Financial Sector Legislation Amendment (Trans-Tasman Banking Supervision) Act 2006 (147 of 2006)

Schedule 1   Trans-Tasman cooperation

Australian Prudential Regulation Authority Act 1998

6   After section 8

Insert:

8A Trans-Tasman cooperation

(1) In performing and exercising its functions and powers, APRA must:

(a) support the prescribed New Zealand authorities in meeting their statutory responsibilities relating to prudential regulation and financial system stability in New Zealand; and

(b) to the extent reasonably practicable, avoid any action that is likely to have a detrimental effect on financial system stability in New Zealand.

(2) APRA must balance the requirements of subsection (1) with the requirements specified in section 8.

(3) If:

(a) APRA proposes to take an action; and

(b) APRA has reasonable cause to believe that the action is likely to have a detrimental effect on financial system stability in New Zealand;

APRA must, to the extent that APRA considers reasonably practicable in the circumstances, having regard to urgency or other similar constraint, consult with and consider the advice of each prescribed New Zealand authority APRA considers to be relevant in the circumstances before taking the action.

(4) The performance of a function or the exercise of a power by APRA is not invalid merely because of a failure by APRA to comply with this section.