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Niue Bank Act 1994

NIUE LAWS
LEGISLATION AS AT DECEMBER 2006

NIUE BANK ACT 1994

1994/177 – 28 March 1994

PART 1
PRELIMINARY

1 Short title
2 Interpretation
3 Act to bind the Government

PART 2
THE NIUE BANK

4 Establishment of Bank
5 Branches and Agencies

PART 3
FUNCTIONS AND POWERS OF NIUE BANK

6 Functions of the Bank
7 Dealing in foreign exchange
8 Foreign exchange gains and losses
9 Foreign exchange
10 Foreign reserves
11 Bank may raise loans
12 Lender of last resort
13 Settlement account services
14 Financial sector policy advice
15 Government banking business
16 Securities registry services
17 Bank may require financial institution to supply information
18 Failure to supply information
19 Requirement that information be audited
20 Powers

PART 4
MANAGEMENT OF NIUE BANK

21 Board of Directors
22 Duties of Board
23 Membership of Board
24 Term of office of non-executive directors
25 Appointment of non-executive directors
26 Extraordinary vacancies
27 Disqualification of non-executive directors
28 Removal from office of non-executive directors
29 Meetings of Board
30 Directors to disclose interests
31 Fees and expenses of non-executive directors

PART 5
CENTRAL BANK

32 Bank to act as Central Bank
33 Powers of Central Bank

PART 6
USE OF WORDS "BANK", "BANKER" AND "BANKING"

34 "Bank", "banker" and "banking"
35 Certain persons exempt from section 34
36 Power to require change of name or title

PART 7
REGISTRATION OF BANKS AND PRUDENTIAL
SUPERVISION OF REGISTERED BANKS

37 Registration and prudential supervision
38 Exercise of powers under this Part
39 Register
40 Application for registration
41 Voluntary removal of name from register
42 Offence
43 Determination of applications
44 Conditions of registration
45 Publication of principles
46 Cancellation of registration
47 Carrying on business in a prudent manner
48 Annual fee
49 Credit assessment of registered banks
50 Public disclosure of financial and other information by registered banks
51 Disclosure statements to be signed
52 Bank may require disclosure statement to be corrected
53 Interpretation
54 Content of advertisements by registered banks
55 Regulations
56 Offence to advertise in contravention of regulations
57 Bank may prohibit advertisements by registered banks
58 Offences in relation to disclosure statements and advertisements
59 Civil liability
60 Defences
61 Supply of information for purposes of prudential supervision
62 Requirement that information be audited
63 Bank may require report on financial and accounting systems
64 Disclosure of information to Bank by auditors
65 Auditor to inform registered bank of intention to disclose
66 Protection of auditors
67 Powers to obtain information and documents
68 Requirements on entering and searching premises
69 Investigation of affairs of registered bank
70 Powers of person appointed to carry out investigation
71 Offences in relation to investigations
72 Requirements to be complied with by a person carrying out an investigation
73 Confidentiality of information
74 Procedure for obtaining warrants
75 Effect of warrant
76 Effect of proceedings
77 Effect of final decision that exercise of powers unlawful
78 Decision that exercise of powers under section 69 or 70 unlawful
79 Bank may require registered bank to consult
80 Bank may give advice and assistance
81 Bank may give directions
82 Offence to contravene directions
83 Offence to disclose giving of notice
84 Miscellaneous provisions with respect to notices and directions

PART 8
FINANCIAL AND OTHER MATTERS

85 Financial year
86 Notional surplus income
87 Funding agreements
88 Contents of funding agreements
89 Funding agreements to be ratified by the Assembly
90 Application of surplus income
91 Annual report and accounts
92 Contents of financial statements
93 Management statements
94 Auditors
95 Performance audit

PART 9
INTERNATIONAL COMMERCIAL BANK

96 Bank to act as International Commercial Bank
97 Appointment of Board of International Commercial Bank
98 Duties of Board of International Commercial Bank
99 Powers of International Commercial Bank
100 Liabilities of International Commercial Bank not to be charge against Niue Government Account

PART 10
MISCELLANEOUS PROVISIONS

101 Issue of Bank notes
102 Obligations under this Act not limited
103 Regulations
104 Consents under regulations
105 Offences against regulations
106 Penalties for offences
107 Evidence
108 No action to lie against certain persons
109 [Spent]

______________________

To establish the Niue Bank and to confer certain functions and powers on the
Niue Bank

PART 1
PRELIMINARY

1 Short title

This is the Niue Bank Act 1994.

2 Interpretation

In this Act –

"Bank" means the Niue Bank constituted under this Act;

"Board" means the Board of Directors of the Bank constituted by section 21;

"document" means a document in any form, whether signed or initialled or otherwise authenticated by its maker or not, and includes –

(a) Any writing on any material;

(b) Any information recorded or stored by means of any tape-recorder, computer, or other device; and any material subsequently derived from information so recorded or stored;

(c) Any label, marking, or other writing that identifies or describes any thing of which it forms part, or to which it is attached by any means;

(d) Any book, map, plan, graph, or drawing;

(e) Any photograph, film, negative, tape or other device in which one or more visual images are embodied so as to be capable (with or without the aid of some other equipment) of being reproduced;

"foreign exchange" means –

(a) The bank notes or other currency, postal notes or money orders of any country other than Niue, the Cook Islands and New Zealand;

(b) Promissory notes and bills of exchange payable otherwise than in New Zealand currency;

(d) An obligation to make payment otherwise than in Niue currency;

(e) A security in respect of which any amount is payable in a country other than Niue or is payable otherwise than in New Zealand currency;

"Minister" means the Minister of Finance;

"registered bank" means a person whose name is entered in the register maintained under section 39;

"security" means any interest or right to participate in any capital, assets, earnings, royalties, or other property of any person, and includes –

(a) Any interest in or right to be paid money that is, or is to be, deposited with, lent to, or otherwise owing by, any person (whether or not the interest or right is secured by a charge over any property); and

(b) Any renewal or variation of the terms or conditions of any existing security.

3 Act to bind the Government

This Act shall bind the Government.

PART 2
THE NIUE BANK

4 Establishment of Bank

(1) There is hereby established a Bank to be called the Niue Bank.

(2) The Bank shall be a body corporate with perpetual succession and a common seal.

(3) Without limiting any other provision of this Act, the Bank shall, in the exercise of its functions and powers under this Act, have the rights, powers and privileges of a natural person.

(4) The common seal of the Bank shall be judicially noted in all courts and for all purposes.

(5) The common seal shall be used only with the authority of the Board and every instrument to which the seal is affixed shall be signed by the Minister or a person appointed by the Board for that purpose.

5 Branches and agencies

The Bank may establish branches and agencies and appoint agents in Niue or elsewhere.

PART 3
FUNCTIONS AND POWERS OF NIUE BANK

6 Functions of the Bank

The Bank shall have the following functions and purposes –

(a) To act as a Central Bank under Parts 5 to 8;

(b) To act as an International Commercial Bank under Part 9; and

7 Dealing in foreign exchange

For the purposes of performing its functions and fulfilling its obligations under this Act or any other Act, the Bank may deal in foreign exchange with such persons, including the Crown, and on such terms and conditions as the Bank thinks fit with the concurrence of Cabinet.

8 Foreign exchange gains and losses

(1) The Bank shall pay into the Niue Government Account any exchange gains (whether realised or unrealised) made by the Bank as a result of dealing in foreign exchange under section 7.

(2) The Minister shall upon the appropriation of the Assembly, pay to the Bank out of the Niue Government Account the amount of any exchange losses (whether realised or unrealised) incurred by the Bank as a result of dealing in foreign exchange under section 7.

9 Foreign exchange

The Bank shall advise the Minister and Cabinet on –

(a) Foreign exchange rate systems;

(b) The management of foreign reserves;

(d) Any other matters relating to foreign exchange.

10 Foreign reserves

(1) The Minister in concurrence with Cabinet shall in consultation with the Bank, determine the level at which, or the levels within which, foreign reserves shall be maintained for the purpose of enabling the Bank to exercise the powers' conferred by this Act.

(2) The Bank shall hold and maintain foreign reserves of that level or within those levels and, for that purpose, but without limiting the power of the Bank under this Act, may in concurrence with Cabinet –

(a) Acquire and deal in foreign currency;

(b) Deal in foreign currency on behalf of the Crown;

11 Bank may raise loans

The Bank may, if it appears to be necessary or expedient in the public interest to do so, raise loans from any person, organisation, or government, either within or outside Niue, upon such terms and conditions as may be prescribed by Act.

12 Lender of last resort

The Bank shall, if the Bank considers it necessary for the purpose of maintaining the soundness of the Niue financial system, and only with the prior approval of Cabinet, act as lender of last resort for the financial system.

13 Settlement account services

The Bank may provide settlement account services for financial institutions on such terms and conditions as may be determined by agreement.

