17 NOVEMBER NEW ZEALAND GAZETTE 4405

Quarter Accounting Period, by calculating the ratio for each quarter in the First Quarter Accounting Period or Third Quarter Accounting Period pursuant to clause 5(a) of this Schedule and then taking the maximum of such ratios.

6. The General Short Form Disclosure Statement shall contain:

(a) a statement of aggregate Credit Exposure to Connected Persons, expressed both as an amount and as a percentage of Tier One Capital; and

(b) a statement of aggregate Credit Exposure to Non-Bank Connected Persons, expressed both as an amount and as a percentage of Tier One Capital.

7. The information required to be disclosed pursuant to clause 6 of this Schedule shall be made:

(a) as at the Off Quarter Balance Date; and

(b) in respect of peak end-of-day Credit Exposures for the First Quarter Accounting Period or Third Quarter Accounting Period.

8. The General Short Form Disclosure Statement shall contain a statement of the aggregate amount of contingent exposures of the Banking Group to Connected Persons, arising from risk lay-off arrangements in respect of Credit Exposures to Counterparties (other than Counterparties which are Connected Persons), as at the Off Quarter Balance Date.

9. The General Short Form Disclosure Statement shall contain a statement of the aggregate amount of the Banking Group’s Specific Provisions provided against Credit Exposures to Connected Persons as at the Off Quarter Balance Date.

Sixth Schedule

Risk Management Policies

1. Where there has been a Material change in the three months prior to the Off Quarter Balance Date in the Banking Group’s policies for managing any of the following risks:

(a) Credit Risk, including concentrations of Credit Risk, intra-day Credit Risk, Credit Risk to Bank Counterparties and related party Credit Risk;

(b) Currency Risk;

(c) Interest Rate Risk;

(d) Equity Risk;

(e) liquidity risk;

(f) any other Material business risk to which the Banking Group is exposed;

the General Short Form Disclosure Statement shall contain a statement on the nature of those changes.

2. If, in the three months prior to the Off Quarter Balance Date, the Banking Group has become exposed to a new category of risk specified in clause 1 of this Schedule to which the Banking Group was not previously exposed, the General Short Form Disclosure Statement shall contain a general description of:

(a) the nature of that risk and the activities of the Banking Group which give rise to that risk;

(b) the methods used to identify and monitor exposure to that risk, including the frequency with which exposures are monitored;

(c) the systems and procedures for controlling that risk, including, where applicable, whether exposure limits are employed, any policies with respect to collateral or other security, and any policies on the use of Financial Instruments to mitigate or hedge risks.

Explanatory Note

This note is not part of the Order in Council, but is intended to indicate its general effect.

This Order in Council is one of four Orders in Council promulgated pursuant to section 81(1) of the Reserve Bank of New Zealand Act 1989. The Orders in Council provide for a new public disclosure regime for registered banks, replacing existing prospectus requirements imposed under the Securities Act 1978 on registered banks in respect of their offers of debt securities to the public. All four Orders in Council come into force on 1 January 1996.

The disclosure regime is part of a new set of arrangements being implemented by the Reserve Bank of New Zealand to supervise registered banks.

This Order in Council applies to a registered bank which is incorporated in New Zealand, in respect of each such bank’s “off quarters” (ie the first and third quarters of the bank’s financial year).

All registered banks will be required to issue a public disclosure statement each quarter. The disclosure statement required to be published pursuant to this Order in Council comprises a Key Information Summary, a General Short Form Disclosure Statement and, if applicable, a Supplemental Disclosure Statement.

The Key Information Summary must be displayed prominently in each bank branch and must be available free of charge immediately upon request. The Key Information Summary provides a brief summary of key financial information on the registered bank and its banking group.

The General Short Form Disclosure Statement is required to contain a range of financial and corporate information on the bank and its banking group. The General Short Form Disclosure Statement need not be displayed in each bank branch, but must be made available free of charge within five working days of a request having been made for it at a bank office or agency, or immediately from a bank’s head office. The information required to be included in a General Short Form Disclosure Statement includes:

a. a statement as to whether the bank has a credit rating, and if so, a disclosure of that rating;

b. short form financial statements for the banking group, including details on asset quality;

c. information on capital adequacy (using the Reserve Bank of New Zealand’s capital adequacy framework);

d. information, both as at the end of the off quarter and peak over the accounting period to date, on the banking group’s exposure concentration to individual counterparties and groups of closely related counterparties and to connected persons;

e. descriptions of the banking group’s policies and systems for managing risks in respect of a new category of risk not previously incurred by the banking group;

f. statements signed by the directors of the bank, including an attestation as to whether the directors are satisfied that the banking group’s internal controls are adequate for managing the group’s material business risks and whether the controls are being properly applied, and a statement that the disclosure statement is not false or misleading.

The General Short Form Disclosure Statement required by this Order in Council is an abbreviated version of the General Disclosure Statement required by the Registered Bank Disclosure Statements (Full and Half-Year—New Zealand Incorporated Registered Banks) Order 1995.

Each bank must also publish a Supplemental Disclosure Statement, unless the information it would include is