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Reserve Bank of New Zealand Bill
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Hon Grant Robertson
Reserve Bank of New Zealand Bill
Government Bill
315—3
Contents
Key
1
Title
2
Commencement
Part 1
Preliminary provisions
3
Purposes
4
Overview
5
Interpretation
6
Transitional, savings, and related provisions
7
Act binds the Crown
Part 2
Reserve Bank of New Zealand
Subpart 1—Continuation of Reserve Bank of New Zealand
8
Continuation of Reserve Bank of New Zealand
9
Bank’s objectives
10
Bank’s functions
11
Minister may add functions on Bank’s request
12
Status of Bank
13
Core things Bank can do
14
Other things Bank can do
15
Acts must be for purpose of functions
Subpart 2—Validity of acts
16
Acts in breach of statute are invalid
17
Some natural person acts protected
18
Limits on protection of natural person acts
19
Acts that are not in best interests of Bank
20
Dealings between Bank and other persons
21
Interpretation for sections 12 to 20
Subpart 3—Minister’s role
22
Minister’s role
23
When Minister may delegate powers
Subpart 4—Board of Bank and its members
Role, membership, and accountability
24
Board’s role
25
Membership of board
26
Accountability of members to Minister
Appointment, removal, and conditions of members
27
Method of appointment of members
27A
Provisions that do not apply to Governor
28
Criteria for recommendations by Minister
29
Minister must consult other political parties
30
Qualifications of members
31
Requirements before appointment
32
Term of office of members
32A
Former Governor may be appointed as member
33
Validity of members’ acts
34
Validity of appointments
35
Removal of members
36
Just cause for removal of members
37
Process for removal of members
38
No compensation for member’s loss of office
39
Resignation of members
40
Members ceasing to hold office
Remuneration and expenses
41
Remuneration of members
42
Expenses of members
Collective duties of board
43
Bank must act consistently with objectives, functions, statement of intent, and statement of performance expectations
44
Manner in which functions must be performed
45
Bank must operate in financially responsible manner
46
Subsidiaries and other interests
47
Board must have regard to financial policy remit when acting in relation to prudential strategic intentions and prudential standards
Individual duties of members
48
Duty to comply with relevant legislation
49
Duty to act with honesty and integrity
50
Duty to act in good faith and not at expense of Bank’s interests
51
Duty to act with reasonable care, diligence, and skill
52
Duty not to disclose information
Effect of non-compliance with duties
53
Accountability for collective board duties
54
Member’s liability for breach of collective duty
55
Accountability for individual duties
56
Member’s liability for breach of individual duty
57
Court actions requiring or restraining board or members
Reliance on information and advice
58
When members may rely on certain information and advice
Conflict of interest disclosure rules
59
When person is interested
60
Obligation to disclose interest
61
Who disclosure of interests must be made to
62
What must be disclosed
63
Consequences of being interested in matter
64
Consequences of failing to disclose interest
65
Permission to act despite being interested in matter
66
Permission must be disclosed in annual report
67
Bank may avoid certain acts done in breach of conflict of interest rules
68
What is fair value
69
Onus of proving fair value
70
Effect of avoidance on third parties
When Governor may not act as member of board
70A
When Governor may not act as member of board
Delegation
71
Ability to delegate
72
Powers of delegate
73
Effect of delegation on Bank or board
74
Revocations of delegations
Miscellaneous provisions relating to board
75
Vacancies in membership of board
76
Appointment of chairperson, etc, and board procedure
Subpart 5—Monitor of Bank
77
Appointment and role of monitor
78
Minister must set expectations
Subpart 6—Governor
79
Governor
79A
Process requirements relating to Minister’s recommendation
80
Term of appointment of Governor
81
Terms and conditions of appointment of Governor
82
Extension of term of Governor
83
Qualifications of Governor
84
Appointment procedure for Governor
85
Validity of appointments
86
Removal of Governor from office
87
Board must advise Minister of just cause and may recommend removal
88
Just cause for removal of Governor
89
Process for removal of Governor
90
Resignation of Governor
91
When Governor ceases to hold office
92
Minister must make temporary appointment if office of Governor is vacant
Subpart 7—Monetary policy committee
93
Monetary policy committee continues
94
Functions of MPC
95
Board must regularly review performance of MPC and members
96
Membership of MPC
Charter for MPC
97
Charter for MPC
98
Content of charter
99
Replacement charter
100
Consultation about replacement charter
101
Publication of charter
Code of conduct
103
Code of conduct
104
Content of code
105
Publication of code
Other matters
106
Other matters
Subpart 8—Subsidiaries
107
Acquisition of subsidiaries
108
General duty relating to subsidiaries
109
Duties relating to performance, remuneration of directors, and chief executives
110
Acquisition of shares or interests in companies, trusts, and partnerships, etc
111
Relationship with Companies Act 1993 and other Acts
Part 3
Central bank functions
Subpart 1—Bank to act as central bank
112
Bank to act as central bank
113
Central bank functions
Subpart 2—Monetary policy
Formulating monetary policy
114
Function to formulate monetary policy through MPC
115
MPC must formulate monetary policy in manner consistent with economic objectives and MPC remit
116