14 Financial sector policy advice

The Bank shall advise Cabinet and the Minister on matters relating to the operation of the Niue financial system.

15 Government banking business

(1) The Bank may, under an agreement with the Minister, undertake all or part of the banking business of the Government.

(2) Any such agreement may provide for the Bank to charge for the provision of banking services.

16 Securities registry services

(1) The Bank may provide securities registry services for any person including services in connection with –

(a) The issue, registration, exchange, transfer, or replacement of securities;

(b) The calling and acceptance of tenders or applications for securities;

(2) Securities registry services may be provided for such remuneration, and on such terms and conditions, as may be agreed by the Bank and the person for whom they are provided.

17 Bank may require financial institution to supply information

(1) For the purposes of enabling the Bank to carry out the functions and exercise the powers conferred on it by this Part, the Bank may, by notice in writing to any financial institution, or by notice in the Gazette, require the institution or, as the case may be, institutions of a certain class, to supply to the Bank such information and data relating to the business of the institution or institutions of the relevant class for such periods, and in such form, as may be specified in the notice.

(2) Without limiting subsection (1), a notice may require information and data to be supplied relating to the assets and liabilities, income and expenditure (including interest rates charged and payable), fees and charges, obligations and commitments, and risk exposures of, and classes of transactions entered into by, that institution or class of institutions and any associated person and, where specified, in consolidated form, in respect of business carried on in Niue or elsewhere and whether as principal, broker, agent, or intermediary.

(3) Any notice given under this section may, by a subsequent notice, be revoked, varied, or amended by the Bank.

(4) Information and data required to be supplied under this section shall be supplied to the Bank at such place in Niue and at such time as are specified in the notice.

(5) A financial institution shall not be required to supply data or information under this section relating to the affairs of a particular customer or client.

18 Failure to supply information

Every financial institution commits an offence if, without lawful justification or excuse, it –

(a) Fails to comply in any respect with any of the provisions of section 17 or of any requirements of the Bank under that section; or

(b) Supplies any information or data which it is required to supply under section 17 which is false or misleading in any material particular.

19 Requirement that information be audited

(1) Where the Bank believes that any information or data supplied by a financial institution under section 17 is, or may be, inadequate or inaccurate, it may, by notice in writing to that financial institution, require that information or data to be audited by an auditor approved by the Bank.

(2) Every financial institution commits an offence if without lawful justification or excuse, it fails to comply with a requirement under subsection (1).

20 Powers

Without limiting section 4 or any other provision of this Act, the Bank, has power, whether in Niue or elsewhere, to –

(a) Carry on the business of banking;

(b) Issue securities;

(d) Enter into agreements or arrangements and obtain assurances necessary or desirable for carrying out its functions and exercising its powers;

(e) Carry on any business or exercise any powers, not inconsistent with any other function of the Bank, which can be conveniently carried on, or exercised in conjunction with its functions and the exercise of its powers;

(f) Do any act or perform any function or duty imposed upon it or required to be done under any other Act.

PART 4
MANAGEMENT OF NIUE BANK

21 Board of Directors

There shall be a Board of Directors of the Bank.

22 Duties of Board

Subject to this Act, the Board of the Bank shall –

(a) Keep under constant review the performance of the Bank in carrying out its functions;

(b) Ensure that the Bank carries out the functions imposed on it by this Act;

(d) Direct the exercise of powers granted to the Bank by this Act.

23 Membership of Board

(1) The Board shall consist of 3 members.

(2) The Board shall comprise –

(a) The Minister;

(b) Two non-executive directors to be appointed by Cabinet.

(3) The validity of the acts of the Board is not affected by any vacancy in its membership.

24 Term of office of non-executive director

(1) Every non-executive director appointed under this Act shall be appointed for terms not exceeding 2 years.

(2) A non-executive director may be reappointed.

(3) A non-executive director may, at any time, resign office by notice in writing to the Minister.

25 Appointment of non-executive directors

In considering the appointment or reappointment of a person to the office of non-executive director of the Bank, Cabinet shall have regard, in relation to that office, to –

(a) That person’s knowledge, skill and experience; and

(b) The likelihood of any conflict between the interests of the Bank and any interests which that person has or represents.

26 Extraordinary vacancies

(1) If a non-executive director dies, or resigns or is removed from office, that office shall become vacant and the vacancy shall be deemed to be an extraordinary vacancy.

(2) A non-executive director shall be deemed to have resigned from office if that director –

(a) Is prohibited by section 27 from holding office as a director; or

(b) Fails, without the Board’s consent, to attend 3 consecutive meetings of the Board.

(3) The manner of filling an extraordinary vacancy shall be the same manner as prescribed by section 23.

(4) A person who is appointed to fill an extraordinary vacancy shall be appointed for the residue of the term of the vacating director.

27 Disqualification of non-executive directors

No person shall be appointed, or reappointed to the office of non-executive director of the Bank, or hold that office, if that person –

(a) Is an employee of a registered bank; or

(b) Is an undischarged bankrupt; or

(c) Has been convicted of any offence of dishonesty or any other offence if that other offence is punishable by imprisonment for a term of 3 years or more; or

(d) Is a mentally disordered person.

28 Removal from office of non-executive directors

Cabinet may, on the advice of the Minister, remove a non-executive director of the Bank from office if Cabinet is satisfied that the director –

(a) Is unable, or has failed, to perform the duties of a director of the Bank; or

(b) Has been guilty of misconduct; or

29 Meetings of Board

(1) The Board of the Bank shall meet at least 3 times in each year.

(2) The Minister shall convene and preside at meetings of the Board.

(3) If the Minister is absent from a meeting, the non-executive directors shall convene a meeting in the Minister’s absence.

(4)

(a) Decisions of the Board shall be made by a majority of the votes of the directors present.

(b) If only 2 of the directors are present, the decision must be unanimous.

(5) Subject to this section, the Board may regulate its own procedure.

30 Directors to disclose interests

(1) A director who is interested in a contract or proposed contract with the Bank, or in the exercise or proposed exercise by the Bank of a power, shall declare that interest at every meeting of the Board at which that contract or proposed contract, or the exercise or proposed exercise of the power is considered by the Board.

(2) A director who is interested in a contract or proposed contract or in the exercise or proposed exercise of a power shall not be entitled to vote on a resolution that relates to the contract or proposed contract or the exercise or proposed exercise of the power.

31 Fees and expenses of non-executive directors

The Bank shall pay the non-executive directors such fees as the Minister after considering any recommendation by the Board, determines.

PART 5
CENTRAL BANK

32 Bank to act as Central Bank

The Bank shall act as the Central Bank of Niue under Parts 6 to 8.

33 Powers of Central Bank

In discharging its functions under section 32, the Bank shall have the powers prescribed in sections 7 to 19.

PART 6
USE OF WORDS "BANK", "BANKER" AND "BANKING"

34 "Bank", "banker" and "banking"

(1) Except as otherwise provided in this Part, no individual or body (whether incorporated or not) shall be formed or registered, carry on any business, trade, or occupation under any name or title that includes the words "bank", "banker" or "banking", or any of those words as part of any other word.

(2) Every person or body who contravenes subsection (1) commits an offence and is liable on conviction to a fine not exceeding 50 penalty units in the case of an individual or to a fine not exceeding 50 penalty units in the case of a body corporate.

(3) For the purposes of this section and section 35, a reference to the words "bank", "banker" or "banking" includes a reference to a translation of those words in another language.

35 Certain persons exempt from section 34

(1) Nothing in section 34 applies to –

(a) The Bank;

(b) A registered bank under this Act;

(c) Any body (whether incorporated or not) that is formed or registered in a country other than Niue under a name or title that includes the words "bank", "banker" or "banking", or any of those words as part of any other word, that is authorised for the time being by the Bank to use those words, or any of those words as part of any other word, in connection with the establishment or operation of a representative office in Niue;

(d) A subsidiary of a registered bank that is authorised for the time being by the Bank to use those words, or any of those words as part of any other word;

(e) [Spent]

(f) Any bank carrying on business in Niue at the time this provision is enacted.

(2) Nothing in section 34 prevents a body (whether incorporated or not) being formed or registered, or carrying on any business, trade or occupation, under a name or title that includes the words "bank", "banker" or "banking" where those words signify –

(a) Any geographic place name; or

(b) The name of any town or road; or

(3) An authorisation or consent under this section may be given subject to such conditions as the Bank thinks fit.

(4) The Bank may, by notice in writing to the person to whom the authorisation or consent has been given –

(a) Revoke the authorisation or consent;

(b) Vary, alter, or remove any condition of the authorisation or consent or add a further condition to it.

36 Power to require change of name or title

(1) Where the Bank is satisfied that a person has contravened, or is contravening, section 34 it may, by notice in writing to that person and whether or not that person has been convicted of an offence against that section, require that person to change its name or title.

(2) Every person to whom a notice has been given under subsection (1) shall comply with the notice within 4 weeks after receiving it or within such longer period as the Bank may allow.

