Guidance on the DCS Transitional Standard 2025

Ref #22482673 v1.0
Deposit Takers
(Depositor
Compensation
Scheme
Transitional
Provisions)
Standard 2025
Guidance on the Transitional Standard
Date: 16 May 2025

1 Deposit Takers (Depositor Compensation Scheme Transitional Provisions) Standard 2025 – Guidance on the Transitional Standard

2 Deposit Takers (Depositor Compensation Scheme Transitional Provisions) Standard 2025 – Guidance on the Transitional Standard Contents
Part A: Introduction to the DCS Transitional Standard ____________________________________ 3
A.1 Purpose and status of this document 3
A.2 Overview 3
A.3 Context and background 3
Part B: Detailed guidance on the DCS Transitional Standard______________________________ 5
B.1 The Transitional Standard 5
B.2 Purpose 5
B.3 Application of the Transitional Standard 5 B.4 Authorised individuals 6 B.5 Information provided by the depositor 6 B.6 Accessing the DCS depositor page 7 B.7 Content of the DCS depositor page 7 B.8 Pre-positioning the DCS depositor page 8 B.9 Activating the DCS depositor page 8 B.10 Support 9 B.11 Deactivating the DCS depositor page 9 B.12 Performance of the DCS depositor page 9 B.13 Alternate models 9 B.14 Mobile applications 11
Part C: Providing information to the Reserve Bank _______________________________________ 12
C.1 Data variables to be provided 12
C.2 Data transfer requirements 13

3 Deposit Takers (Depositor Compensation Scheme Transitional Provisions) Standard 2025 – Guidance on the Transitional Standard
Part A: Introduction to the DCS Transitional Standard
A.1 Purpose and status of this document
This guidance accompanies the Deposit Takers (Depositor Compensation Scheme Transitional Provisions) Standard 2025 (the Transitional Standard). It is intended to assist deposit takers comply with the Transitional Standard by outlining:
 the intended effect of provisions of the Transitional Standard, considering the policy and some design choices the Reserve Bank of New Zealand (the Reserve Bank) made when developing the Transitional Standard:
 the Reserve Bank’s current expectations in respect of certain operational details, such as the provision of data required either under the Transitional Standard or by separate notice. The guidance must be read alongside the Transitional Standard. If there is any inconsistency between the Transitional Standard and the guidance, the Transitional Standard prevails. We will keep the guidance under review and will update it in light of experience and feedback by deposit takers. While we do not expect to, the Reserve Bank may change its interpretation of the Transitional Standard. We will endeavour to communicate with deposit takers before updating the guidance. The Reserve Bank welcomes ongoing feedback about the wording of the Transitional Standard and how it can be useful for deposit takers. A.2 Overview This document provides additional information to explain the Transitional Standard. The Transitional Standard is divided into the following parts:
 Part 1: Preliminary provisions
 Part 2: DCS depositor page
 Part 3: Alternate model to DCS depositor page  Part 4: Miscellaneous provisions A.3 Context and background The Transitional Standard was issued on 15 May 2025. Its purpose is to set the requirements for deposit takers to collect and provide alternate account information from depositors in the event of a deposit taker failure that requires payments to compensate depositors eligible under the Depositor Compensation Scheme (DCS). Without this information the DCS will not be able to compensate eligible depositors. The Transitional Standard applies from 1 July 2025 until it is replaced by a permanent DCS standard, which will also cover additional requirements that apply from 2028 onwards. The Transitional Standard has intentionally been made as flexible as possible and requires less information than is expected to be required in the permanent DCS standard from 2028. In the event of a deposit taker failure that requires the DCS to compensate eligible depositors, the compensation will be made to each eligible depositor via payment into an account with another

