Banks (Shareholdings) Regulations (Amendment)

Overview

The Banks (Shareholdnings) Regulations (Amendment) Statutory Rules 1985 No. 299, issued under the authority of the Treasurer, aim to address a specific issue arising from the Banks (Shareholdnings) Act 1972. This Act regulates the share ownership in Australian banks, particularly limiting the voting shares any individual or corporation can hold in a bank to 10 per cent, or 15 per cent with the Treasurer's approval. The Regulations amend the existing rules to streamline the process for The Bank of Tokyo, Ltd and its associates in relation to their interests in Bank of Tokyo Australia Limited, by deeming certain interests to be held under specific conditions as outlined in the Act. This amendment ensures that the interests of The Bank of Tokyo, Ltd and its relevant officers are recognised and regulated appropriately under the Act. The policy objective of these Regulations is to provide clarity and certainty in the application of the shareholding limits to The Bank of Tokyo, Ltd and its associates, facilitating the granting of banking authorities and maintaining the integrity of the Australian banking system.

Scope and Application

The Banks (Shareholdings) Regulations (Amendment) Statutory Rules 1985 No. 299 pertains to the Banks (Shareholdings) Act 1972, applying to individuals and corporations that have an interest in the voting shares of Australian banks. The Act regulates the maximum nominal amount of voting shares a person may own in an Australian bank, generally capped at 10 per cent, or 15 per cent with the Treasurer's approval. The Act extends its application to the Commonwealth and is administered by the Treasurer who may, on application, set a higher percentage for a particular person through an instrument published in the Gazette. The amendments made by these regulations specifically cater to The Bank of Tokyo, Ltd and its associates, granting them a 100 per cent interest in Bank of Tokyo Australia Limited. However, these amendments do not extend to other associates of The Bank of Tokyo, Ltd who are not relevant officers, as their interests are to be disregarded under section 17 and paragraph 8(9)(d) of the Act. This exclusion is facilitated through a prescribed class of persons listed in the Schedule to the Regulations, which is updated to include The Bank of Tokyo, Ltd in relation to Bank of Tokyo Australia Limited.

Key Provisions

The Banks (Shareholdings) Regulations (Amendment) Statutory Rules 1985 No. 299, issued under the authority of the Treasurer, pertain to the shareholding limits of banks incorporated in Australia as outlined in the Banks (Shareholdings) Act 1972 (the Act). Section 10 of the Act generally restricts the nominal amount of voting shares of an Australian-incorporated bank in which a person may have an interest to 10 per cent of the total nominal amount of the bank's voting shares, or 15 per cent with the Treasurer's approval. Sub-section 10(4) allows the Governor-General to fix a higher percentage upon application by the person, and this percentage must be published in the Gazette. Sub-section 10(3) further stipulates that once a percentage is applicable, the person cannot hold more shares than the fixed percentage. The Act imposes obligations on individuals and entities to comply with the specified shareholding limits. Specifically, under section 9, associates of a bank, including officers, partners, and subsidiaries, are deemed to have the same interest in the bank as the primary entity. This means that these associates are subject to the same shareholding restrictions. Additionally, under the new amendments, relevant officers of The Bank of Tokyo, Ltd are granted a 100 per cent interest in Bank of Tokyo Australia Limited, as per the gazetted instrument. For associates other than the relevant officers, their interests are disregarded under paragraph 8(9)(d) of the Act, as prescribed by the Banks (Shareholdings) Regulations. The Regulations amend the Schedule to include The Bank of Tokyo, Ltd in relation to Bank of Tokyo Australia Limited, thereby applying the same principles to the new class of persons. This amendment ensures that the interests of these prescribed persons are disregarded for the purposes of the Act. For each of the sixteen applicants who successfully obtained a banking authority, a similar addition is made to the Schedule of the Regulations, thereby formalising their interests. The Act includes provisions for penalties and consequences for non-compliance. While the specific penalties are not detailed in the provided text, it is understood that breaches of the Act may lead to civil or criminal consequences, depending on the nature and severity of the breach. The maximum penalties for such breaches would be determined by relevant laws and judicial interpretations.