Non-bank Deposit Takers (Nelson Building Society) Exemption Revocation Notice 2020

RESERVE
BANI(
OF NEW ZEALAND
TE PUTEA MATUA
Non-bank Deposit Takers (Nelson Building
Society) Exemption Revocation Notice 2020
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 ofreasons of the Bank). Notice 1 Title This notice is the Non-bank Deposit Takers (Nelson Building Society) Exemption Revocation Notice 2020. 2 Commencement This notice comes into force on 3 September 2020. 3 Revocation The Non-Bank Deposit Takers (Nelson Building Society) Exemption Notice 2018 is revoked. Dated at Wellington this 2nd day of September 2020. Ref #9207252 v 1.2 -----p Geoff Bascand Deputy Governor

2
Statement of reasons
This notice, which comes into force on 3 September 2020, revokes the Non-Bank Deposit Takers (Nelson Building Society) Exemption Notice 2018 (the Exemption). The Bank, after taking into account the principles set out in section 8 of the Non-bank Deposit Takers Act 2013 (the Act), considers it appropriate to revoke the Exemption on the basis that:

• Pait 3 of the Deposit Takers (Credit Ratings, Capital Ratios and Related Paity
  Exposures) Regulations 2010 (the Regulations) sets out rules relating to the minimum capital ratio that non-bank deposit takers are required to maintain. In paiticular, regulation 10(5)(a) provides that non-cumulative preference shares without full voting rights may not constitute more than 25% of capital, for deposit taker that is not a qualifying mutual.
• The Exemption provides that Nelson Building Society (NBS) is subject to a 50% capital
  limit, instead of the 25% limit set out in regulation 10(5)(a).
• The Bank has reviewed recent changes to the te1ms and conditions of NBS' preference
  shares, and considers that it will no longer be unduly burdensome and onerous for NBS to comply with regulation 10(5)(a). Ref #9207252 v 1.2