Banking Act 1959

Part I - Preliminary  

SECTION 5   Interpretation   Definitions

(1)  


In this Act, unless the contrary intention appears:

accountable person
has the meaning given by sections 37BA and 37BB .

account-holder
means an entity (as defined in section 960-100 of the Income Tax Assessment Act 1997 ) that holds in its name, or keeps in its name, (either alone or jointly with another entity) an account or covered financial product with an ADI.

action that is likely to have a detrimental effect on financial system stability in New Zealand
includes an action that prevents or interferes with an outsourcing arrangement.

ADI
is short for authorised deposit-taking institution.

ADI statutory manager
(Repealed by No 10 of 2018)

administrator
, of a body corporate ' s business, means an administrator appointed under subsection 13A(1) to take control of the body corporate ' s business.

administrator of an ADI ' s business
(Repealed by No 10 of 2018)

advance
includes loan.

appointed auditor
means an auditor appointed in accordance with the prudential standards.

approved form
means a form approved, in writing, by APRA.

APRA
means the Australian Prudential Regulation Authority.

APRA board member
means a member of APRA ' s board of management, including APRA ' s Chair and Chief Executive Officer.

APRA Special Account
has the same meaning as in the Australian Prudential Regulation Authority Act 1998 .

APRA staff member
has the same meaning as in the Australian Prudential Regulation Authority Act 1998 .

ASIC
means the Australian Securities and Investments Commission.

Australia
includes the Territories.

Australian business assets and liabilities
, of a foreign ADI, has the meaning given by subsection 11E(3) .

authorised deposit-taking institution
means a body corporate in relation to which an authority under subsection 9(3) is in force.

authorised NOHC
means a body corporate:


(a) in relation to which an authority under subsection 11AA(2) is in force; and


(b) that is a NOHC of an ADI or ADIs.

Banking Act statutory manager
has the meaning given by subsection 13A(2) .

banking business
means:


(a) a business that consists of banking within the meaning of paragraph 51(xiii) of the Constitution; or


(b) a business that is carried on by a corporation to which paragraph 51(xx) of the Constitution applies and that consists, to any extent, of:


(i) both taking money on deposit (otherwise than as part-payment for identified goods or services) and making advances of money; or

(ii) other financial activities prescribed by the regulations for the purposes of this definition.

business day
means a day that is not a Saturday, a Sunday or a public holiday or bank holiday in the place concerned.

civil penalty provision
: a subsection of this Act (or a section of this Act that is not divided into subsections) is a civil penalty provision if:


(a) the words " civil penalty " and one or more amounts in penalty units are set out at the foot of the subsection (or section); or


(b) another provision of this Act specifies that the subsection (or section) is a civil penalty provision.

Note:

Schedule 2 deals with contraventions of civil penalty provisions, and treats people who are involved in various ways in such a contravention as if they had contravened the provision concerned.

covered bond
has the meaning given by subsection 26(1) .

covered bond liabilities
has the meaning given by subsections 26(4) and (5) .

covered bond special purpose vehicle
has the meaning given by subsection 26(1) .

covered financial product
has the meaning given by subsection (8).

cover pool
has the meaning given by subsection 26(3) .

declaration time
for an ADI means the time the ADI becomes a declared ADI.

declared ADI
means an ADI specified in a declaration under section 16AD as an ADI in relation to which Subdivision C of Division 2AA of Part II applies.

direction under this Act
means a direction under any of the following provisions:


(a) section 11CA ;


(b) section 11CC ;


(c) section 13E ;


(d) section 17 ;


(e) section 23 ;


(f) section 29 ;


(g) section 31F ;


(h) section 37DB .

external administrator
means any of the following:


(a) a liquidator;


(b) a receiver, manager, managing controller, receiver and manager or other controller (other than a Banking Act statutory manager);


(c) a voluntary administrator or administrator of a deed of a company arrangement or a scheme manager.

Expressions used in this definition have the same meanings as they have in the Corporations Act 2001 .

Finance Minister
means the Minister who administers the Public Governance, Performance and Accountability Act 2013 .

financial market
has the meaning given by section 761A of the Corporations Act 2001 .

