Banks (Shareholdings) Regulations (Amendment)

Overview

The Banks (Shareholdings) Regulation (Amendment) 1994 No. 331, issued under the authority of the Treasurer, amends the Banks (Shareholdings) Regulation to address the problem of Rabobank Nederland's acquisition of Primary Industry Bank of Australia Limited (PIBA) from the Bank of Western Australia Limited. The Banks (Shareholdings) Act 1972 generally restricts the nominal amount of voting shares a person may hold in a bank to 10%, or 15% with the Treasurer's approval. The amendment seeks to disregard certain interests in PIBA arising from associate relationships with Rabobank International Holding BV and Rabobank Nederland, facilitating the acquisition in line with the Government's foreign investment policy. The Banks (Shareholdings) Regulation (Amendment) 1994 No. 331, issued by the Treasurer, modifies the Banks (Shareholdings) Regulation to enable Rabobank Nederland's acquisition of PIBA. This amendment was enacted by the Parliament of Australia to align with the Government's foreign investment policy and to facilitate Rabobank International Holding BV's and Rabobank Nederland's acquisition of 100% of the shares in PIBA. By amending the Regulations, the amendment disregards interests in PIBA arising from associate relationships with the two Dutch corporations, thus facilitating the acquisition while adhering to the constraints set by the Banks (Shareholdings) Act 1972.

Scope and Application

The Banks (Shareholdings) Regulation (Amendment) 1994 No. 331 applies to the entities Rabobank International Holding BV and Rabobank Nederland, both of which are corporations incorporated in the Netherlands. This amendment is in response to Rabobank Nederland's acquisition of Primary Industry Bank of Australia Limited (PIBA), a specialist provider of rural finance in Australia and New Zealand. The amendment facilitates the acquisition by fixing the percentage of shares that these entities can hold in PIBA, a subsidiary effectively 100 per cent owned by Rabobank Nederland. The amendment aligns with the Banks (Shareholdings) Act 1922, which generally restricts the nominal amount of voting shares a person or corporation can hold in a bank to 10 per cent, or 15 per cent with the Treasurer's approval. The amendment disregards interests in PIBA arising from associate relationships with Rabobank International Holding BV and Rabobank Nederland, effectively allowing these entities to hold 100 per cent of the shares in PIBA. The changes are enacted through instruments gazetted in accordance with the Act, and the Regulations are amended to reflect these interests, thereby ensuring compliance with the legislative framework.

Key Provisions

The Banks (Shareholdings) Regulation (Amendment) 1994 No. 331 primarily amends the Banks (Shareholdings) Regulations to facilitate the acquisition of Primary Industry Bank of Australia Limited (PIBA) by Rabobank Nederland and Rabobank International Holding BV. Section 10(4) of the Banks (Shareholdings) Act 1922 generally limits the nominal amount of the voting shares of a bank in which a person may have an interest to 10 per cent, or 15 per cent with the approval of the Treasurer. The regulation sets a higher percentage of 100 per cent for Rabobank International Holding BV and Rabobank Nederland concerning their interest in PIBA, as published in the Gazette. This amendment allows Rabobank Nederland to acquire 100 per cent of the shares in PIBA, a specialist provider of rural finance in Australia and New Zealand. Section 9 of the Act also deems associates of Rabobank International Holding BV and Rabobank Nederland to have the same interest in PIBA as the banks. The amendment disregards the interests of these associates under section 10 of the Act by regulation, as provided for by section 17 and paragraph 8(9)(d) of the Act. The Banks (Shareholdings) Regulation (Amendment) 1994 No. 331 imposes specific obligations on Rabobank Nederland, Rabobank International Holding BV, and their associates. Under section 10(4) of the Act, these entities are required to apply to the Treasurer for the fixing of a higher percentage for their interest in PIBA. The Governor-General then fixes the percentage by publishing an instrument in the Gazette. Similarly, under subsection 10(5A) of the Act, the Governor-General can declare that the percentage fixed for the corporations is also applicable to relevant officers of those corporations in relation to PIBA. Furthermore, the regulations require that the interests of associates, other than relevant officers, be disregarded for the purposes of section 10 of the Act. This is achieved by prescribing these interests to be disregarded under paragraph 8(9)(d) of the Act. The Banks (Shareholdings) Act 1922 imposes certain consequences for non-compliance with its provisions. Section 14 of the Act states that a person who contravenes a regulation made under section 17 of the Act is liable to a penalty not exceeding 50 penalty units. Additionally, section 15 of the Act provides that a person who contravenes a regulation made under section 17 of the Act is liable to a penalty not exceeding 50 penalty units for each day during which the contravention continues. It is important to note that these penalties are subject to change, and the maximum penalties may vary depending on the specific nature of the contravention. The Act also includes provisions for civil and criminal consequences for serious or repeated breaches, which may result in more severe penalties.