Notice of Approval under the Financial Sector (Shareholdings) Act 1998 – AIA International

Administered by Department of the Treasury

Legislation au C2018G00739 In force Gazette

Legislation content

 

 

 

COMMONWEALTH OF AUSTRALIA

Financial Sector (Shareholdings) Act 1998

Notice of Approval under Subsections 14(1) and 16(1)

 

I, JOSH FRYDENBERG, Treasurer:

•                 being satisfied that it is in the national interest, under subsections 14(1) and 16(1) of the Act, approve AIA Group Limited and each company specified in Column A of the Schedule, to hold a stake of 100 per cent in The Colonial Mutual Life Assurance Society Limited (ABN 12 004 021 809) and approve AIA Group Limited and each company specified in Column B of the Schedule, to hold a stake of 100% in AIA International Limited, subject to the conditions specified in the Schedule.

This approval comes into force on the date signed and remains in force indefinitely.

Dated: 18 September 2018

 

 

JOSH FRYDENBERG

Treasurer

 

 

 

 

 

 

Schedule

Column A

ABN

Column B

ABN

AIA Company Limited

N/A

AIA Company Limited

N/A

AIA International Limited

N/A

 

 

 

Customer data accessibility conditions

In relation to the approval granted to AIA International Limited (the Applicant) to hold a stake of 100 per cent in The Colonial Mutual Life Assurance Society Limited (CMLA), and in accordance with section 16 of the Financial Sector (Shareholdings) Act 1998 (Cth), the following conditions are imposed. These conditions apply until a Termination Event occurs.

The Applicant must use its best endeavours to ensure, and within its powers must ensure, that:

  1. CMLA implements policies and procedures to ensure that the Applicant’s various directors or executive managers do not and cannot access any Customer Data, except in circumstances where access to specific Customer Data is required:
    1.   in order for the director or executive manager to discharge his or her responsibilities as a director or executive manager of the Applicant or CMLA under applicable law; or
    2.   in compliance with any law of the Commonwealth of Australia, or any of the States and Territories;

in which case the extent, form and manner of access to such Customer Data must be restricted to the bare minimum necessary for the discharge of responsibilities as a director or executive manager or to comply with the applicable law;

2.            each of the Applicant’s various directors or executive managers provide written certification on an annual basis to the Treasury by emailing FSSA-IATA@treasury.gov.au confirming that they have not accessed any Customer Data held by CMLA, except in the circumstances permitted in condition 1;

3.            CMLA implements written policies and procedures to ensure that its personnel do not and cannot disclose any Customer Data to any Offshore Investor or Offshore Personnel, or a recipient located outside Australia, except in circumstances where:

3.1.     access to specific Customer Data is required by a person to allow him or her to undertake his or her duties in the administration of life insurance services by CMLA;

3.2.     the recipient is a person located outside Australia and the recipient has requested access to their own Customer Data; or

3.3.     a person acting on behalf of a customer requires access to Customer Data about that customer in order to provide life insurance services to that customer,

in which case the extent, form and manner of disclosure of such Customer Data must be restricted to the bare minimum necessary;

4.            all Customer Data remains stored only in Australia and is accessible only from within Australia, except in the circumstances where it is required to be accessed from outside Australia in order to comply with the law of the Commonwealth of Australia, or of any of the States and Territories; and

5.            where any Customer Data is stored in the cloud by CMLA, CMLA uses a cloud provider which has been Information Security Registered Assessors Program (IRAP) certified by the Australian Signals Directorate (ASD) and which is listed on the ASD’s Certified Cloud Services.

Footnotes

  1. Customer Data means any “personal information” or “sensitive information” as defined by the Privacy Act 1988 in relation to past, current and future policyholders which is held or collected by, or provided to, CMLA and each of its subsidiaries.
  2. Offshore Investor means any foreign entity (including for the avoidance of doubt any foreign limited partnership) or foreign government investor holding a direct or indirect interest in CMLA.
  3. Offshore Personnel means any officers, employees, consultants or contractors of an Offshore Investor who are ordinarily resident outside Australia and are not employees or officers of CMLA or its related bodies corporate (within the meaning of the Corporations Act 2001).
  4. For the purposes of these conditions a Termination Event occurs when the Applicant ceases to hold an interest of more than 15 per cent in CMLA.