PART 7
REGISTRATION OF BANKS AND PRUDENTIAL SUPERVISION OF REGISTERED BANKS

37 Registration and prudential supervision

The Bank shall under this Part –

(a) Register banks; and

(b) Undertake prudential supervision of registered banks.

38 Exercise of powers under this Part

The powers conferred on the Cabinet, the Minister and the Bank by this Part shall be exercised for the purposes of –

(a) Promoting the maintenance of a sound and efficient financial system; or

(b) Avoiding significant damage to the financial system that could result from failure of a registered bank.

39 Register

(1) The Bank shall maintain a register of persons to be known as "registered banks".

(2) The register shall be available for public inspection at the head office of the Bank during normal business hours.

40 Application for registration

(1) No person who is not registered as a bank under this Act shall carry on banking business in Niue.

(2) Applications to be registered as a registered bank shall be –

(a) Made in such manner as may be specified by the Bank; and

(b) Accompanied by payment of such fee as may be determined by the Bank and approved by the Minister by notice in the Gazette.

(3) Every person who makes an application under this section shall furnish to the Bank such information as may be required by the Bank to assist in determining the application.

41 Voluntary removal of name from register

(1) A registered bank may, by notice in writing, require the Bank to remove the name of that registered bank from the register on a date specified in the notice, not being a date earlier than 14 days, or such shorter period as the Bank may agree to, after the date the notice is given.

(2) The registered bank shall, within 7 days of giving that notice, give public notice of the fact that it had given the notice to the Bank.

(3) The Bank shall remove the name of the registered bank from the register on the date specified in the notice and shall give notice of the removal in the name in the Gazette.

(4) Except with the consent of the Bank, a registered bank shall not give notice under subsection (1) if –

(a) A notice has been given to that registered bank under section 67(1)(c)(i); or

(b) A person has been appointed under section 67(1)(c)(ii) to exercise, in relation to that registered bank, the powers conferred by that paragraph; or

(c) A person has been appointed under section 69 to carry out an investigation of the affairs of that registered bank; or

(d) A notice is in force under section 79 in relation to that registered bank.

(5) The Bank may refuse to remove the name of a registered bank from the register if –

(a) A notice has been given to the registered bank under section 67(1)(c)(i); or

(b) A person has been appointed under section 67(1)(c)(ii) to exercise, in relation to that registered bank, the powers conferred by that paragraph; or

(c) A person has been appointed under section 69 to carry out an investigation into the affairs of that registered bank; or

(d) A notice is in force under section 79 in relation to that registered bank.

42 Offence

(1) No person other than a registered bank shall carry on banking business in Niue or use any name, title, style, or designation or use any description which represents or implies that that person is a registered bank.

(2) Every person who contravenes subsection (1) commits an offence and is liable on summary conviction –

(a) In the case of an individual, to a fine not exceeding 50 penalty units; and

(b) In the case of a body corporate, to a fine not exceeding 500 penalty units.

(3) No person referred to in section 35(1) can be guilty of an offence under this section.

43 Determination of applications

(1) The Bank shall not register any person as a registered bank unless it is satisfied that the business carried on, or proposed to be carried on, by the applicant consists of, or to a substantial extent consists of, or will to a substantial extent, consist of, the borrowing and lending of money, or the provision of other financial services, or both.

(2) In determining an application under section 40, the Bank shall have regard to –

(a) The incorporation and ownership structure of the applicant;

(b) The size of the applicant’s business or proposed business;

(d) The standing of the applicant in the financial market;

(e) In any case where the applicant is a body corporate incorporated outside Niue or an unincorporated body having its head office or principal place of business outside Niue, the law and regulatory requirements relating to the licensing, registration or authorisation of banks of the country in which that body is incorporated or in which that unincorporated body has its head office or principal place of business and their application to any registered bank having its head office or principal place of business in Niue;

(f) In any case where the applicant is a subsidiary of any body corporate incorporated outside Niue, the law and regulatory requirements relating to the licensing, registration, or authorisation of banks of the country in which the body corporate which the Bank considers exercises ultimate control of the applicant is incorporated and their application to any registered bank having its head office or principal place of business in Niue;

(g) Such other matters as may be prescribed in regulations.

(3) For the purposes of subsection (2)(g), Cabinet may on the advice of the Minister given under a recommendation of the Bank, make regulations prescribing additional matters to which the Bank shall have regard in considering applications for registration.

(4) The Bank shall give notice in the Gazette of the registration of any person as a registered bank under this section.

44 Conditions of registration

(1) A person may be registered as a registered bank unconditionally, or subject to such conditions as the Bank may specify.

(2) The Bank may by notice in writing to a registered bank –

(a) In a case where the bank has been registered unconditionally or has been deemed to have been registered, impose conditions of registration;

(b) Vary or remove any condition, whether imposed on the registration of the bank or under paragraph (a), or add to any such condition.

(3) The Bank shall not –

(a) Impose conditions of registration under subsection (2)(a); or

(b) Vary or add to conditions of registration under subsection (2)(b) unless the registered bank is given notice in writing of the Bank’s intention to do so, has a reasonable opportunity to make submissions to the Bank, and the Bank has regard to those submissions.

(4) The Bank may specify conditions that relate to any of the following matters –

(a) The matters to which the Bank is required to have regard under section 43 in determining an application for registration including any matters prescribed by regulations made under that section; and

(b) The matters referred to in section 43 including any matters prescribed by regulations made under that section.

45 Publication of principles

The Bank shall publish the principles on which it acts, or proposes to act –

(a) In determining applications for registration; and

(b) In imposing, varying, removing, or adding to conditions of registration.

46 Cancellation of registration

(1) Cabinet may on the advice of the Minister given in accordance with a recommendation of the Bank, cancel the registration of a registered bank.

(2) The Bank shall not make a recommendation under subsection (1) unless it is satisfied –

(a) That the registered bank was registered on information that was false or misleading in a material particular; or

(b) That the registered bank has suffered a material loss of standing in the financial market since being registered; or

(i) that an order has been made for the winding up of that body corporate; or

(ii) that a resolution has been passed for the voluntary winding up of that body corporate; or

(iii) that a receiver has been appointed in respect of that body corporate; or

(d) If the registered bank is a partnership –

(i) that the partnership is dissolved; or

(ii) that, if a member of the partnership is a body corporate, an event referred to in paragraph (c) has occurred in relation to that member; or

(iii) that a member of the partnership is adjudged bankrupt or has made a composition or arrangement with that member’s creditors; or

(e) That a condition of registration has not been complied with; or

(f) That the registered bank has not carried on its business in a prudent manner;

(g) That the registered bank has been involved in any illegal activity or has been knowingly involved in the laundering of the proceeds of sale of any prohibited narcotic substances or the laundering of the proceeds gained from any other serious criminal activity, whether that sale or laundering or other serious criminal activity occurred in Niue or elsewhere; or

(h) That the registered bank has failed to comply with an obligation imposed under this Act.

(3) The Bank shall not make a recommendation under subsection (1) unless –

(a) The registered bank is given not less than 14 days’ notice in writing of the Bank’s intention to consider making the recommendation; and

(b) The registered bank has a reasonable opportunity to make submissions to the Bank; and

(4) A copy of any written submission made by the registered bank shall be sent to the Minister together with any recommendation by the Bank.

(5) The Bank shall, as soon as practicable after the making of an order in Cabinet cancelling the registration of a registered bank, give notice in writing to the bank stating the grounds on which the Bank’s recommendation was made.

47 Carrying on business in a prudent manner

(1) In –

(a) Having regard, under section 43(2)(c) to the ability of an applicant for registration as a registered bank to carry on its business or proposed business in a prudent manner; or

(b) Determining under section 46(2)(f) that a registered bank has not carried on its business in a prudent manner, the Bank shall confine its consideration to the following matters –

(i) Capital in relation to the size and nature of the business or proposed business;

(ii) Loan concentration or proposed loan concentration and risk exposures or proposed risk exposures;

(iii) Separation of the business or proposed business from other business and from other interests of any person owning or controlling the applicant or registered bank;

(iv) Internal controls and accounting systems or proposed internal controls and accounting systems;

(v) Such other matters as may be prescribed in regulations.

(2) Cabinet may, on the advice of the Minister given in accordance with a recommendation of the Bank, make regulations prescribing additional matters for the purposes of subsection (1).

(3) The Board shall issue, in such manner as the Board may determine, guidelines for the purpose of interpreting any of the matters referred to in subsection (1)(b)(i).

48 Annual fee

(1) Every registered bank shall pay to the Bank an annual fee of such amount as may be determined by the Bank, approved by the Minister, and notified in the Gazette.

(2) Without limiting subsection (1) –

(a) Different fees may be determined for different classes of registered banks;

(b) In determining fees the Bank may have regard to the anticipated costs of the Bank in exercising the powers conferred by this Part.

