Banks (Shareholdings) Regulations (Amendment)

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Banks (Shareholdings) Regulations (Amendment) 1993 No. 259

EXPLANATORY STATEMENT

STATUTORY RULES 1993 No. 259

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 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, fix a higher percentage for that person by an 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. Subsection 10(7) provides that the Governor-General may, if he is satisfied that to do so is in the national interest, by instrument in writing published in the Gazette, revoke an instrument under subsection 10(4) (including such an instrument that has been varied under subsection 10(5)). In that event, under subsection 10(7B) any related instrument published under subsection 10(5A) shall be deemed to have been revoked.

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

To reflect the overall reorganisation of the Lloyds Bank Group, instruments have been gazetted in accordance with the Act, effectively fixing a percentage of 100% under subsection 10(4) for Black Horse Holdings Limited, Lloyds Bank Plc, Lloyds Bank Subsidiaries Limited, The National Bank of New Zealand Limited, and NBNZ Holdings Limited (those corporations) in relation to their interests in Lloyds Bank NZA Limited (LBNZA).

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

Under the Act, it is not possible to make a 'class' instrument for the interests of the associates of those corporations other than their 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 Regulation, 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 LBNZA arising from associate relationships with those corporations.

The details of the proposed Regulations are as follows:

The Schedule to the Banks (Shareholdings) Regulations is amended replacing the current list of corporations with the following list in relation to Lloyds Bank NZA Limited:

Black Horse Holdings Limited, being the corporation formed or incorporated under that name in New Zealand

Lloyds Bank Plc, being the corporation formed or incorporated under that name in the United Kingdom

Lloyds Bank Subsidiaries Limited, being the corporation formed or incorporated under that name in the United Kingdom

The National Bank of New Zealand Limited, being the corporation formed or incorporated under that name in New Zealand

NBNZ Holdings Limited, being the corporation formed or incorporated under that name in New Zealand.

 

Overview

The Banks (Shareholdings) Regulations (Amendment) 1993 No. 259 was enacted to amend the Banks (Shareholdings) Regulations under the Banks (Shareholdings) Act 1972. This legislation was introduced to address the need to adjust shareholding regulations in response to organisational changes within the Lloyds Bank Group, particularly regarding their interests in Lloyds Bank NZA Limited. The Act was passed by the Parliament of Australia and is administered by the Treasurer, with a policy objective of ensuring financial stability by regulating the shareholdings in Australian banks. The explanatory statement highlights that the amendments were necessary to reflect the reorganisation of the Lloyds Bank Group and to streamline the regulatory process concerning their interests in Lloyds Bank NZA Limited, effectively accommodating the complex and evolving nature of their corporate structure.

Scope and Application

The Banks (Shareholdings) Regulations (Amendment) 1993 No. 259 applies to the specified corporations and their associates in relation to their interests in Lloyds Bank NZA Limited, as outlined in the explanatory statement. The amendment is focused on the Lloyds Bank Group’s reorganisation and aims to ensure the regulatory framework appropriately accommodates the restructured entities and their shareholdings. The amendment specifically affects Black Horse Holdings Limited, Lloyds Bank Plc, Lloyds Bank Subsidiaries Limited, The National Bank of New Zealand Limited, and NBNZ Holdings Limited, by fixing their interest in Lloyds Bank NZA Limited at 100%. The regulations also extend to the associates of these corporations, including their relevant officers, ensuring that the shareholding limits under the Banks (Shareholdings) Act 1972 are correctly applied. The changes are made to reflect the current corporate structure and to disregard certain interests arising from associate relationships for the purposes of the Act.

Key Provisions

The Banks (Shareholdings) Regulations (Amendment) 1993 No. 259 primarily revise the list of corporations whose interests in Lloyds Bank NZA Limited (LBNZA) are subject to specific regulations. Under section 10 of the Banks (Shareholdings) Act 1972, these amendments focus on the interests of Black Horse Holdings Limited, Lloyds Bank Plc, Lloyds Bank Subsidiaries Limited, The National Bank of New Zealand Limited, and NBNZ Holdings Limited in LBNZA. These corporations are effectively allowed to hold a 100% interest in LBNZA, a percentage that was fixed through instruments published in the Gazette in accordance with subsection 10(4) of the Act. Additionally, relevant officers of these corporations are also permitted to hold a 100% interest, as fixed under subsection 10(5A) of the Act. The Regulations impose specific obligations on the entities mentioned. These corporations and their relevant officers must comply with the prescribed shareholding limits as outlined in the Gazette. For instance, Black Horse Holdings Limited, Lloyds Bank Plc, and the other entities are required to adhere to the 100% interest limit set for their holdings in LBNZA. This is a significant departure from the usual 10% limit specified in section 10(4) of the Act. Additionally, the relevant officers of these corporations must also conform to the prescribed 100% interest limit for their shares in LBNZA. In terms of consequences, the Act does not explicitly outline specific offences, penalties, or consequences for breach of the provisions regarding shareholding limits. However, any deviation from the prescribed limits could potentially lead to regulatory scrutiny or action under the broader regulatory framework governing banking and financial institutions in Australia. Non-compliance could result in regulatory penalties, enforcement actions, or other administrative consequences as deemed appropriate by the relevant authorities. The Act provides the authority to revoke an instrument under subsection 10(7) if it is deemed necessary in the national interest, with any related instruments under subsection 10(5A) being revoked as per subsection 10(7B).

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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.