing, received written notification (as applicable) that UDC is exempted until the close of 1 September 2021, from the related party exposures limit requirement in regulation 23(3)(b) of the Regulations.

7 Further condition of exemption in clause 6 The exemption in clause 5 is subject to the further condition that UDC's aggregate exposures to related parties as a percentage of its capital do not exceed 50%.

Dated at Wellington this 4th day of August 2016.

[Signature]

Grant Spencer, Deputy Governor.

---

Statement of reasons

This notice, which comes into force on 2 September 2016 and is revoked on the close of 1 September 2021, exempts UDC Finance Limited (UDC) from the requirements of regulation 23(3)(b) of the Deposit Takers (Credit Ratings, Capital Ratios, and Related Party Exposures) Regulations 2010 (clause 5). The exemption is subject to the conditions specified in clauses 6 and 7.

This notice replaces the Non-bank Deposit Takers (UDC Finance Limited) Exemption Notice 2015 which expires on the close of 1 September 2016.

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 requirement for UDC to comply with the related party exposure requirements under Regulations 23(3)(b) would be unduly onerous and burdensome in circumstances where it would excessively restrict the management of intra-day liquidity, funding and financial risk by and between UDC and the rest of the ANZ group:
• The grant of exemption is consistent with the maintenance of a sound and efficient financial system:
• The limit on the exposure as a percentage of capital means that the extent of the exemption is not broader than is reasonably necessary to address the matters that gave rise to the exemption.

---

Ref #6605574 v1.1