Approval to hold a stake in a financial sector company of more than 20% - Judo Capital Holdings Ltd

Administered by Department of the Treasury

Legislation au C2019G00424 In force Gazette

Legislation content

 

Approval to hold a stake in a financial sector company of more than 20%

Financial Sector (Shareholdings) Act 1998

 

SINCE

 

  1. Judo Capital Holdings Ltd ABN 71 612 862 727 (the applicant) has applied to the Treasurer under section 13 of the Financial Sector (Shareholdings) Act 1998 (the Act), for approval to hold a 100% stake in Judo Bank Pty Ltd ABN 11 615 995 581 (the company), which is a financial sector company under the Act;

 

B.                 under section 50 of the Treasury Laws Amendment (Financial Sector Regulation) Act 2018 (the amending Act), the application has effect as if:

(i)                 it had been made under section 13 of the Act as amended by the amending Act; and

(ii)               it had specified that the applicant is seeking for approval to be granted on the basis of paragraph 14(1)(a) of the Act as amended by the amending Act; and

 

C.                 I am satisfied that it is in the national interest to approve the applicant holding a stake in the company of more than 20%,  

 

 

I, Mark Adams, a delegate of the Treasurer, under subsection 14(1) of the Act, APPROVE the applicant holding a stake of 100% in the company.

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

 

Dated: 24 April 2019

 

 

[Signed]

 

Mark Adams

Executive General Manager

Specialised Institutions Division

 

Interpretation

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 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 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.

 

Overview

The Financial Sector (Shareholdings) Act 1998 was enacted by the Parliament of Australia to address the problem of excessive concentration of ownership and control within the financial sector, ensuring that critical financial institutions are not unduly influenced or controlled by a small number of entities or individuals. The Act establishes a framework for regulating significant shareholdings in financial sector companies to safeguard the stability and integrity of the financial system. Under the authority of this Act, the Treasurer may approve or disapprove applications for significant shareholdings, with the overarching policy objective of maintaining a robust and secure financial sector. This legislative instrument, gazetted on 24 April 2019, exemplifies the application of the Act where the Treasurer, through a delegate, has approved Judo Capital Holdings Ltd to hold a 100% stake in Judo Bank Pty Ltd, reflecting a determination that such approval aligns with the national interest.

Scope and Application

The Financial Sector (Shareholdings) Act 1998 applies to any person or entity seeking to acquire a significant stake in a financial sector company, specifically those entities defined under section 3 of the Act. The legislation regulates shareholdings in financial sector companies to ensure financial stability and protect the interests of consumers and the broader economy. The Act's application extends to the Commonwealth jurisdiction and applies to any company that is classified as a financial sector company as per the definitions provided in the Act and its schedules. The Act allows for the Treasurer to approve, subject to conditions, any individual or entity holding a stake exceeding 20% in a financial sector company, provided it is deemed to be in the national interest. Exclusions or exemptions from the application of the Act are not explicitly detailed in this particular instrument, although the Act does allow for the Treasurer to impose, vary, or revoke conditions on approvals under specific circumstances, as outlined in the various subsections of the Act.

Key Provisions

The Financial Sector (Shareholdings) Act 1998, as amended, governs the approval process for any entity seeking to hold a significant stake in a financial sector company. Under section 13 of the Act, Judo Capital Holdings Ltd has applied for approval to hold a 100% stake in Judo Bank Pty Ltd, a financial sector company (section 3). This application is treated as if it were made under the amended section 13 of the Act as per the Treasury Laws Amendment (Financial Sector Regulation) Act 2018 (section 50). The approval is granted on the basis of paragraph 14(1)(a) of the Act as amended, which considers it in the national interest to allow such a stake (section 14(1)). The obligations under the Act require that the applicant, Judo Capital Holdings Ltd, must apply to the Treasurer for approval to hold the specified stake in the financial sector company. The Treasurer, or their delegate, is tasked with assessing whether the approval is in the national interest and, if satisfied, must grant the approval (section 14). Additionally, the Treasurer has the authority to impose, revoke, or vary conditions on the approval at their discretion or in response to an application from the approved entity (section 16). The Act also mandates that the Treasurer must notify the applicant and the financial sector company of the approval and publish a notice in the Gazette (section 14 and Note 6). The Act imposes significant penalties for non-compliance. Under section 11, a person or entity is guilty of an offence if their acquisition of shares in a financial sector company results in an unacceptable shareholding situation or an increase in an existing unacceptable shareholding, and they act recklessly regarding the potential outcome. The maximum penalty for an individual is 400 penalty units, while for a body corporate, the penalty can be up to 2,000 penalty units (subsection 4B(3) of the Crimes Act 1914). This offence is classified as an indictable offence under section 39 of the Act, meaning it can be prosecuted in a higher court.

Legal classification tags

Area of Law
Financial Sector Regulation
Instrument
Gazette Notice
Concepts
Definitions & Interpretation
Offence Provisions
Regulatory Standards
Catchwords
Approval to hold a stake
Unacceptable shareholding situation

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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.