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Guidelines for the Management of Crown and Departmental Foreign Exchange Exposure

SCHEDULE III: Procedure for Opening a Foreign-Currency Bank Account

  1. Pursuant to sections 18 and 19 of the PFA 1989, the Manager of the Budget and Macroeconomic Branch (BMB) of Treasury has delegated authority to approve the opening of Crown and departmental bank accounts.

  2. Pursuant to section 21 of the PFA 1989, foreign-currency bank accounts may only be operated under the terms of a Direction for Foreign-Currency Departmental Bank Accounts or a Notice of Delegation Regarding Crown Bank Accounts issued by the Treasury.

  3. The department must apply in writing to their Treasury Vote Team to open a foreign-currency bank account. The application should include:

    • whether a Crown or departmental account is required;

    • the business justification for the bank account;

    • the currency and required exposure limit;

    • the bank and location at which the account is to be opened;

    • the credit rating of the bank;

    • whether the account is to be interest-bearing; and

    • the names or job titles of the authorised signatories.

  4. The Vote Team will consider the application in terms of the business justification and Treasury’s minimum credit criteria (A- / A3)[1][subject to the exceptions outlined in paragraph 48 of these guidelines]. They will advise BMB whether or not they are in support of the department’s application.

  5. If the Vote Team is in support of the application, BMB will process the request and issue a Direction or Delegation to the department to operate the bank account. In the event that the Vote Team declines the application e.g where the bank does not meet Treasury’s credit criteria and there is an alternative bank available which does, the department will require joint ministerial approval should they wish to proceed with their application.

  6. Once a bank account has been approved by Treasury and the appropriate Direction or Delegation issued, the department will need to update their list of approved counterparties in their Foreign-Exchange Policy Document.

  7. Any proposed changes to a department’s banking arrangements must also be approved by their Treasury Vote Team. The application must be made in writing and state:

    • what the required change is;

    • the reason for the change, including any supporting documentation; and

    • where the request is to close a bank account, confirmation that the account has been reconciled to a zero balance and that no transactions are outstanding.

Notes

  • [1]Credit rating assigned by Standard and Poor’s and Moody’s respectively. When the institution is rated differently by the two agencies, the lower rating prevails.
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