Approval to hold a stake in a financial sector company of more than 20% No. 1 of 2026 - Revolut Payments Australia Pty Ltd

Overview

The Financial Sector (Shareholdings) Act 1998 was enacted to provide a framework for the regulation of significant shareholdings in financial sector companies. The Act aims to protect the financial system's stability and integrity by overseeing and regulating substantial ownership stakes in entities within the financial sector. The policy objective of the Act is to ensure that entities holding significant stakes in financial sector companies are fit and proper persons, thereby safeguarding the national interest. The Australian Prudential Regulation Authority (APRA) is the enacting body responsible for administering the Act. This particular notifiable instrument, Approval to hold a stake in a financial sector company of more than 20% No. 1 of 2026, was introduced to grant approval to Revolut Payments Australia Pty Ltd for holding more than a 20% stake in specific companies. The instrument outlines the conditions under which this approval is granted, ensuring that the approval aligns with the national interest and regulatory requirements set forth by the Act.

Scope and Application

The Financial Sector (Shareholdings) Act 1998 applies to any person or entity seeking to hold more than a 20% stake in a financial sector company, which, in this case, includes Revolut Payments Australia Pty Ltd. The Act operates within the Commonwealth jurisdiction, providing the Treasurer with the authority to approve or deny such shareholdings based on what is deemed to be in the national interest. The approval granted to the applicants listed in Schedule 1 is specific to their holdings in the respective companies mentioned and is subject to the conditions set out in Schedule 2. Notably, the approval is not only specific to the entities listed but also extends to flow-on approvals for any 100% subsidiaries of the holding companies, as per section 19 of the Act. Additionally, the Act mandates that any approvals granted are to be registered as a notifiable instrument on the Federal Register of Legislation.

Key Provisions

The Financial Sector (Shareholdings) Act 1998 (the "Act") governs the holding of stakes in financial sector companies, particularly in the context of authorisation and regulation by the Australian Prudential Regulation Authority (APRA). Section 13 of the Act outlines the process for obtaining approval to hold a stake exceeding 20% in a financial sector company, while Section 14 mandates that the Treasurer must provide written notice of such approvals to the applicant and the financial sector company involved. Under section 16, the approval of such stakes is subject to specific conditions, which can be found in the schedule attached to the instrument. The obligations under the Act are primarily centred around the application process and the conditions imposed on the approval of stakes. The applicants must submit an application to the Treasurer through APRA, detailing the proposed shareholding and its implications for the financial sector company. The Treasurer, or a delegate such as Peter Diamond, assesses the application against national interest criteria and, if satisfied, grants the approval, as seen in the case of Revolut Payments Australia Pty Ltd. This approval is not only conditional but also subject to the terms outlined in Schedule 2, which detail specific restrictions on the control interests of certain applicants. Any breach of the conditions set forth in the approval or the Act itself can lead to various consequences. Under Section 19, the Act provides for flow-on approvals, ensuring that if a holding company is approved for a stake, its subsidiaries also receive equivalent approvals, subject to the same conditions. However, any unauthorised change in the shareholding structure, such as exceeding the approved stake or control interest without prior approval, can result in civil or criminal penalties. These penalties may include fines or imprisonment, depending on the severity and intent of the breach. The specific penalties for non-compliance with the Act are not detailed in the instrument but generally can include substantial fines and imprisonment. The Act empowers APRA and other relevant authorities to enforce compliance through investigations and legal actions, ensuring that financial sector companies adhere to the regulatory framework designed to protect national financial stability. The notifiable nature of this instrument, as mentioned in Note 1, ensures transparency and public access to the approval decisions, further reinforcing the regulatory oversight.