Bank accounts and securities

Introduction

The Crown Entities Act 2004 came into force on 25 January 2005 as one part of a range of legislative amendments designed to strengthen the whole State sector. Among the changes introduced were a number of requirements in relation to financial management and reporting by school boards of trustees.

In general, the purpose of these changes is to limit the amount of risk that board funds are exposed to. In practice it has placed limits on the types of financial institutions that schools can bank with or invest funds in.

Approved bank accounts

Bank accounts operated by schools must be held in registered banks or building societies that either meets the credit-test specified in the Crown Entities (Financial Powers) Regulations 2005 or have been approved by the Minister of Finance.

Banks currently approved for use by school boards of trustees are:

• ABN AMRO Bank NV
• ANZ National Bank Limited
• ASB Bank Limited
• Ashburton Building Society
• Bank of New Zealand
• Citibank N A
• Commonwealth Bank of Australia
• Deutsche Bank A G
• Kiwibank Limited
• Rabobank New Zealand Limited
• Rabobank Nederland
• Southern Cross Building Society
• Southland Building Society
• The Bank of Tokyo-Mitsubishi, Ltd.
• The Hongkong and Shanghai Banking Corporation Limited
• TSB Bank Limited
• Westpac Banking Corporation

Detailed information concerning the use of bank accounts by schools is available in the Financial Information for Schools Handbook (FISH). The Bank Accounts section of this Handbook contains information about:

• Action to take if your current bank is not listed above
• Restrictions on operating overseas bank accounts
• Restrictions on operating bank accounts denominated in foreign currency.

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Approved securities

School boards of trustees may only invest funds in public securities or securities are issued financial institutions that either meet the credit-test specified in the Crown Entities (Financial Powers) Regulations 2005 or have been approved by the Minister of Finance.

Public securities include:

• Treasury Bills
• Government Stock
• Other bonds, notes or debentures issued as part of the public debt of New Zealand.

Securities issued by the following financial institutions are currently approved for use by school boards of trustees:

• ABN AMRO Bank NV
• ANZ National Bank Limited
• ASB Bank Limited
• Bank of New Zealand
• Canterbury Building Society
• Citibank N A
• Commonwealth Bank of Australia
• Deutsche Bank A G
• Hamilton Catholic Development Fund
• Kiwibank Limited
• Rabobank New Zealand Limited
• Rabobank Nederland
• Southern Cross Building Society
• Southland Building Society
• The Bank of Tokyo-Mitsubishi, Ltd.
• The Hongkong and Shanghai Banking Corporation Limited
• TSB Bank Limited
• UDC Finance
• Westpac Banking Corporation

Detailed information concerning the acquisition of securities by schools is available in the Financial Information for Schools Handbook (FISH). The Investments (Acquisition of Securities) section of this Handbook contains information about:

• the application process for boards seeking approval to invest in securities not listed above
• action to take if your school currently holds securities that are not listed above.