What MPC must have regard to in formulating monetary policy
Implementing monetary policy
117
Function to implement monetary policy
117A
Bank not required to implement monetary policy that is inconsistent with financial responsibility duties
Remit for MPC
118
Remit for MPC
119
Contents of MPC remit
120
Other matters relating to MPC remit
Order providing for different economic objective or objectives
121
Order providing for different economic objective or objectives
122
Minister must consider replacing or amending MPC remit
124
Period may be extended
125
Revocation of order at end of period
Reports on monetary policy
126
Regular reports on monetary policy
127
Contents of reports on monetary policy
128
Longer-term report on formulation and implementation of monetary policy
129
Longer-term report must contain information required by charter
Subpart 3—Foreign exchange
Dealing in foreign exchange
130
Dealing in foreign exchange by Bank
131
Power of Minister to direct Bank to deal in foreign exchange within guidelines
132
Minister may defer publication and presentation to House of Representatives
133
Effect of directions on operational objectives
134
Effect of Bank’s notice on duty to give effect to operational objectives
135
Effect of directions on monetary policy
136
Effect of Bank’s notice on duty to comply with Minister’s direction
Foreign exchange gains and losses
137
Foreign exchange gains and losses
Foreign reserves management and co-ordination framework
138
Bank must hold and manage foreign reserves in accordance with framework
139
Purposes of framework
140
Minister and Bank must agree on framework
141
Form and publication of framework
142
Minister and Bank must ensure framework is in force
143
Minister must have regard to framework when issuing direction under section 131
144
Review of framework
145
Bank must defer publishing information relating to certain directions
Subpart 4—Currency
146
Issue of currency by Bank
147
Power of Bank to call in currency
148
Effect of call-in notice
149
Legal tender: bank notes
150
Legal tender: coins
151
Defacing bank notes
152
Making or issuing of other bank notes or coins
153
Reproduction or imitation of currency
154
Court may order imitation currency and other things to be destroyed
155
Time for filing charging document
Subpart 5—Regulating bank note handling machines
156
Interpretation in this subpart
157
Bank may issue standards for bank note handling machines
158
Procedure for issuing standards
159
Content of standards
160
Standards do not prevent return to Bank of unfit bank notes
161
Bank may require operator to test bank note handling machines and to report
162
Bank may require operator to cease operating machine until operator verifies compliance
163
Infringement offence to fail to comply with notice
164
Offence of intentionally or recklessly failing to comply with notice to cease operating machine
165
District Court may make orders about bank note handling machines
Subpart 6—Financial stability reports
166
Purposes of financial stability report
167
Financial stability reports
Part 4
Operation of Reserve Bank
Independence of Bank
168
Safeguarding independence of Bank
Whole of government directions
169
Directions to support whole of government approach
Government directions to Bank
170
Bank must comply with directions given under statutory power of direction
171
Procedure for ministerial directions
172
When procedural requirements for directions do not apply
173
Review and expiry of all directions given to Bank
Employees
174
Bank must be good employer
175
Meaning of good employer
176
Application of clauses 12 and 13 of Schedule 8 of Public Service Act 2020
Protections from liability
177
Definitions for protections from liability
178
Protection from liability for Bank
179
Protection for certain persons
180
Protections from liabilities of Bank
181
Liability of member of board to Bank
182
Protections do not affect other actions
183
Indemnities in relation to act or omission
184
Insurance for liability
185
Breach of indemnity and insurance limits
186
Crown indemnities in relation to statutory management
187
Other provisions relating to Crown indemnities
Dealings with third parties
188
Method of contracting
189
Attorneys
190
Address for service
Review of Bank’s operations and performance
191
Review of Bank’s operations and performance
192
Bank must co-operate with review
Power to request information from Bank
193
Power to request information about operations and performance
194
Power to request information about reporting and financial obligations
195
Power to request information about assessing capability and performance of State services
196
Good reasons for refusing to supply requested information
Miscellaneous
197
Members, Governor, office holders, and employees are officials
198
Evidence
199
Policy advice
Part 5
Financial and accountability matters
Subpart 1—Financial policy remit
200
Financial policy remit
201
Contents of financial policy remit
202
Form, publication, and presentation of financial policy remit
203
Review of financial policy remit
204
Safeguarding independence of Bank
Subpart 1A—Direction relating to Bank’s minimum level of capital and financial risk management
205A
Power of Minister to direct Bank relating to minimum level of capital and financial risk management
Subpart 2—Funding agreements and annual dividend
Funding agreements
206
Funding agreements
207
Contents of funding agreements
208
Funding agreements to be published and presented to House of Representatives
209
Expenditure where there is no current funding agreement
Annual dividend
210
Determination of annual dividend
211
Bank must publish matters relating to annual dividend
Subpart 3—Reporting obligations
212
Interpretation for subpart
