Revocation of existing approvals and granting of new approval to hold a stake in a financial sector company of more than 15% - General Electric Company (New York)

Administered by Department of the Treasury

Legislation au C2015G01743 In force Gazette

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

Financial Sector (Shareholdings) Act 1998

To: General Electric Company (New York) and the person(s) named in the attached Schedule 1 (the applicants).

 

SINCE

 

  1. a number of the applicants have approval under subsection 14(1) of the Financial Sector (Shareholdings) Act 1998 (the Act), to hold a stake of 100% in General Electric Capital Corporation (Connecticut), GE Capital Global Financial Holdings, Inc. (Connecticut), GE Capital Australia Holdings 1, LLC (Delaware),  GE Capital Finance Australasia Pty Ltd ACN 070 396 020, GE Capital Finance Australia Holdings Pty Ltd ACN 603 161 100, GE Personal Finance Pty Ltd ACN 008 443 810, Hallmark Life Insurance Company Ltd ACN 008 446 884 and Hallmark General Insurance Company Ltd ACN 008 477 647, financial sector companies under the Act (the existing Approvals);

 

B.     the persons named in Schedule 1 of the existing Approvals have requested that the existing Approvals be revoked;

 

C.     the applicants have applied for approval under section 13 of the Act, to hold a stake of 100% in each of the companies listed in the attached Schedule 2 (the Companies), financial sector companies under the Act; and

 

D.    I am satisfied it is in the national interest to approve the applicants holding a stake in each of the companies of more than 15%.

 

I, Stuart Bingham, a delegate of the Treasurer, under subsection 18(3) of the Act, REVOKE the existing Approvals and under subsection 14(1) of the Act, APPROVE the applicants holding a stake in each of the Companies of 100%.

This instrument comes into force on the date it is signed.  The Approval under the instrument remains in force indefinitely.

 

Dated 2 September 2015

 

[Signed]

 

Stuart Bingham

General Manager

Diversified Institutions Division

Interpretation

In this Notice:

 

direct control interest has the meaning set out in clause 11 of Schedule 1 to the Act

the existing approvals refers to the approvals, dated 5 March 2015, under subsection 14(1) of the Act for General Electric Company (New York) and certain of its associates to hold a 100% stake in each of the financial sector companies listed in Recital A.

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.

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 applicant 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 - the persons, in addition to General Electric Company (New York), who applied for approval

 

1. GE Capital Global Holdings, LLC (Delaware)

2. GE Capital Sub 3, Inc. (Delaware)

3. GE Capital International Holdings Limited (England and Wales)

4. GE Capital Australia Holdings (England and Wales)

5. GE Capital UK Holdings LLC (Delaware)

6. GE Holdings Australia Pty Ltd ACN 089 628 795

7. GE CF & CEF Holdings Pty Ltd ACN 103 134 658

8. General Electric Capital Corporation (Delaware)

9. GE Capital Global Financial Holdings, LLC (Connecticut)

10. GE Capital Australia Holdings I, LLC (Delaware)

11. GE Capital Australia Holdings II, LLC (Delaware)

12. GE Capital Mortgage Insurance Corporation (Australia) Pty Ltd ACN 081 488 440

13. GE Finance Australia 1 Pty Ltd ACN 600 935 582

14. GE Capital AGC Holdings I LLC (Delaware)

15. GE Capital AGC Holdings II LLC (Delaware)

16. GE Capital International Holdings Corporation (Delaware)

17. GE Engine Services UNC Holding I, Inc. (Delaware)

18. GE UK Industrial Holdings, Inc. (Delaware)

19. GE UK Caledonian Holdings, Inc. (Delaware)

20. GE Capital Global Credit LLC (Delaware)

21. GE Capital Australia Group Holdings Pty Ltd ACN 122 951 062

22. GE Capital Finance Australasia Pty Ltd ACN 070 396 020

23. GE Capital Finance Australia Holdings Pty Ltd ACN 603 161 100

24. GE Personal Finance Pty Ltd ACN 008 443 810

25. Hallmark Life Insurance Company Ltd ACN 008 446 884

 

SCHEDULE 2 - the financial sector companies

 

