Banks (Shareholdings) Amendment Act 1985

No. 25 of 1985

An Act to amend the Banks (Shareholdings) Act 1972, and for related purposes

[Assented to 22 May 1985]

BE IT ENACTED by the Queen, and the Senate and the House of Representatives of the Commonwealth of Australia, as follows:

Short title, &c.

1. (1) This Act may be cited as the Banks (Shareholdings) Amendment Act 1985.

(2) The Banks (Shareholdings) Act 19721 is in this Act referred to as the Principal Act.

Commencement

2. This Act shall come into operation on the day on which it receives the Royal Assent.

3. After section 2 of the Principal Act the following section is inserted:

Crown to be bound

“3. (1) This Act binds the Crown in right of the Commonwealth, of each of the States, of the Northern Territory and of Norfolk Island.

“(2) Nothing in this Act renders the Crown liable to be prosecuted for an offence.”.

Interpretation

4. Section 6 of the Principal Act is amended by inserting “a body politic or” after “includes” in the definition of “corporation” in sub-section (1).

Associated shareholders

5. Section 9 of the Principal Act is amended by inserting in paragraph (3) (a) “(other than a body politic)” after “corporation” (first occurring).

Limitation of shareholdings in banks

6. Section 10 of the Principal Act is amended—

(a) by omitting sub-sections (1) and (2) and substituting the following sub-sections:

“(1) Subject to sub-sections (2d) and (3), a person shall not have an interest in one or more voting shares of a bank if the nominal amount of that share or the aggregate of the nominal amounts of those shares exceeds 10% of the aggregate of the nominal amounts of all the voting shares of the bank.

“(2) The Treasurer may, on application by a person, exempt the person, in writing, from compliance with sub-section (1) in respect of voting shares of a bank.

“(2a) The Treasurer shall not refuse to give an exemption to a person under sub-section (2) from compliance with sub-section (1) in respect of voting shares of a bank unless the Treasurer is satisfied that the giving of the exemption would not be in the national interest.

“(2b) Where an exemption has been given to a corporation under sub-section (2) from compliance with sub-section (1) in respect of voting shares of a bank, the Treasurer may, on application by the corporation, exempt the persons who are from time to time relevant officers of the corporation from compliance with sub-section (1) in respect of voting shares of the bank.

“(2c) An application under sub-section (2b) may accompany an application under sub-section (2).

“(2d) Subject to sub-section (3), a person who is exempt from compliance with sub-section (1) in respect of voting shares of a bank shall not have an interest in one or more voting shares of the bank if the nominal amount of that share or the aggregate of the nominal amounts of those shares exceeds 15% of the aggregate of the nominal amounts of all the voting shares of the bank.

“(2e) The Treasurer may, by notice in writing given to a person, revoke an exemption given to the person under sub-section (2) if the Treasurer is satisfied that to do so is in the national interest, and, where

the Treasurer so revokes an exemption, the revocation has effect as from the day specified in the notice, not being a day earlier than 3 months after the day on which the notice is given.

“(2f) Where an exemption given to a corporation under sub-section (2) from compliance with sub-section (1) in respect of voting shares in a bank is revoked, any exemption given under sub-section (2b) in relation to the relevant officers of the corporation in respect of the bank shall be deemed to have been revoked, and that last-mentioned revocation has effect as from the day on which the first-mentioned revocation has effect.

“(2g) The Treasurer may, by notice in writing given to a corporation, revoke an exemption given under sub-section (2b) in relation to relevant officers of the corporation as from a day specified in the notice, not being a day earlier than 3 months after the day on which the notice is given.”;

(b) by omitting from sub-section (3) “specified in an instrument”;

(c) by omitting from sub-section (3) “Penalty: Two hundred dollars for each day during which the contravention continues.”;

(d) by omitting sub-section (4) and substituting the following sub-section:

“(4) The Governor-General may, after application made to the Treasurer by a person, if the Governor-General is satisfied that to do so is in the national interest, by instrument in writing published in the Gazette, fix, for the purposes of this section in its application to that person in respect of a bank, a percentage exceeding 15%.”;

