RBNZ admits defeat on lender disclosure rules

RBNZ admits defeat on lender disclosure rules, calls for submissions

By Paul McBeth

Aug. 6 (BusinessDesk) – The Reserve Bank of New Zealand says its policy of requiring quarterly updates on the financial condition of banks has failed, and it wants suggestions on streamlining lenders’ disclosure obligations.

The central bank is looking to cut the compliance costs associated with its disclosure rules and is considering dropping the Key Information Summary, a quarterly update on a bank’s financial condition that has been a requirement for 14 years. “We do not believe it (the summary) has delivered what it was intended to achieve,” the bank said. Lenders would still have to provide a quarterly general disclosure statement.

“This review is likely to significantly reduce and modify the Reserve Bank’s disclosure requirements, while introducing other ways of collecting information for prudential purposes,” Deputy Governor Grant Spencer said in a statement.

The review of banks’ disclosure requirements comes amid an overhaul of Securities Law which will see companies’ offer documents made simpler, reducing compliance costs and complexity for retail investors.

Wearing its bank regulator hat, the Reserve Bank is calling for submissions on its consultation document, and has two favoured positions, both of which reduce the number of quarterly documents banks are required to supply.

Banks expect it will take about three months to adapt to any of the changes indicated, the central bank said.

(BusinessDesk)

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