Friendly Societies and Credit Unions (Regulatory Improvements) Amendment Act 2018
Reprint as at 1 April 2019
Friendly Societies and Credit Unions (Regulatory Improvements) Amendment Act 2018
Public Act |
2018 No 17 |
|
Date of assent |
4 July 2018 |
|
Commencement |
see section 2 |
Note
Changes authorised by subpart 2 of Part 2 of the Legislation Act 2012 have been made in this official reprint.
Note 4 at the end of this reprint provides a list of the amendments incorporated.
This Act is administered by the Ministry of Business, Innovation, and Employment.
Contents
The Parliament of New Zealand enacts as follows:
1 Title
This Act is the Friendly Societies and Credit Unions (Regulatory Improvements) Amendment Act 2018.
2 Commencement
This Act comes into force on the earlier of the following dates:
(a)
a date appointed by the Governor-General by Order in Council:
(b)
the date immediately after the expiry of the period of 18 months that commences on the date on which this Act receives the Royal assent.
Section 2: this Act brought into force, on 1 April 2019, by clause 2 of the Friendly Societies and Credit Unions (Regulatory Improvements) Amendment Act 2018 Commencement Order 2018 (LI 2018/168).
3 Principal Act
This Act amends the Friendly Societies and Credit Unions Act 1982 (the principal Act).
Part 1 Amendments to principal Act
4 Section 2 amended (Interpretation)
(1)
In section 2, definition of association, replace “registered as such under Part 3”
with “incorporated under Part 3 in accordance with section 146”
.
(2)
In section 2, definition of committee and committee of management, after “branch”
, insert “or a credit union”
.
(3)
In section 2, replace the definition of credit union with:
credit union—
(a)
means a credit union incorporated under Part 3 in accordance with section 100B; and
(b)
subject to section 146(8) and with any necessary modifications, includes an association of credit unions incorporated under Part 3 in accordance with section 146
(4)
In section 2, insert in its appropriate alphabetical order:
financial product has the meaning given in section 7(1) of the Financial Markets Conduct Act 2013
(5)
In section 2, replace the definition of officer with:
officer,—
(a)
in relation to a registered society or branch, includes any trustee, treasurer, secretary, or member of the committee of management of the society or branch, and any person appointed by the society or branch to sue and be sued on its behalf; and
(b)
in relation to a credit union, means a person who—
(i)
is a member of the credit union’s committee of management; or
(ii)
holds any other office provided for in the credit union’s rules
(6)
In section 2, replace the definition of registered with:
registered means registered in a register maintained by the Registrar for the purposes of this Act
(7)
In section 2, repeal the definition of Revising Barrister.
5 New section 2A inserted (Transitional, savings, and related provisions)
After section 2, insert:
2A Transitional, savings, and related provisions
The transitional, savings, and related provisions set out in Schedule 1AA have effect according to their terms.
6 Section 5 amended (Registry Office and registers)
(1)
After section 5(2), insert:
(2A)
Any register may—
(a)
be an electronic register; or
(b)
be kept in any other manner that the Registrar thinks fit.
(2B)
The Registrar may amend any register if—
(a)
a society, branch, or credit union informs the Registrar of information that is different from the information entered on the register; or
(b)
the Registrar is satisfied at any time that the register contains a typographical error or a mistake, or omits information supplied to the Registrar.
(2)
Replace section 5(3)(b) with:
(b)
in respect of any credit union,—
(i)
the rules and any amendments, notices of change of registered office and of the appointment of officers, annual returns, and notices of change of name and of special resolutions:
(ii)
details of any action taken by the Registrar under section 139 in relation to the credit union:
(iii)
if the credit union is removed from the register under section 140, the notice of the removal issued by the Registrar:
(iv)
if the credit union is restored to the register under section 140H, the notice of the restoration issued by the Registrar.
7 Section 16 repealed (Revising Barrister may examine rules)
Repeal section 16.
8 Section 23 amended (Amendment of rules)
(1)
Replace section 23(1) with:
(1)
An amendment of the rules of a registered society or branch has no effect until the amendment is registered.
(1A)
For the purposes of subsection (1), the following, signed by 3 members and the secretary of the registered society or branch, must be sent to the Registrar:
(a)
a copy of the amendment:
(b)
a copy of the rules as amended.
(2)
In section 23(2)(a), after “or branch”
, insert “, and a copy of the rules as amended,”
.
9 Section 24 amended (Revising Barrister or actuary may examine amendments)
(1)
In the heading to section 24, replace “Revising Barrister or actuary”
with “Actuary”
.
(2)
Repeal section 24(1).
10 Section 25 replaced (Acknowledgment of registration of amendment of rules)
Replace section 25 with:
25 Registration of amendment of rules
On being satisfied that any amendment of the rules of a registered society or branch complies with and is not contrary to the provisions of this Part, the Registrar must register the amendment.
11 Section 51 amended (Borrowing powers, overdrafts)
After section 51(2), insert:
(3)
This section does not limit what may be done under section 58A.
12 New sections 58A to 58E and cross-heading inserted
After section 58, insert:
Friendly society securities
58A Registered friendly society that is licensed insurer may offer friendly society securities
(1)
If authorised by, and in accordance with its rules, a registered friendly society that is a licensed insurer may offer friendly society securities to members for subscription.
(2)
Friendly society securities—
(a)
are transferable only between members; and
(b)
confer no voting rights upon holders.
(3)
In the event of a registered friendly society being wound up, claims for friendly society securities must not be paid until all creditors’ claims have been paid.
(4)
In the event of a registered friendly society incurring losses that exceed its retained earnings and reserves, the value of friendly society securities issued by it must be written down accordingly.
(5)
The following provisions of the Financial Markets Conduct Act 2013 apply for the purposes of that Act in relation to a registered friendly society and any friendly society securities that it issues as they apply in relation to a credit union and any financial products that it issues:
(a)
paragraph (a) of the definition of special resolution in section 6(1):
(b)
section 120(1)(c).
(6)
A registered friendly society may, in relation to friendly society securities issued or to be issued by it, appoint a supervisor and sign or amend a trust deed for the purposes of subpart 1 of Part 4 of the Financial Markets Conduct Act 2013.
(7)
Subsection (6) applies regardless of anything to the contrary in the rules of the registered friendly society.
58B Meaning of distribution
(1)
In sections 58C to 58E, unless the context otherwise requires, distribution, in relation to a distribution by a registered friendly society to a member, means—
(a)
the direct or indirect transfer of money or property to or for the benefit of the member; or
(b)
the incurring of a debt to or for the benefit of the member.
(2)
For the purposes of subsection (1),—
(a)
the distribution must relate to friendly society securities held by the member to whom the distribution is being made; and
(b)
a transfer may be made, or a debt incurred, by means of a purchase of property, the redemption or other acquisition of friendly society securities, a distribution of indebtedness, or by some other means.
58C Distribution must be authorised
A distribution must be authorised in writing by the committee, or committee of management, as the case may be, of the registered friendly society.
58D Distribution must not be authorised unless registered friendly society solvent
The committee, or committee of management, as the case may be, of the registered friendly society must not authorise a distribution unless the committee is satisfied on reasonable grounds that, immediately after the distribution is made, the registered friendly society will be solvent.
58E Solvency test
(1)
A registered friendly society is solvent for the purposes of the payment of a distribution if—
(a)
the registered friendly society is able to pay its debts as they become due in the normal course of business; and
(b)
the value of the registered friendly society’s assets is greater than its liabilities, including its contingent liabilities.
(2)
In determining whether the value of the registered friendly society’s assets is greater than its liabilities, the committee, or committee of management, as the case may be, of the registered friendly society—
(a)
must have regard to all circumstances that the committee knows or ought to know affect, or may affect, the value of the registered friendly society’s assets and the value of its liabilities, including its contingent liabilities; and
(b)
may rely on valuations of assets or estimates of liabilities that are reasonable in the circumstances.
(3)
In determining, for the purposes of this section, the value of a contingent liability, account may be taken of—
(a)
the likelihood of the contingency occurring; and
(b)
any claim that the registered friendly society is entitled to make, and can reasonably expect to be met, to reduce or extinguish a contingent liability.