TAX CONDITIONS

In relation to the approval granted to AIA International Limited (the Applicant) to hold a stake of 100 per cent in The Colonial Mutual Life Assurance Society Limited (CMLA), and in accordance with section 16 of the Financial Sector (Shareholdings) Act 1998 (Cth), the following conditions are imposed. These conditions apply until a Termination Event occurs.

  1. The Applicant must comply with the taxation laws of the Commonwealth of Australia in relation to the action, and any transactions, operations or assets in connection with the assets or operations acquired as a result of the action. The Applicant does not breach this condition if it has taken reasonable care to comply with the relevant taxation laws and has a reasonably arguable position.
  2. The Applicant must use its best endeavours to ensure, and within its powers must ensure, that entities in its control group2 comply with the taxation laws of the Commonwealth of Australia in relation to the action and any transactions, operations or assets in connection with the assets or operations acquired as a result of the action. The Applicant does not breach this condition if entities in its control group have taken reasonable care to comply with the relevant taxation laws and have a reasonably arguable position.
  3. The Applicant must provide any documents or information3 that is required to be provided to the Australian Taxation Office (ATO) in accordance with the taxation laws of the Commonwealth of Australia in relation to the action and any transactions, operations or assets in connection with assets or operations acquired as a result of the action. These documents or information must be provided within the timeframe specified by the ATO.
  4. The Applicant must use its best endeavours to ensure, and within its powers must ensure, that entities in its control group provide any documents or information that is required to be provided to the ATO in accordance with the taxation laws of the Commonwealth of Australia in relation to the action and any transactions, operations or assets in connection with assets or operations acquired as a result of the action. These documents or information must be provided within the timeframe specified by the ATO.
  5. The Applicant must pay its outstanding taxation debt under the taxation laws of the Commonwealth of Australia, and must use its best endeavours to ensure, and within its powers must ensure, that entities in its control group pay any outstanding taxation debt under the taxation laws of the Commonwealth of Australia, which is due and payable at the time of the proposed action. This condition does not apply to payment arrangements agreed with the ATO or where the ATO has exercised its discretion to defer part or all of the payment of a disputed amount, to the extent that those arrangements are complied with.
  6. The Applicant must provide an annual report to the Treasury on compliance with these conditions. The first report must cover the period from the date the action takes place to the end of the applicant’s income year for tax purposes. All subsequent reports must cover the applicant’s income year for tax purposes. If the action takes place less than 90 days before the end of the first income year, then that period can be incorporated in the next report. Each report must be provided by the due date for lodgement of the applicant’s tax return for that year.
  7. The Applicant must advise the Treasury within 60 days of taking the action that it has done so.
  8. The Applicant must advise the Treasury within 60 days of a termination event that the event has taken place.

1 For the purposes of these conditions a termination event occurs:

(a)   when the applicant ceases to hold all of the interests the acquisition of which was the subject of the no objection notification;

(b)   when the applicant ceases to control, as defined in the Foreign Acquisitions and Takeovers Act 1975, the entity or business the control of which was the subject of the no objection notification;

(c)   when the applicant ceases to carry on an Australian business the starting of which was the subject of the no objection notification.

2 For the purposes of these conditions, an applicant’s control group consists of entities:

(a)   that control the applicant (a controller);

(b)   that a controller controls;

(c)   that the applicant controls, which includes for the purposes of these conditions an entity that is the subject of the application;

For the purposes of determining a control group, control has the meaning in section 50AA of the Corporations Act 2001.

