Approval to hold the transferring business of a financial sector company
Financial Sector (Shareholdings) Act 1998
TO: Bendigo and Adelaide Bank Limited ABN 11 068 049 178 (the applicant) SINCE
- the applicant and Service One Credit Union Limited ABN 42 095 848 598 (the Company) are financial sector companies within the meaning of the Financial Sector (Shareholdings) Act 1998 (the Act); and
- 99% of the gross assets and liabilities of the Company (the transferring business) are to be transferred to the applicant as a voluntary transfer of business under the Financial Sector (Business Transfer and Group Restructure) Act 1999 (the Business Transfer Act); and
C. the applicant has applied to the Treasurer under section 13A of the Act, to hold the transferring business; and
D. I am satisfied that it is in the national interest to approve the applicant holding the transferring business,
I, Stephen Edward Glenfield, a delegate of the Treasurer, under subsection 14(1) of the Act, APPROVE the applicant holding the transferring business.
This Approval commences on the date it is signed and remains in force indefinitely. Dated: 1 December 2014
[Signed]
Stephen Edward Glenfield General Manager
Specialised Institutions Division South West Region
Interpretation Document ID: 215195
In this Notice
financial sector company has the meaning given in section 3 of the Act.
Note 1
Regulation 6 of the Financial Sector (Transfers of Business) Regulations 1999 provides that, for
subsection 43(4) of the Business Transfer Act, the provisions of the Act apply in relation to a transfer of business as if section 13A were inserted after section 13 of the Act. Section 13A provides that a financial sector company to which more than 15% of the gross assets and liabilities of another financial sector company (the transferring business) is to be transferred under the Act, must apply to the Treasurer for approval to hold the transferring business and that Division 3 of Part 2 of the Act applies to the application as if the transferring business were a separate financial sector company.
Note 2
Under section 14 of the Act, the Treasurer must give written notice of the approval to the applicant
and arrange for a copy of the notice to be published in the Gazette and given to the Company.
Overview
The Financial Sector (Shareholdings) Act 1998 was enacted to address the need for regulatory oversight and control over significant shareholdings in financial sector companies, ensuring stability and confidence within the financial system. The Act empowers the Treasurer to approve or disapprove the acquisition of a substantial interest in a financial sector company. In this instance, the Act facilitates the transfer of 99% of the gross assets and liabilities of Service One Credit Union Limited to Bendigo and Adelaide Bank Limited, a financial sector company. The approval by the delegate of the Treasurer, Stephen Edward Glenfield, under section 13A of the Act, ensures that the transfer is in the national interest. This legislative framework provides a mechanism for the Treasurer to exercise oversight over significant transfers of business within the financial sector, ensuring that they do not compromise the stability and integrity of the financial system.
Scope and Application
The Financial Sector (Shareholdings) Act 1998 governs the approval of a financial sector company holding the transferring business of another financial sector company, and applies to entities defined as financial sector companies under the Act. In this instance, the approval pertains to Bendigo and Adelaide Bank Limited and Service One Credit Union Limited, both of which are financial sector companies as defined in the Act. The Act’s application is triggered when more than 15% of the gross assets and liabilities of one financial sector company are to be transferred to another, necessitating an application to the Treasurer for approval under section 13A of the Act. The approval process is aimed at ensuring the transfer is in the national interest, as per section 14 of the Act. The Act’s jurisdictional reach is national, and its provisions are extended to cover the transfer through subordinate instruments such as the Financial Sector (Transfers of Business) Regulations 1999. The approval granted to the applicant remains in force indefinitely from the date of signing.
Key Provisions
The main operative sections of the Financial Sector (Shareholdings) Act 1998 (the Act) include section 13A, which requires a financial sector company, in this case Bendigo and Adelaide Bank Limited, to apply to the Treasurer for approval if it intends to hold a transferring business where more than 15% of the gross assets and liabilities of another financial sector company are to be transferred. Section 14 of the Act mandates the Treasurer to give written notice of the approval to the applicant and arrange for a copy of the notice to be published in the Gazette and given to the Company.
The Act imposes specific obligations on the parties involved. The applicant must apply to the Treasurer for approval under section 13A before holding the transferring business. The Treasurer, upon being satisfied that it is in the national interest to approve the transfer, issues the approval under section 14. Additionally, the Financial Sector (Transfers of Business) Regulations 1999, particularly Regulation 6, specifies that the provisions of the Act apply to transfers of business as if section 13A were inserted after section 13 of the Act. This ensures that the Act's provisions govern the application process comprehensively.
Failure to comply with the requirements of the Act may lead to civil or criminal consequences. However, the Notice does not explicitly detail offences, penalties, or specific consequences for non-compliance. It is implicit that any breaches of the Act's provisions or the Regulations could result in legal action, potentially including fines or other penalties as prescribed by the relevant legislation. The maximum penalties would depend on the nature and severity of the breach, as well as the specific provisions of the Act and any related regulations.
In summary, the Act and its associated regulations establish a framework for approving transfers of business between financial sector companies. The obligations centre around the application process and the Treasurer’s role in granting approval. While the Notice does not explicitly state the penalties for non-compliance, it is understood that breaches could lead to significant legal repercussions.