Revocation of existing approval and granting of new approval to hold a stake in a financial sector company of more than 15%

Administered by Department of the Treasury

Legislation au C2019G00448 In force Gazette

Legislation content

 

 

Revocation of existing approval and granting of new approval to hold a stake in a financial sector company of more than 15%

Financial Sector (Shareholdings) Act 1998

To: The companies listed in Schedule 1 (the Existing Approval Holders) and the companies listed in Schedule 2 (the Applicants)

 

SINCE

 

  1. On 17 May 2017, the Existing Approval Holders were granted approval under subsection 14(1) of the Financial Sector (Shareholdings) Act 1998 (the Act) to hold a 100% stake in Sirius International Insurance Corporation ABN 26 764 933 001 (SIIC) and other related companies, each a financial sector company under the Act (the Existing Approval);

 

B.       On 4 March 2019, the Existing Approval Holders requested that the Existing Approval be revoked;

 

C.       On 4 March 2019, the Applicants applied to the Treasurer under section 13 of the Act for approval to hold a 100% stake in SIIC and the companies listed in Schedule 3 (the Financial Sector Companies), each a financial sector company under the Act; and

 

D.       I am satisfied it is in the national interest for the Applicants to hold a 100% stake in SIIC and the Financial Sector Companies,

 

I, Louis Serret, a delegate of the Treasurer:

 

(a)     under subsection 18(3) of the Act, REVOKE the Existing Approval; and

 

(b)     under subsection 14(1) of the Act, APPROVE the Applicants to hold a 100% stake in SIIC and the Financial Sector Companies.

 

This instrument commences on the date that Sirius Group International S.a.r.l. (Luxembourg) acquires all of the issued share capital in Sirius Insurance Holding Sweden AB (Sweden) and remains in force indefinitely.

 

 

 

Dated 29 March2019

 

[Signed]

 

 

……………………………

Louis Serret

General Manager

Specialised Institutions Division

 

 

Interpretation

 

In this Notice:

 

100% subsidiary has the meaning given in section 3 of the Act.

financial sector company has the meaning given in section 3 of the Act.

stake in relation to a company, has the meaning given in clause 10 of Schedule 1 to the Act.

unacceptable shareholding situation has the meaning given in section 10 of the Act.

 

 

Note 1   Under paragraph 16(2)(a) of the Act, the Treasurer may, by written notice given to a person who holds an Approval under section 14, impose one or more conditions or further conditions to which the Approval is subject. Under paragraph 16(2)(b) of the Act, the Treasurer may revoke or vary any conditions imposed under paragraph 16(2)(a) of the Act or specified in the Notice of Approval. The Treasurer’s powers under subsection 16(2) of the Act may be exercised on the Treasurer’s own initiative or on application made to the Treasurer in accordance with the requirements of subsection 16(4) of the Act, by the person who holds the Approval (see subsection 16(3) of the Act).

 

Note 2   A person who holds an Approval under section 14 of the Act may apply to the Treasurer under subsection 17(1) of the Act, to vary the percentage specified in the Approval.

 

Note 3   Under subsection 17(6) of the Act, the Treasurer may, on the Treasurer’s own initiative, by written notice given to a person who holds an Approval under section 14, vary the percentage specified in the Approval if the Treasurer is satisfied it is in the national interest to do so.

 

Note 4   The circumstances in which the Treasurer may revoke a person’s Approval under section 14 are set out in subsection 18(1) of the Act.

 

Note 5   Section 19 of the Act provides for flow-on approvals. If an Approval has been granted for the holding of a stake in a financial sector company and the financial sector company is a holding company for an authorised deposit-taking institution or an authorised insurance company, then an approval is taken to exist for the holding of a stake of equal value in each financial sector company that is a 100% subsidiary of the holding company.

 

Note 6   Under section 14 of the Act, the Treasurer must give written notice of this Approval to the applicant and financial sector company concerned and must publish a copy of this notice in the Gazette.

 

Note 7   Under section 11 of the Act, a person or 2 or more persons under an arrangement are guilty of an offence if the person(s) acquires shares in a company and the acquisition has the result, in relation to a financial sector company, that:

 

(i)          an unacceptable shareholding situation comes into existence; or

(ii) if an unacceptable shareholding situation already exists in relation to the company and in relation to a person – there is an increase in the stake held by the person in the company;

 

and the person(s) was reckless as to whether the acquisition would have that result. A maximum penalty of 400 penalty units applies or by virtue of subsection 4B(3) of the Crimes Act 1914, in the case of a body corporate, a penalty not exceeding 2,000 penalty units. By virtue of section 39 of the Act, an offence against section 11 is an indictable offence.

 

Note 8   Under subsection 32(3) of the Act, if a person has engaged in or is proposing to engage in any conduct in contravention of a condition to which an approval under section 14 is subject, the Federal Court may, on the application of the Treasurer, grant an injunction:

 

(i)          restraining the person engaging in the conduct; and

(ii)         if in the Court’s opinion, it is desirable to do so, requiring the person to do something.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Schedule 1 – the Existing Approval Holders

 

  1. China Minsheng Investment Group Corp. Ltd. (P.R. China)
  2. CM International Holding Pte. Ltd. (Singapore)
  3. CM Bermuda Ltd. (Bermuda)
  4. Sirius International Insurance Group, Ltd. (Bermuda)
  5. Sirius International Holdings Ltd. (Bermuda)
  6. Sirius International Group, Ltd. (Bermuda)
  7. Sirius Bermuda Insurance Company Ltd. (Bermuda)
  8. Sirius International UK Holdings Ltd (UK)
  9. Sirius Group Holdings (Luxembourg) S.a.r.l (Luxembourg)
  10. Sirius Insurance Holding Sweden AB (Sweden)
  11. Fund American Holdings AB (Sweden)

 

Note: The place of incorporation of each of the companies in Schedule 1 appears in the brackets after the name of the company.

