1Short title
This Act may be cited as the Financial Sector (Shareholdings) Act 1998.
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Bill homepage (APH)This Act may be cited as the Financial Sector (Shareholdings) Act 1998.
This Act commences on the commencement of the Australian Prudential Regulation Authority Act 1998.
In this Act, unless the contrary intention appears:
100% subsidiary has the same meaning as in the Income Tax Assessment Act 1997.
agreement means any agreement, whether formal or informal and whether express or implied.
APRA means the Australian Prudential Regulation Authority.
assets threshold has the meaning given by subsections 14A(6) and (7).
Australia, when used in a geographical sense, includes the external Territories.
authorised deposit‑taking institution has the same meaning as in the Banking Act 1959.
authorised insurance company means:
a company authorised under the Insurance Act 1973 to carry on insurance business; or
a company registered under section 21 of the Life Insurance Act 1995.
civil penalty provision has the same meaning as in the Regulatory Powers Act.
company means a body corporate.
Federal Court means the Federal Court of Australia.
financial sector company means:
an authorised deposit‑taking institution; or
an authorised insurance company; or
a holding company of a company covered by paragraph (a) or (b).
holding company has the meaning given by section 4.
Regulatory Powers Act means the Regulatory Powers (Standard Provisions) Act 2014.
relevant licensed company, in relation to an approval under paragraph 14(1)(b), means the company to which subsection 14A(3) or (4) applied in granting the approval.
rules means rules made under subsection 45A(1).
scheme means:
any agreement, arrangement, understanding, promise or undertaking, whether express or implied and whether or not enforceable, or intended to be enforceable, by legal proceedings; and
any scheme, plan, proposal, action, course of action or course of conduct, whether unilateral or otherwise.
total resident assets has the meaning given by subsection 14A(5).
unacceptable shareholding situation has the meaning given by section 10.
Schedule 1 sets out definitions of expressions used in Part 2 (which deals with restrictions on shareholdings).
For the purposes of this Act, a company (the first company) is the holding company of another company if the other company is a 100% subsidiary of the first company.
This Act binds the Crown in right of the Commonwealth, of each of the States, of the Australian Capital Territory and of the Northern Territory.
This Act does not make the Crown liable to be prosecuted for an offence.
This Act extends to all the external Territories.
This Act extends to acts, omissions, matters and things outside Australia.
If a person holds a stake in a financial sector company that exceeds the allowed percentage, the Federal Court may make orders to ensure that the situation ceases to exist.
A person commits an offence if, by acquiring shares in a company (alone or under an arrangement with others), the person causes or worsens such a situation.
A person’s stake is the percentage of voting power in the company controlled by the person and the person’s associates.
The allowed percentage is 20% or a higher percentage approved by the Treasurer for the person either:
on national interest grounds; or
on the basis that the person is a fit and proper person and the company concerned is new or recently established, with assets below a certain threshold amount.
A person who holds a stake of no more than 20% of a financial sector company may be declared by the Treasurer to have practical control of the company. The person must then take steps to end that control.
The regulations may require records to be kept, and information to be given, for purposes relating to these restrictions.
Schedule 1 sets out definitions of expressions used in this Part.
For the purposes of this Act, an unacceptable shareholding situation exists in relation to a particular financial sector company and in relation to a particular person if the person holds a stake in the company of more than:
20%; or
if an approval of a higher percentage is in force under Division 3 in relation to the company and in relation to the person—that higher percentage.
A person’s stake includes the interests of the person’s associates—see Schedule 1.
If:
a person, or 2 or more persons under an arrangement, acquire shares in a company; and
the acquisition has the result, in relation to a financial sector company, that:
an unacceptable shareholding situation comes into existence in relation to the company and in relation to a person; or
if an unacceptable shareholding situation already exists in relation to the company and in relation to a person—there is an increase in the stake held by the person in the company; and
the person or persons mentioned in paragraph (a) were reckless as to whether the acquisition would have that result;
the person or persons mentioned in paragraph (a) commit an offence punishable on conviction by a fine not exceeding 400 penalty units.
Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.
If an unacceptable shareholding situation exists in relation to a financial sector company, the Federal Court may, on application by the Treasurer or the company, make such orders as the court considers appropriate for the purpose of ensuring that that situation ceases to exist.
If an unacceptable shareholding situation has existed in relation to a financial sector company, the Federal Court may, on application by the Treasurer or the company, make such orders as the court considers appropriate.
The Federal Court’s orders include:
an order directing the disposal of shares; or
an order restraining the exercise of any rights attached to shares; or
an order prohibiting or deferring the payment of any sums due to a person in respect of shares held by the person; or
an order that any exercise of rights attached to shares be disregarded.
Subsection (3) does not, by implication, limit subsection (1) or (2).
In addition to the Federal Court’s powers under subsections (1), (2) and (3), the court:
has power, for the purpose of securing compliance with any other order made under this section, to make an order directing any person to do or refrain from doing a specified act; and
has power to make an order containing such ancillary or consequential provisions as the court thinks just.
The Federal Court may, before making an order under this section, direct that notice of the application be given to such persons as it thinks fit or be published in such manner as it thinks fit, or both.
The Federal Court may, by order, rescind, vary or discharge an order made by it under this section or suspend the operation of such an order.
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