4 Deposit Takers (Depositor Compensation Scheme Transitional Provisions) Standard 2025 – Guidance on the Transitional Standard deposit taker. Unlike some other countries who operate similar schemes, the payment will not be made by a cheque, so it is important that the Reserve Bank holds accurate and up-to-date information on all depositors. An authorised individual for a deposit can provide that information to the Reserve Bank through a DCS depositor page. The DCS depositor page must be contained in or linked from the failed deposit taker’s online banking software, such as an Internet site or a mobile application (referred to in the Transitional Standard and the rest of this guidance as account software). The DCS depositor page must only be activated1 upon receipt of a specified event notice and a direction in writing to activate the DCS depositor page from the Reserve Bank. If the deposit taker has both an Internet site and a mobile application2 , it only needs to ensure that its mobile application contains or links to the DCS depositor page from 1 January 2026. The Transitional Standard sets out how the DCS depositor page must operate and what information the DCS depositor page must enable the deposit taker to collect from the depositor and subsequently provide to the Reserve Bank. Single depositor view (SDV) requirements will apply from 2028 and will provide more information to the Reserve Bank to make this process easier. However, due to the limited amount of time to design systems to comply with the Transitional Standard, from 2025 until 2028 a much smaller amount of minimum information will be required to be collected. That information is:
 a unique identifier for the depositor, so that the Reserve Bank can reconcile the information on the deposit taker’s systems with the information collected through the DCS depositor page:
 the account number and account name of the alternate account for the DCS compensation to be paid to (alternate account details). Authorised individuals3 must be able to provide their contact email address and contact phone number, although they may choose not to provide this information. The Reserve Bank will be able to accept additional data from deposit takers beyond the minimum requirements and we encourage deposit takers to design their DCS depositor page to collect additional information if they are able to do so. ____________ 1 Defined in clause 4 of the Transitional Standard as making the software readily accessible to the public. 2 Defined in clause 4 of the Transitional Standard as software that is designed to be used on a mobile device. 3 Alternate account details and contact details are provided on the DCS depositor page by persons who have authority to pay money to another person or to an account with another deposit taker, or both. In many instances they will be the depositor. Those persons are collectively referred to in the Transitional Standard and the rest of this guidance as authorised individuals.

5 Deposit Takers (Depositor Compensation Scheme Transitional Provisions) Standard 2025 – Guidance on the Transitional Standard
Part B: Detailed guidance on the DCS Transitional Standard
B.1 The Transitional Standard
This document is provided to support the interpretation of and compliance with the Deposit Takers (Depositor Compensation Scheme Transitional Provisions) Standard 2025 (the Transitional Standard) issued on 15 May 2025. This document provides support by outlining the Reserve Bank’s intention behind the specific wording in the Transitional Standard. B.2 Purpose The Transitional Standard is intended to ensure that deposit takers have the appropriate systems in place to collect alternate accounts and contact details from authorised individuals in the event of the deposit taker’s failure. A deposit taker will be required to have a DCS depositor page pre-positioned for all account software that an authorised individual could access to manage the accounts in which deposits are placed. Account software does not include other online facilities that a depositor could use to manage their banking, for example, a secure email facility used to message the deposit taker with instructions regarding their account. B.3 Application of the Transitional Standard (Clauses 2 and 3) The Transitional Standard will come into force on 1 July 2025 and will apply until section 10 of the Deposit Takers Act 2023 (DTA) comes into force (which is expected to be in 2028), when it will be replaced by a permanent DCS standard. (Clause 5) The Transitional Standard applies to all registered banks and licensed non-bank deposit takers (referred to in the Transitional Standard as existing deposit takers) that allow depositors to view or manage their deposit accounts using account software. The Transitional Standard does not apply to an overseas licenced deposit taker that predominately provides services to wholesale clients4 . This is intended to ensure that only deposit takers whose products are covered by the DCS, and who provide account software, are required to contain, or provide a link or other means of getting to, a DCS depositor page. The Transitional Standard will also apply to any person granted bank registration or an NBDT5 licence6 after 1 July 2025 until the DTA is fully in force around 2028. ____________ 4 Refer to regulation 6(2) of the Deposit Takers Regulations 2025. 5 Non-bank deposit taker. 6 Registered under the Banking (Prudential Supervision) Act 1989 or a licenced NBDT under the Non-bank Deposit Takers Act 2013.