3 This includes documents or information held, possessed or stored outside Australia.

 

 

 

Overview

The Financial Sector (Shareholdings) Act 1998 was enacted to address the need for regulation and oversight of foreign shareholdings in the Australian financial sector, particularly in sensitive areas like life insurance. This Act was introduced by the Commonwealth Parliament to ensure that foreign ownership and control of Australian financial institutions do not pose undue risks to the national economy or financial stability. The Act requires the Treasurer to approve certain acquisitions of shares in Australian financial entities by foreign investors, subject to specific conditions. In this context, the Commonwealth of Australia granted approval for AIA Group Limited and associated companies to hold a 100% stake in The Colonial Mutual Life Assurance Society Limited and AIA International Limited, subject to customer data accessibility and tax compliance conditions. These conditions are designed to protect sensitive customer information and ensure adherence to Australian tax laws, thereby safeguarding the national interest.

Scope and Application

The Financial Sector (Shareholdings) Act 1998 applies to entities involved in the financial sector of Australia, specifically in the context of foreign ownership and control of financial sector entities. This Act is of Commonwealth jurisdiction, extending its reach across the entire nation. The Act provides the Treasurer with the authority to approve, subject to specific conditions, the acquisition or holding of stakes in financial sector entities by foreign entities or individuals. In this instance, the Act was invoked to approve AIA Group Limited and related entities to hold a 100% stake in The Colonial Mutual Life Assurance Society Limited and AIA International Limited, subject to certain conditions. These conditions pertain to the protection of customer data, ensuring it is not accessed by directors or executive managers of the acquiring entities except under specific legal or operational circumstances, and mandating annual certifications to the Treasury. Furthermore, the Act imposes conditions to prevent the disclosure of customer data to offshore investors or personnel, unless necessary for specific duties, and mandates that all customer data be stored and accessible only within Australia, except where required by law to be accessed externally. Additionally, the Act imposes tax compliance conditions on the acquiring entities, requiring adherence to Australian taxation laws and the provision of necessary documentation and information to the Australian Taxation Office. The Act does not explicitly state exclusions or thresholds within the provided text, but it does specify conditions that must be adhered to by the acquiring entities. The application and scope of the Act may be further defined or extended through subordinate instruments, which could include regulations or guidelines issued under the authority of the Act to clarify or expand upon the conditions and requirements for foreign shareholdings in the Australian financial sector. The Act’s conditions are enforced until a termination event occurs, which is defined as the cessation of the acquiring entity’s control over the financial sector entity or the cessation of the entity carrying on an Australian business.

Key Provisions

The Financial Sector (Shareholdings) Act 1998 (Cth) is a critical piece of legislation that governs the approval process for foreign shareholdings in Australian financial institutions. In the context of the notice of approval issued by the Treasurer under subsections 14(1) and 16(1) of the Act, the primary sections involved pertain to the authorisation of specific shareholdings in particular entities, subject to the conditions outlined in the accompanying schedule. This approval allows AIA Group Limited and its associated companies to hold a 100% stake in The Colonial Mutual Life Assurance Society Limited and AIA International Limited, with the approval being effective indefinitely from the date signed. The obligations imposed by this Act and the accompanying approval require AIA International Limited to implement stringent measures to protect customer data and ensure compliance with taxation laws. Specifically, AIA International Limited must ensure that its directors and executive managers do not access customer data unless it is necessary for their roles or required by law. Additionally, it must prevent any unauthorised disclosure of customer data to offshore investors or personnel, except under specific circumstances such as when a recipient located outside Australia requests access to their own customer data. Furthermore, all customer data must be stored within Australia and accessible only from within the country, unless required by law to be accessed externally. The approval also mandates that any cloud storage of customer data must be conducted by a provider certified by the Australian Signals Directorate. Failure to comply with the conditions set out in the approval can lead to significant consequences. While the specific penalties are not detailed in the notice, breaches of conditions related to customer data protection and taxation compliance could potentially result in legal action, financial penalties, or other civil or criminal sanctions as prescribed by relevant legislation. The Act underscores the importance of adhering to these conditions to maintain the integrity and security of Australian financial institutions and their customer data.

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Area of Law
Financial Sector Law
Instrument
Gazette Notice
Concepts
Definitions & Interpretation
Reporting & Disclosure Obligations
Compliance Obligations
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Customer Data accessibility conditions
Tax conditions

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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.