MARCH

NEW ZEALAND GAZETTE

4

(d) clause 7 of the Fifth Schedule to the principal Order is hereby deleted and replaced with the following:

"7. The General Short Form Disclosure Statement shall disclose the number of individual Bank Counterparties (not being members of a Group of Closely Related Counterparties) and Groups of Closely Related Counterparties of which a Bank is the parent to whom the Banking Group has a Credit Exposure which equals or exceeds 10% of the Overseas Banking Group’s Equity over the First Quarter Accounting Period or Third Quarter Accounting Period in successive ranges of 10% of Equity, commencing at 10% of Equity."

(e) clause 9 of the Fifth Schedule to the principal Order is hereby deleted and replaced with the following:

"9. The General Short Form Disclosure Statement shall disclose the number of individual non Bank Counterparties (not being members of a Group of Closely Related Counterparties) and Groups of Closely Related Counterparties of which a Bank is not the parent to whom the Banking Group has a Credit Exposure which equals or exceeds 10% of the Overseas Banking Group’s Equity over the First Quarter Accounting Period or Third Quarter Accounting Period in successive ranges of 10% of Equity, commencing at 10% of Equity."

DIANE WILDERSPIN, Acting for Clerk of the Executive Council.

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 amend the public disclosure requirements for registered banks contained in the principal Orders, which took effect on 1 January 1996. The principal Orders are amended by:

(a) the inclusion of schedules specifying market risk disclosure requirements, and

(b) a number of miscellaneous amendments to the general disclosure requirements.

This Order in Council comes into force on 1 April 1996. The market risk disclosures apply in respect of Short Form Disclosure Statements relating to off quarter balance dates which occur after 1 April 1996. Where a registered bank is unable to disclose peak exposures for that part of an accounting period which precedes the date on which the Order comes into force, the registered bank may disclose peak information in respect of the period commencing with the date on which this Order comes into force.

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” (i.e., the first and third quarters of the bank’s financial year).

Market Risk Disclosure Requirements

A registered bank will be required to include market risk information in its General Short Form Disclosure Statement.

The market risk information to be disclosed will relate to the banking group’s interest rate exposure, foreign currency exposure and equity exposure. A bank will be required to disclose its exposure to each of these categories of market risk, as an amount and as a percentage of the overseas banking group’s equity. These disclosures will be required in respect of exposures as at the end of off quarters and peak exposures over the accounting period to date.

The Order requires a bank to calculate market risk exposures using either the method specified in the Order, or a different method provided that such method does not give a result which would be materially lower than that arrived at by the method specified in the Order.

Miscellaneous Amendments

In addition, the Order in Council amends the principal Order:

— by modifying the disclosure requirements relating to large exposures. This modification makes it clear that, when banks disclose the number of individual counterparties or counterparty groups to which they have a large exposure, they should not include in the total, those individual counterparties which are part of a counterparty group already included in the total. This will ensure that there is no double counting of exposures;

— where applicable, to require registered banks to publish information about any statutory requirement to hold net assets in New Zealand.

This Order in Council is administered in the Reserve Bank of New Zealand.

PUBLISHED BY AUTHORITY OF DEPARTMENT OF INTERNAL AFFAIRS
GP PRINT LIMITED, WELLINGTON, NEW ZEALAND—1996
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