Reserve Bank of New Zealand Bill

Hon Grant Robertson

Reserve Bank of New Zealand Bill

Government Bill

315—1

Contents

Explanatory note
1Title
2Commencement
3Purposes
4Overview
5Interpretation
6Transitional, savings, and related provisions
7Act binds the Crown
8Continuation of Reserve Bank of New Zealand
9Bank’s objectives
10Bank’s functions
11Power to add functions
12Status of Bank
13Core things Bank can do
14Other things Bank can do
15Acts must be for purpose of functions
16Acts in breach of statute are invalid
17Some natural person acts protected
18Limits on protection of natural person acts
19Acts that are not in best interests of Bank
20Dealings between Bank and other persons
21Interpretation for sections 12 to 20
22Minister’s role
23When Minister may delegate powers
24Board’s role
25Membership of board
26Accountability of members to Minister
27Method of appointment of members
28Criteria for recommendations by Minister
29Minister must consult other political parties
30Qualifications of members
31Requirements before appointment
32Term of office of members
33Validity of members’ acts
34Validity of appointments
35Removal of members
36Just cause for removal of members
37Process for removal of members
38No compensation for member’s loss of office
39Resignation of members
40Members ceasing to hold office
41Remuneration of members
42Expenses of members
43Bank must act consistently with objectives, functions, statement of intent, and statement of performance expectations
44Manner in which functions must be performed
45Bank must operate in financially responsible manner
46Subsidiaries and other interests
47Board must have regard to financial policy remit when acting in relation to prudential strategic intentions and prudential standards
48Duty to comply with relevant legislation
49Duty to act with honesty and integrity
50Duty to act in good faith and not at expense of Bank’s interests
51Duty to act with reasonable care, diligence, and skill
52Duty not to disclose information
53Accountability for collective board duties
54Member’s liability for breach of collective duty
55Accountability for individual duties
56Member’s liability for breach of individual duty
57Court actions requiring or restraining board or members
58When members may rely on certain information and advice
59When person is interested
60Obligation to disclose interest
61Who disclosure of interests must be made to
62What must be disclosed
63Consequences of being interested in matter
64Consequences of failing to disclose interest
65Permission to act despite being interested in matter
66Permission must be disclosed in annual report
67Bank may avoid certain acts done in breach of conflict of interest rules
68What is fair value
69Onus of proving fair value
70Effect of avoidance on third parties
71Ability to delegate
72Powers of delegate
73Effect of delegation on Bank or board
74Revocations of delegations
75Vacancies in membership of board
76Appointment of chairperson, etc, and board procedure
77Appointment and role of monitor
78Minister must set expectations
79Governor
80Term of appointment of Governor
81Terms and conditions of appointment of Governor
82Extension of term of Governor
83Qualifications of Governor
84Appointment procedure for Governor
85Validity of appointments
86Removal of Governor from office
87Board must advise Minister of just cause and may recommend removal
88Just cause for removal of Governor
89Process for removal of Governor
90Resignation of Governor
91When Governor ceases to hold office
92Minister must make temporary appointment if office of Governor is vacant
93Monetary policy committee continues
94Functions of MPC
95Board must regularly review performance of MPC and members
96Membership of MPC
97Charter for MPC
98Content of charter
99Replacement charter
100Consultation about replacement charter
101Publication of charter
102Status of charter
103Code of conduct
104Content of code
105Publication and status of code
106Other matters
107Acquisition of subsidiaries
108General duty relating to subsidiaries
109Duties relating to performance, remuneration of directors, and chief executives
110Acquisition of shares or interests in companies, trusts, and partnerships, etc
111Relationship with Companies Act 1993 and other Acts
112Bank to act as central bank
113Central bank functions
114Function to formulate monetary policy through MPC
115MPC must formulate monetary policy in manner consistent with economic objectives and MPC remit
116What MPC must have regard to in formulating monetary policy
117Function to implement monetary policy
118Remit for MPC
119Contents of MPC remit
120Other matters relating to MPC remit
121Order providing for different economic objective or objectives
122Order must include replacement MPC remit
123Effect of order on current MPC remit
124Period may be extended
125Revocation of order at end of period
126Regular reports on monetary policy
127Contents of reports on monetary policy
128Longer-term report on formulation and implementation of monetary policy
129Longer-term report must contain information required by charter
130Dealing in foreign exchange by Bank
131Power of Minister to direct Bank to deal in foreign exchange within guidelines
132Minister may defer publication and presentation to House of Representatives
133Effect of directions on operational objectives
134Effect of Bank’s notice on duty to give effect to operational objectives
135Effect of directions on monetary policy
136Effect of Bank’s notice on duty to comply with Minister’s direction
137Foreign exchange gains and losses
138Bank must hold and manage foreign reserves in accordance with framework
139Purposes of framework
140Minister and Bank must agree on framework
141Form and publication of framework
142Minister and Bank must ensure framework is in force
143Minister must have regard to framework when issuing direction under section 131
144Review of framework
145Bank must defer publishing information relating to certain directions
146Issue of currency by Bank
147Power of Bank to call in currency
148Effect of call-in notice
149Legal tender: bank notes
150Legal tender: coins
151Defacing bank notes
152Making or issuing of other bank notes or coins
153Reproduction or imitation of currency
154Court may order imitation currency and other things to be destroyed
155Time for filing charging document
156Interpretation in this subpart
157Bank may issue standards for bank note handling machines
158Procedure for issuing standards and public notice of standards
159Content of standards
160Standards do not prevent return to Bank of unfit bank notes
161Bank may require operator to test bank note handling machines and to report
162Bank may require operator to cease operating machine until operator verifies compliance