13 Cross-heading above section 98 replaced
Replace the cross-heading above section 98 with:
Incorporation
14 Section 98 amended (Credit unions to be registered)
(1)
In the heading to section 98, replace “registered”
with “incorporated under this Part”
.
(2)
Replace section 98(1) with:
(1)
No person, other than a credit union incorporated under this Part in accordance with section 100B, may trade or carry on business as a credit union.
(3)
Replace section 98(2)(a) with:
(a)
administering a fund into which members of a group contribute money that is to be applied wholly or principally—
(i)
in loans to those members; or
(ii)
in both of the following:
(A)
loans to those members:
(B)
loans of the kind referred to in section 110(1)(b):
(4)
In section 98(2)(b), delete “, society, or body of persons”
.
(5)
In section 98(2)(c), delete “society, or body of persons,”
.
15 Section 99 amended (Exemptions from registration)
(1)
In the heading to section 99, replace “registration”
with “incorporation under this Part”
.
(2)
In section 99(1)(a) and (b) and (2), delete “, society, or body of persons (whether corporate or unincorporate)”
.
(3)
In section 99(3), delete “, society, or body of persons”
in each place.
16 Section 100 replaced (Society may register as credit union)
Replace section 100 with:
100 Persons eligible to incorporate credit union
(1)
Any 21 or more persons falling within subsection (2) may apply to the Registrar in accordance with section 100A for the incorporation of a credit union under this Part.
(2)
The persons referred to in subsection (1) are as follows:
(a)
an adult:
(b)
a charitable entity as defined by the Charities Act 2005:
(c)
an incorporated society registered under the Incorporated Societies Act 1908.
100A Application for incorporation of credit union
(1)
An application under section 100 for the incorporation of a credit union must—
(a)
be signed by each of the applicants; and
(b)
include a copy of the credit union’s proposed rules; and
(c)
include a list of the names, addresses, and designations of the officers proposed for the credit union; and
(d)
include such information or evidence as the Registrar may reasonably require in relation to any of the matters referred to in section 100B(1)(a) to (f).
(2)
The credit union’s proposed rules must either—
(a)
contain provisions in respect of the matters mentioned in Schedule 4; or
(b)
accord with any model rules applicable to credit unions produced by the Registrar under section 9.
100B Incorporation of credit union
(1)
Subsection (2) applies if an application is made under section 100 for the incorporation of a credit union and the Registrar is satisfied—
(a)
that the credit union will have at least 21 members who fall within section 100(2); and
(b)
that the credit union’s proposed rules comply with section 100A(2); and
(c)
that the only objects of the credit union will be those of a credit union specified in section 101; and
(d)
that the credit union will have a common bond as defined in section 102; and
(e)
that the credit union’s name will comply with section 103; and
(f)
that there is no reason to expect that the credit union will not be operated in accordance with its rules and this Part.
(2)
The Registrar must—
(a)
register the credit union’s name; and
(b)
issue a certificate of incorporation; and
(c)
register the credit union’s rules (together with any other documents or information relating to the credit union that the Registrar thinks appropriate).
(3)
The credit union is, on and after the date of incorporation set out in the certificate of incorporation, a body corporate that has—
(a)
perpetual succession; and
(b)
the capacity, rights, powers, and privileges provided for in section 107B.
(4)
The credit union continues in existence until it is removed from the register under section 140.
(5)
The certificate of incorporation is conclusive evidence that—
(a)
all the requirements of this Part as to incorporation have been complied with; and
(b)
on and after the date of incorporation set out in the certificate, the credit union is registered and incorporated under this Part.
(6)
If the Registrar refuses to act under subsection (2) in relation to an application, the applicants may, within 3 months after the date on which they are notified of the refusal, appeal against the refusal to the High Court.
(7)
If the refusal is overruled on appeal, then, subject to such terms and conditions as the court may impose or otherwise in pursuance of the court order, the Registrar must act under subsection (2) as soon as practicable.
17 Section 101 amended (Objects of credit union)
(1)
Before section 101(1), insert:
(1AA)
A credit union is to operate, on the basis of this Act, for the mutual benefit and assistance of its members.
(2)
Replace section 101(1)(b) with:
(b)
the use and control of the members’ savings for their mutual benefit, including—
(i)
for making loans to members; and
(ii)
if authorised by the credit union’s rules, for making loans under section 110(1)(b); and
(ba)
if authorised by, and in accordance with, the credit union’s rules, the provision of products or services under section 110(2); and
(3)
Repeal section 101(2).
18 Section 102 amended (Qualifications for admission to membership of credit union)
In section 102(1)(e), replace “forming a society to be registered as”
with “incorporating”
.
19 Section 103 amended (Name to contain words “credit union”)
(1)
In the heading to section 103, replace “to contain words “credit union””
with “of credit union”
.
(2)
In section 103, delete “society registered as a”
.
(3)
In section 103, insert as subsections (2) and (3):
(2)
A credit union’s name must not—
(a)
be identical, or almost identical, to that of—
(i)
any other credit union; or
(ii)
any other body corporate established or registered in New Zealand or carrying on activities in New Zealand; or
(b)
be, in the Registrar’s opinion, likely to mislead the credit union’s members or the public as to the credit union’s nature or identity; or
(c)
be, in the Registrar’s opinion, offensive; or
(d)
be a name the use of which by the credit union contravenes any other enactment.
(3)
If, at any time, a credit union’s name contravenes (through inadvertence or otherwise) this section,—
(a)
the Registrar may by notice to the credit union require the credit union to change its name so that the name does not contravene this section; and
(b)
if the Registrar does so, the credit union must change its name accordingly within the period of 4 weeks from the date on which it receives the Registrar’s notice or within such longer period as the Registrar may allow.
20 Section 104 repealed (Registration and rules of credit union)
Repeal section 104.
21 Section 105 amended (Effect of rules on members of credit union)
Replace section 105(1) with:
(1)
The rules of a credit union are binding, in accordance with their terms, as between—
(a)
the credit union and each member; and
(b)
each member.
(1A)
Subsection (1) is subject to the rest of this Act.
22 Section 106 amended (Membership of credit union, voting rights)
(1)
In section 106(1)(a), replace “39”
with “39(1) and (2)”
.
(2)
After section 106(1)(a), insert:
(aa)
no person under the age of 18 years can be an officer of a credit union; and
(3)
Repeal section 106(7).
(4)
After section 106(8), insert:
(9)
Section 82 (special resolutions) applies in relation to a credit union with any necessary modifications.
23 New sections 106A to 106C inserted
After section 106, insert:
106A Members not liable for obligations of credit union
(1)
A member of a credit union is not liable for an obligation of the credit union by reason only of being a member.
(2)
Subsection (1) does not affect—
(a)
section 141; or
(b)
any liability that a member of a credit union has to the credit union—
(i)
under its rules or a contract; or
(ii)
for any tort, breach of a fiduciary duty, or other actionable wrong committed by the member.
106B Amendment of credit union’s rules
(1)
A credit union’s rules may be amended by a resolution of a majority of its members entitled to vote and voting on the matter.
(2)
Section 26 (which permits the Registrar to amend rules) applies (with any necessary modifications) to a credit union’s rules as it applies to a registered society’s rules.
(3)
An amendment of a credit union’s rules has no effect until the amendment is registered.
(4)
For the purposes of subsection (3), the following, signed by 3 members, must be sent to the Registrar for registration (unless the amendment is made by the Registrar under section 26):
(a)
a copy of the amendment:
(b)
a copy of the rules as amended.
(5)
Subsections (3) and (4) do not apply to a change in the situation of a credit union’s registered office, but notice of the change, and a copy of the rules as amended, must be sent promptly to the Registrar for registration.
(6)
An amendment of a credit union’s rules may be registered only if the rules as amended either—
(a)
contain provisions in respect of the matters mentioned in Schedule 4; or
(b)
accord with any model rules applicable to credit unions produced by the Registrar under section 9.
