Approval to hold a stake of more than 20% in a financial sector company No. 8 of 2021
Financial Sector (Shareholdings) Act 1998
To: Alex Corporation Limited ABN 89 634 554 608 and the other persons named in the schedule (the applicants)
SINCE:
- the applicants have applied to the Treasurer under subsection 13(1) of the Financial Sector (Shareholdings) Act 1998 (the Act) for approval to hold a stake of more than 20% in Alex Bank Pty Ltd ABN 13 627 244 848 (the financial sector company);
B. I have considered the matters prescribed in the Financial Sector (Shareholdings) Rules 2019; and
C. I am satisfied that the criteria in subsection 14A(1) of the Act are met in relation to the applicants and the financial sector company,
I, Therese McCarthy Hockey, a delegate of the Treasurer, under paragraph 14(1)(b) of the Act, APPROVE the applicants holding a stake of 100% in the financial sector company.
Under subsection 16(1) of the Act, the approval is subject to the conditions set out in the schedule.
This instrument commences on the day it is made and remains in force for the period worked out under section 15A of the Act.
Dated: 7 July 2021
Therese McCarthy Hockey Executive Director Banking Division
Interpretation
In this instrument:
APRA means the Australian Prudential Regulation Authority.
financial sector company has the meaning given in section 3 of the Act.
relevant licensed 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.
Notes
This instrument will be registered on the Federal Register of Legislation as a notifiable instrument.
The Treasurer or the Treasurer’s delegate is required to give a copy of this instrument to the financial sector company and, where applicable, the relevant licensed company.
Section 16A of the Act sets out conditions that apply to an approval under paragraph 14(1)(b) of the Act.
Section 19A of the Act provides for flow-on approvals for an approval under paragraph 14(1)(b) of the Act. If the approval relates to a financial sector company that is a holding company of the relevant licensed company for the approval, subsection 19A(1)(a) provides for flow-on approvals that relate to the relevant licensed company and to each financial sector company that is both a 100% subsidiary of the holding company and a holding company of the relevant licensed company. If the approval is held by a company, subsection 19A(4) provides for flow-on approvals to be held by each officer of the company.
Schedule – the applicants
- Alex Corporation Limited ABN 89 634 554 608
- Craig Fenwick
- Fafconfen1 Pty Ltd ACN 627 163 286 as trustee for CKFC Family Trust
- Simon Beitz
- Beitz Projects Pty Ltd ACN 124 526 290 as trustee for The Gymboree – Growing Minds Trust ABN 36 177 533 675
- Simon Beitz and Elaine Beitz as trustee for Beitz Superfund ABN 94 331 037 403
- Steven Kluss as trustee for Kluss Investment Trust ABN 51 712 890 277
- Greg Moynihan
- Onyom Pty Ltd ABN 20 108 408 635
- Craig Manson
- Pietro Pavia
- Anna Pavia
- Dastel Pty Ltd ACN 617 025 331 as trustee for Peter Pavia Pension Fund ABN 70 289 437 963
- Carol Nanette Beitz
- Katherine Ostin
- Nitso Pty Limited ACN 115 730 651 as trustee for The Ostin-Shortus Family Trust
- Simon Fenwick
- Silver River Investment Holdings Pty Ltd ACN 618 380 199 as trustee for The Fenwick Family Trust
- John Heaton and Leanne Heaton
Schedule – the conditions
Limits on individual shareholdings
None of the applicants, except Alex Corporation Limited, may hold a direct control interest of greater than 20% in the financial sector company without prior approval from the Treasurer or a delegate of the Treasurer.
Interpretation
In this schedule:
direct control interest has the meaning given in clause 11 of Schedule 1 to the Act.
Overview
The Financial Sector (Shareholdings) Act 1998 was enacted to address the need for regulation of significant shareholdings in financial sector companies, ensuring financial stability and effective oversight. This Act empowers the Treasurer or their delegate to approve or decline applications for shareholdings exceeding 20% in financial sector companies, subject to certain criteria. The policy objective of the Act is to safeguard the integrity and resilience of Australia's financial system by preventing undue concentration of ownership and control. In the context of the notifiable instrument F2021N00156, the Treasurer, through their delegate Therese McCarthy Hockey, has approved Alex Corporation Limited and other specified applicants to hold a 100% stake in Alex Bank Pty Ltd, subject to conditions outlined in the accompanying schedule. This approval was granted after consideration of relevant factors under the Financial Sector (Shareholdings) Rules 2019, and it is in line with the criteria set out in the Act.
Scope and Application
The Financial Sector (Shareholdings) Act 1998 applies to entities and individuals seeking to hold a significant stake in a financial sector company, specifically targeting those entities and individuals who wish to acquire, directly or indirectly, a shareholding of more than 20%. This Act operates on a Commonwealth level, thus its provisions extend across Australia, impacting both corporate and individual entities alike. The Act provides a framework for the Treasurer or their delegate to review and approve or deny such shareholdings based on prescribed criteria. While the Act broadly applies to any financial sector company as defined in the Act, there are specific exclusions and exemptions, particularly relating to certain types of insurance companies and those financial sector companies that are not defined as 'relevant licensed companies'. The Act also allows for its application to be extended or restricted through subordinate instruments, such as the Financial Sector (Shareholdings) Rules 2019, which provide detailed guidance on the application process and criteria for approval.
Key Provisions
The main operative sections of the legislation are subsection 13(1) of the Financial Sector (Shareholdings) Act 1998 (the Act), which provides the process for applying for approval to hold a stake of more than 20% in a financial sector company, and paragraph 14(1)(b) of the Act, which allows the Treasurer or a delegate to approve the application if certain criteria are met. Under subsection 16(1) of the Act, any approval granted is subject to specific conditions, which are detailed in the schedule attached to this instrument. This approval allows Alex Corporation Limited and the other named applicants to hold a stake of 100% in Alex Bank Pty Ltd, a financial sector company. The approval is contingent upon adherence to the conditions outlined in the attached schedule.
The obligations imposed by the Act on the parties governed by this legislation include submitting an application to the Treasurer for approval to hold a stake of more than 20% in a financial sector company, as required under subsection 13(1) of the Act. Additionally, the applicants must comply with the conditions set forth in the schedule, which include restrictions on individual shareholdings to ensure no applicant, except Alex Corporation Limited, holds a direct control interest exceeding 20% without prior approval. Furthermore, the Treasurer or a delegate must provide a copy of this instrument to the financial sector company and, where applicable, the relevant licensed company, as outlined in section 16A of the Act.
In terms of offences, penalties, or consequences for breach, the legislation does not explicitly state penalties for non-compliance with the conditions set out in the schedule. However, any breach of the conditions could potentially lead to the revocation of the approval by the Treasurer or a delegate of the Treasurer. The approval itself is also subject to review and may be subject to change if circumstances warrant it. The failure to adhere to the specified conditions could result in significant regulatory scrutiny and possible enforcement actions by the relevant authorities.