Deposit Takers (Nelson Enterprise Loan Trust) Exemption Notice 2013

RESERVE BANK OF NEW ZEALAND

Grant Spencer
Deputy Governor
Head of Financial Stability

Deposit Takers
(Nelson Enterprise Loan Trust)
Exemption Notice 2013

Pursuant to section 157G of the Reserve Bank of New Zealand Act 1989, the Reserve Bank of New Zealand gives the following notice (to which is appended a statement of reasons of the Bank).

Contents

		Page
1	Title	1
2	Commencement	1
3	Revocation	1
4	Interpretation	1
5	Exemption from capital ratio requirements	1
6	Exemption from related party exposures requirements	1
7	Exemption from liquidity requirements	1
8	Conditions of exemptions in clauses 5 to 7	2

Notice

1. Title
This notice is the Deposit Takers (Nelson Enterprise Loan Trust) Exemption Notice 2013.

2. Commencement
This notice comes into force on 1 November 2013.

3. Revocation
This notice is revoked on the close of 31 October 2016.

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

Act means the Reserve Bank of New Zealand Act 1989

NELT means Nelson Enterprise Loan Trust.

(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.

5. Exemption from capital ratio requirements NELT is exempted from sections 157T and 157U of the Act.

6. Exemption from related party exposures requirements NELT is exempted from sections 157X and 157Y of the Act.

7. Exemption from liquidity requirements
NELT is exempted from sections 157ZA and 157ZB of the Act.

2 The Terrace, Wellington 6011
PO Box 2498, Wellington 6140, New Zealand
Telephone +64 4 472 2029 Fax +64 4 473 2250
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8. Conditions of exemptions in clauses 5 to 7

The exemptions in clauses 5 to 7 are subject to the following conditions:

a) the total liabilities of NELT remain less than $2 million; and

b) NELT is not subject to the requirement to appoint a trustee whether under section 33(2) of the Securities Act 1978, or under the equivalent provision in the Financial Markets Conduct Act 2013; and

c) NELT continues to operate as a non-profit making trust for primarily charitable purposes; and

d) NELT discloses the nature of the exemptions in clauses 5 to 7, and the nature of the conditions in this clause, in any promotional or advertising material relating to its debt securities.

Dated at Wellington this 24 day of October 2013

Grant Spencer,
Deputy Governor.

Statement of reasons

This notice comes into force on 1 November 2013 and is revoked on the close of 31 October 2016.

Nelson Enterprise Loan Trust (NELT) is a deposit taker within the meaning of Part 5D of the Reserve Bank of New Zealand Act 1989 (the Act). This notice exempts NELT from the following prudential requirements in the Act:

• sections 157T and 157U (capital ratio requirements);

• sections 157X and 157Y (related party exposures requirements);

• sections 157ZA and 157ZB (liquidity requirements).

The exemptions are subject to conditions.

The Reserve Bank of New Zealand (the Bank), after taking into account the principles set out in section 157F(2) of the Act and satisfying itself as to the matters set out in section 157(G)(2) of the Act, considers it appropriate to grant the exemptions because:

• the costs of complying with the prudential requirements are unduly onerous and burdensome in the circumstances. The circumstances are that NELT is a non-profit making trust and has charitable and community based objectives.

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In addition, its borrowing and lending activities are on a small scale and it does not need to appoint a trustee under the Securities Act 1978;

• for the reasons given above, the Bank is satisfied that the exemptions are consistent with the maintenance of a sound and efficient financial system;

• the fact that the exemptions extend only to NELT and have conditions imposed ensures that the exemptions are not broader than is reasonably necessary to address the matters that gave rise to the exemptions.

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