(7)
Before registering an amendment of a credit union’s rules, the Registrar may require from the credit union such information or evidence as may be reasonable to show that, after the amendment takes effect, the credit union will be operated in accordance with its rules and this Part.
106C Credit union to supply copy of rules
A credit union must deliver to any person on request, on payment of any reasonable charge imposed by the credit union, a copy of the rules of the credit union.
24 Cross-heading above section 107 replaced
Replace the cross-heading above section 107 with:
Shares and securities
25 Section 107A amended (Credit union may offer credit union securities)
In section 107A(1), delete “and trust deed”
.
26 New sections 107B to 107F and cross-heading inserted
After section 107A, insert:
Capacity, powers, and validity of actions
107B Capacity and powers of credit union
(1)
A credit union has, both within and outside New Zealand,—
(a)
full capacity to carry on or undertake any business or activity, to do any act, or to enter into any transaction, if the carrying on or undertaking of the business or activity, the doing of the act, or the entering into the transaction—
(i)
is directly in pursuance of the credit union’s objects or is incidental to the credit union’s objects; and
(ii)
is authorised by this Act or the credit union’s rules; and
(b)
for the purposes of paragraph (a), full rights, powers, and privileges.
(2)
Subsection (1) is subject to this Act, any other enactment, and the general law.
(3)
The credit union’s rules may contain the following provisions:
(a)
provisions giving authority for the purposes of subsection (1)(a)(ii):
(b)
provisions restricting the capacity, rights, powers, or privileges that the credit union would otherwise have.
107C Validity of actions
(1)
An act of a credit union or the transfer of property to or by a credit union is not invalid merely because the credit union did not have the capacity, right, or power to do the act or to transfer or take a transfer of the property.
(2)
Subsection (1) does not limit—
(a)
section 107F or 118; or
(b)
any proceedings that may otherwise be taken—
(i)
by a member of a credit union against the credit union or an officer of the credit union to prevent an act of, or a transfer of property to or by, the credit union that would be invalid apart from subsection (1); or
(ii)
by a credit union or a member or former member of a credit union against an officer or a former officer of the credit union in relation to an act of, or a transfer of property to or by, the credit union that would have been invalid apart from subsection (1).
(3)
The fact that an act is not, or would not be, in the best interests of a credit union does not affect the capacity of the credit union to do the act.
107D Dealings between credit union and other persons
(1)
A credit union may not assert against a person dealing with the credit union that—
(a)
this Act has not, or the credit union’s rules have not, been complied with; or
(b)
a person named as an officer of the credit union in any register—
(i)
is not an officer of the credit union; or
(ii)
has not been duly appointed; or
(iii)
does not have authority to exercise a power that, given the nature of the credit union, an officer customarily has authority to exercise; or
(c)
a person held out by the credit union as an officer, employee, or agent of the credit union—
(i)
has not been duly appointed; or
(ii)
does not have authority to exercise a power that, given the nature of the credit union, a person appointed to that capacity customarily has authority to exercise; or
(d)
a person held out by the credit union as an officer, employee, or agent of the credit union does not have the authority to exercise a power that the credit union holds the person out as having; or
(e)
a document issued on behalf of the credit union by an officer, employee, or agent of the credit union with actual or usual authority to issue the document is not valid or not genuine.
(2)
However, a credit union may assert any of the matters referred to in subsection (1)(a) to (e) against a person dealing with the credit union if that person had, or ought to have had, by virtue of the person’s position with or relationship to the credit union, knowledge of those matters.
(3)
Subsection (1) applies even though a person of a kind referred to in subsection (1)(b) to (e) acts fraudulently or forges a document that appears to have been signed on behalf of the credit union, unless the person dealing with the credit union has actual knowledge of the fraud or forgery.
(4)
In this section, person dealing—
(a)
means, in the case of a transaction with a credit union, the other party to the transaction; and
(b)
includes a person who has acquired property, rights, or interests from a credit union.
107E No constructive notice
A person is not affected by, or deemed to have notice or knowledge of the contents of, the rules of, or any other document relating to, a credit union merely because—
(a)
the rules are, or the document is,—
(i)
registered; or
(ii)
available to the public under section 5(3) or (4); or
(iii)
available for inspection at an office of the credit union; or
(b)
in the case of the rules, a copy of them can be requested under section 106C.
107F High Court may restrain credit union from acting contrary to Act or credit union’s rules
(1)
The High Court may, on an application by a person listed in subsection (2), make an order restraining a credit union from acting contrary to this Act or the credit union’s rules.
(2)
The application may be made by—
(a)
a member of the credit union; or
(b)
the Registrar; or
(c)
the Reserve Bank of New Zealand, but only if the credit union is an NBDT as defined in section 5 of the Non-bank Deposit Takers Act 2013.
27 Sections 109 and 109A repealed
Repeal sections 109 and 109A.
28 Section 110 replaced (Credit union may make loans to members)
Replace section 110 with:
110 Credit union may make loans to members and enterprises related to members, etc
(1)
A credit union may make loans (with or without security) as follows:
(a)
to members:
(b)
to enterprises in cases where—
(i)
the enterprise (when the loan is made)—
(A)
is related to a member; and
(B)
has no more than 19 full-time equivalent employees; and
(ii)
the loan is to be used for the purposes of a business being, or to be, carried on by the enterprise.
(2)
A credit union may provide products or services as follows:
(a)
to members:
(b)
to enterprises which have loans with the credit union under subsection (1)(b):
(c)
to enterprises in cases where—
(i)
the enterprise (when the product or service is provided)—
(A)
is related to a member; and
(B)
has no more than 19 full-time equivalent employees; and
(ii)
the product or service is for the purposes of a business being, or to be, carried on by the enterprise.
(3)
In this section, enterprise means any of the following:
(a)
a body corporate:
(b)
a firm under the Partnership Act 1908:
(c)
the trustee or trustees of a trust.
(4)
For the purposes of this section, an enterprise is related to a member (M) if—
(a)
the enterprise is a body corporate and M has the power, directly or indirectly, to exercise, or to control the exercise of, the rights to vote attaching to 25% or more of the voting products (as defined in section 6(1) of the Financial Markets Conduct Act 2013) of the body corporate; or
(b)
the enterprise is a firm under the Partnership Act 1908 in which M is a partner and—
(i)
M’s share of the firm’s profits in accordance with the terms of the partnership is 25% or more; or
(ii)
if M’s share of the firm’s profits cannot be determined in accordance with the terms of the partnership, M’s share of the most recent distribution of the firm’s profits was 25% or more; or
(c)
the enterprise is the trustee or trustees of a trust and M has, or the members of M’s family (taken together) have, a beneficial entitlement to 25% or more of the trust’s assets.
(5)
For the purposes of subsection (4)(c), the members of M’s family are—
(a)
M; and
(b)
any current or former spouse, civil union partner, or de facto partner of M; and
(c)
any brother, sister, lineal ancestor, or lineal descendant of M; and
(d)
any current or former spouse, civil union partner, or de facto partner of a person covered by paragraph (c).
29 Sections 112 to 117 repealed
Repeal sections 112 to 117.
30 Section 127 amended (Annual return)
(1)
In section 127(1), replace “3”
with “4”
.
(2)
Replace section 127(3)(d) with:
(d)
must have attached a list containing the names, addresses, and designations of the officers of the credit union; and
31 Section 128 amended (Annual return by credit union under dissolution)
Repeal section 128(1).
32 Section 133 amended (Credit union to be insured against fraud or other dishonesty)
(1)
Replace section 133(1) with:
(1)
A credit union must have a policy of insurance that complies with the requirements of this section.
(2)
Repeal section 133(4).
