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 C2019G00241 In force Gazette

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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: RenaissanceRe Holdings Ltd. (RenRe) and RenaissanceRe Specialty Holdings (UK) Limited (RRSUKL) (the applicants)

 

SINCE

 

  1. RenRe and RRSUKL 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 Tokio Millennium Re AG (TMR AG) ABN 12 146 546 661, a financial sector company under the Act;

 

B.     RenRe has applied to the Treasurer under section 13 of the Act for approval to hold a 100% stake in RRSUKL, a financial sector company under the Act;

 

C.     Approval was previously granted on 1 March 2011 to Tokio Marine Holdings Inc., Tokio Marine & Nichido Fire Insurance Co. Ltd., Kiln Group Limited, Philadelphia Consolidated Holdings Corp., Tokio Marine Asia Pte. Ltd., Tokio Marine & Nichido Life Insurance Co. Ltd., Tokio Marine & Nichido Financial Life Insurance Co. Ltd., Tokio Millennium Re (UK) Limited and Tokio Marine Technologies LLC (the current holders) under subsection 14(1) of the Act to hold a 100% stake in Tokio Millennium Re Ltd. (now named TMR AG) (the existing approval);

 

D.     The current holders have requested that the existing approval be revoked from the time RRSUKL acquires a 100% stake in TMR AG (the Effective Time);

 

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

 

  1. Revoke the existing approval with effect from the Effective Time;
  2. Approve the applicants to hold a 100% stake in TMR AG; and
  3. Approve RenRe to hold a 100% stake in RRSUKL;

 

I, Nigel Boik, a delegate of the Treasurer:

 

(a)   Under subsection 18(3) of the Act, REVOKE the existing approval granted on 1 March 2011 with effect from the Effective Time; and

 

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

(i)                  the applicants to hold a 100% stake in TMR AG; and

(ii)                RenRe to hold a 100% stake in RRSUKL.  

 

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

Dated 21 February 2019

 

[Signed]

 

………………………

Nigel Boik

General Manager

Diversified 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 address concerns regarding significant shareholdings in financial sector companies, aiming to ensure financial stability and protect the interests of consumers. This Act provides the Treasurer with the authority to approve or disapprove shareholdings in financial sector companies, ensuring that no single entity or group of entities holds an excessive stake that could compromise the stability of the financial sector. The Act's policy objective is to prevent unacceptable shareholding situations, which could lead to risks such as market manipulation or undue influence over financial institutions. The enactment of this Act by the Commonwealth Parliament reflects a commitment to maintaining a secure and resilient financial system by regulating the ownership and control of financial sector companies.

Scope and Application

The Financial Sector (Shareholdings) Act 1998 applies to any person or entity seeking to acquire a significant stake in a financial sector company, which is defined in section 3 of the Act. The Act governs the shareholding of financial sector companies, which includes authorised deposit-taking institutions, authorised insurance companies, and other entities specified under the Act. This legislation has a Commonwealth reach, applying across Australia and regulating conduct and transactions that involve substantial shareholdings in the financial sector. The Act provides for the Treasurer to grant or revoke approvals for significant shareholdings, subject to certain conditions, and to impose penalties for non-compliance. Notably, the Act allows for the extension and restriction of its application through subordinate instruments, such as the revocation of existing approvals or the imposition of conditions on new approvals. Exclusions and exemptions are not explicitly stated in the provided text, but the Act allows for the Treasurer to impose conditions or vary existing approvals based on the national interest, thereby offering some flexibility in its application.

Key Provisions

The primary operative sections of the Financial Sector (Shareholdings) Act 1998, as referenced in the Gazette, revolve around the regulation of shareholdings in financial sector companies. Section 14(1) allows the Treasurer to approve the holding of a stake in a financial sector company, while subsection 18(3) empowers the Treasurer to revoke such an approval if deemed necessary. The current instrument revokes the existing approval for a 100% stake in Tokio Millennium Re AG held by several entities and grants new approvals to RenaissanceRe Holdings Ltd. (RenRe) and RenaissanceRe Specialty Holdings (UK) Limited (RRSUKL) for a 100% stake in Tokio Millennium Re AG and RenRe for a 100% stake in RRSUKL respectively (subsections 18(3) and 14(1)). The Act imposes several obligations and requirements on the parties involved. Notably, under section 14, the Treasurer must provide written notice of any approval to the applicants and the relevant financial sector company and must publish a copy of this notice in the Gazette. Additionally, any person or entity holding an approval under section 14 can apply to the Treasurer to vary the percentage specified in the approval, as outlined in subsection 17(1). The Treasurer also has the authority to vary the percentage on their own initiative if it is in the national interest, as per subsection 17(6). Flow-on approvals are addressed in section 19, ensuring that if an approval exists for a stake in a financial sector company, it extends to 100% subsidiaries of the holding company. The Act also delineates offences and penalties for breaches. Section 11 imposes an offence and a penalty of up to 400 penalty units for individuals and 2,000 penalty units for bodies corporate if they acquire shares in a company, resulting in an unacceptable shareholding situation or an increase in an existing unacceptable shareholding situation, while being reckless about the outcome. This offence is indictable under section 39. Furthermore, under section 32(3), the Federal Court may grant an injunction to restrain any conduct in contravention of conditions subject to an approval under section 14, at the Treasurer’s application. These provisions ensure compliance and provide mechanisms for enforcement 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.