This is a perfect example of why Nike Cup is considered a 'poison chalice' ...
NZF finds itself in a sticky situation because it appears to have initially agreed to allow two clubs to reach a private agreement about a player 'loan' and that act has created a playing field that is not level for other competitors.
Had the 'loan' option described above been made available to all teams, I am convinced that it would have been used by other clubs.
Hopefully proposed qualification changes to Nike Cup for 2015 will make it harder for this sort of nonsense to occur.
Another thought: Was player in question actually transferred to ECB from Onehunga ? If not and he played in Metro competition for ECB in 2013 it would seem that both clubs have also contravened those regulations as there is no such thing as player 'loans' at youth level - you are either registered for a club and are eligible to play for them or you are not.