NEW ZEALAND Law and Practice Contributed by: Deemple Budhia, Ling Yan Pang, Fred Ward and Matt Kersey, Russell McVeagh
4.8 Investor Protection There are no specific investor protection rules applicable to securitisations. However, the fair dealing provisions (described in 4.2 General Dis- closure Laws or Regulations ) apply to securiti - sations. 4.9 Banks Securitising Financial Assets There are no other specific rules that apply to registered banks that securitise their financial assets, except for the impact of APS 120 (in rela - tion to the “big four” banks) referred to in 4.2 General Disclosure Laws or Regulations and 4.3 Credit Risk Retention . 4.10 SPEs or Other Entities The most common form of SPE used in securiti - sations is a trust, as described in 1.2 Structures Relating to Financial Assets . Companies have also been used, but are less common. Please see the description in 1.2 Structures Relating to Financial Assets in relation to the use of trusts, which are generally accepted and well-established for New Zealand securitisa - tions. Trusts were originally used in the New Zealand market for tax reasons, particularly in relation to achieving tax neutrality. Separately, as discussed in 4.2 General Disclo- sure Laws or Regulations , securitisations are not offered to all types of wholesale investor in order to ensure the SPE is not subject to other regulatory requirements. 4.11 Activities Avoided by SPEs or Other Securitisation Entities Other than selling restrictions to ensure that any offer of notes, and any subsequent sales, are only made to certain categories of wholesale investors, as described in 4.2 General Disclo- sure Laws or Regulations and 4.10 SPEs or
Other Entities , there are no particular activities that a securitisation entity would try to avoid. 4.12 Participation of Government- Sponsored Entities No government-sponsored entities in New Zea - land participate in the securitisation market oth - er than the RBNZ through its repurchase facility (which applies to various types of debt securi - ties) or as a potential investor. 4.13 Entities Investing in Securitisation Typical investors in a securitisation include banks, fixed income managers, insurance com - panies (including life insurance companies), superannuation funds (such as KiwiSaver funds), hedge funds and government agencies. Any restrictions on these investments will depend on the rules of the particular entity, such as statuto - ry requirements, constitutional documents and/ or investment policies. 4.14 Other Principal Laws and Regulations There are no further details to discuss. 5. Synthetic Securitisation 5.1 Synthetic Securitisation Regulation and Structure There is no express prohibition on carrying out synthetic securitisations in New Zealand. How - ever, in recent years such transactions have gen - erally not been seen in the New Zealand market.
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