6 Deposit Takers (Depositor Compensation Scheme Transitional Provisions) Standard 2025 – Guidance on the Transitional Standard B.4 Authorised individuals (Clause 4) Authorised individual is defined as any individual who has authority, in relation to a deposit, to do either or both of the following:
 authorise money to be paid to a person who is not a holder of the deposit:
 authorise money to be paid to an account with another deposit taker.
Particularly in relation to accounts held by a natural person, the authorised individual is likely to be the depositor. In relation to body corporate accounts, such as for a business or club, it would be a person authorised to manage deposits for the entity, such as to transfer money to a third party. An authorised individual would not include anyone with view-only access (such as young children) or people who can only transfer money within the accounts of a depositor at a single deposit taker. It is possible for a single deposit to have more than one authorised individual, but only one alternate account can be provided – this is discussed further below. B.5 Information provided by the depositor (Clause 7) The minimum information that the DCS depositor page must collect is the account name and account number of the alternate account. The authorised individual must also be able to provide a contact email address and phone number, although providing this information is voluntary. The minimum information required has been determined taking into account the short implementation timeline and to minimise the costs of deposit takers to comply with the Transitional Standard. An authorised individual may need to provide different alternate account details for different deposits. The DCS depositor page must be structured in a way that allows an authorised individual to do this. For example, an authorised individual may have authority in the following contexts:
 as the sole account holder:
 as one of many authorised individuals for a company, trust, or club account:
 in other situations that have resulted in the person having authority to manage a deposit, such as a person having power of attorney. The alternate account is not required to be in the name of the depositor. For example, it may be an account of a trusted family member or friend at the option of the authorised individual. The DCS depositor page is required to accept New Zealand account numbers, although the deposit taker may choose to also accept foreign accounts. If an authorised individual wishes to provide a foreign account number, irrespective of whether their deposit taker’s DCS depositor page will allow for this, they can instead contact the Reserve Bank. Providing a foreign account number may delay their payment and incur additional fees.

7 Deposit Takers (Depositor Compensation Scheme Transitional Provisions) Standard 2025 – Guidance on the Transitional Standard Updates to details An authorised individual may access the DCS depositor page without having all the information to complete the form. For example, they might not yet have their alternate account details. They can leave the DCS depositor page and access it again at a later date. However, they will be expected to reauthenticate themselves each time they access the page. If an authorised individual enters incorrect information, or wishes to update their information, they should be encouraged to contact the Reserve Bank to have those details corrected. This will avoid the Reserve Bank receiving conflicting information. If updated or corrected information is provided through a DCS depositor page, the Reserve Bank will store the new information but will not overwrite the original entry. If an account has more than one authorised individual, they may have different understandings of what the correct alternate account details and contact details are. 7 While it is our preference that any difference is resolved prior to completing the DCS depositor page, we acknowledge that this is not within the deposit taker’s control. If more than one submission of depositor information is provided for the same account, only the first submission received will be used. B.6 Accessing the DCS depositor page (Clause 8) An authorised individual can only provide information to a DCS depositor page once they have verified their identity and their status as an authorised individual. They do this by using the same electronic credentials they were able to use to access the deposit taker’s account software immediately before a specified event notice was issued to the deposit taker. The DCS depositor page itself does not need to be contained within the account software, for example, the Internet site or mobile application itself, but must remain part of software that is maintained by, or on behalf of, the deposit taker. It would be consistent with the Transitional Standard if a mobile application login, once authenticated, redirected the authorised individual to a DCS depositor page accessed through a browser rather than directly in the application. B.7 Content of the DCS depositor page (Clauses 9 and 10) Clauses 9 and 10 of the Transitional Standard specify content that must be notified on the DCS depositor page to an authorised individual, both before and after the authorised individual submits information to the DCS depositor page. Before the DCS depositor page can accept information from the depositor, the page must display statements to the effect that:
 the deposit taker is in liquidation, is in receivership, or is under statutory management (whichever applies); and ____________ 7 As noted above, the DCS depositor page can be designed to accept more than one set of contact information.

