Banks (Shareholdings) Regulations (Amendment)

Legislation au C2004L00988 Regulations Not in force Legislative Instrument

Legislation content

Banks (Shareholdings) Regulations (Amendment) 1991 No. 57

EXPLANATORY STATEMENT

STATUTORY RULES 1991 No. 57

ISSUED BY THE AUTHORITY OF THE TREASURER

BANKS (SHAREHOLDINGS) ACT 1972

BANKS (SHAREHOLDINGS) REGULATIONS (AMENDMENT)

Section 10 of the Banks (Shareholdings) Act 1972 (the Act) generally limits the nominal amount of the voting shares of a bank in which a person (including a corporation) may have an interest to 10 per cent, or 15 per cent with the approval of the Treasurer, of the total nominal amount of the voting shares of the bank. Under subsection 10(4) of the Act the Governor-General may, after application made to the Treasurer by a person, fix a higher percentage for that person by an instrument published in the Gazette. Subsection 10(5A) provides that the Governor-General may, on the publication under subsection 10(4) of an instrument fixing a percentage applicable to a corporation in respect of a bank, after application made to the Treasurer by the corporation, by instrument in writing published in the Gazette, declare that, for the purposes of subsection (3), the percentage so fixed is also applicable to the persons who are from time to time relevant officers of the corporation in respect of the bank. Subsection 10(3) provides that where such percentage is applicable to a person, that person may not hold a greater nominal amount of shares than the percentage so fixed.

Under subsection 10(5) of the Act, the Governor-General may, if he is satisfied that to do so is in the national interest, by instrument in writing published in the Gazette, vary an instrument made under subsection 10(4) of the Act so that the percentage fixed by the instrument as varied exceeds 15 per cent.

Section 17 of the Act provides that the Governor-General may make regulations for the purposes of the Act.

Standard Chartered Bank Australia Limited (SCBAL) has made an application to the Government on behalf of its existing shareholders, Standard Chartered PLC, Standard Chartered Bank, Standard Chartered Holdings Limited and Standard Chartered Investments Pty Limited, to increase their interest in SCBAL from 75% to 100%.

An instrument under subsection 10(5) of the Act, permitting an increase from 75% to 100% in relation to the interests in SCBAL by the existing shareholders has therefore been prepared.

As SCBAL intends to remain a public company, it is required to have at least five shareholders. Therefore, three companies in the Standard Chartered group have been added to the shareholders in SCBAL.

As required by the Act an instrument has been gazetted which fixes a percentage of 100% under subsection 10(4) for Standard Chartered Nominees Limited (SCN), Stanchart Nominees Limited (SN), and Standard Chartered Overseas Holdings (SCOH) in relation to their interests in SCBAL.

Under section 9 of the Act the associates (including all officers, partners, subsidiaries and related companies) of SCN, SN and SCOH would also be deemed to have the same interest in SCBAL as these companies. In the case of officers of SCN, SN and SCOH, an instrument has been gazetted pursuant to subsection 10(5A) of the Act which would fix a percentage of 100% in relation to interests in SCBAL for those persons who are from time to time relevant officers of SCN, SN and SCOH. Similar instruments have been gazetted to cover the existing shareholders in SCBAL.

Under the Act, it is not possible to make a 'class' instrument for the interests of the associates of SCN, SN, and SCOH, other than their relevant officers. These other associates represent a large and ever-changing group of persons and corporations. Rather than make an instrument pursuant to subsection 10(4) for every person within the meaning of section 9, it is convenient to prescribe these interests - that is, to have them disregarded for the purposes of section 10 of the Act - by regulation, as provided for by section 17 and paragraph 8(9)(d).

Paragraph 8(9)(d) of the Act provides that a prescribed interest in a share that is an interest of such a person or class of persons as is prescribed shall be disregarded. The Banks (Shareholdings) Regulations (the Regulations) currently prescribe a class of persons in relation to their interests in the banks listed in the Schedule to the Regulations, where those interests are deemed to be held by virtue of an associate relationship. The effect of the proposed amendments to the Regulations would be to disregard for the purposes of the Act interests in SWAL arising from associate relationships with SCN, SN and SCOH. The present shareholders in SWAL are already included in the schedule to the Regulations.

