Revocation of existing approval and granting of new approval to hold a stake in a financial sector company of more than 20% - Hannover Rück SE (HR SE)

Administered by Department of the Treasury

Legislation au C2019G00453 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: Hannover Rück SE (HR SE) and the persons named in the attached Schedule 1 (the applicants)

 

SINCE

 

A.     It is proposed that a restructure take place of the group of companies of which HR SE is the ultimate holding company, including a change in the ownership of Hannover Life Re of Australasia Ltd ABN 37 062 395 484 (HLRA), a financial sector company under the Financial Sector (Shareholdings) Act 1998 (the Act) and in anticipation of this:

 

  1. Each applicant has applied for approval under section 13 of the Act to hold a stake of 100% in HLRA; and

 

b.      Each applicant other than Hannover Rück Beteiligung Verwaltungs- GmbH (HRBV) has applied for approval under section 13 of the Act to hold a stake of 100% in HRBV

 

from the time HRBV becomes a holding company of HLRA.

 

B.     Each applicant other than HRBV has approval under subsection 14(1) of the Act to hold a 100% stake in HLRA (approval dated 28 March 2008);

 

C.     The applicants have requested the approval dated 28 March 2008 be revoked from the time, if any, HRBV becomes a holding company of HLRA;

 

D.     I am satisfied it is in the national interest to:

 

  1. approve each applicant holding a 100% stake in HLRA;

 

b.      approve each applicant other than HRBV holding a 100% stake in HRBV; and

 

c.      revoke the existing approval dated 28 March 2008 for the applicants other than HRBV to hold a 100% stake in HLRA ,

 

 

 

 

I, Adrian Rees, a delegate of the Treasurer, under:

 

(a)   subsection 14(1) of the Act, APPROVE each applicant holding a 100% stake in HLRA from the time HRBV becomes a holding company of HLRA;

 

(b)   subsection 14(1) of the Act, APPROVE each applicant, other than HRBV, holding a 100% stake in HRBV from the time HRBV becomes a holding company of HLRA; and

 

(c)    subsection 18(3) of the Act, REVOKE, from the time HRBV becomes a holding company of HLRA, the instrument made on 28 March 2008 granting the applicants, other than HRBV, approval to hold a 100% stake in HLRA.

 

This instrument comes into force from the date it is signed.

 

Dated 7 May 2019

 

[Signed]
 

 

Adrian Rees General Manager

Diversified 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 holding company has the meaning given by section 4 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) 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 applicants 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 section 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

Overview

The Financial Sector (Shareholdings) Act 1998 was enacted to safeguard the stability and integrity of Australia's financial system by regulating significant shareholdings in financial sector companies. This legislation aims to prevent unacceptable shareholding situations that could pose systemic risks to the financial sector. The Act empowers the Treasurer to approve or disapprove shareholdings in financial sector companies, ensuring that such holdings do not compromise the financial system's stability. The Act was introduced by the Parliament of Australia to address the need for stringent oversight of significant shareholdings within financial institutions, particularly to prevent any undue influence that might jeopardise financial stability. This legislation allows the Treasurer to grant or revoke approvals for individuals or entities to hold stakes in financial sector companies, with the primary policy objective of maintaining the soundness and resilience of the financial system. The enactment of the Act underscores the government's commitment to preventing and mitigating systemic risks through rigorous control over major shareholdings in financial institutions.

Scope and Application

The Financial Sector (Shareholdings) Act 1998 applies to any person or entity seeking to hold a stake in an Australian financial sector company, which is defined in the Act, exceeding a certain threshold. In this instance, the Act applies to Hannover Rück SE (HR SE) and the individuals named in Schedule 1, who have applied for approval to hold a 100% stake in Hannover Life Re of Australasia Ltd (HLRA) and Hannover Rück Beteiligung Verwaltungs- GmbH (HRBV), both of which are financial sector companies. The Act is a Commonwealth legislation and its provisions apply nationally across Australia. The Act allows for the Treasurer to approve or disapprove shareholdings in financial sector companies, and this approval can be subject to conditions, varied, or revoked as necessary to protect the national interest. The Act also provides for the flow-on of approvals to 100% subsidiaries of approved holding companies. The application of the Act may be extended or restricted by subordinate instruments, such as notices or conditions imposed on approvals, as per the provisions of the Act. The Act does not specify any exclusions or thresholds apart from the 100% stake in the context of this instrument.

Key Provisions

The Financial Sector (Shareholdings) Act 1998 (the Act) governs the approval of shareholdings in financial sector companies. Section 13 of the Act mandates that any person seeking to acquire a stake of more than 20% in a financial sector company must obtain approval from the Treasurer. In this case, the applicants, Hannover Rück SE (HR SE) and the named individuals, have applied for approval under section 13 to hold a 100% stake in Hannover Life Re of Australasia Ltd (HLRA) and, for all applicants except Hannover Rück Beteiligung Verwaltungs-GmbH (HRBV), a 100% stake in HRBV when it becomes a holding company of HLRA. Section 14(1) of the Act allows the Treasurer to grant such approvals if it is deemed to be in the national interest, which is the basis for the approval of the applicants' stakes in HLRA and HRBV, subject to HRBV becoming the holding company of HLRA. The applicants must comply with the terms and conditions set forth in the approval notice, which includes providing written notice to the applicants and the financial sector company concerned and publishing a copy of the notice in the Gazette, as required by section 14 of the Act. Additionally, the applicants must ensure that their shareholdings do not result in an unacceptable shareholding situation, as defined in section 10 of the Act. If an unacceptable shareholding situation arises or is exacerbated, the applicants may be subject to penalties under section 11 of the Act, which stipulates that any person or group of persons who recklessly acquires shares leading to such a situation commits an offence. The maximum penalty for an individual is 400 penalty units, or for a body corporate, 2,000 penalty units, as outlined in subsection 4B(3) of the Crimes Act 1914. Furthermore, under subsection 18(3) of the Act, the Treasurer has the authority to revoke any existing approvals if it is deemed necessary to do so. In this instance, the existing approval dated 28 March 2008 for the applicants, excluding HRBV, to hold a 100% stake in HLRA is revoked from the time HRBV becomes the holding company of HLRA. Additionally, section 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 under section 14, if the Treasurer applies to the court. This provides a mechanism to enforce compliance with the Act and its 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.