49 Credit assessment of registered banks

(1) The Bank may by notice in writing to all registered banks or to all members of any class of registered banks, require each of those banks –

(a) To undergo an independent assessment of its credit worthiness or financial stability by a person or organisation nominated or approved by the Bank; and

(b) To publish the results of that assessment in such manner as the Bank directs.

(2) Every registered bank shall comply with a notice given under this section.

50 Public disclosure of financial and other information by registered banks

(1) The Bank shall, by notice in the Gazette, prescribe the information which, on the approval of the notice by Cabinet under subsection (5), shall be published by all registered banks or any specified class of registered banks.

(2) The information shall be contained in a document to be known as a "disclosure statement" and shall be published in the manner and on such occasions as shall be specified in the notice.

(3) Without limiting the information which may be prescribed, a notice under subsection (1) may prescribe information relating to –

(a) Directors, principal officers, secretaries, auditors, bankers, and solicitors;

(b) Incorporation and ownership structure;

(d) Assets and liabilities including asset and liability maturities;

(e) Income and expenditure;

(f) Fees and charges including interest rates charged and payable;

(g) Capital structure;

(h) Loan concentrations and risk exposures;

(i) Liquidity;

(j) Obligations and commitments including contingent liabilities;

(k) Foreign exchange and interest rate exposures;

(l) Pending proceedings and arbitrations;

(m) Acquisitions.

(4) Without limiting subsection (1) or subsection (3), a notice under subsection (1) may –

(a) Prescribe information that is required to be contained under normal accounting principles in financial statements;

(b) Require the publication of financial statements and notes to those statements for any period or periods specified in the notice;

(d) Require financial information which is required to be published to be taken from audited financial statements;

(e) Require financial statements and information which are required to be published to be audited and to be accompanied by an auditor’s report.

(5) The Cabinet may, by order –

(a) In a case where a notice under subsection (1) prescribes information to be published by all registered banks, approve that notice, and on the coming into force of that order, every registered bank shall publish that information in the form and in the manner prescribed;

(b) In a case where a notice under subsection (1) prescribes information to be published by a specified class of registered banks, approve that notice, and on the coming into force of that order, every registered bank which is a member of that class shall publish that information in the form and in the manner prescribed.

(6) A registered bank shall not be required to publish information relating to the affairs of any particular customer or client of the bank.

(7) The Bank shall consult with the Government before it prescribes information which shall be published and the manner in which it shall be published, under this section, by registered banks or any specified class of registered banks.

(8) If the auditor’s report required under subsection (4)(e) is qualified in any way, this may constitute a reasonable ground for the exercise of those powers conferred on the Bank by sections 79 to 84.

51 Disclosure statements to be signed

Every disclosure statement which a registered bank is required to publish under section 50 shall be dated and shall be signed –

(a) In the case of a body corporate, by every director of the body corporate or by that director’s agent authorised in writing; and

(b) In the case of a partnership, by every member of the partnership or by that member’s agent authorised in writing.

52 Bank may require disclosure statement to be corrected

Where the Bank considers that a disclosure statement published by a registered bank –

(a) Contains information that is false or misleading; or

(b) Does not contain information which it is required to contain, whether or not the information contained in the disclosure statement is false or misleading as a result of the omission; the Bank may, by notice in writing to the registered bank, require the registered bank to –

(i) publish a disclosure statement that does not contain false or misleading information; or

(ii) publish a disclosure statement that contains the information that was omitted; or

(iii) take such other corrective action as the Bank may specify in the notice.

53 Interpretation

For the purposes of sections 54 to 60 –

"advertisement" means a form of communication –

(a) That is to be, or has been, distributed to any person by any means; and

(b) That is authorised or instigated by or on behalf of a registered bank or prepared with the co-operation of, or by arrangement with, a registered bank; and

(c) That contains, or refers to, an offer of debt securities by a registered bank, or is reasonably likely to induce persons to subscribe for debt securities of the registered bank;

"debt security" in relation to a registered bank, means any interest in or right to be paid money that is, or is to be, deposited with, lent to, or otherwise owing by, that registered bank (whether or not the interest or right is secured by a charge over any property), and includes –

(a) A debenture, debenture stock, bond note, certificate of deposit, and convertible note; and

(b) Any renewal or variation of the terms or conditions of any existing debt security; and

54 Content of advertisements by registered banks

(1) Every advertisement by a registered bank shall comply with the requirements prescribed by regulations made under this Act.

(2) This section shall come into force on a date to be appointed by order of Cabinet.

55 Regulations

(1) Cabinet may, on the advice of the Minister given in accordance with a recommendation of the Bank, make regulations for the following purposes –

(a) Regulating advertising and advertisements by registered banks including –

(i) prescribing the information, statements, certificates, documents, or other matters that shall or shall not be contained in, or endorsed on, or attached to, advertisements;

(ii) prohibiting or restricting the use in advertisements of prescribed words, information, statements, sounds and images, graphics, or other matters;

(iii) prescribing requirements as to the layout or presentation of advertisements and the size of printing used in advertisements

– and different matters may be prescribed, prohibited, restricted, specified, or required in respect of different classes of advertisements;

(b) Prescribing offences in respect of the contravention of or non-compliance with any regulations made under paragraph (a), and prescribing the fines, not exceeding, in the case of an individual 50 penalty units, and in the case of a body corporate, 500 penalty units, that may be imposed in respect of any offence.

(2) The Bank shall consult with Cabinet before it makes a recommendation under subsection (1).

56 Offence to advertise in contravention of regulations

(1) If an advertisement that does not comply with the requirements prescribed by regulations made under this Act is distributed to any person –

(a) The registered bank; and

(b) Every person holding office as a director of the registered bank at the time the advertisement was distributed – commits an offence.

(2) A registered bank that commits an offence against this section is liable on conviction to a fine not exceeding 500 penalty units.

(3) An individual who commits an offence against this section is liable on conviction to a fine not exceeding 50 penalty units.

(4) It is a defence to a prosecution for an offence against this section by a person referred to in subsection (1)(b) if the defendant proves that the advertisement was published without the defendant’s knowledge and consent.

(5) This section shall come into force on a date to be appointed by order by Cabinet.

57 Bank may prohibit advertisements by registered banks

(1) Where, at any time, the Bank is of the opinion that an advertisement –

(a) Is likely to deceive, mislead, or confuse with regard to any matter that is material to an offer of debt securities by a registered bank to which it relates; or

(b) Is inconsistent with the most recent disclosure statement published by the registered bank; or

(c) Does not comply with regulations made under this Act – the Bank may make an order prohibiting the distribution of that advertisement or any advertisement which relates to the offer of those securities.

(2) Any order may be made on such terms and conditions as the Bank thinks fit.

(3) Where the Bank makes an order under this section –

(a) It shall forthwith notify the registered bank that the order has been made and the reasons for making it; and

(b) It may notify any other person that the order has been made and the reasons for making it.

(4) Every person who contravenes an order made under this section commits an offence and is liable on conviction to a fine not exceeding 50 penalty units.

(5) It is a defence to a charge under subsection (4) if the defendant proves that the advertisement was distributed –

(a) Without the defendant’s knowledge; or

(b) Without the defendant’s knowledge of the order.

(6) At any time after an order has been made under this section, the registered bank shall be entitled to appear and be represented before the Bank and the Bank, if it is satisfied that the order should not continue in force, may revoke the order.

(7) This section shall come into force on a date to be appointed by order by Cabinet.

58 Offences in relation to disclosure statements and advertisements

(1) Every registered bank commits an offence if, without lawful justification or excuse, it fails to publish information that is required to publish in a disclosure statement under section 50.

(2) Where a disclosure statement that includes information that is false or misleading is published by a registered bank, the registered bank and every person holding office as a director of the registered bank at the time of publication of the disclosure statement, commits an offence.

(3) Where an advertisement that contains information that is false or misleading is distributed, the registered bank and every person holding office as a director of the bank at the time of distribution of the advertisement, commits an offence.

(4) A registered bank that commits an offence against this section is liable on conviction to a fine not exceeding 500 penalty units.

(5) An individual who commits an offence against this section is liable on conviction to imprisonment for a term not exceeding 2 years, or to a fine not exceeding 50 penalty units.

(6) It is a defence to a prosecution for an offence against subsection (2) or subsection (3), if the defendant proves that the information was immaterial or, in the case of an individual, that the defendant had reasonable grounds to believe and did, up to the publication of the disclosure statement, or the distribution of the advertisement, as the case may be, believe that the information was true.

(7) This section shall come into force on a date to be appointed for the order by Cabinet.

59 Civil liability

(1) Subject to section 60, the following persons are liable to pay compensation to any person who sustains a loss by reason of subscribing for any debt security issued by a registered bank in reliance on false or misleading information contained in a disclosure statement or an advertisement, namely –

(a) The registered bank; and

(b) Every person holding office as a director of the registered bank at the time of publication of the disclosure statement or the distribution of the advertisement, as the case may be.

