Financial Sector (Shareholdings) (Heritage Bank Limited) Instrument 2022
I, Jim Chalmers, Treasurer, make the following instrument.
Dated 20 September 2022
Dr Jim Chalmers
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) (Heritage Bank 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Note: This table relates only to the provisions of this instrument as originally made.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.
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 Australian Central Credit Union Ltd (ABN 11 087 651 125) to hold more than 20% of the gross assets and liabilities of Heritage Bank Limited (ABN 32 087 652 024).
(2) The approval is to hold up to 100% of the gross assets and liabilities of Heritage Bank Limited.
(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 Heritage Bank Limited (ABN 32 087 652 024) to Australian Central Credit Union Ltd (ABN 11 087 651 125).
7 Consent to the restructuring of ADIs
Under subsection 63(1) of the Banking Act 1959, consent is given to Heritage Bank Limited (ABN 32 087 652 024) to enter into an arrangement or agreement for the sale or disposal of its business to Australian Central Credit Union Ltd (ABN 11 087 651 125).
Overview
The Financial Sector (Shareholdings) (Heritage Bank Limited) Instrument 2022 was enacted on 20 September 2022, and it was made by Dr Jim Chalmers, the Treasurer. The instrument was created under 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 primary purpose of this legislation is to address the need for regulatory approval concerning shareholdings and business transfers within the financial sector, particularly focusing on Heritage Bank Limited. The instrument grants approval for the Australian Central Credit Union Ltd to hold more than the statutory 20% limit of Heritage Bank Limited's gross assets and liabilities, facilitating the transfer and restructuring of business operations between authorised deposit-taking institutions.
Scope and Application
The Financial Sector (Shareholdings) (Heritage Bank Limited) Instrument 2022 is an Australian legislative instrument designed to regulate shareholdings and business transfers within the financial sector, specifically concerning Heritage Bank Limited. This instrument, made under 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, applies to authorised deposit-taking institutions (ADIs) and their transactions. It allows Australian Central Credit Union Ltd to exceed the 20% shareholding limit of Heritage Bank Limited and facilitates the transfer and restructuring of Heritage Bank Limited's business to Australian Central Credit Union Ltd. The instrument came into effect the day after its registration and remains in force until repealed or revoked. This legislative instrument does not specify exclusions or exemptions but is subject to the broader provisions of the underlying Acts and Regulations.
Key Provisions
The Financial Sector (Shareholdings) (Heritage Bank Limited) Instrument 2022 (hereafter referred to as the 'Instrument') was made under the authority of several acts, including 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. This Instrument allows for approvals to exceed the 20% shareholding limit and related approvals for the transfer of business. Specifically, section 5 grants approval for the Australian Central Credit Union Ltd to hold more than 20% of the gross assets and liabilities of Heritage Bank Limited, up to a maximum of 100%. The approval granted under section 5 remains in force until it is repealed or revoked. Additionally, sections 6 and 7 provide consent for the voluntary transfer of business between authorised deposit-taking institutions and the restructuring of authorised deposit-taking institutions, respectively.
The Instrument imposes specific obligations and requirements on the parties involved. Australian Central Credit Union Ltd must adhere to the conditions outlined in the Instrument, which includes holding no more than 100% of Heritage Bank Limited's gross assets and liabilities. Heritage Bank Limited must also comply with the terms of the Instrument, which allows for the transfer of business to Australian Central Credit Union Ltd and the restructuring of its operations. The Instrument also requires that any changes to the shareholding limit or the transfer of business must be reported to the relevant authorities.
Failure to comply with the provisions of the Instrument may result in civil or criminal penalties. While the specific penalties are not outlined in the text, it is important to note that breaches of financial sector legislation can result in substantial fines and other consequences. The maximum penalties for breaches of the Financial Sector (Shareholdings) Act 1998 can include fines of up to $1.2 million for individuals and $6 million for corporations, as well as potential imprisonment for directors and officers. Similarly, breaches of the Financial Sector (Transfer and Restructure) Act 1999 can result in fines of up to $1.1 million for individuals and $5.5 million for corporations, along with potential imprisonment for directors and officers. It is essential for the parties involved to understand and comply with the requirements of the Instrument to avoid any potential legal consequences.