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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% - 6 of 2020

Revocation of existing approval and granting of new approval to hold a stake in a financial sector company of more than 20% - 6 of 2020

Administered by Department of the Treasury

Legislation au F2021N00008 Not in force Notifiable Instrument

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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

On 29 March 2019, 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);
On 5 September 2020, the Existing Approval Holders requested that the Existing Approval be revoked;
On 5 September 2020, 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
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, Sharyn Reichstein, 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, if any, that Third Point Reinsurance Ltd (Bermuda) acquires a 100% stake in SIIC and thereafter remains in force indefinitely.

Dated 23 December 2020

[Signed]

Sharyn Reichstein General Manager Insurance Branch 1

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;

Government Notices Gazette C2019G00448 20/05/2019

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. 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 1 appears in the brackets after the name of the company.

Schedule 2 – the Applicants

1. Sirius International Insurance Corporation (Sweden)

2. Fund American Holdings AB (Sweden)

3. Sirius Insurance Holding Sweden AB (Sweden)

4. Sirius Group International S. a. r. l. (Luxembourgh)

5. Sirius International UK Holdings Ltd (United Kingdom)

6. Sirius Bermuda Insurance Company,Ltd (Bermuda)

7. Sirius International Group Ltd (Bermuda)

8. Sirius International Holdings Ltd (Bermuda)

9. Sirius International Insurance Group, Ltd. (Bermuda)

10. Third Point Reinsurance Ltd (Bermuda)

11. CM Bermuda Limited (Bermuda)

12. CMIG International Holding Pte.Ltd (Singapore)

13. China Minsheng Investment Group Corp., Ltd (People’s Republic of China)

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. Fund American Holdings AB (Sweden)

2. Sirius Insurance Holding Sweden AB (Sweden)

3. Sirius Group International S. a. r. l. (Luxembourgh)

4 .Sirius International UK Holdings Ltd (United Kingdom)

5. Sirius Bermuda Insurance Company,Ltd (Bermuda)

6. Sirius International Group Ltd (Bermuda)

7. Sirius International Holdings Ltd (Bermuda)

8. Sirius International Insurance Group Ltd.(Bermuda)

9. Third Point Reinsurance Ltd. (Bermuda)

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

Government Notices

Overview

The Financial Sector (Shareholdings) Act 1998 was enacted to regulate and monitor foreign shareholdings in Australian financial sector companies, ensuring these holdings do not pose a risk to the financial stability and integrity of the Australian economy. The Act was introduced to address the need for tighter control and oversight of foreign investments in the financial sector, which could potentially lead to unacceptable shareholding situations that might threaten national security or financial stability. This Act is administered by the Australian Parliament and its primary policy objective is to safeguard Australia's financial system from undue foreign influence. The notifiable instrument issued under this Act concerns the revocation of an existing approval for certain companies to hold a stake in a financial sector company and the granting of new approval to other companies to hold a similar stake, both exceeding 20%. The revocation and new approval reflect the national interest in maintaining the stability and security of Australia's financial sector.

Scope and Application

The Financial Sector (Shareholdings) Act 1998 governs the approval process for entities wishing to acquire significant stakes in financial sector companies within Australia, ensuring such shareholdings align with the national interest. This Act applies to companies, both domestic and foreign, seeking to hold a stake in a financial sector company exceeding 20%, and mandates the need for explicit approval from the Treasurer of Australia. The Act applies to the companies listed in the schedules, including the Existing Approval Holders and the Applicants, with the authority to approve or revoke such stakes resting with the Treasurer. The Act's jurisdiction extends across the Commonwealth, ensuring that the provisions apply uniformly nationwide. Exclusions or exemptions from the Act are not specified in the text, implying that the approval process is mandatory for all entities fitting the criteria unless otherwise stipulated by subordinate instruments. The Act also empowers the Treasurer to impose conditions, vary existing approvals, or revoke them entirely, reflecting the dynamic nature of financial sector regulations and the importance of maintaining national security and stability in the financial system.

Key Provisions

The key provisions of the notifiable instrument F2021N00008 under the Financial Sector (Shareholdings) Act 1998 (the Act) revolve around the revocation of an existing approval and the granting of a new approval for shareholdings in certain financial sector companies. Specifically, section 18(3) of the Act allows the Treasurer to revoke an existing approval for holding a stake in a financial sector company, while section 14(1) permits the granting of a new approval for such holdings. In this instance, the instrument revokes the existing approval held by the companies listed in Schedule 1 (the Existing Approval Holders) and grants a new approval to the companies listed in Schedule 2 (the Applicants) to hold a 100% stake in Sirius International Insurance Corporation (SIIC) and other related companies, collectively referred to as the Financial Sector Companies. The Act imposes several obligations and requirements on the parties involved. For the Existing Approval Holders, their approval to hold a stake in SIIC and related companies is revoked, which means they can no longer maintain their current shareholdings without further approval. The Applicants, who have been granted the new approval, must adhere to any conditions imposed by the Treasurer, which could include specific terms related to their shareholdings. Additionally, under section 14 of the Act, the Treasurer is mandated to provide written notice of the approval to the applicant and the financial sector company concerned and to publish a copy of this notice in the Gazette. The Act also establishes clear consequences for breaches. Section 11 of the Act stipulates that any person or group of persons under an arrangement who acquires shares in a company and results in an unacceptable shareholding situation, or increases an existing unacceptable shareholding situation, commits an offence if they were reckless about whether their actions would have such a result. The maximum penalty for this offence is 400 penalty units for individuals and 2,000 penalty units for bodies corporate. Furthermore, subsection 32(3) of the Act allows the Federal Court to grant an injunction to restrain any person from engaging in conduct that contravenes the conditions of an approval, and to require the person to take certain actions if deemed desirable by the Court. These provisions underscore the importance of compliance with the Act’s requirements to avoid significant penalties and legal repercussions.

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

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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.

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