EXPLANATORY STATEMENT
STATUTORY RULES 1987 NO 127
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 with the approval of the Treasurer 15 per cent, 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.
In order to permit the sale of a 20 per cent interest in Hongkong Bank of Australia Limited by the Victorian Economic Development Corporation to Hongkong Australia Holdings Pty Ltd, which is a wholly-owned subsidiary of the Hongkong and Shanghai Banking Corporation, the Governor-General of the Commonwealth of Australia on the recommendation of the Treasurer has, pursuant to sub-section 10(5) of the Act, varied the instrument which had previously been gazetted under sub-section 10(4) so that the instrument as varied fixes a percentage of 100 for Hongkong Australia Holdings Pty Ltd and the Hongkong and Shanghai Banking Corporation in relation to their interests in Hongkong bank of Australia Limited. The Governor-General has also, pursuant to sub-section 10(7) of the Act revoked the instrument fixing a percentage of 20 for the Victorian Economic Development Corporation in relation to its interest in Hongkong Bank of Australia Limited.
Under the Act, however, it is not possible to make a ‘class’ instrument prescribing the interests of the associates of those corporations, other than their relevant officers. These other associates, as defined in section 9. would represent an extremely large and ever-changing list of persons and corporations. Accordingly, rather than make an instrument, pursuant to sub-section 10(4). for every person within the meaning of section 9, it was considered convenient at the time of granting of a banking authority to Hongkong Bank of Australia Limited to prescribe, as provided for by section 17 and paragraph 8(9)(d), the interests of associates of those corporations which were to have large interest in the bank.
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 which are deemed under sub-section 9(2) of the Act to exist by virtue of those persons being associates of the corporations listed in the Schedule so that those interests are disregarded for the purposes of the Act.
In view of the fact that the Victorian Economic Development Corporation will no longer have an interest in Hongkong Bank of Australia Limited, the amendment to the Regulations deletes the Victorian Economic Development Corporation from the Schedule in relation to Hongkong Bank of Australia Limited.