(e) by inserting in sub-section (5) “if the Governor-General is satisfied that to do so is in the national interest,” after “person concerned,”;

(f) by omitting from sub-section (5) “the last preceding sub-section but so that the percentage fixed by the instrument as varied shall not be less than ten” and substituting “sub-section (4) (including such an instrument that has previously been varied under this sub-section) but so that the percentage fixed by the instrument as varied exceeds 15%”;

(g) by inserting after sub-section (5) the following sub-sections:

“(5a) The Governor-General may, on or after the publication under sub-section (4) of an instrument (including such an instrument that has been varied under sub-section (5)) fixing a percentage applicable to a corporation in respect of a bank, after application made to the Treasurer by the corporation, by instrument in writing published in the Gazette, declare that, for the purposes of sub-section (3)—

(a) the percentage so fixed is also applicable to the persons who are from time to time relevant officers of the corporation in respect of the bank; and

(b) if that percentage is subsequently varied under sub-section (5), that percentage as so varied is also applicable to those persons

in respect of the bank as from the day on which that variation has effect.

“(5b) An application under sub-section (5a) may accompany an application under sub-section (4).”;

(h) by omitting from sub-section (6) “either of the last two preceding sub-sections” and substituting “sub-section (2), (2b), (4), (5) or (5a)”;

(j) by omitting from sub-section (7) “or (5) of this section” and substituting “(including such an instrument that has been varied under sub-section (5)) or (5a)”;

(k) by inserting after sub-section (7) the following sub-sections:

“(7a) The Governor-General shall not revoke an instrument under sub-section (4) (including such an instrument that has been varied under sub-section (5)) in relation to a person in respect of a bank unless the Governor-General is satisfied that to do so is in the national interest.”;

“(7b) Where an instrument under sub-section (4) (including such an instrument that has been varied under sub-section (5)) fixing a percentage applicable to a corporation in respect of a bank is revoked, any instrument published under sub-section (5a) in relation to the relevant officers of the corporation in respect of the bank shall be deemed to have been revoked, and that last-mentioned revocation has effect as from the day on which the first-mentioned revocation has effect.”;

(m) by omitting from sub-section (8) “varying an instrument under sub-section (5) of this section” and substituting “under sub-section (5) varying an instrument under sub-section (4) (including such an instrument that has previously been varied under sub-section (5))”;

(n) by omitting from sub-section (9) “Penalty: One thousand dollars.”; and

(o) by adding at the end the following sub-sections:

“(10) Notwithstanding sub-section 8 (10), where a person has an interest in a share by reason only that the person is an associate of another person and, in the opinion of the Treasurer, the first-mentioned person’s control of, or capacity to influence, the voting power in respect of the share is, and is likely to remain, insignificant, the Treasurer may, of the Treasurer’s own motion or after application made by the person, by notice in writing given to the person, declare that the person’s interest in the share shall be disregarded for the purposes of the application of this section in relation to the person.

“(11) The Treasurer may, by notice in writing given to a person, revoke a declaration under sub-section (10) in relation to the person as from a day specified in the notice, not being a day earlier than 3 months after the day on which the notice is given.

“(12) A person who fails to comply with sub-section (1), (2d) or (3) is guilty of an offence punishable, on conviction, by a fine not exceeding—

(a) if the offender is a natural person—$ 10,000; or

(b) if the offender is a body corporate—$50,000.

“(13) A person who contravenes sub-section (9) is guilty of an offence punishable, on conviction, by a fine not exceeding—

(a) if the offender is a natural person—$5,000; or

(b) if the offender is a body corporate—$25,000.

“(14) In this section, ‘relevant officer’, in relation to a corporation that has an interest in one or more voting shares of a bank, means an officer of the corporation who has an interest in one or more voting shares of the bank by reason only of the application to the officer of paragraph 9 (3) (a) in relation to the corporation.”.