33 New sections 133A and 133B inserted
After section 133, insert:
133A Method of contracting
(1)
A contract or other enforceable obligation may be entered into by a credit union as follows:
(a)
an obligation that, if entered into by a natural person, would, by law, be required to be by deed may be entered into on behalf of the credit union in writing signed under the name of the credit union by—
(i)
2 or more officers of the credit union; or
(ii)
if the credit union’s rules so provide, an officer, or other person or class of persons, whose signature or signatures must be witnessed; or
(iii)
1 or more attorneys appointed by the credit union in accordance with section 133B:
(b)
an obligation that, if entered into by a natural person, is, by law, required to be in writing may be entered into on behalf of the credit union in writing by a person acting under the credit union’s express or implied authority:
(c)
an obligation that, if entered into by a natural person, is not, by law, required to be in writing may be entered into on behalf of the credit union in writing or orally by a person acting under the credit union’s express or implied authority.
(2)
A credit union may, in addition to complying with subsection (1), affix its common seal, if it has one, to the contract or document containing the enforceable obligation.
(3)
Subsection (1) applies to a contract or other obligation—
(a)
whether or not that contract or obligation was entered into in New Zealand; and
(b)
whether or not the law governing the contract or obligation is the law of New Zealand.
133B Attorneys
(1)
A credit union may, by an instrument in writing executed in accordance with section 133A(1)(a), appoint a person as its attorney either generally or in relation to a specified matter.
(2)
Subsection (1) is subject to the credit union’s rules.
(3)
An act of the attorney in accordance with the instrument binds the credit union.
(4)
Sections 19 to 21 of the Property Law Act 2007 apply, with all necessary modifications, in relation to a power of attorney executed by a credit union—
(a)
to the same extent as if the credit union were a natural person; and
(b)
as if the commencement of the liquidation of the credit union or, if there is no liquidation, the removal of the credit union from the register under section 140 were an event revoking the power of attorney within the meaning of those sections.
34 Section 134 repealed (Guarantee funds)
Repeal section 134.
35 Section 135 replaced (Amalgamation of credit unions and transfer of engagements)
Replace section 135 with:
Amalgamations and transfers of engagements
135 Amalgamation of credit unions and transfer of engagements of 1 credit union to another credit union
(1)
Two or more credit unions may, by special resolution of each of them, amalgamate as 1 credit union.
(2)
The amalgamated credit union may continue as—
(a)
one of the amalgamating credit unions; or
(b)
a new credit union.
(3)
A credit union may, by special resolution, transfer its engagements to any other credit union that, by special resolution or in any other manner that may be authorised by its rules, has undertaken to fulfil the engagements of that credit union.
(4)
A credit union, other than an association, must not—
(a)
amalgamate with—
(i)
an association; or
(ii)
a body that is not a credit union; or
(b)
transfer its engagements to, or accept a transfer of engagements from,—
(i)
an association; or
(ii)
a body that is not a credit union.
(5)
An association must not—
(a)
amalgamate with a body that is not an association; or
(b)
transfer its engagements to, or accept a transfer of engagements from, a body that is not an association.
135A Members of credit union to be given information about proposed amalgamation or transfer of engagements
(1)
Before a credit union amalgamates, or transfers its engagements, information relating to the terms of the proposed amalgamation or transfer must be given to the credit union’s members by sending to each member, not less than 14 days before the date of the general meeting at which the resolution for the amalgamation or transfer is to be proposed, a notice the contents of which have been approved for the purpose by the Registrar.
(2)
For the purposes of subsection (1), the information to be given must relate, at the least, to the following:
(a)
the financial position of the credit union and that of the other credit union concerned:
(b)
the interest of the officers of the credit union, and of the officers of the other credit union concerned, in the amalgamation or transfer:
(c)
the compensation or other consideration (if any) proposed to be paid to any officers referred to in paragraph (b):
(d)
the payments (if any) to be made to the members of the credit union, and to the members of the other credit union concerned, in consideration of the amalgamation or transfer.
135B Secured creditors and public notice
Before a credit union amalgamates, transfers its engagements, or accepts a transfer of engagements from another credit union, the credit union must, at or before the prescribed time,—
(a)
send to every secured creditor of the credit union the prescribed information relating to the proposed amalgamation or transfer; and
(b)
give public notice of the proposed amalgamation or transfer in the prescribed manner and containing the prescribed information relating to the proposed amalgamation or transfer.
135C Registration of special resolutions for amalgamation or transfer of engagements
(1)
Section 85 applies, with any necessary modifications, if a special resolution is passed for the amalgamation, or transfer of engagements, of a credit union.
(2)
Further, the Registrar must not register the special resolution unless satisfied that the requirements of section 100B(1)(a) to (f) or 146(1)(a) to (d) are met in relation to, as the case requires,—
(a)
the amalgamated credit union; or
(b)
the credit union to which the transfer of engagements is being made.
(3)
Once each special resolution relating to an amalgamation, or to a transfer of engagements, has been registered, the Registrar must,—
(a)
in the case of an amalgamation,—
(i)
issue a certificate of amalgamation; and
(ii)
if the amalgamated credit union is one of the amalgamating credit unions, make any necessary changes to that credit union’s registration (for example, registering its new rules); and
(iii)
if the amalgamated credit union is a new credit union, act under section 100B(2) or 146(2) in relation to that credit union (and section 100B(3) to (5) or 146(3) to (5) applies accordingly); and
(iv)
remove from the register under section 140 any amalgamating credit union that is not the amalgamated credit union; or
(b)
in the case of a transfer of engagements,—
(i)
issue a certificate of transfer of engagements; and
(ii)
make any necessary changes to the registration of the credit union to which the transfer is being made (for example, registering its new rules); and
(iii)
remove the other credit union from the register under section 140.
(4)
On and after the date set out in the certificate of amalgamation or transfer of engagements,—
(a)
in the case of an amalgamation,—
(i)
the amalgamation is effective in accordance with its terms; and
(ii)
the amalgamated credit union succeeds to all the property, rights, powers, and privileges of each of the amalgamating credit unions; and
(iii)
the amalgamated credit union succeeds to all the liabilities and obligations of each of the amalgamating credit unions; and
(iv)
proceedings pending by, or against, an amalgamating credit union may be continued by, or against, the amalgamated credit union; and
(v)
a conviction, ruling, order, or judgment in favour of, or against, an amalgamating credit union may be enforced by, or against, the amalgamated credit union; or
(b)
in the case of a transfer of engagements,—
(i)
the transfer is effective in accordance with its terms; and
(ii)
the credit union to which the transfer is made succeeds to all the property, rights, powers, and privileges of the other credit union; and
(iii)
the credit union to which the transfer is made succeeds to all the liabilities and obligations of the other credit union; and
(iv)
proceedings pending by, or against, the other credit union may be continued by, or against, the credit union to which the transfer is made; and
(v)
a conviction, ruling, order, or judgment in favour of, or against, the other credit union may be enforced by, or against, the credit union to which the transfer is made.
(5)
The date set out in the certificate of amalgamation or transfer of engagements must be—
(a)
the date immediately after the date on which it is issued; or
(b)
if later, the date on which the amalgamation or transfer of engagements is to become effective in accordance with its terms.
(6)
In this Part, non-qualifying member,—
(a)
in relation to an amalgamated credit union, includes a person who does not fulfil the qualifications for admission to membership of the credit union but became a member of it by virtue of the amalgamation, having been, immediately before the amalgamation became effective, a non-qualifying member of one of the amalgamating credit unions; and
(b)
in relation to a credit union to which there is a transfer of engagements, includes a person who does not fulfil the qualifications for admission to membership of the credit union but became a member of it by virtue of the transfer, having been, immediately before the transfer became effective, a non-qualifying member of the credit union whose engagements are transferred.
135D Other registers
(1)
The Registrar-General of Land, the Registrar of Deeds, or any other person charged with keeping any books or registers is not obliged to change the name of a transferor credit union to that of a transferee credit union in those books or registers or in any documents solely because an amalgamation or a transfer of engagements has been effected.
(2)
The presentation to a Registrar or any other person of a specified instrument is, in the absence of evidence to the contrary, sufficient evidence that the property to which the instrument relates has become the property of the transferee credit union.
(3)
In subsection (2), a specified instrument is an instrument that—
(a)
is executed or purports to be executed by the transferee credit union; and
(b)
relates to any property held immediately before the amalgamation or transfer of engagements by a transferor credit union; and
(c)
states that the property has become the property of the transferee credit union by virtue of section 135C(4).
