Financial Sector (Shareholdings) (Citigroup Pty Limited) Instrument 2022
I, Josh Frydenberg, Treasurer, make the following instrument.
Dated 25 March 2022
Josh Frydenberg
Treasurer
Contents
Part 1—Preliminary
1 Name
2 Commencement
3 Authority
4 Definitions
Part 2—Approvals to exceed 20% shareholding limit
5 Approval of application for transfer of business
Part 3—Related approvals for transfer of business
6 Consent to the voluntary transfer of business between ADIs
7 Consent to the restructuring of ADIs
Part 1—Preliminary
1 Name
This instrument is the Financial Sector (Shareholdings) (Citigroup Pty Limited) Instrument 2022.
2 Commencement
(1) Each provision of this instrument specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.
Commencement information |
Column 1 | Column 2 | Column 3 |
Provisions | Commencement | Date/Details |
1. The whole of this instrument | The day after this instrument is registered. | |
Note: This table relates only to the provisions of this instrument as originally made. It will not be amended to deal with any later amendments of this instrument.
(2) Any information in column 3 of the table is not part of this instrument. Information may be inserted in this column, or information in it may be edited, in any published version of this instrument.
3 Authority
This instrument is made under the following:
(a) Banking Act 1959; and
(b) Financial Sector (Shareholdings) Act 1998; and
(c) Financial Sector (Transfer and Restructure) Act 1999; and
(d) Financial Sector (Transfer and Restructure) Regulations 2018.
4 Definitions
Note: Paragraph 13(1)(b) of the Legislation Act 2003 has the effect that expressions have the same meaning in this instrument as in the Financial Sector (Shareholdings) Act 1998 as in force from time to time.
In this instrument:
ABN has the meaning given by the A New Tax System (Australian Business Number) Act 1999.
ADI (authorised deposit‑taking institution) means a body corporate that is an ADI for the purposes of the Banking Act 1959.
banking business has the meaning given by the Banking Act 1959.
the Act means the Financial Sector (Shareholdings) Act 1998.
Part 2—Approvals to exceed 20% shareholding limit
5 Approval of application for transfer of business
(1) Under paragraph 14(1)(a) of the Act, as modified by section 8 of the Financial Sector (Transfer and Restructure) Regulations 2018, approval is granted to the National Australia Bank Limited (ABN 12 004 044 937) to hold more than 20% of the gross assets and liabilities of Citigroup Pty Limited (ABN 88 004 325 080).
(2) The approval is to hold up to 100% of the gross assets and liabilities of Citigroup Pty Limited’s banking business.
(3) The approval granted under subsection (1) remains in force until repealed or otherwise revoked.
Part 3—Related approvals for transfer of business
6 Consent to the voluntary transfer of business between ADIs
Under paragraph 11(1)(e) of the Financial Sector (Transfer and Restructure) Act 1999, consent is given to the transfer of business from Citigroup Pty Limited (ABN 88 004 325 080) to National Australia Bank Limited (ABN 12 004 044 937).
7 Consent to the restructuring of ADIs
Under subsection 63(1) of the Banking Act 1959, consent is given to Citigroup Pty Limited (ABN 88 004 325 080) to enter into an arrangement or agreement for the sale or disposal of its business to National Australia Bank Limited (ABN 12 004 044 937).
Overview
The Financial Sector (Shareholdings) (Citigroup Pty Limited) Instrument 2022 was enacted to provide specific approvals under various financial sector legislation for the transfer of business and shareholdings between authorised deposit-taking institutions (ADIs). This instrument was introduced to address the need for regulatory approval in cases where significant changes in financial sector holdings occur, ensuring compliance with existing financial legislation. Enacted by Josh Frydenberg, the Treasurer, the instrument operates under the authority of the Banking Act 1959, the Financial Sector (Shareholdings) Act 1998, the Financial Sector (Transfer and Restructure) Act 1999, and the Financial Sector (Transfer and Restructure) Regulations 2018. The overarching policy objective is to maintain financial stability and protect the interests of depositors while facilitating necessary business transfers and restructurings within the financial sector.
Scope and Application
The Financial Sector (Shareholdings) (Citigroup Pty Limited) Instrument 2022 was made under the authority of several key pieces of Australian legislation, including the Banking Act 1959, the Financial Sector (Shareholdings) Act 1998, and the Financial Sector (Transfer and Restructure) Act 1999, with the regulations being further guided by the Financial Sector (Transfer and Restructure) Regulations 2018. This instrument provides specific approvals and consents in relation to the transfer of business and restructuring activities involving authorised deposit-taking institutions (ADIs). Specifically, it grants the National Australia Bank Limited the ability to hold up to 100% of the gross assets and liabilities of Citigroup Pty Limited’s banking business, subject to the conditions set out in the instrument. Furthermore, the instrument also provides consent for the transfer of business from Citigroup Pty Limited to National Australia Bank Limited and for Citigroup Pty Limited to enter into an arrangement or agreement for the sale or disposal of its business to National Australia Bank Limited. These approvals and consents are applicable to the specific entities named and the particular transactions involved, ensuring compliance with the legislative framework governing financial sector shareholdings and restructuring in Australia.
Key Provisions
The Financial Sector (Shareholdings) (Citigroup Pty Limited) Instrument 2022 outlines specific approvals related to shareholdings and business transfers within the financial sector. In Section 5, it grants the National Australia Bank Limited the authority to hold up to 100% of the gross assets and liabilities of Citigroup Pty Limited's banking business, thus exceeding the typical 20% shareholding limit. This approval is granted under the Financial Sector (Shareholdings) Act 1998 and remains effective until it is repealed or revoked. Section 6 provides consent for the voluntary transfer of business between the two authorised deposit-taking institutions (ADIs), in accordance with the Financial Sector (Transfer and Restructure) Act 1999. Section 7, in turn, consents to the restructuring of Citigroup Pty Limited, allowing it to enter into an agreement for the sale or disposal of its business to National Australia Bank Limited, as stipulated under the Banking Act 1959.
The obligations imposed by this instrument primarily concern the National Australia Bank Limited and Citigroup Pty Limited. For National Australia Bank Limited, the key obligations include adhering to the conditions set forth in Section 5, which governs the shareholding limit. For Citigroup Pty Limited, the primary obligations involve complying with the terms of Sections 6 and 7, which pertain to the voluntary transfer of business and the restructuring agreement, respectively. Both entities must ensure that their activities align with the statutory requirements and maintain proper documentation to evidence compliance.
Failure to comply with the provisions of this instrument may result in legal consequences. While the specific penalties are not detailed in the text provided, breaches of financial sector regulations generally attract significant penalties under Australian law. These may include fines, legal action, and other administrative penalties. In the case of serious or repeated breaches, the entities involved could face more severe consequences, such as revocation of licenses or other regulatory sanctions. The exact nature and severity of penalties would depend on the specific breach and the applicable laws, including the Banking Act 1959, Financial Sector (Shareholdings) Act 1998, and Financial Sector (Transfer and Restructure) Act 1999.