1. GE Capital Global Holdings, LLC (Delaware)

2. GE Capital Sub 3, Inc. (Delaware)

3. GE Capital International Holdings Limited (England and Wales)

4. General Electric Capital Corporation (Delaware)

5. GE Capital Australia Group Holdings Pty Ltd ACN 122 951 062

6. GE Capital UK Holdings LLC (Delaware)

7. GE Capital Finance Australasia Pty Ltd ACN 070 396 020

8. GE Capital Finance Australia Holdings Pty Ltd ACN 603 161 100

9. GE Personal Finance Pty Ltd ACN 008 443 810

10. Hallmark Life Insurance Company Ltd ACN 008 446 884

11. Hallmark General Insurance Company Ltd ACN 008 477 647

 

Overview

The Financial Sector (Shareholdings) Act 1998 was enacted by the Australian Parliament to address potential risks to the nation's financial stability arising from concentrated shareholdings in financial sector companies. This legislation provides the Treasurer with the authority to approve or disapprove shareholdings that exceed a certain threshold, thereby ensuring that the financial sector remains resilient and robust. The Act aims to prevent unacceptable shareholding situations that could compromise the safety and soundness of financial sector companies. In the case of General Electric Company (New York) and its associates, the existing approvals to hold a 100% stake in various financial sector companies have been revoked, and new approvals have been granted to hold stakes of up to 100% in specified companies, reflecting a decision made in the national interest by Stuart Bingham, a delegate of the Treasurer, under the provisions of the Act. This revocation and re-approval process ensures that the shareholding structures align with the legislative intent to safeguard the financial sector.

Scope and Application

The Financial Sector (Shareholdings) Act 1998 applies to entities and individuals seeking to acquire a significant stake in Australian financial sector companies, defined as those entities authorised or regulated under Australian financial services legislation. The Act's jurisdiction covers the entire Commonwealth of Australia, ensuring a uniform approach to the regulation of foreign shareholding in the financial sector. The Act applies to both domestic and foreign entities, with a particular focus on those seeking to hold a stake exceeding 15% in specified financial sector companies. The instrument details the revocation of existing approvals held by General Electric Company (New York) and its associates to hold a 100% stake in certain financial sector companies, while granting new approvals for these entities to hold a 100% stake in other specified companies. The Act allows for the imposition of conditions on approvals and provides mechanisms for the variation or revocation of these conditions by the Treasurer, either on the Treasurer's own initiative or in response to an application by the entity holding the approval. Furthermore, the Act includes provisions for the Treasurer to vary the percentage of shareholding specified in an approval if deemed to be in the national interest. The application of the Act may be extended or restricted through subordinate instruments, which can impose additional conditions or modify existing ones. The Act also includes provisions for offences related to unacceptable shareholding situations and allows for the Federal Court to grant injunctions to restrain non-compliant conduct.

Key Provisions

The Financial Sector (Shareholdings) Act 1998 (the Act) governs the approval process for holding a stake in a financial sector company. Under section 13 of the Act, the approval is necessary for any entity to hold a stake exceeding 15% in such companies. In this case, the Act provides for the revocation of existing approvals held by General Electric Company (New York) and its associates for a 100% stake in several financial sector companies, and grants new approval for the applicants to hold a 100% stake in the specified companies. These provisions are detailed in sections 13, 14, and 18 of the Act. The obligations and requirements imposed by the Act on the parties involved include submitting an application for approval to hold a stake in a financial sector company and providing any necessary information to the Treasurer. The Act mandates that the Treasurer must give written notice of the approval to the applicant and the financial sector company concerned, and publish a copy of this notice in the Gazette (section 16). Additionally, the Act outlines the conditions under which the Treasurer can impose, revoke, or vary conditions on an approval (sections 16 and 17). If an approval exists for a holding company, flow-on approvals are granted for its 100% subsidiaries (section 19). Failure to comply with the requirements of the Act may result in offences and penalties. Under section 11 of the Act, it is an offence if a person or group of persons under an arrangement acquires shares in a financial sector company and an unacceptable shareholding situation arises as a result. This includes reckless disregard of the potential outcome. The penalty for such an offence can be up to 400 penalty units for individuals and 2,000 penalty units for bodies corporate. An unacceptable shareholding situation is defined in section 10 of the Act. If a person engages in conduct that contravenes a condition of an approval, the Federal Court can grant an injunction to restrain such conduct (section 32(3)). Offences under section 11 of the Act are indictable, as stated in section 39 of the Act.

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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.