The detail of the proposed Regulation is as follows:

The Schedule to the Banks (Shareholdings) Regulations is amended by adding the following corporations in relation to Standard Chartered Bank Australia Limited:

•       Standard Chartered Nominees Limited. being the corporation formed or incorporated under that name, in the United Kingdom;

•       Stanchart Nominees Limited, being the corporation formed or incorporated under that name in the United Kingdom;

•       Standard Chartered Overseas Holdings Limited, being the corporation formed or incorporated under that name in the United Kingdom.

 

Overview

The Banks (Shareholdings) Regulations (Amendment) 1991 No. 57 was enacted by the authority of the Treasurer under the Banks (Shareholdings) Act 1972, to address the need for the Standard Chartered Bank Australia Limited (SCBAL) to increase the shareholdings of its existing shareholders from 75% to 100%. The Act was introduced to ensure that the banking system remains stable and that no single entity or group of entities can exert undue influence over a bank, thereby protecting the interests of depositors and the overall financial system. These regulations were designed to facilitate the transition of SCBAL to full ownership by its existing shareholders while ensuring compliance with the shareholding limits set out in the Act. This amendment allows the Governor-General to make specific adjustments to the shareholding limits for certain entities as outlined in the Act.

Scope and Application

The Banks (Shareholdings) Act 1972 applies to persons and corporations who hold an interest in the voting shares of a bank, and specifically restricts the nominal amount of voting shares that can be held by any individual or entity to 10% of the total nominal amount of the voting shares of the bank, or 15% with the approval of the Treasurer. The Act allows for the Governor-General to fix a higher percentage for a person or corporation by an instrument published in the Gazette, and to make regulations for the purposes of the Act. The Banks (Shareholdings) Regulations (Amendment) 1991 amends the Banks (Shareholdings) Regulations to disregard interests in Standard Chartered Bank Australia Limited arising from associate relationships with Standard Chartered Nominees Limited, Stanchart Nominees Limited, and Standard Chartered Overseas Holdings Limited. The Regulations apply to these corporations in relation to their interests in Standard Chartered Bank Australia Limited and their relevant officers, and are intended to have them disregarded for the purposes of the Act. The amendment has been made in response to an application by Standard Chartered Bank Australia Limited to increase the interest of its existing shareholders in the bank from 75% to 100%.

Key Provisions

The Banks (Shareholdings) Regulations (Amendment) 1991 No. 57 addresses the amendment of the existing regulations under the Banks (Shareholdings) Act 1972, primarily focusing on altering the shareholding limits for certain corporations in relation to Standard Chartered Bank Australia Limited (SCBAL). Section 10 of the Act establishes the primary shareholding limit, generally capping the nominal amount of voting shares a person or corporation can hold in a bank at 10 per cent, or 15 per cent with Treasurer approval (subsection 10(4)). Additionally, the Governor-General has the authority to fix a higher percentage for an individual or corporation if deemed necessary and published in the Gazette (subsection 10(5)). The amendment to these regulations seeks to accommodate an increase in the shareholding interest of specific corporations in SCBAL. Under these regulations, the obligations for the involved parties revolve around adhering to the prescribed shareholding limits and ensuring compliance with the amendments. For SCBAL, the obligation includes maintaining at least five shareholders and ensuring that the increased shareholding by the existing entities, such as Standard Chartered Nominees Limited, Stanchart Nominees Limited, and Standard Chartered Overseas Holdings Limited, falls within the approved limits. These entities must also ensure that their relevant officers' shareholdings are aligned with the prescribed percentage, as fixed by the Governor-General. The regulations necessitate that any changes to shareholdings are documented and published in the Gazette, thus maintaining transparency and compliance with the Act. Any breach of the provisions outlined in the Banks (Shareholdings) Act 1972 or the Banks (Shareholdings) Regulations could lead to significant consequences. While the Act itself does not explicitly detail penalties for breaches, the overarching legal framework in Australia may impose various penalties. For instance, under general corporate and financial laws, breaches could result in fines, legal actions, or even disqualifications for directors. The exact penalties would depend on the nature and severity of the breach, with potential outcomes ranging from financial penalties to more severe criminal charges if the breach involves fraudulent activities or deliberate non-compliance. It is essential for all parties involved to meticulously adhere to the regulations to avoid these potential repercussions.

Legal classification tags

Area of Law
Corporate Law & Governance
Instrument
Regulation
Concepts
Definitions & Interpretation
Licensing & Registration
Regulatory Standards

Interactions

Authorises

All Versions

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.