(2) This section shall come into force on a date to be appointed by order by Cabinet.

60 Defences

(1) A person is not liable under section 59 in relation to false or misleading information that is included in a disclosure statement or an advertisement if that person proves that –

(a) The disclosure statement was published or the advertisement was distributed without his or her knowledge or consent, and on becoming aware of the publication or distribution he or she forthwith gave notice to the Bank that it was published or distributed without his or her knowledge or consent, and also gave reasonable public notice that it was published or distributed without his or her knowledge or consent; or

(b) After publication of the disclosure statement or the distribution of the advertisement and before the securities were subscribed for, he or she, on becoming aware of the false or misleading information, withdrew his or her consent to the disclosure statement or the advertisement, forthwith gave notice to the Bank of the withdrawal of that consent, and also gave reasonable public notice of the withdrawal of the consent; or

(c) He or she had reasonable grounds to believe and did, up to the time of the subscription for the securities, believe that the statement was true.

(2) This section shall come into force on a date to be appointed by order by Cabinet.

61 Supply of information for purposes of prudential supervision

(1) For the purposes of this Part, the Bank may, by notice in writing to any registered bank or by notice in the Gazette applying to any specified class of registered banks, require the bank, or as the case may be, banks of that class, to supply to the Bank such information, data, and forecasts relating to the business, operation, or management of the bank or banks of that class and for such periods and in such form as may be specified in the notice.

(2) Without limiting subsection (1), a notice may require information and data to be supplied relating to the financial and accounting systems and controls, assets and liabilities, income and expenditure (including interest rates charged and payable), fees and charges, obligations and commitments and risk exposures of, and transactions entered into by, that registered bank or class of registered banks and any associated person and, where specified, in consolidated form, in respect of business carried on in Niue, or elsewhere and whether as principal, broker, agent or intermediary.

(3) A notice given under this section may, by a subsequent notice, be revoked, varied or amended by the Bank.

(4) Information, data, and forecasts required to be supplied under this section shall be supplied to the Bank at such place in Niue and at such time as may be specified in the notice.

(5) Every registered bank commits an offence if, without lawful justification or excuse it –

(a) Fails to comply in any respect with any of the provisions of this section or with any of the requirements of the Bank under this section; or

(b) Supplies any information or data which it is required to supply under this section which is false or misleading in a material particular.

62 Requirement that information be audited

(1) The Bank may, by notice in writing to a registered bank, require any information and data which that bank is required to supply under section 61 to be audited by an auditor approved by the Bank.

(2) Every registered bank commits an offence if, without lawful justification or excuse, it fails to comply with this section.

63 Bank may require report on financial and accounting systems

(1) The Bank may, by notice in writing to a registered bank, require that registered bank to supply the Bank with a report, prepared by a person approved by the Bank, on the financial and accounting systems and controls of that registered bank.

(2) Every registered bank commits an offence if, without lawful justification or excuse, it fails to comply with this section.

64 Disclosure of information to Bank by auditors

Every person who holds, or at any time has held, office as required by any enactment, as an auditor of a registered bank, shall disclose to the bank information relating to the affairs of that registered bank obtained in the course of holding that office if, in the opinion of that person –

(a) The registered bank is insolvent or is likely to become insolvent or is in serious financial difficulties; and

(b) The disclosure of that information is likely to assist, or be relevant to, the exercise by the Bank of its powers under this Part.

65 Auditor to inform registered bank of intention to disclose

Every auditor shall, before disclosing any information to the Bank under section 64 take reasonable steps to inform the registered bank of the intention to disclose the information and the nature of the information.

66 Protection of auditors

(1) No civil, criminal, or disciplinary proceedings shall lie against any auditor arising from the disclosure in good faith of information to the Bank under section 64.

(2) No tribunal, body, or authority, having jurisdiction in respect of the professional conduct of any auditor, shall make any order against, or do any act in relation to, that person in respect of such disclosure.

(3) No information received by the Bank under section 64 shall be admissible in evidence in any proceedings against the auditor concerned.

(4) Nothing in subsection (3) shall limit the admissibility of any information obtained in any other way.

67 Powers to obtain information and documents

(1) Where the Bank has reasonable cause to believe –

(a) That any information or data supplied to the Bank by a registered bank under section 61 is false or misleading in a material particular; or

(b) That a registered bank has failed to comply with any requirement to supply information, data, or forecasts under section 61; or

(i) by notice in writing to that registered bank, require that registered bank to supply to the Bank, within the time specified in the notice, such information and data relating to the business, operation and management of that registered bank as may be specified in the notice; or

(ii) appoint, in writing, any person to enter and search any premises and inspect, remove, and take copies of, any documents or extracts from documents relating to the business, operation, and management of that registered bank in the possession, or under the control, of any person, and, where necessary, require the reproduction in usable form of any information recorded or stored in those documents.

(2) Every person commits an offence who, without lawful justification or excuse, hinders, obstructs, or delays, in the conduct of any inspection under this section, any person duly authorised to make such inspection.

(3) Every registered bank commits an offence if, without lawful justification or excuse –

(a) It fails to comply with any requirement of the Bank under subsection (1)(c)(i); or

(b) It supplies any information or data required to be supplied under subsection 1(c)(i) which is false or misleading in a material particular.

68 Requirements on entering and searching premises

(1) No person appointed under section 67(1)(c)(ii) shall enter and search any premises, or inspect, remove, or take copies of any documents, or extracts from documents, in the possession of, or under the control of, any person, or require the reproduction in usable form of any information recorded or stored in any documents, unless –

(a) The occupier of the premises, or the person who has possession of the documents, agrees; or

(b) That person obtains a warrant under section 74.

(2) Every person authorised to enter and search any premises under a warrant obtained under section 74 on first entering those premises, and, if requested, at any subsequent time, produce –

(a) Evidence of that person’s authority to enter the premises; and

(b) Evidence of that person’s identity.

69 Investigation of affairs of registered bank

Where the Bank is satisfied that it is necessary or desirable for the purpose of determining whether or not to exercise the powers conferred under section 79 that an investigation of the affairs of any registered bank should be carried out, the Bank may appoint, in writing, any person to carry out an investigation of the affairs of that registered bank.

70 Powers of person appointed to carry out investigation

(1) Any person appointed under section 69 may, for the purposes of carrying out an investigation of the affairs of a registered bank –

(a) By notice in writing, require that registered bank, or any officer or employee of that registered bank, or any other person, to –

(i) supply any information or data relating to the business, operation, and management of the registered bank;

(ii) produce for inspection any documents of, or relating to, the business, operation and management of that registered bank in the custody, or under the control, of that registered bank, officer, employee, or person;

(iii) where necessary, reproduce in usable form any information recorded or stored in such documents;

(b) Take copies of any documents produced for inspection under paragraph (a);

(c) Require any officer or employee of that registered bank, or any other person, to answer any question relating to the business, operation, and management of that registered bank.

(2) Subject to section 72, any person appointed under section 69 may, for the purposes of carrying out an investigation of the affairs of the registered bank, at any time –

(a) Enter and search any premises;

(b) Inspect, remove and take copies of any documents, or extracts from documents, relating to the business, operation and management of that registered bank in the possession, or under the control, of any person;

71 Offences in relation to investigations

(1) Every person commits an offence who, without lawful justification or excuse –

(a) Hinders, obstructs, or delays any person appointed to carry out an investigation under section 69, in carrying out that investigation; or

(b) Refuses to answer any question put to him or her by that person under section 70; or

(c) Supplies any information required to be supplied under section 70 which is false or misleading in a material particular.

(2) Every registered bank commits an offence if, without lawful justification or excuse –

(a) It fails to comply with any requirement of a person appointed to carry out an investigation under section 69; or

(b) It supplies any information or data required to be supplied under section 70(1) which is false or misleading in a material particular.

(3) A statement made by any person in answer to any question by a person appointed under section 69 to carry out an investigation into the affairs of a registered bank shall not be admissible in criminal proceedings against the maker of the statement.

72 Requirements to be complied with by person carrying out investigation

(1) Any person who exercises any powers conferred by section 70(1) shall, if requested, produce the instrument of that person’s appointment under section
69.

(2) No person who exercises any powers conferred by section 70(2) shall enter and search any premises, or inspect, remove and take copies of any documents or extracts from documents, or require the reproduction in usable form of any information recorded or stored in documents, unless –

(a) The occupier of the premises, or the person who has possession of the documents, agrees; or

(b) That person obtains a warrant under section 74.

(3) Every person authorised to enter and search any premises under a warrant obtained under section 74 shall, on first entering those premises and, if requested, at any subsequent time, produce –

(a) Evidence of that person’s authority to enter the premises; and

(b) Evidence of that person’s identity.

