Reserve Bank of New Zealand Act 2021

Coat of Arms of New Zealand

Reserve Bank of New Zealand Act 2021

Public Act
 
2021 No 31
Date of assent
 
16 August 2021
Commencement
 
see section 2

Contents

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
11Minister may add functions on Bank’s request
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
28Provisions that do not apply to Governor
29Criteria for recommendations by Minister
30Minister must consult other political parties
31Qualifications of members
32Requirements before appointment
33Term of office of members
34Former Governor may be appointed as member
35Validity of members’ acts
36Validity of appointments
37Removal of members
38Just cause for removal of members
39Process for removal of members
40No compensation for member’s loss of office
41Resignation of members
42Members ceasing to hold office
43Remuneration of members
44Expenses of members
45Bank must act consistently with objectives, functions, statement of intent, and statement of performance expectations
46Manner in which functions must be performed
47Bank must operate in financially responsible manner
48Subsidiaries and other interests
49Board must have regard to financial policy remit when acting in relation to prudential strategic intentions and prudential standards
50Duty to comply with relevant legislation
51Duty to act with honesty and integrity
52Duty to act in good faith and not at expense of Bank’s interests
53Duty to act with reasonable care, diligence, and skill
54Duty not to disclose information
55Accountability for collective board duties
56Member’s liability for breach of collective duty
57Accountability for individual duties
58Member’s liability for breach of individual duty
59Court actions requiring or restraining board or members
60When members may rely on certain information and advice
61When person is interested
62Obligation to disclose interest
63Who disclosure of interests must be made to
64What must be disclosed
65Consequences of being interested in matter
66Consequences of failing to disclose interest
67Permission to act despite being interested in matter
68Permission must be disclosed in annual report
69Bank may avoid certain acts done in breach of conflict of interest rules
70What is fair value
71Onus of proving fair value
72Effect of avoidance on third parties
73When Governor may not act as member of board
74Ability to delegate
75Powers of delegate
76Effect of delegation on Bank or board
77Revocations of delegations
78Vacancies in membership of board
79Appointment of chairperson, etc, and board procedure
80Appointment and role of monitor
81Minister must set expectations
82Governor
83Process requirements relating to Minister’s recommendation
84Term of appointment of Governor
85Terms and conditions of appointment of Governor
86Extension of term of Governor
87Qualifications of Governor
88Appointment procedure for Governor
89Validity of appointments
90Removal of Governor from office
91Board must advise Minister of just cause and may recommend removal
92Just cause for removal of Governor
93Process for removal of Governor
94Resignation of Governor
95When Governor ceases to hold office
96Minister must make temporary appointment if office of Governor is vacant
97Monetary policy committee continues
98Functions of MPC
99Board must regularly review performance of MPC and members
100Membership of MPC
101Charter for MPC
102Content of charter
103Replacement charter
104Consultation about replacement charter
105Publication of charter
106Code of conduct
107Content of code
108Publication of code
109Other matters
110Acquisition of subsidiaries
111General duty relating to subsidiaries
112Duties relating to performance, remuneration of directors, and chief executives
113Acquisition of shares or interests in companies, trusts, and partnerships, etc
114Relationship with Companies Act 1993 and other Acts
115Bank to act as central bank
116Central bank functions
117Function to formulate monetary policy through MPC
118MPC must formulate monetary policy in manner consistent with economic objectives and MPC remit
119What MPC must have regard to in formulating monetary policy
120Function to implement monetary policy
121Bank not required to implement monetary policy that is inconsistent with financial responsibility duties
122Remit for MPC
123Contents of MPC remit
124Other matters relating to MPC remit
125Order providing for different economic objective or objectives
126Minister must consider replacing or amending MPC remit
127Period may be extended
128Revocation of order at end of period
129Regular reports on monetary policy
130Contents of reports on monetary policy
131Longer-term report on formulation and implementation of monetary policy
132Longer-term report must contain information required by charter
133Dealing in foreign exchange by Bank
134Power of Minister to direct Bank to deal in foreign exchange within guidelines
135Minister may defer publication and presentation to House of Representatives
136Effect of directions on operational objectives
137Effect of Bank’s notice on duty to give effect to operational objectives
138Effect of directions on monetary policy
139Effect of Bank’s notice on duty to comply with Minister’s direction
140Foreign exchange gains and losses
141Bank must hold and manage foreign reserves in accordance with framework
142Purposes of framework
143Minister and Bank must agree on framework
144Form and publication of framework
145Minister and Bank must ensure framework is in force
146Minister must have regard to framework when issuing direction under section 134
147Review of framework
148Bank must defer publishing information relating to certain directions
149Issue of currency by Bank
150Power of Bank to call in currency
151Effect of call-in notice
152Legal tender: bank notes
153Legal tender: coins
154Defacing bank notes
155Making or issuing of other bank notes or coins
156Reproduction or imitation of currency
157Court may order imitation currency and other things to be destroyed
158Time for filing charging document
159Interpretation in this subpart
160Bank may issue standards for bank note handling machines
161Procedure for issuing standards
162Content of standards
163Standards do not prevent return to Bank of unfit bank notes
164Bank may require operator to test bank note handling machines and to report
165Bank may require operator to cease operating machine until operator verifies compliance
166Infringement offence to fail to comply with notice
167Offence of intentionally or recklessly failing to comply with notice to cease operating machine
168District Court may make orders about bank note handling machines
169Purposes of financial stability report