(4)
Subsection (5) applies if—
(a)
any financial products issued by a person (A) or any rights or interests in property of a person (A) become, by virtue of section 135C(4), the property of a transferee credit union; and
(b)
a certificate signed on behalf of the committee of management of the transferee credit union is presented to A, stating that those products, rights, or interests have by virtue of section 135C(4) become the property of the transferee credit union.
(5)
Despite subsections (1) and (2) and any other enactment or rule of law, A, on presentation of the certificate, must register the transferee credit union as the holder of the financial products or as the person entitled to the rights or interests.
(6)
Except as provided in this section, nothing in sections 135 to 135C derogates from the provisions of the Land Transfer Act 1952 or the Land Transfer Act 2017.
(7)
In this section,—
transferee credit union,—
(a)
in relation to an amalgamation, means the amalgamated credit union:
(b)
in relation to a transfer of engagements, means the credit union to which the transfer is made
transferor credit union,—
(a)
in relation to an amalgamation, means an amalgamating credit union:
(b)
in relation to a transfer of engagements, means the credit union from which the transfer is made.
135E Powers of court in relation to proposed amalgamation or transfer of engagements
(1)
This section applies if a creditor of a relevant credit union, or any other person to whom a relevant credit union is under an obligation, believes that the creditor or other person would be unfairly prejudiced by a proposed amalgamation or transfer of engagements.
(2)
The creditor or other person may apply to the District Court for an order under subsection (3).
(3)
The court may, if it is satisfied that the creditor or other person would be unfairly prejudiced by the proposed amalgamation or transfer of engagements, make any order the court thinks fit in relation to the proposal, including—
(a)
directing that effect must not be given to the proposal:
(b)
modifying the proposal in any manner specified in the order:
(c)
directing the relevant credit union or its committee of management to reconsider the proposal or any part of it.
(4)
An order may be made under subsection (3) on the conditions that the court thinks fit.
(5)
In this section, relevant credit union means,—
(a)
in relation to a proposed amalgamation, an amalgamating credit union:
(b)
in relation to a proposed transfer of engagements, the credit union making the transfer or the credit union to which the transfer would be made.
36 Section 136 amended (Registrar may approve amalgamations or transfers of engagements of credit unions)
In section 136(1), delete “or trustees”
.
37 Cross-heading above section 137 amended
In the cross-heading above section 137, replace “and suspension of business”
with “suspension of business, removal from register, and restoration to register”
.
38 New section 137A inserted (Members may resolve to put credit union into liquidation)
After section 137, insert:
137A Members may resolve to put credit union into liquidation
(1)
A credit union may be put into liquidation by the appointment of a liquidator by the credit union’s members.
(2)
The liquidator must be appointed by a special resolution.
(3)
Part 16 of the Companies Act 1993 applies to the liquidation of a credit union under subsection (1), with all necessary modifications, as if the credit union were a company that has been put into liquidation under section 241(2)(a) of that Act.
39 Section 138 amended (Registrar may apply to put credit union into liquidation)
(1)
In the heading to section 138, replace “Registrar may apply to”
with “High Court may”
.
(2)
In section 138, replace “the application of the Registrar”
with “an application under this section”
.
(3)
In section 138, delete “in accordance with the Companies Act 1993”
.
(4)
Replace section 138(a) with:
(a)
the credit union is unable to pay its debts; or
(aa)
the credit union has not commenced operations within 1 year of incorporation or has suspended its operations for more than 6 months; or
(ab)
incorporation has been obtained for the credit union by fraud or mistake; or
(ac)
the credit union exists for an illegal purpose; or
(ad)
the requirement about membership in section 100B(1)(a) is not met in relation to the credit union; or
(5)
In section 138, insert as subsections (2) and (3):
(2)
An application under this section may be made by any of the following:
(a)
the credit union:
(b)
a member of the credit union:
(c)
a creditor of the credit union:
(d)
the Registrar.
(3)
Part 16 of the Companies Act 1993 applies, with any necessary modifications,—
(a)
to an application under this section as if the application were an application under section 241(2)(c) of that Act; and
(b)
to the liquidation as if the liquidator had been appointed under section 241(2)(c) of that Act.
40 Section 139 amended (Registrar may suspend business of credit union)
In section 139(6), delete “under section 109(2)”
.
41 Section 140 replaced (Cancellation or suspension of registration, and dissolution of credit union)
Replace section 140 with:
140 Removal from register
(1)
A credit union is removed from the register when the Registrar, acting under subsection (2), registers a notice issued by the Registrar stating that the credit union is removed from the register.
(2)
The Registrar may remove a credit union from the register—
(a)
in accordance with section 135C(3)(a)(iv) or (b)(iii) on the date set out in the certificate of amalgamation or transfer of engagements; or
(b)
if a request that the credit union be removed from the register on a ground specified in subsection (3) is given to the Registrar in accordance with the credit union’s rules; or
(c)
if the credit union has been put into liquidation, and—
(i)
no liquidator is acting; or
(ii)
the documents referred to in section 257(1)(a) of the Companies Act 1993 (as applied by section 137A or 138 of this Act) have not been sent or delivered to the Registrar within 6 months after the liquidation is completed; or
(d)
if a liquidator sends or delivers to the Registrar—
(i)
the documents referred to in section 257(1)(a) of the Companies Act 1993 (as applied by section 137A or 138 of this Act); and
(ii)
a copy of the notice referred to in section 140A(1)(a).
(3)
A request may be made on the grounds—
(a)
that the credit union has ceased to operate, has discharged in full its liabilities to all its known creditors, and has distributed its remaining assets to those persons entitled to them or otherwise in accordance with its rules; or
(b)
that the credit union has no assets remaining after paying its debts in full or in part, and no creditor has applied to the High Court under section 138 for an order putting the credit union into liquidation.
(4)
A request must be made in the prescribed manner (if any).
140A Notice of intention to remove from register
(1)
The Registrar may remove a credit union from the register under section 140(2)(b) to (d) only if—
(a)
the Registrar is satisfied that notice of the intention to remove the credit union from the register has been given in the prescribed manner to the public and all other prescribed persons (if any); and
(b)
the Registrar—
(i)
is satisfied that no person has objected to the removal under section 140B; or
(ii)
if an objection to the removal has been received, has complied with sections 140C and 140D.
(2)
The notice under subsection (1)(a) must specify the date by which an objection to the removal under section 140B must be delivered to the Registrar, which must be no less than the prescribed number of working days after the date of the notice.
140B Objection to removal from register
(1)
If a notice is given under section 140A(1)(a), any person may deliver to the Registrar, not later than the date specified in the notice, an objection to the removal on any of the following grounds:
(a)
that the credit union is still operating or there is other reason for it to continue in existence:
(b)
that the credit union is a party to a legal proceeding:
(c)
that the credit union is in receivership or liquidation, or both:
(d)
that the person is a creditor, or another person, who has an undischarged claim against the credit union:
(e)
that, for any other reason, it would not be just and equitable to remove the credit union from the register.
(2)
Section 321(2) of the Companies Act 1993 applies for the purposes of subsection (1)(d), with all necessary modifications, as if the credit union were a company.
140C Objections under section 140B(1)(a), (b), or (c)
If an objection is made under section 140B(1)(a), (b), or (c), the Registrar must not proceed with the removal unless the Registrar is satisfied that—
(a)
the objection has been withdrawn; or
(b)
any facts on which the objection is based are not, or are no longer, correct; or
(c)
the objection is frivolous or vexatious.
140D Objections under section 140B(1)(d) or (e)
(1)
If an objection is made under section 140B(1)(d) or (e), the Registrar may give notice to the person objecting that, unless notice of a specified application is given to the Registrar not later than 20 working days after the date of the notice, the Registrar intends to proceed with the removal.
(2)
In this section, specified application means an application under section 138 or 140F.