73 Confidentiality of information

(1) This section applies to –

(a) Information, data, and forecasts supplied or disclosed to, or obtained by –

(i) the Bank;

(ii) a person appointed under section 67(1)(c)(ii) or section 69 – under, or for the purposes of, or in connection with the exercise of powers conferred by this Part;

(b) Information and data derived from or based upon information, data, and forecasts referred to in paragraph (a);

(2) Information, data, and forecasts to which this section applies shall not be published or disclosed by the Bank, any officer or employee of the Bank, or a person appointed under section 67(1)(c)(ii) or section 69, except –

(a) With the consent of the person to whom the information relates;

(b) To the extent that the information is available to the public under any Act, or in a public document;

(c) In statistical or summary form arranged in such a manner as to prevent any information published or disclosed from being identified by any person as relating to any particular person;

(d) For the purposes of, or in connection with, the exercise of powers conferred by this Part;

(e) In connection with any proceedings for an offence against this Act;

(f) To any central bank, authority, or body in any other country which exercises functions corresponding to or similar to those conferred on the Bank under this Part for the purposes of the exercise by that central bank, authority, or body of those functions;

(g) To any person whom the Bank is satisfied has a proper interest in receiving such information.

(3) No information, data, or forecasts shall be published or disclosed under subsection (2)(f) or (g) unless the Bank is satisfied that satisfactory provision exists to protect the confidentiality of the information, data, or forecasts published or disclosed.

(4) No officer or employee of the Bank and no person appointed under section 67(1)(c)(ii) or section 69 shall use any information, data, or forecasts to which this section applies for a purpose not connected with the purpose for which such information, data, or forecasts was, or were, supplied, disclosed, or obtained.

(5) No person to whom any information, data, or forecasts to which this section applies is or are published or disclosed under subsection (2)(d) shall publish, disclose, or use such information, data, or forecasts except –

(a) For the purposes of, or in connection with the exercise of powers conferred by, this Part; and

(b) Under such conditions as may be specified by the Bank.

(6) No person to whom any information, data or forecasts to which this section applies is or are published or disclosed under subsection (2)(a) or subsection

(2)(g) shall publish, disclose or use such information, data, or forecasts unless the publication, disclosure, or use is –

(a) Authorised by the Bank; or

(b) Necessary or desirable in connection with the exercise of any function or power conferred by any enactment.

(7) Every person who contravenes this section commits an offence.

(8) Nothing in any other Act applies to information, data and forecasts to which this section applies whether or not such information, data, and forecasts has or have been published or disclosed to any person under this section.

74 Procedure for obtaining warrants

(1) If the Court is satisfied, on application in writing, made on oath, that there are reasonable grounds for believing –

(a) That any information or data supplied to the Bank by a registered bank under section 61 is false or misleading in a material particular; or

(b) That a registered bank has failed to comply with any requirement to supply information, data, or forecasts under section 61;

(c) That a registered bank has failed to comply with section 63 – it may issue a warrant, in terms of section 75, to a person appointed under section 67(1)(c)(ii).

(2) If the Court is satisfied, on application in writing made on oath, that there are reasonable grounds for believing that it is necessary for the purpose of determining whether to exercise the powers conferred under section 79 that an investigation of the affairs of a registered bank should be carried out, it may issue a warrant, in terms of section 75, to a person appointed under section 69.

(3) Every warrant issued under subsection (1) shall state whether it is issued under paragraph (a) or paragraph (b).

75 Effect of warrant

(1) Every warrant issued under section 74 authorises the person named in it, at any time and, if necessary, by force, to –

(a) Enter and search the premises named in it;

(b) Inspect, remove, and take copies of, documents or extracts from documents relating to the business, operation and management of the registered bank in the possession, or under the control, of any person;

(2) The warrant shall continue in force for a period of 6 months or until the purpose for which it was granted has been satisfied, whichever is the lesser.

(3) Every person named in the warrant shall, as soon as practicable after removing any documents or extracts from documents from any premises, supply a copy of the documents or extracts to the person from whom the documents or extracts were removed.

76 Effect of proceedings

(1) Where any proceedings in any court in respect of the exercise of any powers conferred by section 67 or section 69 or section 70, until a final decision in relation to those proceedings is given, the powers may be, or may continue to be exercised as if no such proceedings had been commenced, and no person shall be excused from fulfilling any obligation under those sections by reason of those proceedings.

(2) This section shall apply notwithstanding any other Act or rule of law.

77 Effect of final decision that exercise of powers unlawful

In any case where it is declared in a final decision given in any proceedings in respect of the exercise of powers conferred by section 67 that the exercise of any powers conferred by that section is unlawful, to the extent to which the exercise of those powers is declared unlawful –

(a) The Bank shall ensure that forthwith after the decision of the Court is given –

(i) any information and data supplied by the registered bank under section 67(1)(c) is destroyed;

(ii) any documents or extracts from documents obtained under an inspection made under section 67(1)(c)(i) are returned to the person previously having possession of those documents or previously having them under his or her control and any copies of such documents or extracts are destroyed;

(iii) any information derived from or based upon any such information and data or documents or extracts is destroyed;

(b) No information and data supplied by the registered bank under section 67(1)(c) and no documents or extracts from documents obtained under an inspection made under section 67(1)(c)(i) shall be –

(i) admissible in evidence in any proceedings;

(ii) used in connection with the exercise of any power conferred by section 79.

78 Decision that exercise of powers under section 69 or 70 unlawful

In any case where it is declared in a final decision given in any proceedings in respect of the exercise of powers conferred by section 69 or section 70 that the exercise of any powers conferred by those sections is unlawful, to the extent to which the exercise of those powers is declared unlawful –

(a) The Bank shall ensure that forthwith after the decision of the Court is given –

(i) Any information or data obtained under section 70(1) is destroyed;

(ii) Any documents produced for inspection under section 70(1)(a) are returned to the person previously having possession of the documents or previously having the documents under his or her control and any copies of such documents or extracts from documents are destroyed;

(iii) any documents or extracts from documents obtained under an inspection made under section 70(2) are returned to the person previously having possession of those documents or previously having them under his or her control and any copies of such documents or extracts from documents are destroyed;

(iv) any information derived from or based upon any such information, documents or extracts is destroyed;

(b) No information or data obtained or documents produced for inspection under section 70(1)(a) and no documents or extracts from documents obtained under an inspection made under section 70(2) shall be –

(i) admissible in evidence in any proceedings;

(ii) used in connection with the exercise of any power conferred by section 79.

79 Bank may require registered bank to consult

(1) If the Bank has reasonable grounds to believe that –

(a) A registered bank is insolvent or is likely to become insolvent; or

(b) A registered bank is about to suspend payment or is unable to meet its obligations as and when they fall due; or

(c) The affairs of a registered bank are being conducted in a manner prejudicial to the soundness of the financial system; or

(d) The circumstances of a registered bank are such as to be prejudicial to the soundness of the financial system; or

(e) The business of a registered bank has not been, or is not being, conducted in a prudent manner; or

(f) A registered bank has failed to comply with any requirement imposed by or under this Act or regulations made under this Act; or

(g) A registered bank has been convicted of an offence against this Act; or

(h) A registered bank has failed to comply with a condition of its registration – the Bank may, by notice in writing, require the registered bank and any associated person of the registered bank, while the notice is in force to consult with the Bank as to the circumstances of that registered bank and methods of resolving any difficulties facing it.

(2) If the Bank has reasonable grounds to believe that –

(a) An associated person of a registered bank is insolvent or is likely to become insolvent; or

(b) An associated person of a registered bank is about to suspend payment or is unable to meet its obligations as and when they fall due; or

(c) The affairs of an associated person of a registered bank are being conducted in a manner prejudicial to the soundness of the financial system; or

(d) The circumstances of an associated person of a registered bank are such as to be prejudicial to the soundness of the financial system – the Bank may, by notice in writing, require that associated person, the registered bank, and any other associated person of the registered bank while the notice is in force to consult with the Bank as to the circumstances of that associated person and methods of resolving any difficulties facing it.

(3) Every notice under subsection (1) or subsection (2) shall state the grounds on which it is given.

(4) A registered bank or an associated person, as the case may be, that fails to comply with a notice under this section commits an offence.

(5) The Bank may, at any time, revoke a notice given under this section.

80 Bank may give advice and assistance

(1) While a notice under section 79(1) is in force in relation to a registered bank or an associated person, the Bank may –

(a) Give advice to the registered bank or associated person concerning its affairs;

(b) Give advice and assistance in connection with the negotiation of any sale or other disposition of the whole or any part of the capital or business undertaking of that registered bank or associated person;

(d) With the consent of the Minister, by notice in writing to the parties, approve the sale or other disposition of the whole or any part of the capital, or business undertaking, of the registered bank or associated person to any person specified in the notice.