Financial Claims Scheme Special Account
has the same meaning as in the Australian Prudential Regulation Authority Act 1998 .

Financial System Stability Special Account
means the Financial System Stability Special Account established by section 70E .

foreign ADI
means a body corporate that:


(a) is a foreign corporation within the meaning of paragraph 51(xx) of the Constitution; and


(b) is authorised to carry on banking business in a foreign country; and


(c) has been granted an authority under section 9 to carry on banking business in Australia.

holding company
, of a body corporate, means another body corporate of which the first body corporate is a subsidiary.

industry support contract
means a contract under which emergency financial support is to be provided by parties to the contract to any ADI that is a party to the contract if a specified event occurs. The contract may also deal with matters associated with the provision of the financial support.

insolvent
, in relation to a body corporate, means that the body corporate is not able to pay all its debts as and when they become due and payable.

investigator
means a person APRA appoints under subsection 13(4) , 13A(1) or 61(1) .

issuing ADI
has the meaning given by subsection 26(6) .

large ADI
means an ADI of a kind determined under paragraph 37G(3)(a) .

lawyer
means a duly qualified legal practitioner and, in relation to a person, means such a practitioner acting for the person.

liquidator
includes a provisional liquidator.

listing rules
has the meaning given by section 761A of the Corporations Act 2001 .

medium ADI
means an ADI of a kind determined under paragraph 37G(3)(b) .

net credit balance
:


(a) the net credit balance , at a time, of an account means the excess of the balance of the account in credit in favour of the account-holder at that time over the amount (if any) of fees, charges and duties that are identified under the agreement under which the account is kept and are payable by the account-holder to the ADI at that time; and


(b) the net credit balance , at a time, of a covered financial produce that is not an account means the amount owed to the account-holder at that time under the terms of the agreement under which the covered financial product is kept.

New Zealand registered bank
means a registered bank, as defined in section 2 of the Reserve Bank of New Zealand Act 1989 of New Zealand, that carries on a business in New Zealand.

NOHC
is short for non-operating holding company.

NOHC authority
means an authority under subsection 11AA(2) .

NOHC/NOHC subsidiary
has the meaning given by subsection 13D(5) .

non-ADI holding company
, of another body corporate, means a body corporate (other than an ADI) of which the other body corporate is a subsidiary.

non-ADI lender
has the meaning given by section 38B .

non-ADI lender rule
means a rule under section 38C .

non-operating holding company
means, in relation to a body corporate, a body corporate:


(a) of which the first body corporate is a subsidiary; and (b) that does not carry on a business (other than a business consisting of the ownership or control of other bodies corporate); and


(c) that is incorporated in Australia.

outsourcing arrangement
means an arrangement for the business of a New Zealand registered bank, or functions relating to such business, to be carried on by an entity other than the bank.

Part IIB provision of finance
has the meaning given by section 38B .

penalty unit
(Repealed by No 31 of 2014)

personal information
has the same meaning as in the Privacy Act 1988 .

prescribed New Zealand authority
means the following:


(a) the Reserve Bank of New Zealand;


(b) an authority of the government of New Zealand that:


(i) has statutory responsibilities relating to prudential regulation or financial system stability; and

(ii) is prescribed by the regulations for the purposes of this definition.

protected account
has the meaning given by subsections (4), (5), (6) and (7).

prudential matters
means matters relating to:


(a) the conduct of any part of the affairs of, or the structuring or organising of, an ADI, an authorised NOHC, a relevant group of bodies corporate, or a particular member or members of such a group, in such a way as:


(i) to keep the ADI, NOHC, group or member or members of the group in a sound financial position; or

(ii) to facilitate resolution of the ADI, NOHC, group or member or members of the group; or

(iii) to protect the interests of depositors of any ADI; or

(iv) not to cause or promote instability in the Australian financial system; or

(v) not to cause or promote instability in the New Zealand financial system; or


(b) the conduct of any part of the affairs of an ADI, an authorised NOHC, a relevant group of bodies corporate, or a particular member or members of such a group, with integrity, prudence and professional skill.

prudential regulation
(Repealed by No 147 of 2006)

prudential requirement regulation
means a regulation under section 11A .

prudential standard
means a standard under section 11AF .