8 Deposit Takers (Depositor Compensation Scheme Transitional Provisions) Standard 2025 – Guidance on the Transitional Standard  the Reserve Bank has begun the process under the DCS for compensation to be paid to, or on account of, eligible depositors in respect of their protected deposits placed with the deposit taker; and  information about the DCS is available on Reserve Bank’s Internet site (dcs.govt.nz). After the authorised individual provides information on the DCS depositor page, the page must display a statement to the effect that:
 the information has been received; and
 any compensation will be paid into an account according to the details provided, after the Reserve Bank determines who is entitled to compensation and calculates the amount of their entitlement. B.8 Pre-positioning the DCS depositor page (Clauses 11 and 12) Deposit takers must be able to comply, at all times, with the requirement under clause 12 to activate the DCS depositor page upon receipt of a specified event notice and a direction to activate its DCS depositor page from the Reserve Bank. Under clause 12(4), the DCS depositor
page must only be activated when directed under clause 12.
B.9 Activating the DCS depositor page
(Clause 12)
Upon being directed to activate its DCS depositor page, the deposit taker must be able to:
 activate its DCS depositor page; and
 deactivate all account software, except for software that provides a link to its DCS depositor
page or that allows persons to view information about deposits (for example, account balances
and transaction histories).
This action must be taken as soon as practicable after receiving the direction. No further guidance on a specific time has been provided, as each situation will be unique. However, clause 12(3) requires that compliance with clause 12(2) may be outside normal business hours, so it would not be appropriate for a deposit taker to wait until normal business hours to start completing this action. The deposit taker must deactivate all account software except for software that provides a link or other means of getting to its DCS depositor page or that allows persons to view information about deposits (for example, account balances and transaction histories). The Reserve Bank expects that authorised individuals will be unable to open, manage, or close their accounts. The Transitional Standard does not require that an authorised individual must be provided with view access—for example, for historical transactions or balances immediately prior to the specified event notice being issued. This has been done to minimise the system build cost of complying with the Transitional Standard from 1 July 2025. However, providing this functionality would be best practice, and we recommend deposit takers provide it if they are able to do so.

9 Deposit Takers (Depositor Compensation Scheme Transitional Provisions) Standard 2025 – Guidance on the Transitional Standard B.10 Support (Clause 13) The deposit taker is required, under clause 13(b), to provide assistance to the public in relation to accessing or using its DCS depositor page. This could include call-centre staff and other assistance such as the ability to complete password resets. Exact levels of assistance are expected to be discussed with the Reserve Bank. The deposit taker is not required to maintain a facility to onboard existing depositors that do not use account software. Those depositors can provide their alternate account details and contact details to the Reserve Bank. B.11 Deactivating the DCS depositor page (Clause 14) When directed in writing to deactivate the DCS depositor page by the Reserve Bank, the deposit taker must do so as soon as practicable but no later than 8 am on the day after receiving the direction. As with activating the DCS depositor page, the Reserve Bank expects this may be required to be done on a non-business day or outside of business hours. B.12 Performance of the DCS depositor page (Clause 15) The Reserve Bank expects that the number of people accessing a DCS depositor page may result in a greater capacity requirement faced by the deposit taker during its usual course of business. To reduce the build cost for an unlikely event, the Transitional Standard does not require the deposit taker to build website capacity to handle this increase in expected demand. However, a deposit taker is expected to maintain the capacity they had for the maximum number of people who could reasonably be expected to access the account software simultaneously in their usual course of business prior to the failure. This requirement is found in clause 15(c) of the Transitional Standard. We would not expect a deposit taker to reduce costs by reducing their website capacity in the lead up to a failure event unless this capacity could be restored upon the deposit taker’s receipt of a specified event notice. B.13 Alternate models (Clauses 16 to 19)
Part 3 of the Transitional Standard allows a deposit taker to propose an alternate model for
collecting depositor information for the Reserve Bank’s approval. The ability to propose an alternate model was initially designed for smaller deposit takers where the build costs of the Transitional Standard could be disproportionate. However, it is available to deposit takers of any size.