(3)
The Registrar may proceed with the removal if—
(a)
notice of a specified application is not served on the Registrar; or
(b)
the specified application is withdrawn; or
(c)
on the hearing of the specified application, the court refuses to grant either an order putting the credit union into liquidation or an order that the credit union not be removed from the register.
(4)
Every person who makes a specified application must give the Registrar notice in writing of the decision of the court within 5 working days after the decision is given.
140E Registrar must send information to person who requests removal
The Registrar must send the following to a person who delivered a request under section 140(2)(b) or a liquidator referred to in section 140(2)(d):
(a)
a copy of an objection under section 140B:
(b)
a copy of a notice given by or to the Registrar under section 140D:
(c)
if the credit union is removed from the register, notice of the removal.
140F High Court may order that credit union not be removed
(1)
A person who gives a notice objecting to the removal of a credit union from the register on a ground specified in section 140B(1)(d) or (e) may apply to the High Court for an order that the credit union is not to be removed from the register.
(2)
The court may, if it is satisfied that the credit union should not be removed from the register on any of the grounds in section 140B(1), make an order that the credit union is not to be removed from the register.
140G Liability of officers, members, and others to continue
The removal of a credit union from the register does not affect the liability of any former officer or member of the credit union or any other person in respect of any act or omission that took place before the credit union was removed from the register, and that liability continues and may be enforced as if the credit union had not been removed from the register.
140H Restoration of credit union to register
(1)
A credit union is restored to the register when the Registrar, acting under section 140I or an order made under section 140K, registers a notice issued by the Registrar stating that the credit union is restored to the register.
(2)
A credit union that is restored to the register must be treated as having continued in existence as if it had not been removed from the register.
140I Registrar may restore credit union to register
(1)
The Registrar must, on an application made in the prescribed manner, and may, on the Registrar’s own motion, restore a credit union to the register if the Registrar is satisfied that, at the time the credit union was removed from the register,—
(a)
the credit union was still operating or another reason existed for the credit union to continue in existence; or
(b)
the credit union was a party to a legal proceeding; or
(c)
the credit union was in receivership or liquidation, or both.
(2)
This section does not limit section 140K.
140J Notice of proposed restoration
(1)
Before the Registrar restores a credit union to the register under section 140I, the Registrar must be satisfied that notice of the intention to restore the credit union to the register has been given in the prescribed manner to the public and all other prescribed persons (if any).
(2)
The notice under subsection (1) must specify the date by which an objection to the restoration may be delivered to the Registrar, which must be no less than the prescribed number of working days after the date of the notice.
(3)
The Registrar must not restore a credit union to the register under section 140I if the Registrar receives an objection to the restoration within the period stated in the notice under subsection (1).
140K High Court may order restoration of credit union
(1)
The High Court may, on the application of a person referred to in subsection (2), order that a credit union be restored to the register if it is satisfied that,—
(a)
at the time the credit union was removed from the register,—
(i)
the credit union was still operating or another reason existed for the credit union to continue in existence; or
(ii)
the credit union was a party to a legal proceeding; or
(iii)
the credit union was in receivership or liquidation, or both; or
(iv)
the applicant was a creditor, or another person, who had an undischarged claim against the credit union; or
(b)
for any other reason it is just and equitable to restore the credit union to the register.
(2)
The following persons may make an application:
(a)
any person who is prescribed for the purposes of this subsection:
(b)
the Registrar:
(c)
with the leave of the court, any other person.
140L Registrar or High Court may require provisions of this Act to be complied with
The Registrar or the High Court may, before restoring a credit union to the register under section 140I or ordering its restoration to the register under section 140K, require any of the provisions of this Act to be complied with (being provisions with which the credit union had failed to comply before it was removed from the register).
140M Other High Court orders
(1)
This section applies if a credit union is restored to the register under section 140I or its restoration to the register is ordered under section 140K.
(2)
The High Court may, on the application of the Registrar or the applicant for restoration or on its own motion, give any directions or make any orders that may be necessary or desirable for the purpose of placing the credit union and any other persons as nearly as possible in the same position as if the credit union had not been removed from the register.
(3)
However, a direction or an order may not require the return to the credit union of any assets that have been properly transferred in accordance with any provision of the credit union’s rules that falls within item 17 of Schedule 4.
42 Section 141 amended (Liability of members on winding up)
(1)
In section 141, replace “section 138”
with “section 137A or 138”
.
(2)
In section 141, delete “qualified”
.
43 Section 143 amended (Associations of credit unions to be registered)
(1)
In the heading to section 143, replace “to be registered”
with “may be incorporated under this Part”
.
(2)
Repeal section 143(1).
(3)
Replace section 143(2) to (4) with:
(2)
Any 2 or more credit unions may apply to the Registrar in accordance with section 145 for the incorporation of an association of credit unions under this Part.
(3)
The objects of the association must be, or fall within, the objects set out in subsection (4).
(4)
The objects referred to in subsection (3) are as follows:
(a)
to promote the interests of the association’s members:
(b)
as authorised by the association’s rules,—
(i)
to provide its members or other persons with products or services:
(ii)
otherwise to carry out activities for the benefit or assistance of its members or other persons.
44 Section 145 amended (Application for registration of association)
(1)
In the heading to section 145, replace “registration”
with “incorporation”
.
(2)
Replace section 145(1) and (2) with:
(1)
An application under section 143(2) for the incorporation of an association of credit unions must be signed by each of the applicants.
(2)
The application must include—
(a)
a copy of the association’s proposed rules; and
(b)
a list of the names, addresses, and designations of the officers proposed for the association.
(3)
Repeal section 145(4).
45 Section 146 replaced (Registration of association)
Replace section 146 with:
146 Incorporation of association
(1)
Subsection (2) applies if an application is made under section 143(2) for the incorporation of an association of credit unions and the Registrar is satisfied—
(a)
that the association will have at least 2 members; and
(b)
that the rules as submitted are not contrary to the provisions of this Act and may be reasonably approved by the Registrar; and
(c)
that there are reasonable grounds for believing that the association will be able to carry out its objects successfully; and
(d)
that there is no reasonable cause why the association should not be incorporated.
(2)
The Registrar must—
(a)
register the association’s name; and
(b)
issue a certificate of incorporation; and
(c)
register the association’s rules (together with any other documents or information relating to the association that the Registrar thinks appropriate).
(3)
The association is, on and after the date of incorporation set out in the certificate of incorporation, a body corporate that has—
(a)
perpetual succession; and
(b)
the capacity, rights, powers, and privileges provided for in section 107B.
(4)
The association continues in existence until it is removed from the register under section 140.
(5)
The certificate of incorporation is conclusive evidence that—
(a)
all the requirements of this Part as to incorporation have been complied with; and
(b)
on and after the date of incorporation set out in the certificate, the association is registered and incorporated under this Part.
(6)
If the Registrar refuses to act under subsection (2) in relation to an application, the applicants may, within 3 months after the date on which they are notified of the refusal, appeal against the refusal to the High Court.
(7)
If the refusal is overruled on appeal, then, subject to such terms and conditions as the court may impose or otherwise in pursuance of the court order, the Registrar must act under subsection (2) as soon as practicable.
(8)
Sections 98 to 102, 103(1), 106(1) to (6), 106B(6), 107, 107A, 138(1)(c), and 142 do not apply in respect of associations.
(9)
Section 103(3) applies in respect of an association as if section 145(3) were in section 103.
(10)
If an association has only 2 members, section 106B(4) applies in respect of the association as if the reference to 3 members were to 2 members.
46 Section 151 amended (Appeals)
In section 151(3), after “Registrar”
, insert “under Part 2”
.
47 Section 152 amended (Regulations)
After section 152(c), insert:
(ca)
prescribing matters as referred to in section 135B, 140(4), 140A(1)(a) or (2), 140I(1), 140J(1) or (2), or 140K(2)(a):
48 Section 154 amended (Recovery of fines, etc, imposed on society, branch, or credit union)
(1)
In the heading to section 154, replace “, branch, or credit union”
with “or branch”
.
(2)
In section 154, replace “or branch, or credit union”
with “or branch”
.
