Revocation of existing approval and granting of new approval to hold a stake in a financial sector company of more than 20% No. 10 of 2021

Administered by Department of the Treasury

Legislation au F2021N00085 Not in force Notifiable Instrument

Legislation content

 

 

Revocation of existing approval and granting of new approval to hold a stake in a financial sector company of more than 20% No. 10 of 2021

 

Financial Sector (Shareholdings) Act 1998

 

 

To: Allianz SE, Allianz Europe BV (Allianz BV), Allianz Australia Limited (AAL) ABN 21 000 006 226 and Allianz Australia Insurance Limited (AAIL) ABN 15 000 122 850 (the Applicants).

 

SINCE

 

  1. Allianz SE, Allianz BV and AAL (the Existing Approval Holders) hold the following approvals (the Existing Approvals):

 

a.     On 20 April 1999 Allianz SE was granted approval under subsection 14(1) of the Financial Sector (Shareholdings) Act 1998 (the Act) to hold a 100% stake in AAL, formerly MMI Limited, a financial sector company under the Act;

b.     On 30 December 2009 Allianz BV was granted approval under subsection 14(1) of the Act to hold a 100% stake in AAL and AAIL; and

c.      On 30 December 2009 AAL was granted approval under subsection 14(1) of the Act to hold a 100% stake in AAIL;

 

B.     On 24 March 2021, the Existing Approval Holders requested that the Existing Approvals be revoked from the time, if any, the approvals in C. are granted;

 

C.    On 1 February 2021, the following applications were made to the Treasurer under section 13 of the Act:

 

  1. The Applicants to hold a 100% stake in Westpac General Insurance Limited (WGIL) ABN 99 003 719 319, a financial sector company under the Act;

 

b.     Allianz SE, Allianz BV and AAL to hold a 100% stake in AAIL, a financial sector company under the Act;

 

c.      Allianz SE and Allianz BV to hold 100% stake in AAL, a financial sector

 

 

 

company under the Act;

 

d.     Allianz SE to hold 100% stake in Allianz BV, a financial sector company under the Act; and

 

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

 

  1. Allianz SE, Allianz BV, AAL and AAIL to hold 100% stake in WGIL;
  2. Allianz SE, Allianz BV and AAL to hold 100% stake in AAIL;
  3. Allianz SE and Allianz BV to hold 100% stake in AAL; and
  4.   Allianz SE to hold 100% in Allianz BV. I, Sharyn Reichstein, a delegate of the Treasurer:

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

 

(b)  under paragraph 14(1)(a) of the Act, APPROVE:

 

(i)       Allianz SE, Allianz BV, AAL and AAIL to hold 100% stake in WGIL;

(ii)     Allianz SE, Allianz BV and AAL to hold 100% stake in AAIL;

(iii)    Allianz SE and Allianz BV to hold 100% stake in AAL; and

(iv)   Allianz SE to hold 100% in Allianz BV.

 

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

 

Dated: 5 May 2021

 

 

Sharyn Reichstein1 General Manager Insurance Division

 

Interpretation

 

Act means the Financial Sector (Shareholdings) Act 1998.

 

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.

 


1 A delegate of the Treasurer.

 

 

 

Notes

 

Note 1 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 2 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 3 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 4 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 5 Under section 14 of the Act, the Treasurer must give written notice of this Approval to the applicant and financial sector company concerned and this instrument will be registered in the Federal Register of Legislation as a notifiable instrument.

 

Note 6 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 7 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.

Overview

The Financial Sector (Shareholdings) Act 1998 was enacted to regulate the acquisition and holding of significant stakes in financial sector companies, ensuring stability and integrity in the financial sector. The Act provides a framework for the Treasurer to approve or disapprove shareholdings in financial entities, aiming to prevent unacceptable shareholding situations that could threaten financial stability. This legislative instrument, F2021N00085, revokes existing shareholding approvals held by Allianz SE, Allianz BV, and Allianz Australia Limited (AAL), and grants new approvals for their shareholdings in specified financial sector companies, including Westpac General Insurance Limited. Enacted by the Australian Government, the policy objective is to facilitate the national interest in maintaining a secure and stable financial sector while preventing any unacceptable concentration of ownership.

Scope and Application

The Financial Sector (Shareholdings) Act 1998 applies to any person or entity that intends to hold a stake in a financial sector company, specifically those exceeding 20% of the company. This Act operates at the Commonwealth level, impacting entities such as Allianz SE, Allianz BV, Allianz Australia Limited (AAL), and Allianz Australia Insurance Limited (AAIL), which have applied for and received approvals to hold significant stakes in various financial sector companies. These entities must comply with the provisions of the Act, including obtaining necessary approvals and adhering to the conditions imposed by the Treasurer. The Act also includes mechanisms for the revocation of existing approvals and the granting of new approvals, as seen in the provided notifiable instrument. The Act's application extends to all financial sector companies within Australia, with specific focus on those companies that are either authorised deposit-taking institutions or authorised insurance companies. There are no stated exclusions or exemptions within the Act itself, although the scope of application can be further defined through subordinate instruments. The Act allows for the Treasurer to vary the percentage of stake held by entities if deemed to be in the national interest, thereby providing flexibility in managing shareholdings within the financial sector.

Key Provisions

The main operative sections of this legislation are subsections 18(3) and 14(1) of the Financial Sector (Shareholdings) Act 1998. Under these provisions, the delegate of the Treasurer is authorised to revoke existing approvals and grant new approvals for the holding of stakes in financial sector companies. Specifically, this instrument revokes existing approvals held by Allianz SE, Allianz BV, and Allianz Australia Limited (AAL) and grants new approvals for Allianz SE, Allianz BV, AAL, and Allianz Australia Insurance Limited (AAIL) to hold 100% stakes in specified financial sector companies, including Westpac General Insurance Limited (WGIL). These changes are intended to reflect the national interest and align with the evolving structure of the companies involved. The obligations imposed by this Act on the parties it governs include the requirement to apply for and obtain approvals before acquiring or holding stakes in financial sector companies. The applicants, Allianz SE, Allianz BV, AAL, and AAIL, must ensure that their shareholdings comply with the terms of their approvals. This involves adhering to the specified percentages of ownership and any conditions attached to the approvals. Additionally, the Treasurer has the authority to vary the percentage of shareholdings on their own initiative if it is deemed to be in the national interest, as outlined in subsection 17(6) of the Act. Breaches of the provisions outlined in the Act can lead to significant penalties and consequences. Section 11 of the Act stipulates that a person or entity is guilty of an offence if they acquire shares in a financial sector company in a manner that results in an unacceptable shareholding situation, either by creating one or increasing an existing one, while being reckless about the consequences. The maximum penalty for an individual is 400 penalty units, while for a body corporate, the penalty can be up to 2,000 penalty units. Furthermore, under subsection 32(3) of the Act, the Federal Court can grant an injunction to restrain a person from engaging in conduct that contravenes the conditions of an approval. This ensures compliance with the regulatory framework and protects the national interest in the financial sector.

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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.