10 Deposit Takers (Depositor Compensation Scheme Transitional Provisions) Standard 2025 – Guidance on the Transitional Standard We recognise that there is limited time to have a proposal considered and approved between when the standard is issued in May and when it comes into force in July. We will continue to work with deposit takers who wish to develop an appropriate alternate model as soon as practicable. An alternate model may be approved after 1 July 2025 but the fact that approval was not provided by this date will not be a factor in whether the alternate model will be approved. If an alternate model is not approved by 1 July 2025, the deposit taker will still be required to comply with the DCS depositor page model provided for under the Transitional Standard. Some Group 3 deposit takers (i.e. deposit takers with total assets of less than NZ$2 billion) may be able to have an alternate model approved that involves holding, or collecting, alternate account details for each depositor prior to clause 16 of the Transitional Standard applying. Any proposed alternative model would need to be considered against the criteria in clause 16(4). If an alternate model is not approved by the Reserve Bank, the deposit taker will not be able to use any alternate model and must comply with Part 2 of the Transitional Standard. A deposit taker can approach the Reserve Bank for approval to use an alternate model for a particular piece of account software and does not need to do so in respect of all account software. For example, a larger deposit taker may operate multiple account software, with one or more being legacy products (i.e. products that are no longer new or current but continue to be used by a small proportion of customers and are in the process of being shut down at some point after 1 July 2025) and further updates to that account software is not possible. In this case, the deposit taker could approach the Reserve Bank with an explanation of why they cannot satisfy the Transitional Standard for that account software and their proposed alternate model for collecting depositor information that would have otherwise been collected through a DCS depositor page. An alternate model for a subset of account software may be approved after 1 July 2025 but the fact that the approval was not provided by this date will not be a factor in whether the alternate model will be approved. Best practice for applying for an alternate model is for the deposit taker to contact their supervisor or dcs@rbnz.govt.nz and include the following information:
 why they are unable to comply with the Transitional Standard without use of an alternate model:
 the proposed alternate model and why it complies with clause 16 of the Transitional Standard:
 the approximate number of customers that would be affected by this model and how that number compares to their overall customer base:
 any other concerns identified with the proposed alternate model and the actions the deposit taker has and will take to mitigate those concerns to the extent possible:
 the timeframe that the alternate model would need to be in place for, if applicable.

11 Deposit Takers (Depositor Compensation Scheme Transitional Provisions) Standard 2025 – Guidance on the Transitional Standard B.14 Mobile applications (Clause 21) A small number of deposit takers made clear to the Reserve Bank during the development of the Transitional Standard that additional time would be required to implement a DCS depositor page for mobile applications8 . For deposit takers that have account software that includes both an Internet site and a mobile application, clause 21 provides that the Internet site is required to contain a DCS depositor page or provide a link or other means to get to a DCS depositor page by 1 July 2025, but the same requirement applies to their mobile application only from 1 January 2026 (6 months later). The deposit taker will still be required to deactivate software functionality in its mobile application that allows depositors to open, manage and close accounts from 1 July 2025 if it is directed to do so following a specified event notice being issued. This could be done by disabling all functionality within the application. A deposit taker is not required to build a mobile application just to offer a DCS depositor page. In that case, the requirement only applies to the deposit taker’s Internet site. We acknowledge that authorised individuals may need to update their mobile application to access the DCS depositor page. The deposit taker is only required to ensure the updated version of the application that is capable of meeting the requirements can be downloaded on or before 1 January 2026. ____________ 8 Defined in clause 4 of the Transitional Standard as software that is designed to be used on a mobile device.

