Overview

The Revocation of existing approval and granting of new approval to hold a stake in a financial sector company of more than 20% No. 6 of 2026 instrument was enacted in 2026 to address the need for regulatory approval in the financial sector, specifically concerning shareholdings in financial sector companies. This notifiable instrument was introduced by the Australian Prudential Regulation Authority (APRA) under the authority of the Treasurer, who delegates certain powers under the Financial Sector (Shareholdings) Act 1998. The policy objective of this instrument is to ensure that significant shareholdings in financial sector companies are subject to regulatory oversight, thereby protecting the stability and integrity of Australia’s financial system. The instrument revokes the previous approval for certain entities to hold a 100% stake in Assetinsure and other financial sector companies, and grants new approval to other entities to hold the same stake. The instrument is designed to commence on the date it is made and will remain in force indefinitely.

Scope and Application

The Financial Sector (Shareholdings) Act 1998 applies to individuals and entities seeking to hold a significant stake in financial sector companies, specifically those exceeding a 20% shareholding. This Act governs the approval process for such shareholdings and outlines the conditions under which these can be approved, revoked, or modified. The Act applies to entities such as Lombard Australia Holdings Pty Ltd and various international trusts and companies, as well as their respective financial sector companies like Assetinsure Pty Limited. Geographically, the Act operates on a national level, encompassing the Commonwealth of Australia and its territories. The Act includes provisions for subordinate instruments, which may further detail specific requirements or exclusions related to the approval process. Exclusions or exemptions within the Act are limited and typically pertain to certain types of entities or shareholdings that fall below the specified threshold. The Act ensures that any changes to existing approvals or the granting of new ones are in the national interest and are communicated effectively through the Federal Register of Legislation.

Key Provisions

The key provisions of the instrument concern the revocation of existing approval and the granting of new approval for holding a stake in a financial sector company of more than 20% (subsection 14(1) and subsection 18(3)). The Existing Approval Holders, listed in Schedule 1, who previously held a 100% stake in Assetinsure and the financial sector companies, have had their approval revoked. The Applicants named in Schedule 2 have been granted approval to hold a 100% stake in Assetinsure and the financial sector companies listed in Schedule 3. This decision follows a request by the Existing Approval Holders to revoke their existing approval and an application by the Applicants for new approval, both dated 2 December 2025. The Act imposes certain obligations on the parties involved. The Existing Approval Holders must relinquish their stake in the specified financial sector companies as per the revocation of their approval. The Applicants, now approved, must comply with all relevant provisions of the Act concerning shareholdings in financial sector companies. Both sets of entities must ensure that their operations and shareholdings remain within the legal framework set by the Act, including any future changes to their stakes or the financial sector companies involved. Breaching the provisions of the Act can lead to serious consequences. While the specific offences and penalties are not detailed in the instrument, the Act generally provides for both civil and criminal penalties for non-compliance. Civil penalties could include fines or other monetary penalties, while criminal penalties might involve imprisonment or both fines and imprisonment, depending on the severity of the breach. The maximum penalties are not specified in this particular instrument but would be defined elsewhere in the Act or related regulations. The revocation and approval process is also subject to scrutiny, with all approvals being registered on the Federal Register of Legislation as notifiable instruments, ensuring transparency and accountability.