(3)
In section 154, replace “, branch, or credit union”
with “or branch”
in each place.
49 Section 155 amended (Status of trustees and officers for purposes of Crimes Act 1961)
In section 155(1), delete “or credit union”
.
50 Section 156 amended (Liability of officers and of members of committee on commission of offence)
In section 156, delete “or credit union”
in each place.
51 Section 157 amended (Institution of legal proceedings by or against society or branch or credit union)
(1)
In the heading to section 157, delete “or credit union”
.
(2)
In section 157, delete “or credit union”
in each place.
(3)
In section 157(2), delete “or (credit union)”
.
52 New Schedule 1AA inserted
Insert the Schedule 1AA set out in the Schedule of this Act as the first schedule to appear after the last section of the principal Act.
53 Schedule 4 amended
(1)
In Schedule 4, replace item 6 with:
6
The appointment and removal of a committee of management (by whatever name known) and of other officers.
(2)
In Schedule 4, after item 9, insert:
9A
Whether or not the credit union is to make loans of the kind referred to in section 110(1)(b) and, if it is, the mode and circumstances, expressed either generally or specifically, in which the loans are to be made and repaid, including any special provision for the insurance of any person to whom a loan is made.
(3)
In Schedule 4, after item 16, insert:
16A
Provision about when, and by whom, a request may be made under section 140(2)(b).
(4)
In Schedule 4, replace item 17 with:
17
Provision requiring, on the credit union’s winding-up under section 137A or 138 or on or before its removal from the register under section 140, any assets remaining after the payment of debts, repayment of share capital, and discharge of other liabilities—
(a)
to be transferred to another credit union, or an association of credit unions; or
(b)
if not so transferred, to be applied for charitable purposes.
54 Schedule 5 amended
In the Schedule 5 heading, replace “, societies, or bodies of persons exempt from registration”
with “exempt from incorporation”
.
Part 2 Consequential amendments
55 Amendment to Administration Act 1969
(1)
This section amends the Administration Act 1969.
(2)
In section 65(1), definition of society, replace “union registered or deemed to be registered”
with “union registered, deemed to be registered, or incorporated”
.
56 Amendment to Insurance (Prudential Supervision) Act 2010
(1)
This section amends the Insurance (Prudential Supervision) Act 2010.
(2)
Replace section 11 with:
11 Application of Act to friendly societies
This Act applies to a friendly society (as that term is defined in section 2 of the Friendly Societies and Credit Unions Act 1982) as if the friendly society were a body corporate.
57 Amendment to Financial Reporting Act 2013
(1)
This section amends the Financial Reporting Act 2013.
(2)
In section 5(1), definition of entity, paragraph (f), replace “society, a branch of a society, or a credit union”
with “society or a branch of a society”
.
58 Amendment to Income Tax Act 2007
(1)
This section amends the Income Tax Act 2007.
(2)
In section YA 1, definition of friendly society, replace “or treated as registered”
with “, treated as registered, or incorporated”
.
59 Amendments to New Zealand Business Number Act 2016
(1)
This section amends the New Zealand Business Number Act 2016.
(2)
In section 5, definition of entity, paragraph (g), replace “society, a branch of a society, or a credit union”
with “society or a branch of a society”
.
(3)
In Schedule 2, item relating to friendly societies, branches of friendly societies, and credit unions, replace “or deemed to be registered”
with “, deemed to be registered, or incorporated”
.
60 Amendment to Property Law Act 2007
(1)
This section amends the Property Law Act 2007.
(2)
In section 4, definition of Registrar, paragraph (c)(iv), after “registered”
, insert “or incorporated”
.
61 Amendment to Receiverships Act 1993
(1)
This section amends the Receiverships Act 1993.
(2)
In section 2(1), definition of Registrar, paragraph (d), after “registered”
, insert “or incorporated”
.
62 Amendment to Social Security Act 1964
(1)
This section amends the Social Security Act 1964.
(2)
In section 82(7)(c), replace “registered”
with “incorporated”
.
Schedule New Schedule 1AA inserted
Schedule 1AA Transitional, savings, and related provisions
s 2A
Part 1 Provisions relating to Friendly Societies and Credit Unions (Regulatory Improvements) Amendment Act 2018
1 Interpretation
(1)
In this Part,—
application period means the period of 6 months beginning with the main commencement date
existing credit union means a credit union, or an association of credit unions, that is registered under Part 3 immediately before the main commencement date
incorporation provision means the amendments to enactments made by the Friendly Societies and Credit Unions (Regulatory Improvements) Amendment Act 2018, except the amendments made by the following:
(a)
sections 4(4), (6), and (7), 5, 6(1), 7, 8, 9, 10, 11, 12, and 52 of that Act:
(b)
the Schedule of that Act
instrument includes (without limitation),—
(a)
whether in writing or not, contracts, agreements, guarantees, conveyances, deeds, leases, grants, licences, exemptions, approvals, securities, financial products, undertakings, consents, waivers, and notices:
(b)
instruments that are made under, or for the purposes of, enactments
liabilities means liabilities, debts, charges, duties, and obligations, whether present or future, whether actual or contingent, and whether payable in, or to be observed or performed in, New Zealand or elsewhere
main commencement date means the date on which the Friendly Societies and Credit Unions (Regulatory Improvements) Amendment Act 2018 comes into force
property means real or personal property in New Zealand or elsewhere, and includes—
(a)
choses in action and money; and
(b)
goodwill; and
(c)
rights, interests, and claims in or to property, whether arising from or accruing under, or created or evidenced by, or the subject of, an instrument or otherwise, and whether liquidated or unliquidated, actual, contingent, or prospective
relevant post-commencement date, in relation to an existing credit union, means the date of incorporation set out in the existing credit union’s certificate of incorporation in accordance with clause 3(7)
rights means rights, powers, privileges, and immunities, whether actual, contingent, or prospective, and whether arising or conferred in New Zealand or elsewhere
specified date means the date specified under subclause (2).
(2)
The Governor-General may, by Order in Council, specify a date as the specified date for the purposes of this Part.
2 Application of incorporation provision to existing credit unions
Except as provided for in clause 3, the incorporation provision applies to an existing credit union—
(a)
only if a certificate of incorporation is issued for the existing credit union on an application for its incorporation sent to the Registrar in accordance with clause 3; and
(b)
only on and after the relevant post-commencement date.
3 Existing credit unions to apply for incorporation
(1)
An existing credit union must, during the application period, send to the Registrar an application for its incorporation.
(2)
The application must be made on behalf of the existing credit union by its committee of management.
(3)
The application must—
(a)
be signed on behalf of the committee of management; and
(b)
comply with, as the case may be,—
(i)
section 100A(1)(b) to (d) and (2) as inserted by the incorporation provision; or
(ii)
section 145(2) as replaced by the incorporation provision.
(4)
The application (including the contents required by section 100A(1)(b) to (d) or 145(2), as the case may be)—
(a)
must be approved by a resolution of a majority of the existing credit union’s members entitled to vote and voting on the matter; and
(b)
once it is so approved, may be sent to the Registrar despite—
(i)
section 104(3) (as it continues to apply to the existing credit union after the main commencement date); or
(ii)
any provision of the existing credit union’s rules.
(5)
Once the application is sent to the Registrar, it is to be—
(a)
treated as an application under, as the case may be, section 100 or 143(2) as replaced by the incorporation provision; and
(b)
then dealt with in accordance with this Act as amended by the incorporation provision.
(6)
For the purposes of section 100B(1)(e) (if applicable), it is to be assumed that the existing credit union’s name immediately before the main commencement date complies with section 103.
(7)
If a certificate of incorporation is issued on the application, the date of incorporation set out in the certificate must be—
(a)
the specified date; or
(b)
if later, the date immediately after the date on which the certificate is issued.
(8)
At the beginning of the relevant post-commencement date, the rules registered by the Registrar under section 100B(2)(c) or 146(2)(c) become the existing credit union’s rules and its trust is terminated.
4 Failure of existing credit union to apply for incorporation, etc
(1)
Subclause (2) applies if an existing credit union fails to send to the Registrar an application for its incorporation in accordance with clause 3.
