Banks (Shareholdings) Regulations (Amendment)

Overview

The Banks (Shareholdings) Regulations (Amendment) 1996 No. 349, issued under the authority of the Assistant Treasurer, addresses a technical error in the previously enacted instruments concerning the name of QIDC, which should read 'QIDC Limited' instead of 'Queensland Industry Development Corporation Limited'. These amendments were necessitated by the discovery of this clerical mistake in the instruments issued on 19 November 1996 under the Banks (Shareholdings) Act 1972, which aimed to allow Metway to own up to 100% of QIDC. This amendment rectifies the oversight and ensures that the regulatory framework accurately reflects the correct corporate name. The policy objective underpinning these amendments is to maintain the integrity and efficacy of the regulatory regime governing bank shareholdings, facilitating the proposed merger of Suncorp, QIDC, and Metway, and supporting the Queensland Government’s plan to privatise its financial institutions.

Scope and Application

The Banks (Shareholdings) Regulations (Amendment) 1996 No. 349 applies to the amendment of the Banks (Shareholdings) Regulations 1972, which in turn are subsidiary to the Banks (Shareholdings) Act 1972. This Act primarily governs the maximum nominal amount of voting shares that a person, including a corporation, can hold in a bank, generally set at 10 per cent of the total nominal amount of the voting shares, or 15 per cent with the approval of the Treasurer. The amendment seeks to correct a technical error in previously issued instruments and regulations that incorrectly listed 'Queensland Industry Development Corporation Limited' instead of the correct name 'QIDC Limited'. This correction is necessary to align the regulatory framework with the actual legal entity involved in the merger of Suncorp, QIDC Limited, and Metway Bank Limited, which is intended to create a significant Queensland-based financial institution. The amendment disregards the interests in QIDC arising from associate relationships with Metway for the purposes of the Banks (Shareholdings) Act, facilitating the merger which is deemed to be in the national interest due to anticipated benefits such as branch and head office cutbacks, revenue gains from bancassurance, and the privatisation of the Queensland Government's financial institutions. The changes are confined to Commonwealth jurisdiction, impacting entities involved in the specified merger and their associates as defined under the Act.

Key Provisions

The Banks (Shareholdings) Regulations (Amendment) 1996 No. 349 primarily concerns amendments to the Banks (Shareholdings) Regulations (the Regulations) to correct a minor technical error and to disregard certain interests in QIDC Limited for the purposes of the Banks (Shareholdings) Act 1972 (the Act). Section 10 of the Act limits the nominal amount of voting shares a person, including a corporation, may hold in a bank, generally to 10 per cent, or 15 per cent with the Treasurer’s approval. The Act allows the Governor-General to fix a higher percentage if deemed in the national interest, and also to extend this higher percentage to relevant officers of a corporation. The Act also provides for the Governor-General to make regulations under section 17 to disregard certain interests. The proposed amendment corrects the name of QIDC in the instruments and regulations, and seeks to disregard the interests of associates of Metway, other than its relevant officers, in QIDC. The Regulations impose specific obligations on the parties involved in the merger of Suncorp, QIDC, and Metway. Firstly, the State of Queensland must ensure that its interest in Metway is reduced to less than 15 per cent within five years, as per the Treasurer’s undertaking. The proposed amendments also require the correction of the name of QIDC in the instruments and regulations, and the disregard of certain interests in QIDC for the purposes of the Act. The Regulations further aim to achieve this disregard by amending the Schedule to the Banks (Shareholdings) Regulations to substitute 'Queensland Industry Development Corporation Limited' with 'QIDC Limited'. Failure to comply with the provisions of the Act and the Regulations may result in civil or criminal consequences. While the Explanatory Statement does not detail specific offences or penalties, breaches of the Act could potentially lead to enforcement actions by the Treasurer or legal proceedings. The maximum penalties for breaches of the Act may vary depending on the nature and severity of the breach. It is important for the parties involved to adhere to the requirements set out in the Act and the Regulations to avoid any legal repercussions. In conclusion, the Banks (Shareholdings) Regulations (Amendment) 1996 No. 349 seeks to correct a minor technical error in the name of QIDC and to disregard certain interests in QIDC for the purposes of the Banks (Shareholdings) Act 1972. The proposed amendments to the Regulations involve correcting the name of QIDC in the instruments and regulations, and disregarding the interests of associates of Metway, other than its relevant officers, in QIDC. The Regulations impose specific obligations on the parties involved in the merger of Suncorp, QIDC, and Metway, and failure to comply with the provisions of the Act and the Regulations may result in civil or criminal consequences.