Banks (Shareholdings) Regulations (Amendment)

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Banks (Shareholdings) Regulations (Amendment) 1996 No. 353

EXPLANATORY STATEMENT

STATUTORY RULES 1996 No. 353

Issued by the Authority of the Assistant 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, if the Governor-General is satisfied that to do so is in the national interest-1-, fix a higher percentage for that person by 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 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.

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

Lloyds Bank NZA Limited (Lloyds) is the Australian subsidiary of the National Bank of New Zealand Limited (the seller). Lloyds provides wholesale banking services and has a small private banking business. The seller wishes to concentrate on its banking operations in New Zealand and Lloyds does not fit within this strategy. The purchaser, the ABN AMRO group plans to provide an extended range of merchant banking services and Lloyds will complement the purchaser very well.

ABN AMRO Australia Limited is owned by ABN AMRO Bank NV, incorporated in the Netherlands which is in turn owned by ABN AMRO Holding N-V, also incorporated in the Netherlands. Therefore, ABN AMRO Holding NV is the ultimate parent of ABN AMRO Australia Limited. Both the Dutch central bank and the Reserve Bank of Australia, have declared in writing that they have no objections to the proposed acquisition.

To reflect the change in ownership of Lloyds, instruments have been gazetted in accordance with the Act, effectively fixing a percentage of 100 under subsection 10(4) for ABN AMRO Australia Limited, ABN AMRO Bank NV and ABN AMRO Holding NV (the ABN AMRO group) in relation to its interest in Lloyds.

Under section 9 of the Act the associates (including officers, partners, subsidiaries and related companies) of the ABN AMRO group would also be deemed to have the same interest in Lloyds as those corporations. In the case of officers of the ABN AMRO group, an instrument pursuant to subsection 10(5A) of the Act is proposed which would fix a percentage of 100 in relation to interests in Lloyds for those persons who are from time to time relevant officers of the ABN AMRO group.

Under the Act, it is not possible to make a 'class' instrument for the interests of the associates of the ABN AMRO group, other than its 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 Lloyds arising from associate relationships with the ABN AMRO group.

The details of the proposed Regulations are as follows:

The Schedules to the item 17 Banks (Shareholdings) Regulations is amended by adding the following corporations to column 3:

ABN AMRO Holding NV, being the corporation formed or incorporated under that name in the Netherlands

ABN AMRO Bank NV, being the corporation formed or incorporated under that name in the Netherlands

ABN AMRO Australia Limited

-1- It is in the national interest for the ABN AMRO group to own up to 100 per cent of Lloyds. First, Lloyds is already owned by a foreign bank and as ABN AMRO already operates in Australia there will be no adverse change in the level of foreign ownership. Second, the ABN AMRO group specialises in the -wholesale section of the finance industry, providing important services to Australia's business community. It is anticipated that their level of professionalism will enhance the competitiveness of Australian businesses and raise the level of competition among financial service providers. This in turn is expected to increase the potential in the future, for Australians to successfully compete in overseas markets.

 

Overview

The Banks (Shareholdings) Regulations (Amendment) 1996 No. 353, issued under the authority of the Assistant Treasurer, amends the Banks (Shareholdings) Regulations to address the proposed acquisition of Lloyds Bank NZA Limited by ABN AMRO Australia Limited, a subsidiary of ABN AMRO Holding N.V. This acquisition is significant as it aligns with the seller's strategy to focus on its New Zealand banking operations, while the purchaser aims to expand its merchant banking services in Australia. The amendment is necessary to allow the ABN AMRO group to own up to 100% of Lloyds, which is deemed to be in the national interest due to the stability of foreign ownership and the potential benefits of increased competition and professional services in the Australian finance industry. The changes are implemented by prescribing the interests of associates of the ABN AMRO group in Lloyds, thereby disregarding these interests for the purposes of the Banks (Shareholdings) Act 1972.

Scope and Application

The Banks (Shareholdings) Regulations (Amendment) 1996 No. 353 pertains to the amendments of the Banks (Shareholdings) Regulations (the Regulations) under the Banks (Shareholdings) Act 1972 (the Act). The Act primarily governs the percentage of voting shares a person, including a corporation, can own in a bank, with a general limit set at 10 per cent, or 15 per cent with the Treasurer's approval. The Act applies to individuals, corporations, and other entities that may have an interest in the voting shares of a bank. It extends across the Commonwealth of Australia, ensuring a uniform approach to bank shareholdings. The proposed amendments aim to facilitate the acquisition of Lloyds Bank NZA Limited by ABN AMRO Australia Limited, a subsidiary of ABN AMRO Holding NV, by adjusting the shareholding limits for the ABN AMRO group to 100 per cent, which has been deemed in the national interest. This adjustment is made through gazetted instruments under subsection 10(4) of the Act and proposed written instruments under subsection 10(5A) for relevant officers. The Regulations, amended by this instrument, will disregard certain interests in Lloyds arising from associate relationships with the ABN AMRO group, thus ensuring compliance with the Act while allowing the proposed acquisition to proceed.

Key Provisions

The Banks (Shareholdings) Regulations (Amendment) 1996 No. 353 primarily amend the existing regulations to facilitate the acquisition of Lloyds Bank NZA Limited by ABN AMRO Australia Limited, a subsidiary of ABN AMRO Holding NV. This amendment is based on the Banks (Shareholdings) Act 1972, which governs the ownership of voting shares in banks. Under Section 10 of the Act, the ownership of voting shares by an individual or corporation is generally limited to 10% of the total voting shares, or 15% with the approval of the Treasurer. However, the Governor-General, on application and if satisfied that it is in the national interest, can fix a higher percentage by instrument published in the Gazette. Additionally, Section 10(5A) allows the Governor-General to apply the same percentage to relevant officers of a corporation. The Act imposes obligations on the ABN AMRO group, ABN AMRO Australia Limited, ABN AMRO Bank NV, and ABN AMRO Holding NV to comply with the shareholding limits set forth in the Banks (Shareholdings) Act 1972. The Act mandates that any interest exceeding the permitted percentage must be approved by the Treasurer, or in certain circumstances, fixed by the Governor-General if it is deemed to be in the national interest. The regulations also require that these interests be properly disclosed and recorded, ensuring transparency and adherence to the legislative framework governing bank shareholdings. The Banks (Shareholdings) Regulations (Amendment) 1996 No. 353 introduces specific provisions to disregard certain interests for the purposes of the Act. This amendment effectively allows the ABN AMRO group to own up to 100% of Lloyds Bank NZA Limited, which is deemed to be in the national interest. The Act and its regulations seek to balance the need for competitive financial services with the necessity to maintain appropriate oversight of bank ownership. Failure to comply with these provisions could result in civil or criminal penalties, including fines and potential legal actions to enforce adherence to the regulatory requirements. The specific penalties are not detailed in the explanatory statement but typically align with the general penalties outlined in the Act for non-compliance with banking regulations.

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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.