All building societies registered under the Building Societies Act 1965 are caught as deposit takers under Part 5D of the Reserve Bank Act (the ‘Act’). This is the case even where a building society:
Unless they qualify for a particular exemption made under the Act, building societies must comply with the prudential regulations. As with all deposit takers, the Bank monitors compliance with prudential regulations but does not prudentially supervise individual building societies for financial soundness.
Most deposit takers, including building societies, are supervised for compliance with the terms of their debt securities by trustees. The appointment of a trustee is required under the Securities Act for most, but not all, deposit takers. A trustee may take action when a deposit taker is no longer able to pay its debt securities when due. Trustees have various reporting requirements to the Reserve Bank.
New Zealand building societies are registered with the Registrar of Building Societies, not with the Reserve Bank. Registration as a building society is a process of establishing an entity’s corporate form and does not relate to prudential supervision or its financial soundness. Information on registration is available at the New Zealand Companies Office.
The Bank does not comment on specific transactions entered into by financial institutions. In particular, note that the Bank is not in a position to monitor transactions undertaken by New Zealand registered building societies that operate in overseas markets. Building societies in this category include Kiwi Deposit Building Society and General Equity Building Society.