Authority to carry on banking business
Banking Act 1959
I, Keith Chapman, a delegate of APRA, under subsection 9(3) of the Banking Act 1959 (the Act), GRANT The Bank of Nova Scotia ABN 34 133 513 827 authority to carry on banking business in Australia.
Under paragraph 9(4)(a) of the Act, I IMPOSE on this Authority the conditions specified in the attached Schedule.
This Authority commences on the date it is signed.
Dated 25 August 2016
[Signed]
Keith Chapman
Executive General Manager Specialised Institutions Division
Interpretation Document ID: 224013
In this Notice
APRA means the Australian Prudential Regulation Authority.
ADI is short for authorised deposit-taking institution and has the meaning given in subsection 5(1) of the Act.
banking business has the meaning given in subsection 5(1) of the Act.
Note 1
Under subsection 9(4) of the Act, APRA may at any time, by notice in writing served on an ADI,
impose conditions or additional conditions or vary or revoke conditions imposed on its Authority to carry on banking business. The conditions must relate to prudential matters.
Note 2
Under subsection 9(6) of the Act, an ADI is guilty of an offence if it does or fails to do an act and
doing or failing to do that act results in a contravention of a condition of the ADI’s Authority, and there is no order in force under section 11 of the Act determining that subsection 9(6) does not apply to the ADI. The penalty is 200 penalty units or, by virtue of subsection 4B(3) of the Crimes Act 1914 in the case of a body corporate, a penalty of up to 1,000 penalty units. By virtue of subsection 9(6A) of the Act, an offence against subsection 9(6) is an indictable offence. Under subsection 9(6B)of the Act, if an ADI commits an offence
against subsection 9(6), the ADI is guilty of an offence against that subsection in respect of the first day on which the offence is committed and each subsequent day (if any) on which the circumstances that gave rise to the ADI committing the offence continue (including the day of conviction for any such offence or any later day).
Note 3
Under subsection 9(9) of the Act, a decision to impose conditions on this Authority is a decision to
which Part VI of the Act applies. If a person whose interests are affected is dissatisfied with that decision, the person may seek reconsideration of the decision by APRA in accordance with section 51B(1) of the Act. The request for reconsideration must be in writing, must state the reasons for the request, and must be given to APRA within 21 days after the decision first comes to the person’s notice or within such further period as APRA allows. If dissatisfied with APRA’s reconsidered decision confirming or varying the first decision, the person may, subject to the Administrative Appeals Act 1975, apply to the Administrative Appeals Tribunal for review of the reconsidered decision.
The address where written notice may be given to APRA is Level 12, 1 Martin Place, Sydney NSW 2000.
Note 4
Act.
Note 5
The circumstances in which APRA may revoke an ADI's Authority are set out in section 9A of the
Under subsection 9(3) of the Act, a copy of this Notice must be provided to the ADI. Under
subsection 9(7) of the Act, APRA must publish a copy of this Notice in the Gazette and may cause notice of the grant of the Authority to be published in any other way it considers appropriate.
Schedule - the conditions imposed on the Authority
1. The ADI, as a foreign ADI carrying on banking business in Australia, shall not accept deposits or other funds for amounts which are less than $250,000 from any source other than from:
(i) incorporated entities;
(ii) persons or unincorporated entities that are not residents of Australia;
(iii) its own employees; or
(iv) persons or unincorporated entities with an initial balance with the foreign ADI of at least $250,000.
In this Schedule, foreign ADI has the meaning given in subsection 5(1) of the Act.
Overview
The Banking Act 1959 was enacted to regulate banking activities in Australia and ensure the stability and integrity of the financial system. It was introduced to address the need for a robust regulatory framework governing the banking sector, particularly in relation to the authorisation and oversight of authorised deposit-taking institutions (ADIs). The Act is administered by the Australian Prudential Regulation Authority (APRA), which is tasked with maintaining the prudential soundness of the financial system. The policy objective of the Act is to protect depositors and ensure that ADIs operate in a safe and sound manner. In 2016, APRA, through a delegate, granted The Bank of Nova Scotia authority to carry on banking business in Australia, subject to certain conditions aimed at ensuring prudential standards are met. This authority underscores the importance of strict regulatory oversight in maintaining the stability of Australia's banking sector.
Scope and Application
The Banking Act 1959 applies to authorised deposit-taking institutions (ADIs) that seek to carry on banking business in Australia. Specifically, this piece of legislation governs the conditions under which such institutions can operate, as demonstrated by the grant of authority to The Bank of Nova Scotia to conduct banking business in Australia. The Act applies to both domestic and foreign ADIs, ensuring that they adhere to specific prudential standards to maintain financial stability. The authority granted by the Australian Prudential Regulation Authority (APRA) includes conditions that must be met, such as restrictions on the acceptance of deposits under a certain amount from non-incorporated entities and non-residents. APRA retains the right to impose, vary, or revoke these conditions at any time, which can be further extended or restricted through subordinate instruments. The Act's jurisdictional reach is national, with any contraventions leading to potential criminal offences and penalties, including up to 1,000 penalty units for body corporates. Dissatisfied parties may seek reconsideration or review of APRA's decisions through established administrative processes.
Key Provisions
The Banking Act 1959 provides the legal framework under which authorised deposit-taking institutions (ADIs) can operate in Australia. Section 9(3) of the Act allows a delegate of the Australian Prudential Regulation Authority (APRA) to grant an ADI the authority to carry on banking business in Australia, as seen in the example where Keith Chapman, a delegate of APRA, granted such authority to The Bank of Nova Scotia (sections 1 and 2). This authority comes with specific conditions imposed under section 9(4) of the Act, which, in this case, are detailed in the attached Schedule (section 2).
The obligations imposed on the ADI by this Act include adhering to the conditions specified in the Schedule, which, for The Bank of Nova Scotia, includes restrictions on the acceptance of deposits under certain thresholds (Schedule, condition 1). These conditions relate to prudential matters and are intended to ensure the stability and soundness of the banking institution. As a foreign ADI, The Bank of Nova Scotia is further restricted in the types of sources from which it can accept deposits, ensuring that it does not accept deposits from individual residents of Australia unless the initial deposit amount is at least $250,000 (Schedule, condition 1). This helps mitigate risks associated with smaller deposits and ensures that the ADI operates within the prudential guidelines set forth by APRA.
Any breach of the conditions imposed on the ADI’s authority to carry on banking business can result in significant consequences. Under section 9(6) of the Act, an ADI is guilty of an offence if it contravenes any condition of its authority, with penalties including fines of up to 200 penalty units for individuals and up to 1,000 penalty units for bodies corporate (Note 2). Additionally, under section 9(6A) of the Act, an offence against subsection 9(6) is considered an indictable offence, and under subsection 9(6B), the ADI is guilty of an offence for each day the contravention continues, including the day of conviction (Note 2). Furthermore, if a person whose interests are affected by a decision to impose conditions is dissatisfied, they can seek reconsideration by APRA within 21 days of becoming aware of the decision, or any extended period allowed by APRA (Note 3).