(2)
The existing credit union’s registration is cancelled at the end of the application period.
(3)
Subclause (4) or (5) (as the case requires) applies if—
(a)
an existing credit union sends an application to the Registrar for its incorporation in accordance with clause 3; and
(b)
the Registrar refuses to act under section 100B(2) or 146(2).
(4)
If the Registrar’s refusal is not appealed against under section 100B(6) or 146(6), the existing credit union’s registration is cancelled at—
(a)
the end of the application period; or
(b)
if later, the end of the period of 3 months referred to in section 100B(6) or 146(6).
(5)
If the Registrar’s refusal is appealed against under section 100B(6) or 146(6) but the appeal is discontinued or the refusal is not overruled, the existing credit union’s registration is cancelled at—
(a)
the end of the application period; or
(b)
if later, the end of the day on which the appeal is discontinued or finally determined.
(6)
The cancellation of an existing credit union’s registration by this clause is to be treated as a cancellation by the Registrar under section 140 (as in force before its replacement by the incorporation provision) and this Act and all other relevant enactments apply accordingly (disregarding the incorporation provision), except that sections 92(2) to (6) and 151 of this Act do not apply to the cancellation.
5 Vesting of existing credit union’s property, rights, and liabilities in body corporate, etc
(1)
This clause and clauses 6 to 12 apply to an existing credit union for which a certificate of incorporation is issued on an application for its incorporation that is sent to the Registrar in accordance with clause 3.
(2)
At the beginning of the relevant post-commencement date, the property, rights, and liabilities of the existing credit union, and of its trustees, belong to, and vest in, the body corporate established by section 100B(3) or 146(3).
(3)
Clauses 6 to 11 do not limit the generality of subclause (2) of this clause.
6 Status of instruments
(1)
This clause applies to an instrument that—
(a)
is entered into by the existing credit union or its trustees (whether alone or with another person) before the relevant post-commencement date; and
(b)
is subsisting immediately before the relevant post-commencement date.
(2)
On and after the relevant post-commencement date, the instrument is binding on, enforceable by, against, or in favour of, or otherwise applicable to the existing credit union as the body corporate as if the body corporate had been the person who entered into the instrument before the relevant post-commencement date.
(3)
On and after the relevant post-commencement date, a reference (express or implied) to the existing credit union or its trustees in the instrument is a reference to the existing credit union as the body corporate.
(4)
In this clause, references to an instrument being entered into by a person include the instrument—
(a)
being made by or with the person; or
(b)
being issued, or given, to or by the person; or
(c)
being addressed to the person; or
(d)
being otherwise applicable to the person.
7 Continuation of legal and other proceedings
(1)
This clause applies to a proceeding—
(a)
that was pending or that existed by, against, in favour of, or otherwise in relation to, the existing credit union before the relevant post-commencement date; or
(b)
to which the existing credit union was a party before the relevant post-commencement date.
(2)
The proceeding must be continued and enforced by, against, in favour of, or otherwise in relation to, the existing credit union as the body corporate or with the body corporate as the party.
(3)
It is not necessary to amend an application, notice, or other document to do so.
(4)
In subclause (1), references to the existing credit union include the following:
(a)
its trustees:
(b)
any authorised officer acting under section 157(1):
(c)
any other person sued, or suing, on behalf of the existing credit union.
(5)
In this clause, proceeding includes action, arbitration, cause of action, conviction, judgment, liquidation, order, and ruling.
8 Employees
(1)
At the beginning of the relevant post-commencement date, each employee of the existing credit union or its trustees becomes an employee of the existing credit union as the body corporate.
(2)
For the purposes of an enactment, rule of law, contract, or agreement relating to the employee, the contract of employment of the employee must be treated as unbroken and a period of service with the existing credit union or its trustees before the relevant post-commencement date must be treated as a period of service with the existing credit union as the body corporate.
(3)
The terms and conditions of employment of the employee must remain the same as the terms and conditions of his or her employment with the existing credit union or its trustees immediately before the relevant post-commencement date, but they may be varied in the same manner.
(4)
The employee is not entitled to receive a payment or benefit by reason only of the change in the employee’s employment status under this clause.
9 Taxes and duties
For the purposes of the Inland Revenue Acts (as that term is defined in section 3 of the Tax Administration Act 1994),—
(a)
the existing credit union as the body corporate is the same person as the existing credit union and its trustees before the relevant post-commencement date; and
(b)
a transaction entered into by, or an act of, the existing credit union or its trustees at a time (the relevant time) before the relevant post-commencement date must be treated—
(i)
as having been entered into by, or as an act of, the existing credit union as the body corporate; and
(ii)
as having been entered into, or as performed by, the existing credit union as the body corporate at the relevant time.
10 Other registers
(1)
The Registrar-General of Land, the Registrar of Deeds, or any other person charged with keeping any books or registers is not obliged to make any changes to those books or registers or in any other documents solely because any property of the existing credit union or its trustees belongs to, and vests in, the body corporate at the beginning of the relevant post-commencement date.
(2)
The presentation to a Registrar or any other person of a specified instrument is, in the absence of evidence to the contrary, sufficient evidence that the property to which the instrument relates belongs to, and is vested in, the existing credit union as the body corporate.
(3)
In subclause (2), a specified instrument is an instrument that—
(a)
is executed or purports to be executed by the existing credit union as the body corporate; and
(b)
relates to any property of the existing credit union or its trustees before the relevant post-commencement date; and
(c)
states that the property belongs to, and is vested in, the existing credit union as the body corporate by virtue of this Part.
(4)
Subclause (5) applies if—
(a)
any financial products issued by a person (A) or any rights or interests in property of a person (A) belong to, and vest in, the body corporate at the beginning of the relevant post-commencement date; and
(b)
a certificate signed on behalf of the committee of management of the existing credit union as the body corporate is presented to A, stating that those products, rights, or interests have become the property of the existing credit union as the body corporate.
(5)
Despite subclauses (1) and (2) and any other enactment or rule of law, A, on presentation of the certificate, must register the body corporate as the holder of the financial products or as the person entitled to the rights or interests.
(6)
Except as provided in this clause, nothing in this Part derogates from the provisions of the Land Transfer Act 1952 or the Land Transfer Act 2017.
11 Effect of incorporation, etc
Neither the incorporation of the existing credit union nor anything in or effected by, or done under, clauses 5 to 10—
(a)
places any person in breach of, or otherwise in default under, an enactment, an instrument, a confidence, a trust, or any other rule of law or equity, or makes any person liable for a civil wrong; or
(b)
entitles any person—
(i)
to require the payment or performance of a liability not otherwise arising for payment or performance; or
(ii)
to exercise a right not otherwise becoming exercisable; or
(c)
invalidates or discharges an instrument or any provision of an instrument; or
(d)
releases a surety from a liability.
12 Termination of security provided under section 114
(1)
Despite clauses 5(2) and 6 to 11, any security provided under section 114 before the relevant post-commencement date terminates at the beginning of that date.
(2)
Subclause (1) does not prevent the body corporate from enforcing the security in relation to any failure or other event that occurs before the relevant post-commencement date.
Reprints notes
1 General
This is a reprint of the Friendly Societies and Credit Unions (Regulatory Improvements) Amendment Act 2018 that incorporates all the amendments to that Act as at the date of the last amendment to it.
2 Legal status
Reprints are presumed to correctly state, as at the date of the reprint, the law enacted by the principal enactment and by any amendments to that enactment. Section 18 of the Legislation Act 2012 provides that this reprint, published in electronic form, has the status of an official version under section 17 of that Act. A printed version of the reprint produced directly from this official electronic version also has official status.
3 Editorial and format changes
Editorial and format changes to reprints are made using the powers under sections 24 to 26 of the Legislation Act 2012. See also http://www.pco.parliament.govt.nz/editorial-conventions/.
4 Amendments incorporated in this reprint
Friendly Societies and Credit Unions (Regulatory Improvements) Amendment Act 2018 Commencement Order 2018 (LI 2018/168)