EXPLANATORY STATEMENT
STATUTORY RULES 1986 NO 92
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: that amount is limited 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 such 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 Governor-General of the Commonwealth of Australia on the recommendation of the Treasurer has granted a banking authority to Bank of America Australia Limited.
As required by the Act an instrument has been gazetted which separately but not cumulatively fixes a percentage of 75 under sub-section 10(4) for BankAmerica Corporation and Bank of America National Trust and Savings Association in relation to their interests in Bank of America Australia Limited. In addition, an instrument has been gazetted which separately but not cumulatively fixes a percentage of 25 under sub-section 10(4) for Coles Myer Ltd., K mart Corporation and K mart Holdings Pty. Limited in relation to their interest in Bank of America Australia Limited.
Under section 9 of the Act the associates (ie all officers, partners, subsidiaries etc) of the above corporations are deemed to have the same interest in Bank of America Australia Limited as the corporations themselves. BankAmerica Corporation and Bank of America National Trust and Savings Association have made application to the Treasurer for a ‘class’ instrument fixing a percentage of 75 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 75 is also applicable to the persons who are from time to time relevant officers of BankAmerica Corporation and Bank of America National Trust and Savings Association in respect to Bank of America Australia Limited.
In addition, Coles Myer Ltd., K mart Corporation and K mart Holdings Pty. Limited have made application to the Treasurer for a ‘class’ instrument fixing a percentage a 25 in respect of their officers pursuant to sub-section 10(5A). Hence, an instrument has been gazetted which declares for the purposes of the Act that a percentage of 25 is applicable to persons who are from time to time relevant officers of Coles Myer Ltd., K mart Corporation and K mart Holdings Pty. 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 the relevant officers. These other associates, as defined in section 9, would represent an extremely large and ever-changing list of persons and 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 (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 sub-section 9(2) of the Act, that is by virtue of an associate relationship. The effect of the Regulations is that these 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 Bank of America Australia Limited.
For each of the sixteen successful applicants announced by the Treasurer on 27 February 1985 which has been granted a banking authority, a similar addition has been made to the Schedule to the Regulations.
Detail of the Regulation is as follows:
The Schedule to the Banks (Shareholdings) Regulations is amended by adding the following corporations to the Schedule in relation to Bank of America Australia Limited.
• BankAmerica Corporation
• Bank of America National Trust and Savings Association
• Coles Myer Ltd.
• K mart Corporation
• K mart Holdings Pty. Limited