Who needs to be licenced
Anyone wanting to carry on the activities of an NBDT, as defined in Section 5 of the NBDT Act, needs to get a licence. These activities are:
- making an NBDT-regulated offer of debt securities; and
- carrying on the business of borrowing and lending money, or providing financial services, or both.
Persons declared by regulations made under section 73(1)(c) to be NBDTs must apply for a licence.
Definition of NBDT-regulated offer
An NBDT-regulated offer is defined in section 41 of the Financial Markets Conduct Act 2013 (the FMC Act). It is an offer of debt securities to any investor to whom the FMC Act requires disclosure when making such an offer, even if the offer is made to other investors who are not required to receive disclosure. At a general level, this means a 'retail' offer or an offer to the public.
However, an NBDT-regulated offer includes offers to persons who meet certain investment activity criteria, and persons who are ‘eligible investors’ (broadly experienced investors who certify that they do not need the protections provided by the FMC Act). Such persons would not receive disclosure under the FMC Act, but NBDTs who make offers open to such persons and meet the other qualifications to be an NBDT will come within the definition of NBDT regulated offer.
In lay terms, debt securities include debentures, bonds, deposits, call accounts and similar transactions.
How to apply for a licence
When processing your licence application, we will assess your ability to comply with the requirements of the NBDT Act on an ongoing basis. We will also assess the suitability of directors and senior officers of the applicant.
You will need to submit an NBDT licence application to us as outlined in the Guidelines for Non-bank Deposit Taker Licence Applicants. Include in your application a suitability notice for each of your directors and senior officers, or proposed directors and senior officers. You will also need to provide financial information and, in certain circumstances, information about your corporate and individual controllers.
Corporate and individual controllers are those with ‘influence’ over the NBDT, being persons with a direct or indirect ownership stake of at least 25% in the NBDT and persons who can appoint 25% or more of the NBDT’s board.
Guidance for application process
The following guidance explains more about the licence application process and the information required. Read this guidance before you start your application.
You must complete the following forms as part of your licence application.
There are two versions of the application form: one for paper submission and one for electronic submission. A complete financial information workbook must accompany your application.
NBDT licence application form paper version (PDF 181 KB) or
NBDT licence application form electronic version (PDF 913 KB)
Financial information workbook (XLS 66 KB)
You will also need to fill out a controller form, either the individual or corporate version. Section 3 of the application form explains which one you should fill out.
Corporate controller form (PDF 119 KB)
Individual controller form (PDF 112 KB)
We have produced templates for you to complete and submit to us for director and senior officer suitability.
Template suitability notice – director (PDF 215 KB)
Template suitability notice – senior officer (PDF 71 KB)
In November 2014, we published an NBDT licensing update setting out the general conditions for NBDT licences and providing further guidance about the suitability regime for NBDT directors and senior officers.
NBDT licensing update November 2014 (PDF 69 KB)
Consent for change of ownership
Section 43 of the NBDT Act requires a person who seeks to become a corporate or individual controller of a licensed NBDT to gain our written consent before completing a transaction that will achieve that.
A 'controller' in this context refers to a person who will have influence over the NBDT in such a way they will have:
- the ability, directly or indirectly, to appoint 25% or more of the members of the NBDT’s governing body (for example its board); or
- a direct or indirect ownership stake in the NBDT of 20% or more.
A person increasing their influence over the NBDT beyond a level we had previously permitted must also get our permission to do so.
A person applying to us under Section 43 of the NBDT Act must submit a completed application for change of ownership.
Download the Application for change of Ownership (PDF 144 KB)