recapitalisation direction
means a direction given by APRA under subsection 13E(1) or (1B) .

related body corporate
, in relation to a body corporate, means a body corporate that is related to the first-mentioned body, as determined in accordance with subsection 5(2A) .

relevant group of bodies corporate
has the meaning given by subsection 5(3) .

remuneration
, of an accountable person, includes the meaning given by subsection 37E(3) .

resolution
means the process by which APRA or other relevant persons manage or respond to an entity:


(a) being unable to meet its obligations; or


(b) being considered likely to be unable, or being considered likely to become unable, to meet its obligations; or


(c) suspending payment, or being considered likely to suspend payment;

including through the exercise of powers and functions under this Act or another law.

section 9 authority
means an authority under subsection 9(3) .

senior manager
of an ADI or an authorised NOHC or the Australian operations of a foreign ADI means a person who has or exercises any of the senior management responsibilities (within the meaning of the prudential standards) for the ADI or NOHC or for the Australian operations of the foreign ADI, as the case may be.

small ADI
means an ADI of a kind determined under paragraph 37G(3)(c) .

subsidiary
has the meaning given by subsection (2).

the Reserve Bank
means the Reserve Bank of Australia.

transferred liabilities determination
means a determination under subsection 16AIA(1) .

ultimate termination of control
has the meaning given by subsection 13C(1) .

variable remuneration
has the meaning given by section 37EA .

Subsidiary

(2)  


For the purposes of this Act, the question whether a body corporate is a subsidiary of another body corporate is to be determined in the same way as that question is determined for the purposes of the Corporations Act 2001 . Related bodies corporate

(2A)  


For the purposes of this Act, the question whether a body corporate is related to another body corporate is to be determined in the same way as that question is determined for the purposes of the Corporations Act 2001 . Relevant group of bodies corporate

(3)  


For the purposes of this Act:


(a) an ADI and its subsidiaries together constitute a relevant group of bodies corporate ; and


(b) an authorised NOHC and its subsidiaries together also constitute a relevant group of bodies corporate .

Protected account

(4)  


Subject to subsections (5), (6) and (7), a protected account is an account or covered financial product that is kept by an account-holder (whether alone or jointly with one or more other account-holders) with an ADI and either:


(a) is an account that is prescribed by the regulations for the purposes of this paragraph; or


(b) is an account, or covered financial product, that is kept under an agreement between the account-holder and the ADI requiring the ADI to pay the account-holder, on demand by the account-holder or at a time agreed by them, the net credit balance of the account or covered financial product at the time of demand or the agreed time (as appropriate).

Note:

Paragraph (a) - the regulations may prescribe the account by reference to a class of accounts: see subsection 13(3) of the Legislation Act 2003 .

(5)  


An account is not a protected account on and after 12 October 2011 unless:


(a) it is recorded in Australian currency; or


(b) it is kept with an ADI that is a declared ADI on 12 October 2011.

(6)  


A covered financial product that is kept with an ADI and is not an account is not a protected account if APRA applies under section 16AAA for an order that the ADI be wound up.

(7)  


An account or covered financial product is not a protected account if the account or covered financial product is prescribed by the regulations for the purposes of this subsection.
Note:

The regulations may prescribe the account or covered financial product by reference to a class of accounts or financial products: see subsection 13(3) of the Legislation Act 2003 .

Covered financial product

(8)  


The Minister may declare that a specified financial product is a covered financial product .
Note:

The declaration may specify the product by reference to a class of financial products: see subsection 13(3) of the Legislation Act 2003 .

(9)  


A declaration made under subsection (8), or an amendment of the declaration, is a legislative instrument, but section 42 (disallowance) of the Legislation Act 2003 does not apply to the declaration or amendment.
Note:

Part 4 of Chapter 3 (sunsetting) of the Legislation Act 2003 does not apply to the declaration or amendment: see regulations made for the purposes of paragraph 54(2)(b) of that Act.

(10)  


Despite subsection 12(1) of the Legislation Act 2003 , the declaration or amendment commences from the time it is made.

(11)  


Subsection 12(2) (retrospective application of legislative instruments) of the Legislation Act 2003 does not apply to the declaration or amendment.



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