163Infringement offence to fail to comply with notice
164Offence of intentionally or recklessly failing to comply with notice to cease operating machine
165District Court may make orders about bank note handling machines
166Purposes of financial stability report
167Financial stability reports
168Safeguarding independence of Bank
169Directions to support whole of government approach
170Bank must comply with directions given under statutory power of direction
171Procedure for ministerial directions
172When procedural requirements for directions do not apply
173Review and expiry of all directions given to Bank
174Bank must be good employer
175Meaning of good employer
176Application of sections 84 and 84A of State Sector Act 1988
177Definitions for protections from liability
178Protection from liability for Bank
179Protection for certain persons
180Protections from liabilities of Bank
181Liability of member of board to Bank
182Protections do not affect other actions
183Indemnities in relation to act or omission
184Insurance for liability
185Breach of indemnity and insurance limits
186Crown indemnities in relation to statutory management
187Other provisions relating to Crown indemnities
188Method of contracting
189Attorneys
190Address for service
191Review of Bank’s operations and performance
192Bank must co-operate with review
193Power to request information about operations and performance
194Power to request information about reporting and financial obligations
195Power to request information about assessing capability and performance of State services
196Good reasons for refusing to supply requested information
197Members, Governor, office holders, and employees are officials
198Evidence
199Policy advice
200Financial policy remit
201Contents of financial policy remit
202Form, publication, and presentation of financial policy remit
203Review of financial policy remit
204 Safeguarding independence of Bank
205Status of financial policy remit
206Funding agreements
207Contents of funding agreements
208Funding agreements to be published and presented to House of Representatives
209Expenditure where there is no current funding agreement
210Determination of annual dividend
211Bank must publish matters relating to annual dividend
212Interpretation for subpart
213Purpose of statement of intent
214Obligation to prepare statement of intent
215Minister may require Bank to prepare new statement of intent at any time
216Minister may grant extension of time for requirement to provide statement of intent
217Content of statement of intent
218Application and term of statement of intent
219Ministerial involvement in statement of intent
220Process for providing statement of intent to Minister
221Amendments to final statement of intent by Bank
222Process for amendments to statement of intent
223Obligation to publish and present statement of intent
224Obligation to publish and present amendments to statement of intent
225Purpose of statement of performance expectations
226Obligation to prepare statement of performance expectations
227Content of statement of performance expectations
228Exemption for certain outputs
229Forecast statement of comprehensive revenue and expense
230Ministerial involvement in statement of performance expectations
231Process for providing statement of performance expectations to Minister
232Amendments to final statement of performance expectations by Bank
233Process for amendments to statement of performance expectations
234Obligation to publish and present statement of performance expectations
235Obligation to publish and present amendments to statement of performance expectations
236Obligation to prepare, present, and publish annual report
237Form and content of annual report
238Bank must defer including information in annual report about certain directions
239Disclosure of remuneration and of details of indemnities and insurance cover
240Form and content of statement of performance
241Annual financial statements
242Information about each class of excluded expenditure
243Statement of responsibility
244Audit report
245Application of this subpart to Bank group
246Minister of Finance may require additional reporting
247Purposes of statement of financial risk management
248Obligation to prepare statement of financial risk management
249Minister and Bank must take reasonable steps to agree on annual dividend principles
250Purposes of statements of prudential policy
251Obligation to prepare statements of prudential policy
252Assessment of regulatory impacts of policies
253Content of assessment of proposed policy
254Bank must publish report on assessment of regulatory impacts
255Board must ensure that proper accounting records are kept
256Minister of Finance instructions
257Consultation with House of Representatives on reporting standards
258Interpretation for this subpart
259Bank may require relevant person to supply information or data for central banking and financial system oversight functions
260Information about particular customer, client, or natural person not required
261Person required to supply information or data has same privileges as witnesses in court
262Infringement offence to fail to supply information or data
263Offence of intentionally or recklessly failing to comply with notice to supply information or data
264Requirement that information or data be reviewed
265Offence of failing to comply with review requirements
266Disclosure of information or data by Bank to other persons
267Offence of unauthorised disclosure
268Conditions relating to disclosure of information or data
269Restrictions on further disclosure of information or data
270Offence of unauthorised disclosure or use
271Subpart does not limit Privacy Act 2020
272Proceedings for infringement offences
273When infringement notice may be issued
274Infringement notice may be revoked
275What infringement notice must contain
276How infringement notice may be served
277Payment of infringement fees
278Reminder notices
279Sharing of information with certain law enforcement or regulatory agencies
280Conditions that may be imposed on providing information under this subpart
281Restriction on disclosure or use
282Council of Financial Regulators
283Function of council
284Chairpersons of council
285Members of council
286Offences
287Penalties for offences
288General regulations
289Regulations relating to fees, charges, and costs
290Regulated entities must pay levy to Bank
291Levy regulations
292Other provisions relating to levy regulations
293Minister may direct Bank to consult on proposed levy regulations
294Bank must consult about proposed levy regulations
295Title of Reserve Bank of New Zealand Act 1989 changed
296Other amendments to Reserve Bank of New Zealand Act 1989
297Other legislation amended

The Parliament of New Zealand enacts as follows: