Common use of Regulation and Supervision Clause in Contracts

Regulation and Supervision. The Reserve Bank Act requires the RBNZ to exercise its powers of registration of banks and prudential supervision of registered banks for the purposes of: • promoting the maintenance of a sound and efficient financial system; or • avoiding significant damage to the financial system that could result from the failure of a registered bank. The RBNZ’s policy around the registration of banks aims to ensure that only financial institutions of appropriate standing and repute are able to become registered banks. Subject to this requirement, the RBNZ has stated that it intends to keep to a minimum any impediments to the entry of new registered banks, in order to encourage competition in the banking system. The RBNZ’s supervisory functions are aimed at encouraging the soundness and efficiency of the financial system as a whole, and are not aimed at preventing individual bank failures or at protecting creditors. The RBNZ seeks to achieve this by drawing on and enhancing disciplines that are naturally present in the market. As a consequence, the RBNZ places considerable emphasis on a requirement that the banks disclose, on a quarterly basis, information on financial performance and risk positions, and on a requirement that directors regularly attest to certain key matters. These measures are intended to strengthen market disciplines and to ensure that responsibility for the prudent management of banks lies with those who the RBNZ considers are best placed to exercise that responsibility-the directors and management. The main elements of the RBNZ’s supervisory role include: • requiring all banks to comply with certain minimum prudential requirements, which are applied through conditions of registration. These include constraints on connected exposure, minimum capital adequacy requirements and minimum standards for liquidity risk management, and are set out in more detail below; • monitoring each registered bank’s financial condition and compliance with conditions of registration, principally on the basis of published quarterly disclosure statements. This monitoring is intended to ensure that the RBNZ maintains familiarity with the financial condition of each bank and the banking system as a whole, and maintains a state of preparedness to invoke crisis management powers should this be necessary; • consulting with the senior management of registered banks; • using crisis management powers available to it under the Reserve Bank Act to intervene where a bank distress or failure situation threatens the soundness of the financial system; • assessing whether a bank is carrying on business prudently; • issuing guidelines on anti-money laundering and countering financing of terrorism; • issuing guidelines on banks’ internal capital adequacy process and liquidity policy; • issuing guidelines on corporate governance; and • maintaining close working relationships with parent bank supervisors (such as APRA in Australia) on bank-specific issues, policy issues and general matters relating to the condition of the financial system in New Zealand and in the countries where parent banks are domiciled. The disclosure statements that are required to be issued quarterly by registered banks contain comprehensive corporate details and full financial statements at the full year, and unaudited interim financial statements at the half year and the off-quarters. They are subject to full external audit at the end of each financial year and a limited scope review at the end of each financial half-year. Each bank director is required to sign his or her bank’s disclosure statements and to make certain attestations. A bank and its directors may incur criminal and civil penalties if the bank’s disclosure statement contains information that is held to be false or misleading. The RBNZ currently also requires all registered banks to obtain and maintain a credit rating from an approved organization and publish that rating in the quarterly disclosure statements. In addition, the RBNZ has wide reaching powers to obtain further information, data and forecasts in connection with its supervisory functions, and to require that information, data, and forecasts be audited. It also possesses a number of crisis management powers. Those powers include recommending that a bank’s registration be cancelled, investigating the affairs of a registered bank, requiring that a registered bank consults with the RBNZ, giving directions to a registered bank, removing, replacing or appointing a director of a registered bank or recommending that a registered bank be subject to statutory management. If a registered bank is declared to be subject to statutory management, no person may, amongst other things: • commence or continue any action or other proceedings including proceedings by way of counterclaim against that bank; • issue any execution, attach any debt, or otherwise enforce or seek to enforce any judgment or order obtained in respect of that bank; • take any steps to put that bank into liquidation; or • exercise any right of set off against that bank.

Regulation and Supervision. The Reserve Bank Act requires the RBNZ to exercise its powers of registration of banks and prudential supervision of registered banks for the purposes of: •  promoting the maintenance of a sound and efficient financial system; or •  avoiding significant damage to the financial system that could result from the failure of a registered bank. The RBNZ’s policy around the registration of banks aims to ensure that only financial institutions of appropriate standing and repute are able to become registered banks. Subject to this requirement, the RBNZ has stated that it intends to keep to a minimum any impediments to the entry of new registered banks, in order to encourage competition in the banking system. The RBNZ’s supervisory functions are aimed at encouraging the soundness and efficiency of the financial system as a whole, and are not aimed at preventing individual bank failures or at protecting creditors. The RBNZ seeks to achieve this by drawing on and enhancing disciplines that are naturally present in the market. As a consequence, the RBNZ places considerable emphasis on a requirement that the banks disclose, on a quarterly basis, information on financial performance and risk positions, and on a requirement that directors regularly attest to certain key matters. These measures are intended to strengthen market disciplines and to ensure that responsibility for the prudent management of banks lies with those who the RBNZ considers are best placed to exercise that responsibility-the directors and management. The main elements of the RBNZ’s supervisory role include: •  requiring all banks to comply with certain minimum prudential requirements, which are applied through conditions of registration. These include constraints on connected exposure, minimum capital adequacy requirements and minimum standards for liquidity risk management, and are set out in more detail below; •  monitoring each registered bank’s financial condition and compliance with conditions of registration, principally on the basis of published quarterly disclosure statements. This monitoring is intended to ensure that the RBNZ maintains familiarity with the financial condition of each bank and the banking system as a whole, and maintains a state of preparedness to invoke crisis management powers should this be necessary; •  consulting with the senior management of registered banks; •  using crisis management powers available to it under the Reserve Bank Act to intervene where a bank distress or failure situation threatens the soundness of the financial system; •  assessing whether a bank is carrying on business prudently; •  issuing guidelines on anti-money laundering and countering financing of terrorism; •  issuing guidelines on banks’ internal capital adequacy process and liquidity policy; •  issuing guidelines on corporate governance; and •  maintaining close working relationships with parent bank supervisors (such as APRA in Australia) on bank-specific issues, policy issues and general matters relating to the condition of the financial system in New Zealand and in the countries where parent banks are domiciled. The disclosure statements that are required to be issued quarterly by registered banks contain comprehensive corporate details and full financial statements at the full year, and unaudited interim financial statements at the half year and the off-quarters. They are subject to full external audit at the end of each financial year and a limited scope review at the end of each financial half-year. Each bank director is required to sign his or her bank’s disclosure statements and to make certain attestations. A bank and its directors may incur criminal and civil penalties if the bank’s disclosure statement contains information that is held to be false or misleading. The RBNZ currently also requires all registered banks to obtain and maintain a credit rating from an approved organization and publish that rating in the quarterly disclosure statements. In addition, the RBNZ has wide reaching powers to obtain further information, data and forecasts in connection with its supervisory functions, and to require that information, data, and forecasts be audited. It also possesses a number of crisis management powers. Those powers include recommending that a bank’s registration be cancelled, investigating the affairs of a registered bank, requiring that a registered bank consults with the RBNZ, giving directions to a registered bank, removing, replacing or appointing a director of a registered bank or recommending that a registered bank be subject to statutory management. If a registered bank is declared to be subject to statutory management, no person may, amongst other things: •  commence or continue any action or other proceedings including proceedings by way of counterclaim against that bank; •  issue any execution, attach any debt, or otherwise enforce or seek to enforce any judgment or order obtained in respect of that bank; •  take any steps to put that bank into liquidation; or •  exercise any right of set off against that bank.

Regulation and Supervision. The Reserve Bank Act requires the RBNZ to exercise its powers of registration of banks and prudential supervision of registered banks for the purposes of: • promoting the maintenance of a sound and efficient financial system; or • avoiding significant damage to the financial system that could result from the failure of a registered bank. The RBNZ’s policy around the registration of banks aims to ensure that only financial institutions of appropriate standing and repute are able to become registered banks. Subject to this requirement, the RBNZ has stated that it intends to keep to a minimum any impediments to the entry of new registered banks, in order to encourage competition in the banking system. The RBNZ’s supervisory functions are aimed at encouraging the soundness and efficiency of the financial system as a whole, and are not aimed at preventing individual bank failures or at protecting creditors. The RBNZ seeks to achieve this by drawing on and enhancing disciplines that are naturally present in the market. As a consequence, the RBNZ places considerable emphasis on a requirement that the banks disclose, on a quarterly basis, information on financial performance and risk positions, and on a requirement that directors regularly attest to certain key matters. These measures are intended to strengthen market disciplines and to ensure that responsibility for the prudent management of banks lies with those who the RBNZ considers are best placed to exercise that responsibility-the directors and management. The main elements of the RBNZ’s supervisory role include: • requiring all banks to comply with certain minimum prudential requirements, which are applied through conditions of registration. These include constraints on connected exposure, minimum capital adequacy requirements and minimum standards for liquidity risk management, and are set out in more detail below; • monitoring each registered bank’s financial condition and compliance with conditions of registration, principally on the basis of published quarterly disclosure statements. This monitoring is intended to ensure that the RBNZ maintains familiarity with the financial condition of each bank and the banking system as a whole, and maintains a state of preparedness to invoke crisis management powers should this be necessary; • consulting with the senior management of registered banks; • using crisis management powers available to it under the Reserve Bank Act to intervene where a bank distress or failure situation threatens the soundness of the financial system; • assessing whether a bank is carrying on business prudently; • issuing guidelines on anti-money laundering and countering financing of terrorism; • issuing guidelines on banks’ internal capital adequacy process and liquidity policy; • issuing guidelines on corporate governance; and • maintaining close working relationships with parent bank supervisors (such as APRA in Australia) on bank-specific issues, policy issues and general matters relating to the condition of the financial system in New Zealand and in the countries where parent banks are domiciled. The disclosure statements that are required to be issued quarterly by registered banks contain comprehensive corporate details and full financial statements at the full year, and unaudited interim financial statements at the half year and the off-quarters. They The financial statements are subject to full external audit at the end of each financial year and a limited scope review at the end of each financial half-year. Each bank director is required to sign his or her bank’s disclosure statements and to make certain attestations. A bank and its directors may incur criminal and civil penalties if the bank’s disclosure statement contains information that is held to be false or misleading. The RBNZ currently also requires all registered banks to obtain and maintain a credit rating from an approved organization and publish that rating in the quarterly disclosure statements. In addition, the RBNZ has wide reaching powers to obtain further information, data and forecasts in connection with its supervisory functions, and to require that information, data, and forecasts be audited. It also possesses a number of crisis management powers. Those powers include recommending that a bank’s registration be cancelled, investigating the affairs of a registered bank, requiring that a registered bank consults with the RBNZ, giving directions to a registered bank, removing, replacing or appointing a director of a registered bank or recommending that a registered bank be subject to statutory management. If a registered bank is declared to be subject to statutory management, no person may, amongst other things: • commence or continue any action or other proceedings including proceedings by way of counterclaim against that bank; • issue any execution, attach any debt, or otherwise enforce or seek to enforce any judgment or order obtained in respect of that bank; • take any steps to put that bank into liquidation; or • exercise any right of set off against that bank.

Regulation and Supervision. The Reserve Bank Act requires the RBNZ to exercise its powers of registration of banks and prudential supervision of registered banks for the purposes of: • promoting the maintenance of a sound and efficient financial system; or • avoiding significant damage to the financial system that could result from the failure of a registered bank. The RBNZ’s policy around the registration of banks aims to ensure that only financial institutions of appropriate standing and repute are able to become registered banks. Subject to this requirement, the RBNZ has stated that it intends to keep to a minimum any impediments to the entry of new registered banks, in order to encourage competition in the banking system. The RBNZ’s supervisory functions are aimed at encouraging the soundness and efficiency of the financial system as a whole, and are not aimed at preventing individual bank failures or at protecting creditors. The RBNZ seeks to achieve this by drawing on and enhancing disciplines that are naturally present in the market. As a consequence, the RBNZ places considerable emphasis on a requirement that the banks disclose, on a quarterly basis, information on financial performance and risk positions, and on a requirement that directors regularly attest to certain key matters. These measures are intended to strengthen market disciplines and to ensure that responsibility for the prudent management of banks lies with those who the RBNZ considers are best placed to exercise that responsibility-the directors and management. The main elements of the RBNZ’s supervisory role include: • requiring all banks to comply with certain minimum prudential requirements, which are applied through conditions of registration. These include constraints on connected exposure, minimum capital adequacy requirements and minimum standards for liquidity risk management, and are set out in more detail below; • monitoring each registered bank’s financial condition and compliance with conditions of registration, principally on the basis of published quarterly disclosure statements. This monitoring is intended to ensure that the RBNZ maintains familiarity with the financial condition of each bank and the banking system as a whole, and maintains a state of preparedness to invoke crisis management powers should this be necessary; • consulting with the senior management of registered banks; • using crisis management powers available to it under the Reserve Bank Act to intervene where a bank distress or failure situation threatens the soundness of the financial system; • assessing whether a bank is carrying on business prudently; • issuing guidelines on overseeing banks' compliance with anti-money laundering and countering financing of terrorismterrorism requirements; • monitoring banks' outsourcing arrangements to determine whether a registered bank's management of risks associated with outsourcing are appropriately managed; • issuing guidelines on banks’ internal capital adequacy process and liquidity policy; • issuing guidelines on corporate governance; and • maintaining close working relationships with parent bank supervisors (such as APRA in Australia) on bank-bank- specific issues, policy issues and general matters relating to the condition of the financial system in New Zealand and in the countries where parent banks are domiciled. The disclosure statements that are required to be issued quarterly by registered banks contain comprehensive corporate details and details, together with full financial statements at the full year, and unaudited interim financial statements at the half year and the off-quarters. They The financial statements are subject to full external audit at the end of each financial year and a limited scope review at the end of each financial half-year. Each bank director is required to sign his or her bank’s disclosure statements and to make certain attestations. A bank and its directors may incur criminal and civil penalties if the bank’s disclosure statement contains information that is held to be false or misleading. The RBNZ implemented the Basel III capital adequacy requirements, as modified to reflect New Zealand conditions, on January 1, 2013. From January 1 2014, the RBNZ required most New Zealand incorporated banks, including ANZ New Zealand, to maintain a conservation buffer of 2.5% above the minimum ratios or face restrictions on distributions. The RBNZ also has the discretion (effective from January 1, 2014) to apply a countercyclical buffer of common equity with an indicative range of between 0 and 2.5%, although there is no formal upper limit. New counterparty credit risk requirements and new disclosure requirements to incorporate Basel III changes took effect on March 31, 2013. Since April 1, 2010, New Zealand incorporated banks (including ANZ New Zealand) have been required to comply with the RBNZ's Liquidity Policy ("BS13"). The Liquidity Policy requires banks to meet a minimum core- funding ratio of 75%, ensuring that a greater proportion of bank funding is met through retail deposits and term wholesale funding. Basel III proposes a liquidity policy which the RBNZ considers very similar to the intent of BS13. However, the RBNZ considers that certain aspects of the new liquidity standards are not suitable for adoption in New Zealand. The RBNZ has stated that it will be reviewing its liquidity policy in 2016 and 2017 in light of the Basel Committee on Banking Supervision’s new liquidity requirements. The RBNZ currently also requires all registered banks to obtain and maintain a credit rating from an approved organization and publish that rating in the quarterly disclosure statements. In addition, the RBNZ has wide reaching powers to obtain further information, data and forecasts in connection with its supervisory functions, and to require that information, data, and forecasts be audited. It also possesses a number of crisis management powers. Those powers include recommending that a bank’s registration be cancelled, investigating the affairs of a registered bank, requiring that a registered bank consults with the RBNZ, giving directions to a registered bank, removing, replacing or appointing a director of a registered bank or recommending that a registered bank be subject to statutory management. If a registered bank is declared to be subject to statutory management, no person may, amongst other things: • commence or continue any action or other proceedings including proceedings by way of counterclaim against that bank; • issue any execution, attach any debt, or otherwise enforce or seek to enforce any judgment or order obtained in respect of that bank; • take any steps to put that bank into liquidation; or • exercise any right of set off against that bank.

Regulation and Supervision. The Reserve Bank Act requires the RBNZ to exercise its powers of registration of banks and prudential supervision of registered banks for the purposes of: • promoting the maintenance of a sound and efficient financial system; or • avoiding significant damage to the financial system that could result from the failure of a registered bank. The RBNZ’s policy around the registration of banks aims to ensure that only financial institutions of appropriate standing and repute are able to become registered banks. Subject to this requirement, the RBNZ has stated that it intends to keep to a minimum any impediments to the entry of new registered banks, in order to encourage competition in the banking system. The RBNZ’s supervisory functions are aimed at encouraging the soundness and efficiency of the financial system as a whole, and are not aimed at preventing individual bank failures or at protecting creditors. The RBNZ seeks to achieve this by drawing on and enhancing disciplines that are naturally present in the market. As a consequence, the RBNZ places considerable emphasis on a requirement that the banks disclose, on a quarterly basis, information on financial performance and risk positions, and on a requirement that directors regularly attest to certain key matters. These measures are intended to strengthen market disciplines and to ensure that responsibility for the prudent management of banks lies with those who the RBNZ considers are best placed to exercise that responsibility-the directors and management. The main elements of the RBNZ’s supervisory role include: • requiring all banks to comply with certain minimum prudential requirements, which are applied through conditions of registration. These include constraints on connected exposure, minimum capital adequacy requirements and minimum standards for liquidity risk management, and are set out in more detail below; • monitoring each registered bank’s financial condition and compliance with conditions of registration, principally on the basis of published quarterly disclosure statements. This monitoring is intended to ensure that the RBNZ maintains familiarity with the financial condition of each bank and the banking system as a whole, and maintains a state of preparedness to invoke crisis management powers should this be necessary; • consulting with the senior management of registered banks. Formal prudential consultations are held annually, and generally focus on the strategic direction of the banks, major changes in their operations and other high level issues; • using crisis management powers available to it under the Reserve Bank Act to intervene where a bank distress or failure situation threatens the soundness of the financial system; • assessing whether a bank is carrying on business prudently; • issuing guidelines on anti-money laundering and countering financing of terrorism; • issuing guidelines on banks’ banks internal capital adequacy process and liquidity policy; • issuing guidelines on corporate governance; and • maintaining close working relationships with parent bank supervisors (such as APRA in Australia) on bank-specific issues, policy issues and general matters relating to the condition of the financial system in New Zealand and in the countries where parent banks are domiciled. The disclosure statements that are required to be issued quarterly by registered banks contain comprehensive corporate details and full financial statements at the full and half year, and unaudited interim financial statements at the half year and the off-quarters. They are subject to full external audit at the end of each financial year and a limited scope review at the end of each financial half-year. Each bank director is required to sign his or her bank’s disclosure statements and to make certain attestations. A bank and its directors may incur criminal and civil penalties if the bank’s disclosure statement contains information that is held to be false or misleading. On the November 19, 2010, the RBNZ announced that it had finalised its main policy decisions in its review of disclosure requirements for registered banks, including ANZ National. The main changes to the existing regime include: • dropping the quarterly Key Information Summary and Supplemental Disclosure Statement; • introducing a single quarterly disclosure document aimed at more financially savvy readers; • cutting by three or four times the size of the half-year disclosure document, by basing it on interim rather than full-year accounting standards; and • further rationalisation of information across all time periods. Subject to the RBNZ’s Orders in Council process, which is required to bring these changes into effect, the first disclosure statements under the new regime will be for reporting periods ended March 31, 2011. The RBNZ currently also requires all registered banks to obtain and maintain a credit rating from an approved organization and publish that rating in the quarterly disclosure statements. In addition, the RBNZ has wide reaching powers to obtain further information, data and forecasts in connection with its supervisory functions, and to require that information, data, and forecasts be audited. As the global financial crises unfolded, it has become more involved on a day-to-day basis It also possesses a number of crisis management powers. Those powers include recommending that a bank’s registration be cancelled, investigating the affairs of a registered bank, requiring that a registered bank consults consult with the RBNZ, giving directions to a registered bank, removing, replacing or appointing a director of a registered bank or recommending that a registered bank be subject to statutory management. If a registered bank is declared to be subject to statutory management, no person may, amongst other things: • commence or continue any action or other proceedings including proceedings by way of counterclaim against that bank; • issue any execution, attach any debt, or otherwise enforce or seek to enforce any judgment or order obtained in respect of that bank; • take any steps to put that bank into liquidation; or • exercise any right of set off against that bank.