170Financial stability reports
171Safeguarding independence of Bank
172Directions to support whole of government approach
173Bank must comply with directions given under statutory power of direction
174Procedure for ministerial directions
175When procedural requirements for directions do not apply
176Review and expiry of all directions given to Bank
177Bank must be good employer
178Meaning of good employer
179Application of clauses 12 and 13 of Schedule 8 of Public Service Act 2020
180Definitions for protections from liability
181Protection from liability for Bank
182Protection for certain persons
183Protections from liabilities of Bank
184Liability of member of board to Bank
185Protections do not affect other actions
186Indemnities in relation to act or omission
187Insurance for liability
188Breach of indemnity and insurance limits
189Crown indemnities in relation to statutory management
190Other provisions relating to Crown indemnities
191Method of contracting
192Attorneys
193Address for service
194Review of Bank’s operations and performance
195Bank must co-operate with review
196Power to request information about operations and performance
197Power to request information about reporting and financial obligations
198Power to request information about assessing capability and performance of State services
199Good reasons for refusing to supply requested information
200Members, Governor, office holders, and employees are officials
201Evidence
202Policy advice
203Financial policy remit
204Contents of financial policy remit
205Form, publication, and presentation of financial policy remit
206Review of financial policy remit
207Safeguarding independence of Bank
208Power of Minister to direct Bank relating to minimum level of capital and financial risk management
209Funding agreements
210Contents of funding agreements
211Funding agreements to be published and presented to House of Representatives
212Expenditure where there is no current funding agreement
213Determination of annual dividend
214Bank must publish matters relating to annual dividend
215Interpretation for subpart
216Purpose of statement of intent
217Obligation to prepare statement of intent
218Minister may require Bank to prepare new statement of intent at any time
219Minister may grant extension of time for requirement to provide statement of intent
220Content of statement of intent
221Application and term of statement of intent
222Ministerial involvement in statement of intent
223Process for providing statement of intent to Minister
224Amendments to final statement of intent by Bank
225Process for amendments to statement of intent
226Obligation to publish and present statement of intent
227Obligation to publish and present amendments to statement of intent
228Purpose of statement of performance expectations
229Obligation to prepare statement of performance expectations
230Content of statement of performance expectations
231Exemption for certain outputs
232Forecast statement of comprehensive revenue and expense
233Ministerial involvement in statement of performance expectations
234Process for providing statement of performance expectations to Minister
235Amendments to final statement of performance expectations by Bank
236Process for amendments to statement of performance expectations
237Obligation to publish and present statement of performance expectations
238Obligation to publish and present amendments to statement of performance expectations
239Obligation to prepare, present, and publish annual report
240Form and content of annual report
241Bank must defer including information in annual report about certain directions
242Disclosure of remuneration and of details of indemnities and insurance cover
243Form and content of statement of performance
244Annual financial statements
245Information about each class of excluded expenditure
246Statement of responsibility
247Audit report
248Application of this subpart to Bank group
249Minister of Finance may require additional reporting
250Purposes of statement of financial risk management
251Obligation to prepare statement of financial risk management
252Minister and Bank must take reasonable steps to agree on annual dividend principles
253Purposes of statements of prudential policy
254Obligation to prepare statements of prudential policy
255Assessment of regulatory impacts of policies
256Content of assessment of proposed policy
257Bank must publish report on assessment of regulatory impacts
258Board must ensure that proper accounting records are kept
259Minister of Finance instructions
260Consultation with House of Representatives on reporting standards
261Interpretation for this subpart
262Bank may require relevant person to supply information for central banking and financial system oversight functions
263Information about particular customer, client, or natural person not required
264Person required to supply information has same privileges as witnesses in court
265Infringement offence to fail to supply information
266Offence of intentionally or recklessly failing to comply with notice to supply information
267Requirement that information be reviewed
268Offence of failing to comply with review requirements
269Publication or disclosure of information by Bank
270Offence of unauthorised publication or disclosure
271Conditions relating to publication or disclosure of information
272Restrictions on further publication or disclosure of information
273Offence of unauthorised publication, disclosure, or use
274Subpart does not limit Privacy Act 2020
275Proceedings for infringement offences
276When infringement notice may be issued
277Revocation of infringement notice before payment made
278What infringement notice must contain
279How infringement notice may be served
280Payment of infringement fees
281Reminder notices
282Sharing of information with certain law enforcement or regulatory agencies
283Conditions that may be imposed on providing information under this subpart
284Restriction on publication, disclosure, or use
285Council of Financial Regulators
286Function of council
287Chairpersons of council
288Members of council
289Offences
290Penalties for offences
291General regulations
292Regulations relating to fees, charges, and costs
293Regulated entities must pay levy to Bank
294Levy regulations
295Other provisions relating to levy regulations
296Consultation about proposed levy regulations
297Title of Reserve Bank of New Zealand Act 1989 changed
298Section 1 amended (Short Title and commencement)
299Other amendments to Reserve Bank of New Zealand Act 1989
300Other legislation amended
Legislative history
Administrative information

The Parliament of New Zealand enacts as follows: