Approval to hold a stake in a financial sector company of more than 15% - Allied World Assurance Company

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Legislation au C2014G00821 In force Gazette

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Approval to hold a stake in a financial sector company of more than 15%

 

Financial Sector (Shareholdings) Act 1998

 

 

SINCE

 

  1. Allied World Assurance Company Holdings Ltd (Bermuda) and the person(s) named in the attached Schedule (the applicants) have applied to the Treasurer under section 13 of the Financial Sector (Shareholdings) Act 1998 (the Act), for approval to hold a stake of more than 15% in each of the companies listed in the attached Schedule (the Companies), financial sector companies under the Act; and

 

B.                 I am satisfied that it is in the national interest to approve the applicants holding a stake in each of the Companies of more than 15%,

 

I, Brandon Kong Leong Khoo, a delegate of the Treasurer, under subsection 14(1) of the Act, APPROVE the applicants holding a stake in each of the Companies of 100 %.

 

This Approval commences on the date it is signed and remains in force indefinitely. Dated: 20 May 2014

[Signed]

 

Brandon Kong Leong Khoo Executive General Manager Specialised Institutions Division

Interpretation Document ID: 213039

 

 

In this Notice:

financial sector company has the meaning given in section 3 of the Act.

stake in relation to a company, has the meaning given in clause 10 of Schedule 1 to the Act.

unacceptable shareholding situation has the meaning given in section 10 of the Act.

Note 1


Under paragraph 16(2)(a) of the Act, the Treasurer may, by written notice given to a person who

holds an Approval under section 14, impose one or more conditions or further conditions to which the Approval is subject. Under paragraph 16(2)(b) of the Act, the Treasurer may revoke or vary any condition imposed under paragraph 16(2)(a) of the Act or specified in the Notice of Approval. The Treasurer’s power under subsection 16(2) of the Act may be exercised on the Treasurer’s own initiative or on application made to the Treasurer in accordance with the requirements of subsection 16(4) of the Act, by the person who holds the Approval (see subsection 16(3) of the Act).

Note 2


A person who holds an Approval under section 14 may apply to the Treasurer under section 17(1) of

the Act, to vary the percentage specified in the Approval.

Note 3


Under subsection 17(6) of the Act, the Treasurer may, on the Treasurer’s own initiative, by written

notice given to a person who holds an Approval under section 14, vary the percentage specified in the Approval if the Treasurer is satisfied that it is in the national interest to do so.

Note 4


The circumstances in which the Treasurer may revoke a person’s Approval under section 14 are set

out in subsection 18(1) of the Act.

Note 5


Section 19 of the Act provides for flow-on approvals. If an Approval has been granted for the

holding of a stake in a financial sector company and the financial sector company is a holding company for an authorised deposit-taking institution or an authorised insurance company, then an approval is taken to exist for the holding of a stake of equal value in each financial sector company that is a 100% subsidiary of the holding company.

Note 6


Under section 14 of the Act, the Treasurer must give written notice of this Approval to the applicant

and financial sector company concerned, and must publish a copy of this Notice in the Gazette.

Note 7


Under section 11 of the Act, a person or 2 or more persons under an arrangement are guilty of an

offence if the person(s) acquires shares in a company and the acquisition has the result, in relation to a financial sector company, that:

(i)         an unacceptable shareholding situation comes into existence; or

(ii)       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(s) was reckless as to whether the acquisition would have that result. A maximum penalty of 400 penalty units applies or by virtue of subsection 4B(3) of the Crimes Act 1914, in the case of a body corporate, a penalty not exceeding 2,000 penalty units. By virtue of section 39 of the Act, an offence against section 11 is an indictable offence.

 

 

        Allied World Assurance Company Holdings, AG (Switzerland)

 

 

        Allied World Assurance Company Ltd ABN 54 163 304 907

  • Allied World Assurance Company Holdings Ltd (Bermuda)

Overview

The Financial Sector (Shareholdings) Act 1998 was enacted by the Parliament of Australia to address the problem of unacceptable shareholding situations in financial sector companies, which can pose systemic risks to the financial stability of the country. This legislation provides a framework for the Treasurer to approve, vary or revoke shareholdings in financial sector companies that exceed 15%, ensuring that such stakes do not undermine the stability and integrity of the financial system. In this instance, the Act is applied to Allied World Assurance Company Holdings Ltd (Bermuda) and related entities, allowing them to hold a stake exceeding 15% in specified companies, following a determination that such shareholding is in the national interest. The policy objective of the Act is to safeguard the financial sector from potential risks posed by concentrated ownership structures, thereby maintaining confidence in the financial system and protecting the interests of consumers and investors.

Scope and Application

The Financial Sector (Shareholdings) Act 1998 applies to any person or entity seeking to acquire a significant stake in financial sector companies, as defined by the Act, which are typically banks, insurance companies, and other entities involved in financial services. The Act is administered at the Commonwealth level and its provisions apply nationally across Australia, ensuring a uniform approach to the regulation of shareholdings in the financial sector. The Act prohibits certain types of shareholdings that could potentially compromise the stability or integrity of the financial sector, unless approved by the Treasurer. The Act also provides the Treasurer with the authority to impose conditions, vary those conditions, or revoke approvals as necessary to protect national interests. There are specific exclusions and exemptions outlined in the Act, such as for certain types of authorised deposit-taking institutions and insurance companies, as well as for certain small-scale shareholdings that fall below the regulatory threshold. The Act extends its application through subordinate instruments, allowing for detailed regulations and guidelines to be established by the Treasurer. This comprehensive legislative framework ensures that significant investments in financial sector companies are closely monitored and regulated to maintain financial stability.

Key Provisions

The Financial Sector (Shareholdings) Act 1998 (the Act) governs the approval process for entities to hold a stake of more than 15% in financial sector companies. Under section 13, applicants such as Allied World Assurance Company Holdings Ltd (Bermuda) must apply to the Treasurer for approval to hold such stakes. The Act, through section 14, allows the Treasurer to approve these applications if it is deemed to be in the national interest. The approval granted can be for a stake of up to 100%, as demonstrated in this case where the applicants have been approved to hold a 100% stake in the specified companies. This approval is indefinite and commences on the date it is signed. The Act imposes several obligations on parties involved. The applicants must ensure that their shareholdings do not lead to an unacceptable shareholding situation as defined in section 10. The Treasurer retains the authority to impose, vary, or revoke conditions on the approval under section 16, as well as to alter the percentage of the approved stake under section 17. The Treasurer must also notify the applicant and the relevant financial sector company of the approval and publish it in the Gazette, as mandated by section 14. The Act sets out significant consequences for breaches. Under section 11, any person or group that acquires shares resulting in an unacceptable shareholding situation, or increases an existing unacceptable situation recklessly, commits an offence. Such an offence is indictable and carries a maximum penalty of 400 penalty units for individuals and 2,000 penalty units for bodies corporate. The Treasurer’s ability to enforce these penalties ensures compliance and maintains the integrity of financial sector regulations.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.