(2) While a notice under section 79(2) is in force in relation to an associated person of a registered bank or the registered bank, the Bank may –

(a) Give advice to the associated person or the registered bank concerning its affairs;

(b) Give advice and assistance in connection with the negotiation of any sale or other disposition of the whole or any part of the capital or business undertaking of that associated person or the registered bank;

(d) With the consent of the Minister, by notice in writing to the parties, approve the sale or other disposition of the whole or any part of the capital, or business undertaking, of the associated person or the registered bank to any person specified in the notice.

81 Bank may give directions

(1) While a notice under section 79(1) is in force in relation to a registered bank or an associated person, the Bank may, with the prior consent of the Minister, give a direction in writing –

(a) Requiring that registered bank or associated person to carry on business or any part of its business under the direction;

(b) Requiring that registered bank or associated person to cease to carry on its business, or any part of its business in accordance with the direction;

(c) Requiring that registered bank or associated person to ensure that any officer or employee of the registered bank or associated person ceases to take part in the management or conduct of its business except with the permission of the Bank and so far as that permission extends;

(d) Requiring the registered bank or associated person in general meeting to remove or replace a director;

(e) Requiring the registered bank or associated person to take such other action as may be specified in the notice.

(2) While a notice under section 79(2) is in force in relation to an associated person of a registered bank or a registered bank, the Bank may, with the prior consent of the Minister, give a direction in writing –

(a) Requiring that associated person or the registered bank to carry on business, or any part of its business, in accordance with the direction;

(b) Requiring that associated person or the registered bank to cease to carry on its business, or any part of its business under the direction;

(c) Requiring the associated person or registered bank to ensure that any officer or employee of the associated person or the registered bank ceases to take part in the management or conduct of its business except with the permission of the Bank and so far as that permission extends;

(d) Requiring that associated person or the registered bank in general meeting to remove or replace a director;

(e) Requiring that associated person or the registered bank to take such other action as may be specified in the notice.

(3) The Bank may, with the consent of the Minister, amend or modify a direction given under this section or revoke a direction and give another direction in its place, and may, at any time, revoke a direction.

82 Offence to contravene directions

(1) Every person commits an offence who, being a registered bank or associated person, without lawful justification or excuse, contravenes, or fails to comply with, a direction under section 81.

(2) Every person commits an offence who, being an officer or employee of a registered bank or of an associated person, without lawful justification or excuse, obstructs, hinders or prevents that registered bank or associated person giving effect to any direction given under section 81.

83 Offence to disclose giving of notice

(1) Subject to subsections (2) and (3) every person commits an offence who discloses that a notice has been given under section 79 or that a direction has been given under section 81.

(2) Nothing in subsection (1) applies to the disclosure or publication of the fact that a notice or direction has been given where the disclosure or publication is made –

(a) To any professional or financial adviser of the registered bank or associated person to which the notice or direction relates;

(b) With the written consent of the Bank, for the purposes of the sale or other disposition, or the possible sale or other disposition, of the whole or any part of the capital, or business undertaking, of the registered bank or associated person;

(i) to the public; or

(ii) to any person who has a proper interest in knowing that the notice or direction has been given.

(3) Nothing in subsection (1) applies to the disclosure or publication of the fact that a direction has been given under section 81(1)(c) or (d) or section 81(2)(c) or (d) for the purpose of giving effect to that direction.

84 Miscellaneous provisions with respect to notices and directions

(1) A notice given under section 79 and a direction given under section 81 shall be deemed to have been given on delivery to the head office, registered office or principal place of business in Niue of the registered bank or associated person.

(2) Where the Bank approves the sale or other disposition under section 80 of the whole or any part of the capital, or business undertaking, of a registered bank or any associated person to any person, the provision of any enactment requiring any consent, licence, permission, clearance or other authority shall not apply in relation to that sale or disposition.

PART 8
FINANCIAL AND OTHER MATTERS

85 Financial year

The Bank’s financial year shall end on 30 June in each year or on such other date as the Board may decide.

86 Notional surplus income

For the purposes of section 90 "notional surplus income", in relation to a financial year of the Bank, means the gross income of the Bank in that year, after –

(a) Deducting the amount of income estimated to be paid or applied in meeting the expenditure (other than interest expenditure) of the Bank in carrying out the functions and exercising the powers referred to in section 87(1) –

(i) as determined under the relevant funding agreement; or

(ii) if a funding agreement has not been ratified under section 89, as determined under the funding agreement applying to the immediately preceding financial year;

(b) Deducting the expenditure (other than interest expenditure) incurred by the Bank in respect of that year in carrying out the other functions of the Bank;

(d) Deducting any provision made under generally accepted accounting practice (other than those taken into account under paragraphs (a) and (b));

(e) Deducting any net income derived by the Bank from its other functions as shown in the financial statements of the Bank for that financial year;

(f) Adding any net loss incurred by the Bank from its other functions as shown in the financial statements of the Bank for that financial year.

87 Funding agreements

(1) Funding agreements shall be entered into by the Minister and the Board which shall specify the amount of income of the Bank to be paid or applied in meeting the expenditure incurred by the Bank in each financial year in carrying out the functions imposed and exercising the powers conferred by this Act and any other Act.

(2) There shall be a funding agreement applying for every financial year and each funding agreement shall apply to a period that comprises 3 consecutive financial years.

(3) The Minister and the Board may by agreement –

(a) Vary the provisions of a funding agreement; or

(b) Terminate a funding agreement and enter into a new funding agreement.

88 Contents of funding agreements

Every funding agreement shall be in writing and –

(a) Shall make provision for the total expenditure to be incurred by the Bank in carrying out the functions and exercising the powers specified in section 87(1);

(b) Shall make provision for such items as may under generally accepted accounting practice, properly be taken into account in determining the expenditure applicable to those functions and powers;

(c) May provide for the extent, if any, to which any material change in the nature or extent of the work undertaken by the Bank in respect of any of those functions or powers shall require the total level of expenditure to be redetermined between the Board and the Minister;

(d) May make provision for such other matters, not being matters that are inconsistent with this section, as the Board and the Minister may think fit.

89 Funding agreements to be ratified by the Assembly

(1) On the sitting day immediately following a funding agreement being entered into, or a funding agreement being varied, the Minister shall lay a copy of the agreement or the variation before the Assembly.

(2) No funding agreement, and no variation of a funding agreement, shall be effective for the purposes of this Act unless it is ratified by a resolution of the Assembly.

90 Application of surplus income

(1) The amount by which, in any financial year, the actual net income of the Bank as shown the financial statements of the Bank for that year exceeds the notional surplus income for that year, calculated under section 86, shall be paid or credited to the reserves of the Bank.

(2) The amount by which in any financial year the notional surplus income for that year, calculated under section 86, exceeds the actual net income of the Bank for that year, as shown in the financial statements of the Bank for that year, shall be deducted from the reserves of the Bank.

(3) An amount equal to the amount of the notional surplus income calculated under section 86 for each financial year shall be paid or credited, at the direction of the Minister, after consultation with the Bank –

(a) To the reserves of the Bank or to the Niue Government Account; or

(b) To both the reserves of the Bank and to the Niue Government Account in proportions determined by the Minister after consultation with the Bank.

(4) In determining the amount of the notional surplus income to be credited to the reserves of the Bank, the Minister shall have regard to –

(a) The capital requirements of the Bank; and

(b) The views of the Board; and

91 Annual report and accounts

(1) Within 6 months after the end of each financial year the Bank shall deliver to the Minister –

(a) A report on the operations of the Bank during that financial year;

(b) Audited financial statements for that financial year;

(d) A statement of the projected income and expenditure for the next financial year.

(2) The report referred to in subsection (1)(a) shall contain such information as is necessary to enable an informed assessment to be made of the Bank’s performance in carrying out its functions during that year.

(3) The documents referred to in subsection (1) shall, by virtue of this section, stand referred to the Assembly.

92 Contents of financial statements

(1) The financial statements shall be prepared under generally accepted accounting practice and shall include –

(a) A statement of the Bank’s financial position as at its balance date;

(b) An operating statement reflecting the income and expenses of the Bank for that year by reference to the functions carried out by the Bank;

(d) A statement of the Bank’s commitments as at the balance date;

(e) A statement of the Bank’s contingent liabilities as at the balance date;

(f) A statement of accounting policies;

(g) Such other statements as are necessary to fairly reflect the financial operations of the Bank for that year and its financial position at the end of that year;

(h) Comparative actual figures for the previous financial year for paragraphs (a) to (e) and, where appropriate paragraph (g).

(2) The financial statements shall show separately–

(a) Any payments made by the Bank under section 8(1); and

(b) Any payments made by the Minister to the Bank under section 8(2).

93 Management statements

(1) The financial statements of the Bank shall be accompanied by a management statement signed by the Board.

(2) The management statement shall comprise –

(a) A statement of the management’s responsibility for the preparation of the annual financial statements and the judgments used in them;

(b) A statement of the management’s responsibility for establishing and maintaining a system of internal control designed to provide reasonable assurance as to the integrity and reliability of financial reporting;

(c) A statement that, in the opinion of the management, the annual financial statements for the financial year fairly reflect the financial position and operations of the Bank.