12 Deposit Takers (Depositor Compensation Scheme Transitional Provisions) Standard 2025 – Guidance on the Transitional Standard
Part C: Providing information to the Reserve Bank
The Reserve Bank may, by notice under section 99 of the Deposit Takers Act, require a deposit taker to provide information for the purposes of the DCS (a DCS information-gathering notice). The DCS information-gathering notice will specify the information the deposit taker must provide (the depositor data). The notice may contain further requirements about the form and manner in which the information is provided to the Reserve Bank. The Transitional Standard regulates the making available of certain information in connection with the DCS that the Reserve Bank considers necessary or desirable for the performance or exercise of its functions, powers, or duties under Part 6, and how that information may be disclosed to the Reserve Bank.9 Clause 20(2) of the Transitional Standard therefore specifies additional data format and data transfer requirements that apply if the Reserve Bank issues a DCS information-gathering notice. The deposit taker is required to:
 provide the depositor data in a format that is readily transferable to, and compatible with, the Reserve Bank’s systems; and  transfer the depositor data by secure electronic transmission using an information management facility (if any) made available by the Reserve Bank for that purpose. The guidance in this part is intended to provide an indication of the steps that the deposit taker will need to take to comply with a DCS information-gathering notice and clause 20(2) of the Transitional Standard. C.1 Data variables to be provided Data variables The DCS information-gathering notice will specify the information that the deposit taker must provide. This will include any of the following depositor information collected through the DCS depositor page (or any approved alternate method), as specified in clause 7 of the Transitional Standard, in relation to each deposit:
 the account number of the account:
 the account name of the account:
 the authorised individual’s contact email address (if provided):
 the authorised individual’s contact phone number (if provided).
Clause 15 of the Transitional Standard specifies that depositor information must be stored according to the deposit taker’s unique identifier for the eligible depositor in relation to the deposit. The Reserve Bank will use this unique identifier to match related depositor information for the same depositor for the purposes of calculating and paying DCS entitlements. ____________ 9 Sections 86 and 88 of the Deposit Takers Act 2023.

13 Deposit Takers (Depositor Compensation Scheme Transitional Provisions) Standard 2025 – Guidance on the Transitional Standard The deposit taker may, at its own discretion, provide additional fields they deem useful for the Reserve Bank to utilise the data. Data format requirements For the purposes of clause 20(2) of the Transitional Standard, the Reserve Bank’s preferred data file formats are:
 first preference: JSON (JavaScript Object Notation):
 second preference: CSV (Comma-Separated Values).
Deposit takers that are unable to use these file formats should advise the Reserve Bank as soon as possible. The Reserve Bank will work with deposit takers to ensure that data is provided in a format that is readily transferable to, and compatible with, the Reserve Bank’s systems. C.2 Data transfer requirements Create depositor data files First data transfer The deposit taker will need to create the depositor data file(s) that contain the depositor information specified in the DCS information-gathering notice. The files are required to be in the format described in the paragraph titled “Data format requirements” above. The DCS information￾gathering notice will specify requirements about the timing of the first data transfer. Subsequent data transfers The Reserve Bank expects that the deposit taker will need to make multiple data transfers to transfer all depositor data as it is collected over time. The DCS information-gathering notice will specify requirements about the frequency of subsequent data transfers (for example, every 24 hours). After the first data transfer, it would be helpful (but will not be required) if subsequent transfers contain only depositor data that is new since any previous data transfers (delta data). If this is not possible, it would be helpful (but will not be required) if:
 the deposit taker notes in their notification email that the transfer contains previously transferred data (historical data); and  historical data remains unchanged from when it was first transferred to the Reserve Bank. Compress (“zip”) the depositor data files The DCS information-gathering notice will likely specify that:
 the depositor data file(s) must be compressed into a ZIP archive file format; and  the ZIP file must be named according to the Reserve Bank’s naming conventions; and  each ZIP file must be no larger than 500 MB.

14 Deposit Takers (Depositor Compensation Scheme Transitional Provisions) Standard 2025 – Guidance on the Transitional Standard Transfer ZIP files to the Reserve Bank using Box The deposit taker must transfer the ZIP files containing depositor data to the Reserve Bank in accordance with the DCS information-gathering notice and the Transitional Standard. For the purposes of clause 20(2) of the Transitional Standard, the Reserve Bank’s secure electronic transmission application is Box. Deposit takers should already have access to Box. Notify Reserve Bank of transfer Notify the Reserve Bank The DCS information-gathering notice will likely require the deposit taker to notify the Reserve Bank each time depositor data is transferred to the Reserve Bank using Box. The notice will also likely require depositor data to be accompanied by certain information about the transferred data (such as file names and version numbers) and relevant contact persons. The Reserve Bank will, in the DCS information-gathering notice, provide a template for the notification email and accompanying information. Reserve Bank will confirm receipt The Reserve Bank will send an email notification to confirm receipt of the transferred data. This will not confirm that the data is complete or accurate. The Reserve Bank will send a second email notification to confirm all depositor data files are complete and error free. If any errors are detected, the Reserve Bank will contact the deposit taker to help resolve them.