Recital 5

(5)The legally binding requirements of New Zealand for CCPs authorised therein consist of Part 5C of the Reserve Bank of New Zealand Act 1989 (‘the primary rules’) and the orders by which CCPs are authorised as a designated settlement system (‘designation orders’). The primary rules and the designation orders set out the requirements that CCPs have to comply with on an ongoing basis to be able to provide clearing services in New Zealand. CCPs established in New Zealand can be authorised as a designated settlement system by the Governor-General, on advice of both the Minister of Finance and the Minister of Commerce and in accordance with a joint recommendation of the Bank of New Zealand and the Financial Markets Authority (together, ‘the joint regulators’). Conditions may be imposed for authorising a CCP as a designated settlement system. The designation orders approve the specific internal rules and procedures of the designated settlement system which contain the requirements that designated settlement systems must comply with, and which are consistent with the joint regulators' high-level policy published by the joint regulators. Pursuant to the Reserve Bank of New Zealand Act 1989, designated settlement systems must comply with relevant international standards concerning clearing and settlement systems, including the Principles for Financial Markets Infrastructures (‘PFMIs’) issued in April 2012 by the Committee on Payment and Settlement Systems ² and the International Organization of Securities Commissions (‘IOSCO’). The joint regulators issued a policy statement ‘The Designation and Oversight of Designated Settlement Systems’ requiring designated settlement systems to comply with the PFMIs.