Planning: statement of intent
213
Purpose of statement of intent
214
Obligation to prepare statement of intent
215
Minister may require Bank to prepare new statement of intent at any time
216
Minister may grant extension of time for requirement to provide statement of intent
217
Content of statement of intent
218
Application and term of statement of intent
219
Ministerial involvement in statement of intent
220
Process for providing statement of intent to Minister
221
Amendments to final statement of intent by Bank
222
Process for amendments to statement of intent
223
Obligation to publish and present statement of intent
224
Obligation to publish and present amendments to statement of intent
Planning: statement of performance expectations
225
Purpose of statement of performance expectations
226
Obligation to prepare statement of performance expectations
227
Content of statement of performance expectations
228
Exemption for certain outputs
229
Forecast statement of comprehensive revenue and expense
230
Ministerial involvement in statement of performance expectations
231
Process for providing statement of performance expectations to Minister
232
Amendments to final statement of performance expectations by Bank
233
Process for amendments to statement of performance expectations
234
Obligation to publish and present statement of performance expectations
235
Obligation to publish and present amendments to statement of performance expectations
Reporting: annual report
236
Obligation to prepare, present, and publish annual report
237
Form and content of annual report
238
Bank must defer including information in annual report about certain directions
239
Disclosure of remuneration and of details of indemnities and insurance cover
240
Form and content of statement of performance
241
Annual financial statements
242
Information about each class of excluded expenditure
243
Statement of responsibility
244
Audit report
Application of this subpart to Bank group
245
Application of this subpart to Bank group
246
Minister of Finance may require additional reporting
Subpart 4—Other accountability statements and reports
Financial risk management
247
Purposes of statement of financial risk management
248
Obligation to prepare statement of financial risk management
249
Minister and Bank must take reasonable steps to agree on annual dividend principles
Statements of prudential policy
250
Purposes of statements of prudential policy
251
Obligation to prepare statements of prudential policy
Assessment of regulatory impacts of policies
252
Assessment of regulatory impacts of policies
253
Content of assessment of proposed policy
254
Bank must publish report on assessment of regulatory impacts
Subpart 5—Accounting records
255
Board must ensure that proper accounting records are kept
Subpart 6—Miscellaneous
256
Minister of Finance instructions
257
Consultation with House of Representatives on reporting standards
Part 6
Miscellaneous provisions
Subpart 1—Information-gathering power
258
Interpretation for this subpart
Bank’s information-gathering power
259
Bank may require relevant person to supply information
or data
for central banking and financial system oversight functions
260
Information about particular customer, client, or natural person not required
261
Person required to supply information
or data
has same privileges as witnesses in court
Offences relating to information-gathering power
262
Infringement offence to fail to supply information
or data
263
Offence of intentionally or recklessly failing to comply with notice to supply information
or data
Requirement that information
or data
be reviewed
264
Requirement that information
or data
be reviewed
265
Offence of failing to comply with review requirements
Confidentiality
266
Publication or disclosure of information
or data
by Bank
267
Offence of unauthorised publication or disclosure
268
Conditions relating to publication or disclosure of information
or data
269
Restrictions on further publication or disclosure of information
or data
270
Offence of unauthorised publication, disclosure, or use
Privacy Act 2020
271
Subpart does not limit Privacy Act 2020
Subpart 2—Provisions relating to infringement offences
272
Proceedings for infringement offences
273
When infringement notice may be issued
274
Revocation of infringement notice before payment made
275
What infringement notice must contain
276
How infringement notice may be served
277
Payment of infringement fees
278
Reminder notices
Subpart 3—Information sharing
279
Sharing of information with certain law enforcement or regulatory agencies
280
Conditions that may be imposed on providing information under this subpart
281
Restriction on publication, disclosure, or use
Subpart 4—Council of Financial Regulators
282
Council of Financial Regulators
283
Function of council
284
Chairpersons of council
285
Members of council
Subpart 5—General offences
286
Offences
287
Penalties for offences
Subpart 6—Regulations
288
General regulations
289
Regulations relating to fees, charges, and costs
290
Regulated entities must pay levy to Bank
291
Levy regulations
292
Other provisions relating to levy regulations
294
Consultation about proposed levy regulations
Subpart 7—Amendments to other legislation
295
Title of Reserve Bank of New Zealand Act 1989 changed
295A
Section 1 amended (Short Title and commencement)
296
Other amendments to Reserve Bank of New Zealand Act 1989
297
Other legislation amended
Schedule 1
Transitional, savings, and related provisions
Schedule 2
Appointment of chairperson, etc, and board procedure
Schedule 3
Remit and monetary policy committee
Schedule 4
Amendments to other legislation
Legislative history
The Parliament of New Zealand enacts as follows: