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 C2015G01741 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 GE Capital Finance Australasia Pty Ltd ACN 070 396 020, 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 applicants 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, Robyn McMahon, 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 5 March 2015

 

[Signed]

 

Robyn McMahon

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 7 November 2011, under subsection 14(1) of the Act for:

  1. GE Capital Australia Group Holdings Pty Ltd ACN 122 951 062 and a number of its associates to hold a 100% stake in each of GE Capital Finance Australasia Pty Ltd ACN 070 396 020,  Hallmark Life Insurance Company Ltd ACN 008 446 884 and Hallmark General Insurance Company Ltd ACN 008 477 647; and
  2. Certain other associates of GE Capital Australia Group Holdings Pty Ltd ACN 122 951 062 to hold a 100% stake in Hallmark Life Insurance Company Ltd ACN 008 446 884 and Hallmark General Insurance Company Ltd ACN 008 477 647.

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. General Electric Capital Corporation (Connecticut);
  2. GE Capital Global Financial Holdings, Inc. (Connecticut);
  3. GE Capital Australia Holdings 1, LLC (Delaware);
  4. GE Capital Australia Group Holdings Pty Ltd ACN 122 951 062;
  5. GE Capital Finance Australasia Pty Ltd ACN 070 396 020;
  6. GE Capital Finance Australia Holdings Pty Ltd ACN 603 161 100;
  7. GE Personal Finance Pty Ltd ACN 008 443 810; and
  8. Hallmark Life Insurance Company Ltd ACN 008 446 884.

 

 

SCHEDULE 2 - the financial sector companies

 

  1. General Electric Capital Corporation (Connecticut)
  2. GE Capital Global Financial Holdings, Inc. (Connecticut);
  3. GE Capital Australia Holdings 1, LLC (Delaware);
  4. GE Capital Australia Group Holdings Pty Ltd ACN 122 951 062;
  5. GE Capital Finance Australasia Pty Ltd ACN 070 396 020;
  6. GE Capital Finance Australia Holdings Pty Ltd ACN 603 161 100;
  7. GE Personal Finance Pty Ltd ACN 008 443 810;
  8. Hallmark Life Insurance Company Ltd ACN 008 446 884; and
  9. Hallmark General Insurance Company Ltd ACN 008 477 647.

 

Overview

The Financial Sector (Shareholdings) Act 1998 was enacted to address the issue of significant shareholdings in financial sector companies and to ensure that these shareholdings do not pose a risk to the stability of the financial system. This Act empowers the Treasurer to regulate and approve shareholdings in financial sector companies, particularly where they exceed certain thresholds. The policy objective of the Act is to maintain the integrity and stability of Australia’s financial sector by controlling and monitoring large shareholdings. The Act provides mechanisms for the approval, variation, and revocation of shareholdings, ensuring that they remain in the national interest. The instrument in question, revoking existing approvals and granting new approvals to General Electric Company (New York) and associated entities, reflects the ongoing exercise of these powers by the Treasurer's delegate.

Scope and Application

The Financial Sector (Shareholdings) Act 1998 applies to persons and entities seeking to hold a stake in a financial sector company, ensuring that such stakes do not reach levels deemed unacceptable for national financial stability. This Act primarily concerns the acquisition of shareholdings in companies within the financial sector, which are defined under section 3 of the Act. The Act extends to all financial sector companies within Australia and applies to both Australian and foreign entities that seek to hold stakes in these companies. The Act allows the Treasurer to impose conditions on, vary, or revoke approvals for shareholdings, as stipulated in sections 16, 17, and 18 respectively. Additionally, the Act provides for flow-on approvals in cases where a holding company for an authorised deposit-taking institution or an authorised insurance company is involved, as outlined in section 19. The Act also delineates penalties for reckless acquisition of shares that result in an unacceptable shareholding situation, with maximum penalties set out in section 11. Notably, the Act's application can be extended or restricted through subordinate instruments, as indicated in the various notes and sections, which provide flexibility in managing financial sector shareholdings in the national interest.

Key Provisions

The Financial Sector (Shareholdings) Act 1998 (the Act) is a legislative instrument that governs the approval of shareholdings in financial sector companies. This Act allows the Treasurer, or a delegate, to approve or revoke the approval of shareholdings in these companies. The key operative sections of this Act include section 13, which permits the granting of approval to hold a stake in a financial sector company, and section 14, which provides for the revocation of such approval. The Act also includes provisions for the imposition and variation of conditions on approvals (section 16), the variation of the percentage specified in an approval (section 17), and the revocation of an approval (section 18). Additionally, section 19 of the Act addresses flow-on approvals for 100% subsidiaries of holding companies. Under this Act, the applicants are required to seek approval to hold a stake in a financial sector company, and the Treasurer or their delegate must consider whether it is in the national interest to grant such approval. The applicants must also notify the Treasurer of any proposed changes to their shareholdings. The Act imposes obligations on the applicants to comply with the terms of their approval, including any conditions that may be imposed. The Act also requires the Treasurer to give written notice of the approval to the applicant and the financial sector company concerned and to publish a copy of the notice in the Gazette. Breaches of the Act may result in civil or criminal consequences. For example, under section 11 of the Act, a person or group of persons may be guilty of an offence if they acquire shares in a financial sector company, resulting in an unacceptable shareholding situation or an increase in the stake held by a person in the company, and they were reckless as to whether the acquisition would have that result. The maximum penalty for this offence is 400 penalty units for an individual and 2,000 penalty units for a body corporate. Additionally, under section 32(3) of the Act, the Federal Court may grant an injunction to restrain a person from engaging in conduct that contravenes a condition to which an approval under section 14 is subject.

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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.