94 Auditors

(1) The Minister may appoint one or more persons (whether as individuals or as the members of any firm or firms), being persons qualified for appointment as auditors of a company under the Companies Act 1955 (NZ) or Companies Act 1993 (NZ) to be the auditor or auditors of the Bank.

(2) Every appointment shall be for a term not exceeding 2 years, but any person appointed as auditor shall continue in office until a successor comes into office.

(3) Any person appointed as auditor shall be eligible for reappointment.

(4) The auditor or auditors shall be entitled to receive from the funds of the Bank such fees as the Board determines.

95 Performance audit

(1) Cabinet on the advice of the Minister may appoint one or more persons(whether as individuals or as members of any firm or firms) to carry out an assessment of the performance by the Bank of its functions and of the exercise by the Bank of its powers under this Act.

(2) As soon as practicable after completing an assessment, the person appointed shall submit a report to the Minister setting out the results of that assessment.

(3) The report shall by virtue of this section, stand referred to the Assembly.

(4) Any person appointed to conduct an assessment under this section, for the purpose of conducting that assessment –

(a) Shall have full access to all books and documents that are the property of or that are under the control of any person relating to the Bank or its affairs;

(b) May require any director, officer or employee of the Bank or any other person to answer any questions relating to the Bank or its affairs;

(c) May, by notice in writing to any person, require that person to deliver any books or documents relating to the Bank or its affairs in the possession or under the control of that person and may take copies of them or extracts from them.

(5) Nothing in subsection (4) limits or affects section 74.

(6) The fees of the person appointed to carry out an assessment under this section shall be paid out of the funds of the Bank.

PART 9
INTERNATIONAL COMMERCIAL BANK

96 Bank to act as International Commercial Bank

The Bank shall act as an International Commercial Bank under this Part.

97 Appointment of Board of International Commercial Bank

(1) The Board shall, on the advice of the Cabinet, appoint a board to administer the functions and powers of the International Commercial Bank.

(2) This board shall be known as the International Commercial Bank Board.

(3) The International Commercial Bank Board shall consist of 3 members.

(4) The International Commercial Bank Board shall comprise –

(a) A Chief Executive to be appointed by Cabinet;

(b) Two non-executive directors to be appointed by Cabinet on the advice of the Minister;

(5) A member of the Board of the Niue Bank shall not be a member of the International Commercial Bank Board at any one time.

(6) The members of the International Commercial Bank Board shall be deemed officers of the Bank for the purposes of section 73 and directors for the purposes of section 106.

(7) Sections 24 to 31 shall apply to the operations and membership of the International Commercial Bank Board.

98 Duties of Board of International Commercial Bank

Subject to this Act, the International Commercial Bank Board shall –

(a) Keep under constant review the performance of the International Commercial Bank in carrying out its functions;

(b) Ensure that the International Commercial Bank carries out the functions imposed on it by this Act;

(d) Direct the exercise of the powers granted to the International Commercial Bank by this Act.

99 Powers of the International Commercial Bank

(1) The International Commercial Bank shall have the power to enter into such transactions as the Board determines are for the benefit of Niue.

(2) The International Commercial Bank shall have all the powers associated with a commercial bank including the following –

(a) The power to incorporate and/or register a company; and

(b) The power to give security over its assets and undertaking.

(3) In discharging its functions under section 96, the International Commercial Bank may exercise those powers specified in sections 7 to 19 if the Board gives its prior consent to such exercise.

100 Liabilities of International Commercial Bank not to be charge against the Niue Government Account

(1) Any liability or obligation incurred by the International Commercial Bank as a result of performing its duties or exercising any power under this Act shall not be a charge against the Niue Government Account.

(2) The Government Loans Act 1980 shall not apply to any liability or obligation incurred by the International Commercial Bank as a result of performing its duties or exercising any power under this Act.

PART 10
MISCELLANEOUS PROVISIONS

101 Issue of Bank notes

(1) It shall not be lawful for any Bank to issue bank notes in Niue.

(2) Any person who contravenes subsection (1) commits an offence and is liable on conviction to a fine not exceeding 1000 penalty units.

102 Obligations under this Act not limited

An obligation or limitation imposed on a person by any other Act or instrument or by any trust or agreement shall not prevent or excuse that person from complying with any provision of this Act or any regulation made under it or with any direction, notice, requirement or condition given or imposed under that provision.

103 Regulations

Cabinet may make regulations for all or any of the following purposes –

(a) Providing for those Acts to be administered by the Bank under section 6;

(b) Providing for such matters as are necessary to enable the Minister or the Bank to exercise any powers and functions conferred on the Minister or the Bank by this Act or by any regulation made for any of the purposes of this Act;

(c) Providing for the granting, refusal and revocation of consents, permissions and exemptions in respect of any matters to which any regulations made under this Act relate; and authorising the imposition, variation, and revocation of conditions subject to which such consents, permissions and exemptions may be granted;

(d) Providing for the furnishing of information and the production of books or documents to the Minister or the Bank or any other person for any of the purposes of any such regulations (whether or not the effect of doing so may be to require the furnishing of information, or the production of books or documents, that will reveal the identity or affairs or any particular person); and providing for the verification of any such information; and providing that any such books or documents may be copied, and may be retained or impounded, by any person or persons to whom they are produced;

(e) Authorising the Minister or the Bank or any other person to exercise any discretionary power or authority for the purposes of any such regulations;

(f) Providing for the delegation of any of the powers or functions of the Minister (including the power of delegation) or the Bank under any such regulations;

(g) Providing for and regulating the issue, registration, transfer, control and redemption of any securities issued by the Bank;

(h) Prescribing forms for the purposes of this Act or of any such regulations, in any case where a form is not prescribed by this Act;

(i) Providing for and regulating the giving or service of notices for the purposes of this Act or of any such regulations, and the effect of such notices;

(j) Prescribing fees to be charged by the Bank in respect of any matter under this Act;

(k) Prescribing offences against any such regulations and prescribing fines not exceeding in respect of any such offence 500 penalty units and, in the case of a continuing offence, 5 penalty units for every day on which the offence has continued;

(l) Providing for such matters as are contemplated by or necessary for giving full effect to this Act and its due administration.

104 Consents under regulations

(1) If a transaction is entered into or an instrument is executed without the prior consent of the Minister or the Bank required by any regulations made under this Act, the Minister or the Bank, as the case may be, may at any time consent to the entry into the transaction or the execution of the instrument.

(2) Subject to the terms of the consent any transaction or instrument and any relationship or interests created by it which would be invalid or unenforceable without that consent shall, on the giving of that consent, be valid and enforceable as if the consent had been given before the transaction was entered into or the instrument executed.

(3) Consent may be given –

(a) In respect of such transactions, instruments, or persons or classes of transactions, instruments or persons as the Minister or the Bank may determine or in respect of any specified transaction, instrument or person;

(b) Wholly or partly and either unconditionally or subject to such conditions as the Minister or the Bank thinks fit.

(4) A consent to the entry into any transaction or the execution of any instrument shall be deemed to be a consent given under the regulations requiring consent.

105 Offences against regulations

(1) Every person commits an offence against this Act who –

(a) With intent to deceive, makes any false or misleading statement or any material omission in –

(i) any offer or declaration made for the purposes of any regulations under this Act; or

(ii) any communication with, or application to, the Minister or the Bank or any other person (whether in writing or otherwise) for the purposes of those regulations;

(b) Resists, obstructs, or deceives any person who is exercising or attempting to exercise any power or function under any such regulations;

(c) Without lawful excuse, acts in contravention of or fails to comply in any respect with any such regulations or any direction, notice, requirement or condition given or imposed under any such regulations.

(2) Nothing in subsection (1) limits section 103(k).

106 Penalties for offences

Every person who commits an offence against this Act for which no penalty is provided except in this section is liable on conviction –

(a) In the case of an individual to imprisonment for a term not exceeding 3 months or to a fine not exceeding 50 penalty units;

(b) In the case of a body corporate, to a fine not exceeding 500 penalty units.

107 Evidence

(1) A copy of a resolution of the Bank certified by the Board to be correct shall in the absence of proof to the contrary be sufficient evidence of the resolution in any proceedings.

(2) A certificate signed by the Board to the effect that –

(a) Any approval or consent required under any Act has or has not been given by the Bank, or is or is not for the time being in force; or

(b) Any document has been duly signed by or on behalf of the Bank or the Board – shall in the absence of proof to the contrary be sufficient evidence of the matters stated in it in any proceedings.

(3) Any certificate purporting to have been signed by the Board shall, in the absence of proof to the contrary, be deemed for all purposes to have been duly signed by the Board.

108 No action to lie against certain persons

Notwithstanding any other provision of this Act, no action shall lie against the Government, the Minister, the Bank, the Board, or any director or employee of the Bank in respect of the performance of their functions or duties under this Act.

109 [Spent]

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