Notice of revocation of consent to establish or maintain a representative office in Australia
Banking Act 1959
TO: The Bank of Nova Scotia ABN 34 133 513 827 (you)
Suite 2, Level 44, Governor Phillip Tower, 1 Farrer Place, Sydney NSW 2000
I, Keith Chapman, a delegate of APRA, under paragraph 67(2)(c) of the Banking Act 1959 (the Act), REVOKE the consent previously given by APRA to you on 1 September 2008 to establish or maintain an office in Australia in connection with the carrying on by you of banking business in a foreign country.
Dated 25 August 2016
[Signed]
Keith Chapman
Executive General Manager Specialised Institutions Division
Interpretation Document ID: 224017
In this Notice
APRA means the Australian Prudential Regulation Authority.
ADI is short for authorised deposit-taking institution and has the meaning given in subsection 5(1) of the Act.
Note 1
Under subsection 67(1) of the Act, a person (other than an ADI) is guilty of an offence if the person:
(a) carries on banking business in a foreign country but does not carry on banking business in Australia; and
(b) establishes or maintains an office in Australia wholly or partly in connection with that banking business in that foreign country; and
(c) APRA has not consented, in writing, to the establishment or maintenance of that office; and
(d) there is no order in force under section 11 of the Act determining that subsection 67(1) does not apply to that person.
The maximum penalty is 50 penalty units or, in the case of a body corporate, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 250 penalty units.
Note 2
Under subsection 67(2) of the Act, APRA may at any time impose conditions, or additional
conditions, on a consent or vary or revoke conditions imposed on a consent or revoke a consent.
Note 3
Under subsection 67(1A) of the Act, if a person commits an offence against subsection 67(1), the
person is guilty of an offence against that subsection in respect of the first day on which the offence is committed and each subsequent day (if any) on which the circumstances that gave rise to the person committing the offence continue (including the day of conviction for any such offence or any later day).
Note 4
Under subsection 67(5) of the Act, a decision to make this revocation is a decision to which Part VI
of the Act applies. If a person whose interests are affected is dissatisfied with that decision, the person may seek reconsideration of the decision by APRA in accordance with section 51B(1) of the Act. The request for reconsideration must be in writing, must state the reasons for the request, and must be given to APRA within 21 days after the decision first comes to the person’s notice or within such further period as APRA allows. If dissatisfied with APRA’s reconsidered decision confirming or varying the first decision, the person may, subject to the Administrative Appeals Act 1975, apply to the Administrative Appeals Tribunal for review of the reconsidered decision.
The address where written notice may be given to APRA is Level 12, 1 Martin Place, Sydney NSW 2000.
Overview
The Banking Act 1959, enacted by the Australian Parliament, was introduced to regulate and control banking activities in Australia, ensuring that the banking system remains stable and sound. The Act provides the Australian Prudential Regulation Authority (APRA) with the power to regulate authorised deposit-taking institutions (ADIs) and to oversee the operations of foreign banks that conduct business in Australia. The primary policy objective of the Act is to protect the interests of depositors and the broader financial system by ensuring that ADIs are managed prudently and responsibly.
This notice of revocation of consent to establish or maintain a representative office in Australia, issued by a delegate of APRA under the Banking Act 1959, demonstrates the regulatory power of APRA in enforcing compliance with the Act. The revocation of consent to The Bank of Nova Scotia to establish or maintain an office in Australia in connection with the carrying on of banking business in a foreign country highlights the importance of adhering to the provisions of the Act and the potential consequences of non-compliance. The Act also provides for reconsideration and review processes for decisions made by APRA, ensuring that affected parties have the opportunity to challenge decisions that may impact their operations.
Scope and Application
The Banking Act 1959 provides a framework for the regulation of banking activities in Australia, with particular emphasis on the establishment and maintenance of offices in Australia by foreign banks. The Act applies to any person, including non-authorised deposit-taking institutions, who intends to carry on banking business in a foreign country but does not carry on banking business in Australia. Specifically, the Act prohibits such persons from establishing or maintaining an office in Australia in connection with their foreign banking business unless they have received written consent from the Australian Prudential Regulation Authority (APRA). The revocation of consent to establish or maintain such an office, as demonstrated in the notice to The Bank of Nova Scotia, is a significant action under the Act. The jurisdictional reach of the Act is national, applying across all states and territories of Australia. APRA, as the regulator, has the authority to impose conditions on consents, vary or revoke them, or revoke consent outright, with the revocation process subject to reconsideration and appeal under the Administrative Appeals Act 1975. Any contravention of the Act’s provisions may result in penalties as stipulated under the Crimes Act 1914.
Key Provisions
The Banking Act 1959 (Act) outlines several key provisions that pertain to the establishment and maintenance of representative offices in Australia by entities conducting banking business in foreign countries. Section 67(1) specifies that it is an offence for a person, other than an authorised deposit-taking institution (ADI), to carry on banking business in a foreign country without conducting such business in Australia, while also establishing or maintaining an office in Australia for that purpose, unless the Australian Prudential Regulation Authority (APRA) has provided written consent. The consent can be subject to conditions and can be revoked at any time by APRA as per section 67(2).
The obligations imposed on entities by this Act include ensuring they have APRA's written consent to establish or maintain an office in Australia if they are involved in foreign banking business. This consent can be subject to any conditions APRA deems necessary and can be revoked if the entity does not comply with the conditions or if APRA decides to revoke the consent for other reasons. The revocation of consent, as in this case, requires the entity to cease the activities associated with the office within a specified period.
Breaching the provisions of the Act can result in significant penalties. Under section 67(1), an individual offender faces a maximum penalty of 50 penalty units, while a body corporate can be fined up to 250 penalty units as per subsection 4B(3) of the Crimes Act 1914. Furthermore, subsection 67(1A) stipulates that each day the offence continues is treated as a separate offence. The legal process for contesting a decision to revoke consent involves requesting reconsideration from APRA within 21 days of the decision being notified, and if unsatisfied with the outcome, applying to the Administrative Appeals Tribunal for further review.