EXPLANATORY STATEMENT
STATUTORY RULES 1987 NO 126
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 such 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.
The Governor-General of the Commonwealth of Australia on the recommendation of the Treasurer has granted a banking authority under the Banking Act 1959 to Primary Industry Bank of Australia Limited.
As required by the Act an instrument has been gazetted which separately, but not cumulatively, fixes a percentage of 100 under sub-section 10(4) for each of the following corporations in relation to their interests in Primary Industry Bank of Australia Limited:
• R and I Investment Holdings Pty Ltd,
• the Commissioners of the Rural and Industries Bank of Western Australia.
Under section 9 of the Act the associates (such as officers, partners, and subsidiaries) of the above corporations are deemed to have the same interest in Primary Industry Bank of Australia Limited as the corporations themselves. The above-mentioned corporations have made an application to the Treasurer for an instrument fixing a percentage of 100 in respect of their officers, pursuant to sub-section 10(5A) of the Act. Hence, an instrument has been gazetted which declares that for the purposes of the Act the percentage of 100 is also applicable to the persons who are from time to time relevant officers of each of the above corporations in respect of Primary Industry Bank of Australia Limited.
Under section 9 of the Act the associates (such as officers, partners and subsidiaries) of the above corporations would also be deemed to have the same interest in Primary Industry Bank of Australia Limited as the corporations themselves. The corporations above-mentioned have made an application to the Treasurer for an instrument fixing a percentage of 100 in respect of their officers, pursuant to sub-section 10(5A) of the Act. The proposed instrument, which will be gazetted when the banking authority comes into force, declares that for the purposes of the Act the percentage of 100 is also applicable to the persons who are from time to time relevant officers of the above corporations in respect of Primary Industry Bank of Australia Limited.
Under the Act, however, it is not possible to make ‘class’ instruments referring to whoever may be the associates of those corporations other than the relevant officers. These other associates, as defined in section 9, would represent a large and ever-changing list of persons and corporations and, rather than make an instrument pursuant to sub-section 10(4) for every person within the meaning of section 9, it is convenient to prescribe the interests of such associates 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 person, or of the persons included in such class of persons, as is prescribed shall be disregarded. The Bank’s (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 sub-section 9(2) of the Act, that is by virtue of an associate relationship. The effect of the Regulations is that these interests are disregarded for the purposes of the Act. The effect of the proposed amendments to the Regulations will be to do the same in the case of Primary Industry Bank of Australia Limited.
Similar additions have been made to the Schedule to the Regulations in respect of each of the new banks which have recently been granted exemptions under the Banks (Shareholdings) Act.
Detail of the proposed Regulation is as follows:
The Schedule to the Banks (Shareholdings) Regulations is amended by adding the following corporations to the Schedule in relation to Primary Industry Bank of Australia Limited:
• R and I Investment Holdings Pty Ltd
• The Commissioners of the Rural and Industries Bank of Western Australia.
Authority - Sub-sections 10(4) and 10(5A) and section 17 of the Banks (Shareholdings) Act 1972.