Revocation of existing approval to hold a stake in a financial sector company of more than 15% and Approval to hold a stake in a financial sector company of more than 15%

Administered by Department of the Treasury

Legislation au C2019G00097 In force Gazette

Legislation content

 

Revocation of existing approval to hold a stake in a financial sector company of more than 15%

Approval to hold a stake in a financial sector company of more than 15%

Financial Sector (Shareholdings) Act 1998

To: AXA Societe Anonyme, AXA Assurances IARD Mutuelle and AXA Assurances Vie Mutuelle (the applicants)

 AND

 AXA Societe Anonyme, AXA France Assurance SAS and AXA Assurances IARD Mutuelle (the current holders)

 

SINCE

 

  1. The applicants have applied to the Treasurer under section 13 of the Financial Sector (Shareholdings) Act 1998 (the Act) for approval to hold a 100% stake in AXA Corporate Solutions Assurance ARBN 138 904 284 (ACS) a financial sector company under the Act;

 

B.     An approval was previously granted on 26 November 2009 to the current holders under subsection 14(1) of the Act to hold a 100% stake in ACS (the existing approval);

 

C.     The current holders have requested that the existing approval be revoked;

 

D.     I am satisfied that it is in the national interest to approve the applicants holding a 100% stake in ACS; and

 

E.     I am satisfied it is in the national interest to revoke the existing approval;

 

I, Louis Serret, a delegate of the Treasurer:

 

(a)   under subsection 14(1) of the Act, APPROVE the applicants holding a 100% stake in ACS; and

 

(b)   under subsections 18(1) and 18(3) of the Act, REVOKE the existing approval

 

 

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

Dated 14 December 2018

 

[Signed]

 

………………………

Louis Serret

General Manager

Specialised Institutions Division

 

Interpretation

In this Notice:

 

100% subsidiary has the meaning given in section 3 of the Act

authorised insurance company 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.

 

 

Overview

The Financial Sector (Shareholdings) Act 1998 was enacted to regulate and monitor significant shareholdings in financial sector companies, thereby ensuring the stability and integrity of Australia's financial system. This legislation was introduced to address the problem of excessive concentration of ownership in financial institutions, which could potentially lead to risks that might threaten the broader financial sector. The Act empowers the Treasurer to approve or disapprove significant shareholdings in financial sector companies and to impose conditions on such approvals. The policy objective underpinning the Act is to prevent unacceptable shareholding situations that could jeopardise the financial system's health and to maintain public confidence in the financial sector. The enactment of this legislation reflects the legislative intent to safeguard the national financial infrastructure by carefully managing and overseeing large shareholdings within the financial industry.

Scope and Application

The Financial Sector (Shareholdings) Act 1998 applies to any person or entity seeking to hold a stake in a financial sector company, which includes authorised deposit-taking institutions and authorised insurance companies. The Act operates within the Commonwealth jurisdiction, impacting the national financial sector. The Act’s application extends to entities that either seek new approval to hold a stake or have existing approvals that may be varied or revoked. The Act includes provisions for the Treasurer to impose conditions, vary the percentage of stakes, or revoke approvals, which can be exercised either on the Treasurer’s own initiative or through an application by the entity holding the approval. Notably, the Act does not apply to situations where the acquisition of shares does not result in an unacceptable shareholding situation, and the conduct is not reckless. The Act’s provisions can be extended or restricted through subordinate instruments, such as notices and conditions imposed on approvals.

Key Provisions

The Financial Sector (Shareholdings) Act 1998 primarily governs the approval process for significant shareholdings in financial sector companies. Section 13 requires applicants to seek approval from the Treasurer for holding a stake exceeding 15% in a financial sector company. Section 14 outlines the conditions under which the Treasurer can grant such approval, while Section 18(1) allows the Treasurer to revoke an existing approval. In this specific case, the applicants, AXA Societe Anonyme, AXA Assurances IARD Mutuelle, and AXA Assurances Vie Mutuelle, have applied for approval to hold a 100% stake in AXA Corporate Solutions Assurance (ACS). Simultaneously, the current holders of a 100% stake in ACS have requested the revocation of their existing approval. The Act imposes several obligations on the parties involved. Firstly, under Section 14, the applicants must apply for and obtain approval from the Treasurer to hold the specified stake in ACS. The Treasurer must carefully consider whether granting this approval aligns with the national interest. Secondly, the current holders of the 100% stake in ACS, AXA Societe Anonyme, AXA France Assurance SAS, and AXA Assurances IARD Mutuelle, must request the revocation of their existing approval, which is also subject to the Treasurer's discretion regarding the national interest. Both the applicants and the current holders must comply with any conditions imposed by the Treasurer as part of the approval or revocation process. The Act also delineates several offences and penalties for non-compliance. Under Section 11, any person or group acting under an arrangement who recklessly acquires shares resulting in an unacceptable shareholding situation or an increase in their stake in a financial sector company commits an offence. This is considered an indictable offence, and the penalties can be severe: 400 penalty units for an individual or 2,000 penalty units for a body corporate. Moreover, under Section 32(3), the Federal Court has the authority to grant an injunction to restrain any person from engaging in conduct that contravenes the conditions of an approval, further reinforcing the importance of compliance with the Act's 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.