Approval to hold a stake in a financial sector company of more than 15% - Swiss Re Asia Holding Pte. Ltd.

Administered by Department of the Treasury

Legislation au C2018G00800 In force Gazette

Legislation content

 

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

Financial Sector (Shareholdings) Act 1998

To: Swiss Re Asia Holding Pte. Ltd. (SRAHL), Swiss Re Reinsurance Holding Company Ltd (SRRH) and Swiss Reinsurance Company Ltd (SRC) (the applicants)

 

SINCE

 

  1. The applicants have applied to the Treasurer under section 13 of the Financial Sector (Shareholdings) Act 1998 (the Act) for the following approvals:
    1. SRAHL to hold a 100% stake in each of Swiss Re Australia Ltd ABN 28 004 360 909 (SR Australia) and Swiss Re Life & Health Australia Limited ABN 74 000 218 306 (SRLHA);
    2. SRRH to hold a 100% stake in each of SRAHL, SR Australia and SRLHA; and
    3. SRC to hold a 100% stake in each of SRRH and SRAHL;

 

B.     The approvals are required as SRAHL and and SRRH will each become a holding company of SR Australia and SRLHA (financial sector companies under the Act) from the time, if any, SRAHL completes its proposed acquisition from SRC of 100% of the issued shares in SR Australia;

 

C.     I am satisfied that it is in the national interest to approve each applicant holding the stakes requested in Recital A. above;

 

I, Nigel Boik, a delegate of the Treasurer under subsection 14(1) of the Act, APPROVE:

a)      SRAHL to hold a 100% stake in each of SR Australia and SRLHA;

b)      SRRH to hold a 100% stake in each of SRAHL, SR Australia and SRLHA; and

c)      SRC to hold a 100% stake in each of SRRH and SRAHL;

 

This instrument comes into force from the date it is signed and remains in force indefinitely. 

Dated: 24 September 2018

 

[Signed]

 

………………………

Nigel Boik

General ManagerDiversified Institutions Division

Interpretation

In this Notice:

 

100% subsidiary has the meaning given in section 3 of the Act

authorised insurance company has the meaning given in section 3 of the Act

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

holding company has the meaning given by section 4 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 conditions imposed under paragraph 16(2)(a) of the Act or specified in the Notice of Approval. The Treasurer’s powers under subsection 16(2) may be exercised on the Treasurer’s own initiative or an 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 of the Act may apply to the Treasurer under subsection 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 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 applicants 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.

 

Note 8 Under section 32(3) of the Act, if a person has engaged in or is proposing to engage in any conduct in contravention of a condition to which an approval under section 14 is subject, the Federal Court may, on the application of the Treasurer, grant an injunction:

(i)                   restraining the person engaging in the conduct; and

(ii)                  if in the court’s opinion, it is desirable to do so, requiring the person to do something.

 

 

Other Approval

 

SRC also has the benefit of an approval taken to have been given on 1 July 1998 under subsection 14(1) of the Act to hold 100% stakes in SR Australia and SRLHA through the operation of section 47 of the Act. This approval remains in force.

 

Overview

The Financial Sector (Shareholdings) Act 1998 was enacted by the Parliament of Australia to regulate and control shareholdings in financial sector companies, thereby safeguarding the stability and integrity of the financial system. This Act was introduced to address the problem of potentially harmful concentrations of ownership and control within the financial sector, which could pose systemic risks to the economy. The Treasurer, acting under the authority of the Act, has the power to approve or disapprove significant shareholdings in financial sector companies, ensuring that such holdings do not lead to unacceptable situations that could undermine financial stability. The Act’s policy objective is to maintain a robust and resilient financial sector by preventing undue concentrations of ownership and control that might compromise the safety and soundness of financial institutions. The approval granted to Swiss Re entities under this Act exemplifies the practical application of these legislative controls to maintain the stability and health of Australia's financial sector.

Scope and Application

The Financial Sector (Shareholdings) Act 1998 applies to entities seeking to acquire or hold a stake in financial sector companies. Specifically, it governs the approval process for entities holding stakes exceeding 15% in financial sector companies, as well as the holding companies of authorised deposit-taking institutions and authorised insurance companies. The Act applies to the Commonwealth jurisdiction, encompassing all entities and transactions involving the acquisition or holding of stakes in financial sector companies within Australia. The approval granted under this Act to SRAHL, SRRH, and SRC to hold specified stakes is subject to conditions that the Treasurer may impose, vary, or revoke. The Act also provides for the flow-on of approvals to 100% subsidiaries of holding companies. Offences under the Act include reckless acquisition of shares leading to unacceptable shareholding situations, with penalties applicable up to 400 penalty units for individuals and 2,000 penalty units for corporate entities. The Federal Court may grant injunctions to restrain or compel conduct in contravention of approval conditions. Notably, SRC already benefits from a pre-existing approval granted on 1 July 1998, which remains in force.

Key Provisions

The Financial Sector (Shareholdings) Act 1998 (the Act) governs the approval process for stakeholders in financial sector companies. Section 13 of the Act requires applicants to seek approval from the Treasurer for stakes in financial sector companies exceeding 15%. The applicants in this case, Swiss Re Asia Holding Pte. Ltd. (SRAHL), Swiss Re Reinsurance Holding Company Ltd (SRRH), and Swiss Reinsurance Company Ltd (SRC), have applied for approval to hold stakes in SR Australia and SR Life & Health Australia Limited (SRLHA). Section 14 of the Act mandates that the Treasurer must give written notice of the approval to the applicants and the financial sector companies concerned, and publish a copy of this notice in the Gazette. The approval is effective from the date of signing and remains in force indefinitely. The Act imposes obligations on the applicants to ensure that their shareholdings comply with the Act. This includes holding a 100% stake in SR Australia and SRLHA for SRAHL, a 100% stake in SRAHL, SR Australia and SRLHA for SRRH, and a 100% stake in SRRH and SRAHL for SRC. The Treasurer is empowered to impose conditions on the approval, revoke or vary any conditions, and revoke the approval altogether if necessary. The applicants may also apply to vary the percentage specified in the approval, and the Treasurer may vary the percentage on their own initiative if it is in the national interest to do so. Breach of the Act’s provisions carries potential civil and criminal consequences. Section 11 of the Act criminalises the acquisition of shares in a company that results in an unacceptable shareholding situation, with a maximum penalty of 400 penalty units for individuals and 2,000 penalty units for bodies corporate. Section 32(3) of the Act empowers the Federal Court to grant an injunction to restrain a person from engaging in conduct in contravention of a condition to which an approval is subject. Additionally, section 19 of the Act provides for flow-on approvals, meaning that if an approval has been granted for the holding of a stake in a financial sector 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.

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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.