EXPLANATORY STATEMENT
STATUTORY RULES 1985 NO. 233
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 incorporated in Australia 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 sub-section 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 instrument published in the Gazette. Sub-section 10(3) provides that where a percentage is applicable in relation to a person, that person may not have a greater nominal amount of shares than the percentage so fixed.
The Treasurer recommended that a banking authority be granted to CHASE AMP Bank Limited and the Administrator of the Government of the Commonwealth of Australia has now granted an authority to CHASE AMP Bank Limited.
CHASE AMP Bank Limited is owned 50 per cent by the Australian Mutual Provident Society and 50 per cent by Chase Manhattan Holdings (Australia) Limited, a company incorporated in the USA. Accordingly, Australian Mutual Provident Society and Chase Manhattan Holdings (Australia) Limited each applied to the Treasurer for a percentage of 50 per cent to be fixed under sub-section 10(4) of the Act in respect of their shareholdings in the new bank. The Treasurer considered that it was in the national interest that an exemption for these interests be granted.
Paragraph (8) (4) (c) of the Act states ‘where a body corporate has an interest in a share and a person is, the associates of a person are, or a person and his associates are, entitled to exercise or control the exercise of not less than three-twentieths of the votes attached to the voting shares in the body corporate, that person shall be deemed to have an interest in that share’. Each corporation which has by virtue of this paragraph a deemed interest in more than 15 per cent of the voting shares of a bank is required to have a percentage higher than 15 per cent fixed under sub-section 10(4).
By virtue of this paragraph the following corporations are deemed to have the same interest in the bank as Chase Manhattan Holdings (Australia) Limited and each applied for a percentage of 50 per cent to be fixed under sub-section 10(4) of the Act.
(a) Chase Manhattan Overseas Banking Corporation which holds all the issued capital of Chase Manhattan Holdings (Australia) Limited;
(b) The Chase Manhattan Bank NA which holds all the issued capital of Chase Manhattan Overseas Banking Corporation; and
(c) The Chase Manhattan Corporation which holds all the issued capital of The Chase Manhattan Bank NA.
Because the Australian Mutual Provident Society is a mutual society and has no shareholders, no other corporation is deemed to have a 50 per cent interest in CHASE AMP Bank Limited by virtue of paragraph 8(4) (c).
Having regard to the fact that these interests are held indirectly through Chase Manhattan Holdings (Australia) Limited, there was no objection to the exemption being granted to all the applicant companies. Therefore, an
instrument, has been gazetted which separately but not cumulatively fixes a percentage of 50 per cent under sub-section 10(4) for each of the following corporations in relation to their interests in CHASE AMP Bank Limited:
• Australian Mutual Provident Society
• Chase Manhattan Holdings (Australia) Limited
• Chase Manhattan Overseas Banking Corporation
• The Chase Manhattan Bank NA
• The Chase Manhattan Corporation
Under section 9 of the Act the associates (ie all officers, partners, subsidiaries etc) of the above corporations are also deemed to have the same interest in CHASE AMP Bank Limited as the above mentioned companies. The companies made application to the Treasurer for a ‘class’ instrument fixing a percentage of 50 per cent in respect of their officers, pursuant to sub-section 10(5A) of the Act. Hence, an instrument has been gazetted, which declares that for the purposes of the Act the percentage of 50 per cent is also applicable to the persons who are from time to time relevant officers of each of the above corporations in respect to CHASE AMP Bank Limited.
Under the Act, however, it is not possible to make such a ‘class’ instrument for the interests of the associates of those corporations other than for the relevant officers. These ‘other associates’, as defined in section 9, represent an extremely large and ever changing list of persons/corporations and rather than make an instrument, pursuant to sub-section 10(4), for every person within the meaning of section 9 it is convenient to prescribe these interests 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 person, or of the persons included in such class of persons, as is prescribed shall be disregarded. The Banks (Shareholding) Regulations (the Regulations) prescribed a class of persons in relation to their interests in Australian Bank Limited deemed to be held by sub-section 9(2) of the Act and thus their interests are disregarded for the purposes of the Act. The effect of the amendments to the Regulations is to do the same in the case of CHASE AMP Bank Limited.
The Regulations have been amended to incorporate references to both Australian Bank Limited and CHASE AMP Bank Limited in a schedule to the Regulations. For each of the sixteen successful applicants announced by the Treasurer on 27 February 1985 which proceeds to the obtaining of a banking authority, a similar addition will be made to the Schedule to the Regulations.
Details of the regulations are as follows:
• Regulation one provides the definition of the Principal Regulations;
• Regulation two amends regulation three of the Principal Regulations which prescribes the interest in a share that a person is deemed to have by virtue of sub-section 9(2) of the Act in respect of a bank that is now specified in the Schedule;
• Regulation three repeals regulation four of the Principal Regulations which prescribed the class of persons in relation to an interest in a share in Australian Bank Limited, namely persons who are deemed to be associates of specified corporations. The new regulation maintains the current prescribed class of persons in relation to an interest in a share of Australian Bank Limited by reference to corporations specified in the Schedule and, in relation to an interest in a share of CHASE AMP Bank Limited, prescribes the class of persons who are deemed to be associates of any of the following corporations specified in the Schedule:
• Australian Mutual Provident Society
• Chase Manhattan Holdings (Australia) Limited
• Chase Manhattan Overseas Banking Corporation
• The Chase Manhattan Bank NA
• The Chase Manhattan Corporation