 

Schedule 2 – the Applicants

 

  1. China Minsheng Investment Group Corp. Ltd. (P.R. China)
  2. CMIG International Holding Pte. Ltd. (Singapore)
  3. CM Bermuda Ltd. (Bermuda)
  4. Sirius International Insurance Group, Ltd. (Bermuda)
  5. Sirius International Holdings Ltd. (Bermuda)
  6. Sirius International Group, Ltd. (Bermuda)
  7. Sirius Bermuda Insurance Company Ltd. (Bermuda)
  8. Sirius International UK Holdings Ltd. (UK)
  9. Sirius Group International S.a.r.l. (Luxembourg)
  10. Sirius Insurance Holding Sweden AB (Sweden)
  11. Fund American Holdings AB (Sweden)

 

Note: The place of incorporation of each of the companies in Schedule 2 appears in the brackets after the name of the company.

 

Schedule 3 – the Financial Sector Companies in addition to SIIC

 

  1. Sirius International Insurance Group, Ltd. (Bermuda)
  2. Sirius International Holdings Ltd. (Bermuda)
  3. Sirius International Group, Ltd. (Bermuda)
  4. Sirius Bermuda Insurance Company Ltd. (Bermuda)
  5. Sirius International UK Holdings Ltd. (UK)
  6. Sirius Group International S.a.r.l. (Luxembourg)
  7. Sirius Insurance Holding Sweden AB (Sweden)
  8. Fund American Holdings AB (Sweden)

 

Note: The place of incorporation of each of the companies in Schedule 3 appears in the brackets after the name of the company.

 

Overview

The Financial Sector (Shareholdings) Act 1998 was enacted to address the problem of controlling stakes in financial sector companies that could pose systemic risks to the stability of the Australian financial system. The Act allows the Treasurer to approve or disapprove significant shareholdings in financial sector companies to ensure that such stakes do not result in an unacceptable situation for financial stability. The Act also provides for the revocation or variation of such approvals, as well as conditions that may be imposed on them. The enacting body is the Parliament of Australia, and the policy objective of the Act is to protect the stability and integrity of the Australian financial system by regulating significant shareholdings in financial sector companies. The Act empowers the Treasurer to approve, revoke, vary, or impose conditions on shareholdings in financial sector companies, as well as to take action against unacceptable shareholding situations.

Scope and Application

The Financial Sector (Shareholdings) Act 1998 applies to entities that hold stakes in financial sector companies, specifically those seeking to hold a stake of more than 15%. The Act regulates the shareholding of such companies by requiring approval from the Treasurer, who can grant or revoke such approvals based on the national interest. The Act's jurisdiction extends across Australia, with the Treasurer having the authority to impose conditions, vary the percentage of the stake, or revoke the approval. Additionally, the Act criminalises the acquisition of shares that result in an unacceptable shareholding situation if done recklessly. The Act also provides for flow-on approvals, meaning that if an approval is granted for a holding company, it extends to its subsidiaries. The Act's application can be further extended or restricted through subordinate instruments, allowing for greater flexibility in its implementation. Entities listed in the schedules of the Act, such as China Minsheng Investment Group Corp. Ltd. and others, are subject to its provisions.

Key Provisions

The key operative sections of the Financial Sector (Shareholdings) Act 1998, as applied in this instrument, include subsection 18(3) which allows for the revocation of existing approval for shareholdings in financial sector companies and subsection 14(1) which provides for the granting of new approval for such shareholdings (subsections 18(3) and 14(1)). This instrument revokes the existing approval for the companies listed in Schedule 1 (subsection 18(3)) and grants new approval for the companies listed in Schedule 2 to hold a 100% stake in Sirius International Insurance Corporation and other financial sector companies listed in Schedule 3 (subsection 14(1)). The Act imposes several obligations on the parties it governs. Firstly, it requires the companies listed in Schedule 2 to comply with the conditions of their new approval, which include holding a 100% stake in the financial sector companies listed in Schedule 3. Secondly, the Act mandates that the Treasurer must notify the applicants and the financial sector companies concerned of the approval and publish a copy of the notice in the Gazette (subsection 14(1)). The Treasurer also retains the authority to impose conditions, vary these conditions, or revoke the approval if it is in the national interest to do so (subsections 16(2) and 18(1)). Breaches of the Act carry significant consequences. Under section 11, individuals or entities that acquire shares in a company resulting in an unacceptable shareholding situation are guilty of an offence, with a maximum penalty of 400 penalty units for individuals and 2,000 penalty units for corporate bodies (subsection 11 and subsection 4B(3) of the Crimes Act 1914). Additionally, under subsection 32(3) of the Act, the Federal Court may grant an injunction restraining any conduct that contravenes a condition of the approval, further emphasising the seriousness of compliance with the Act’s provisions. These offences are indictable under section 39 of the Act.

Legal classification tags

Area of Law
Financial Regulation
Instrument
Statutory Instrument
Concepts
Definitions & Interpretation
Offence Provisions
Licensing & Registration
Reporting & Disclosure Obligations

Interactions

Authorises

All Versions

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.