Revocation of existing approval and granting of new approval to hold a stake in a financial sector company of more than 20%

Administered by Department of the Treasury

Legislation au C2020G00708 In force Gazette

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Revocation of existing approval and granting of new approval to hold a stake in a financial sector company of more than 20%  

Financial Sector (Shareholdings Act) 1998

To:  Pacific Life Re International Limited (Bermuda) (PL Re International), Pacific Life Re Global Limited (Bermuda) (PL Re Global), Pacific Life Re Holdings LLC (Delaware) (PLRH LLC), Pacific LifeCorp (Delaware) (PLC), Pacific Mutual Holding Company (Nebraska) (PMHC) (the Applicants).   

SINCE

 

  1. On 17 August 2015, PLRH LLC, PLC and PMHC (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 Pacific Life Re (Australia) Pty Limited ABN 91 601 822 431 (PLRA) and other related companies, each a financial sector company under the Act (the Existing Approval);

 

B.     On 27 July 2020 the Existing Approval Holders requested that the Existing Approval be revoked;  

 

C.     On 27 July 2020 the Applicants applied to the Treasurer under section 13 of the Act for approval to hold a 100% stake in PLRA, a financial sector company under the Act; 

 

D.     PL Re Global has applied under section 13 of the Act for approval to hold a 100% stake in PL Re International, a financial sector company under the Act; 

 

E.     PLRH LLC has applied under section 13 of the Act for approval to hold a 100% stake in PL Re Global, a financial sector company and PL Re International; 

 

F.      PLC has applied under section 13 of the Act for approval to hold a 100% stake in PLRH LLC, a financial sector company, PL Re Global and PL Re International; and 

 

G.    PMHC has applied under section 13 of the Act for approval to hold a 100% stake in PLC, a financial sector company, PLRH LLC, PL Re Global and PL Re International. 

 

H.     I am satisfied that it is in the national interest to approve:

 

  1. the Applicants to hold a 100% stake in PLRA; 

 

b.        PL Re Global to hold a 100% stake in PL Re International;

 

c.         PLRH LLC to hold a 100% stake in PL Re Global and PL Re International;

 

d.        PLC to hold a 100% stake in PLRH LLC, PL Re Global and PL Re International; and 

 

e.        PMHC to hold a 100% stake in PLC, PLRH LLC, PL Re Global and PL Re

International. 

 

I, Suzanne Johnson, 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:

 

  1. the Applicants to hold a 100% stake in PLRA;

 

ii.            PL Re Global to hold a 100% stake in PL Re International;

 

iii.          PLRH LLC to hold a 100% stake in PL Re Global and PL Re International;

 

iv.          PLC to hold a 100% stake in PLRH LLC, PL Re Global and PL Re International; and 

 

v.           PMHC to hold a 100% stake in PLC, PLRH LLC, PL Re Global and PL Re

International. 

 

 

This instrument commences on the date it is signed and remains in force indefinitely. 

 

 

Dated: 28 August 2020

 

[Signed]

 

 

Suzanne Johnson 

General Manager

Insurance Division 

 

 

 

 

 

 

 

 

 

 

 

Interpretation In this Notice  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.  

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) may be exercised on the Treasurer’s own initiative or an 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. 

 

 

Overview

The Financial Sector (Shareholdings) Act 1998 was enacted to address concerns about the concentration of ownership in the financial sector, ensuring that entities holding significant stakes in financial institutions are fit and proper. This Act was introduced to safeguard the stability and integrity of Australia's financial system by preventing unacceptable shareholding situations in financial sector companies. The relevant legislature, the Parliament of Australia, established this framework to provide the Treasurer with the authority to approve or disapprove shareholdings exceeding a specified threshold and to impose conditions on such approvals. The overarching policy objective of the Act is to maintain and enhance the robustness of the financial sector, thereby protecting consumers and ensuring the continued stability of the financial system. This legislative instrument specifically addresses the applications by Pacific Life Re International Limited, Pacific Life Re Global Limited, Pacific Life Re Holdings LLC, Pacific LifeCorp, and Pacific Mutual Holding Company to revise their existing shareholding approvals in various financial sector companies.

Scope and Application

The Financial Sector (Shareholdings) Act 1998 governs the approval process for the acquisition and holding of stakes in financial sector companies within Australia. This Act applies to various entities and individuals, such as PL Re International Limited, PL Re Global Limited, PL Re Holdings LLC, Pacific LifeCorp, and Pacific Mutual Holding Company, who seek to hold a stake in financial sector companies. The Act’s provisions cover the approval process, revocation of existing approvals, and the imposition of conditions on such approvals. The Act extends its jurisdiction nationally, impacting any entity or individual holding a stake in a financial sector company within Australia. There are no specific exclusions or exemptions outlined in the Act, though the Treasurer has the authority to impose conditions or vary existing approvals. The Act also allows for subordinate instruments to extend or restrict its application, enabling the Treasurer to manage shareholdings in the national interest effectively. The application process involves the Treasurer assessing whether the acquisition of a stake is in the national interest and communicating the decision through written notice and publication in the Gazette.

Key Provisions

The main sections of the Financial Sector (Shareholdings) Act 1998 outline the requirements and processes for approving shareholdings in financial sector companies. Section 13 allows for applications for approval to hold a stake in a financial sector company, while section 14 provides for the grant of such approval. Section 17 allows for the variation of the percentage specified in an approval, and section 18 allows for the revocation of an approval. Section 19 deals with flow-on approvals, whereby an approval for a holding company extends to its 100% subsidiaries. Under section 16, the Treasurer may impose, vary, or revoke conditions on an approval. Section 11 criminalises the acquisition of shares that result in an unacceptable shareholding situation, either by creating one or increasing an existing one, if done recklessly. The obligations imposed by the Act on the parties involved include making applications for approval to hold a stake in a financial sector company, adhering to any conditions imposed by the Treasurer, and complying with the requirements for flow-on approvals. The Act also requires the Treasurer to give written notice of an approval to the applicant and the financial sector company concerned, and to publish a copy of this notice in the Gazette. The Act imposes criminal penalties for breaches, particularly under section 11. An individual or corporate body can be found guilty of an offence if they acquire shares in a financial sector company, resulting in an unacceptable shareholding situation, and do so recklessly. The maximum penalty for individuals is 400 penalty units, while for corporate bodies, it is 2,000 penalty units. The offence is indictable, meaning it can be tried in a higher court before a judge and jury. The Act also provides for the revocation of an approval under section 18, which can be exercised by the Treasurer on their own initiative or in response to an application.

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Financial Regulation
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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.