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NEW ZEALAND GAZETTE, No. 21

23 FEBRUARY 2007

1 January 2007. The existing disclosure requirements were amended in March 2005 to handle the early adoption option but
those amendments will no longer be effective once the international standards are mandatory.
The three reporting dates end-March, end-June and end-September 2007 represent a transitional period during which
registered banks will be reporting on a mixture of accounting standards. The first date on which all banks will be reporting
subject to international standards will be 31 December 2007. As a result, some minor amendments are needed to the
disclosure requirements to ensure that they contain the appropriate definitions and cross-references for banks on all
combinations of reporting standards, for reporting dates beginning with 31 March 2007. The amendments are largely
mechanical. They add references to new accounting standards. Some new definitions have been added and others have cross
references to the new standards.

A description of the principal provisions of the revised disclosure regime is given below.

Under the disclosure regime, all registered banks are 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 Disclosure Statement and, if applicable, a Supplemental Disclosure Statement.

The Key Information Summary provides a brief summary of key financial information on the registered bank and its banking
group, and must be made available free of charge immediately upon request. The Key Information Summary must also be
displayed prominently in each bank branch and in any other customer-accessible bank premises, and made available or
displayed on a bank’s internet website.

The General Disclosure Statement is required to contain a comprehensive range of financial and corporate information on the
bank and its banking group. The General Disclosure Statement need not be displayed in each bank branch, but must be made
available free of charge, immediately if the request is made at a bank’s head office, or within five working days if the request is
made at a bank branch or at any customer-accessible bank premises other than the head office. The information required to be
included in a General Disclosure Statement includes:

a general information on the structure of the bank, the members of the banking group and information on guarantee
arrangements (where applicable);

b information about credit ratings the bank is required to have, and a disclosure of the current level of each such rating;

c comprehensive financial statements for the bank and banking group, prepared in accordance with generally accepted
accounting practice, including asset quality and risk concentration information;

d information, both as at the end of the half year or full year and in respect of peak for the most recent quarter of the
accounting period, on exposure concentrations to individual counterparties and groups of closely related counterparties;

e market risk information, both as at the end of the half year or full year and in respect of peak for the most recent quarter
of the accounting period, on the banking group’s interest rate exposure, foreign currency exposure and equity exposure.
A bank is 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;

f descriptions of the banking group’s policies and systems for identifying, monitoring and managing its risks;

g statements signed by the directors and the New Zealand chief executive officer of the bank, including an attestation as to
whether the directors and the New Zealand chief executive officer are satisfied that the banking group had systems in
place to monitor and control adequately the group’s material business risks and whether the controls have been properly
applied over the reporting period, and a statement that the disclosure statement is not false or misleading;

h information on the banking group’s funds management and securitisation activities, the marketing and distribution of
insurance products, to the extent it has any;

i information on the directorate and auditors of the bank.

Each bank must also publish a Supplemental Disclosure Statement, unless the information it would include is contained in the
General Disclosure Statement. The Supplemental Disclosure Statement must be made available free of charge, immediately if
the request is made at a bank’s head office, or within five working days if the request is made at a bank branch or at any
customer-accessible bank premises other than the head office. This Order in Council requires the following information to be
contained in a Supplemental Disclosure Statement:

a the conditions of registration imposed by the Reserve Bank on the registered bank pursuant to section 74 of the Reserve
Bank of New Zealand Act;

b the contract of guarantee and financial statements of any guarantor, where the material obligations of the overseas bank
are guaranteed;

c where the overseas bank has entered into any material cross guaranteeing arrangements, a copy of the full guarantee
contract if there is a contract which sets out, or is representative of, the rights and obligations of all the cross guarantors;

d the most recent publicly available financial statements of the overseas bank and overseas banking group of which the
registered bank is part;

e where the overseas bank conducts in New Zealand outside the New Zealand banking group any insurance business or
non-financial activities, the most recent publicly available financial statements of that business or those activities.

A bank has three months after its balance date or interim balance date in which to publish the disclosure statements required
by this Order in Council.

The disclosure statement in respect of the end of a financial year is subject to full external audit. The disclosure statement
prepared as at the half year is subject to a limited review by an external auditor, although a bank may elect to obtain a full
external audit. With the exception of the market risk information, the audit opinions at both of these periods concern whether
the information disclosed gives a true and fair view of the matters to which it relates. The audit opinion on the market risk
information relates to whether the information disclosed complies with the provisions of this Order for determining and
disclosing that information.

The disclosure statements required by this Order in Council must be signed by all the directors and the New Zealand chief
executive officer of the bank. A director or New Zealand chief executive officer may authorise in writing another person to sign
on his or her behalf.