4428 NEW ZEALAND GAZETTE No. 135

Accounting Period or the Third Quarter Accounting Period.

The General Short Form Disclosure Statement shall state the method used.

2. For the purposes of this Schedule:

(a) information disclosed shall be in respect of the Banking Group; and

(b) Credit Exposures shall be calculated net of Specific Provisions.

3. Credit Exposures to any OECD Government are not to be included in the Credit Exposure information required to be disclosed pursuant to this Schedule.

4. For the purposes of this Schedule, the Overseas Banking Group’s Equity shall be either that group’s Equity determined as at the Off Quarter Balance Date, or the most recently publicly disclosed amount. Where the Overseas Banking Group’s Equity is not determined as at the Off Quarter Balance Date, the General Short Form Disclosure Statement shall state the date to which the measure of Equity relates.

5. The information required to be disclosed pursuant to clauses 7 and 9 of this Schedule shall include comparative figures for the previous corresponding period.

6. For the purposes of this Schedule:

(a) information on Credit Exposures shall relate only to exposures held in the financial records of the Banking Group;

(b) peak end-of-day aggregate Credit Exposures to each individual Counterparty or a Group of Closely Related Counterparties over the First Quarter Accounting Period or the Third Quarter Accounting Period shall be measured as follows:

(i) within each quarter, by determining the maximum end-of-day aggregate Credit Exposures over the quarter, and dividing that amount by the Overseas Banking Group’s Equity as at the end of the quarter; and

(ii) for the First Quarter Accounting Period or Third Quarter Accounting Period, by calculating the ratio for each quarter in the First Quarter Accounting Period or Third Quarter Accounting Period pursuant to clause 6(b)(i) of this Schedule and then taking the maximum of such ratios.

7. Where aggregate Credit Exposure to any individual Bank Counterparty or a Group of Closely Related Counterparties of which a Bank is the parent equals or exceeds 10% of the Overseas Banking Group’s Equity over the First Quarter Accounting Period or Third Quarter Accounting Period, the General Short Form Disclosure Statement shall disclose the number of those Counterparties, in successive ranges of 10% of Equity, commencing at 10% of Equity.

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

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

(b) in respect of peak end-of-day aggregate Credit Exposures since the commencement of the Accounting Period.

9. Where aggregate Credit Exposure to any individual non Bank Counterparty or a Group of Closely Related Counterparties of which a Bank is not the parent equals or exceeds 10% of the Overseas Banking Group’s Equity over the First Quarter Accounting Period or Third Quarter Accounting Period, the General Short Form Disclosure Statement shall disclose the number of those Counterparties, in successive ranges of 10% of Equity, commencing at 10% of Equity.

10. The information required to be disclosed pursuant to clause 9 of this Schedule shall be made:

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

(b) in respect of peak end-of-day aggregate Credit Exposures since the commencement of the Accounting Period.

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; and

(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 a country other than New Zealand and which operates in New Zealand as a branch of the overseas bank, 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.