TCA Welcomes New Legislation
News Release 4 September 2008
Trustee Corporations Association Welcomes New Legislation
The Reserve Bank Amendment Bill passed yesterday will provide more robust regulation of non-bank deposit takers (NBDT), which includes finance companies, according to the Trustee Corporations Association of New Zealand Inc.
Specific measures under this new legislation will promote a sound and efficient financial system. It also confirms the role of the Reserve Bank as the prudential Regulator and of the Trustee Corporations as the front line supervisors of the NBDTs to ensure they are in compliance with the new regulations. The Securities Commission will continue to formulate and enforce NBDT disclosure requirements.
The Executive Director of the Trustee Corporations Association of New Zealand Inc, David Brown Douglas says, “The new legislation, coupled with the Securities Amendment Regulations introduced in September last year, means that what was best practice as detailed in the TCA Code of Practice and Guidelines, now becomes standard practice.”
The new legislation requires NBDTs to meet new regulatory standards in key areas including: capital adequacy, related party lending, liquidity, risk management, reporting, and governance. NBDTs will also have to have a credit rating from an approved rating agency to assist investors making investment decisions.
Mr Brown Douglas says, “The Trustee Corporations welcome the new legislation and are looking forward to working closely with the Reserve Bank and the Securities Commission to ensure the new regulations are introduced on a timely basis to ensure consistency and transparency across the sector. The Trustee Corporations share the Reserve Bank’s view that the new legislation will provide a strong basis for confidence in non bank deposit takers.”