Repeal of section 11

7. Section 11 of the Principal Act is repealed.

Powers of court with respect to defaulting substantial shareholders

8. Section 12 of the Principal Act is amended—

(a) by omitting from sub-section (1) “sub-section (1), (2) or (3) of section 10 of this Act” and substituting “sub-section 10 (1), (2d) or (3)”;

(b) by inserting in sub-section (1) “or Territory” after “State”;

“(7) A person who contravenes or fails to comply with an order under this section that is applicable to the person is guilty of an offence punishable, on conviction, by a fine not exceeding—

(a) if the offender is a natural person—$5,000; or

(b) if the offender is a body corporate—$25,000.”; and

(d) by omitting sub-section (9) and substituting the following sub-section:

“(9) In this section, Territory’ means the Australian Capital Territory or the Northern Territory.”.

Defence to prosecutions

9. Section 13 of the Principal Act is amended by omitting from sub-section (1) “sub-section (1), (2) or (3) of section 10 of this Act” and substituting “sub-section 10 (12)”.

Repeal of section 15

10. Section 15 of the Principal Act is repealed.

Formal amendments

11. The Principal Act is amended as set out in the Schedule.

Transitional

12. (1) An instrument that was in force under sub-section 10 (4) of the Principal Act (whether or not that instrument had been varied under sub-section 10 (5) of that Act) immediately before the commencement of this Act shall, after that commencement—

(a) in a case where the instrument fixed a percentage of not more than 15—have effect as if it were an exemption granted under sub-section 10 (2) of the Principal Act as amended by this Act; or

(b) in a case where the instrument fixed a percentage exceeding 15—continue in force as if it had been published under sub-section 10 (4) of the Principal Act as amended by this Act.

(2) Where—

(a) the Principal Act as amended by this Act applies in relation to a corporation within the meaning of that Act as so amended by reason of the amendment made by section 3 of this Act; and

(b) immediately after the commencement of this Act, the corporation has an interest in one or more voting shares of a bank and the nominal amount of that share or the aggregate of the nominal amounts of those shares exceeds 15% of the aggregate of the nominal amounts of all the voting shares of the bank,

the Governor-General shall be deemed to have published an instrument under sub-section 10 (4) of the Principal Act as amended by this Act fixing, for the purposes of section 10 of the Principal Act as amended by this Act in its application to the corporation in respect of the bank, a percentage equal to the percentage of the aggregate of the nominal amounts of all the voting shares of the bank represented by the nominal amount of the share, or of the aggregate of the nominal amounts of the shares, first referred to in paragraph (b).

––––––––––––––

SCHEDULE Section 11

FORMAL AMENDMENTS

Sub-section 6(1), definition of “bank”—

Omit “1967”.

Sub-section 8 (2)—

Omit “he” (wherever occurring), substitute “the person”.

Paragraph 8 (3) (a)—

Omit “sub-section (1) of section 5”, substitute “sub-section 5 (1)”.

Paragraph 8 (4) (c)—

Omit “his associates”, substitute “the associates of that person”.

Sub-section 8 (5)—

Omit “paragraph (c) of the last preceding sub-section”, substitute “paragraph (4) (c)”.

SCHEDULE—continued

Sub-paragraph 8 (5) (a) (i)—

Omit “sub-section (5) of section 7”, substitute “sub-section 7 (5)”.

Sub-paragraph 8 (5) (a) (ii)—

Omit “the last preceding sub-section”, substitute “sub-section (4)”.

Paragraph 8 (6) (b)—

Omit “himself or his order”, substitute “that person or as that person directs”.

Paragraph 8 (6) (d)—

(a) Omit “his”.

(b) Omit “he”, substitute “that person”.

Sub-section 8 (7)—

Omit “he”, substitute “the person”.

Paragraph 8 (9) (b)—

(a) Omit “he”, substitute “the person”.

(b) Omit “connexion”, substitute “connection”.

Paragraph 8 (9) (c)—

(a) Omit “he”, substitute “the person”.

(b) Omit “his”.

Sub-section 9 (2)—

Omit “the next two succeeding sub-sections”, substitute “this section”.

Sub-section 9 (3)—

Omit “the last preceding sub-section”, substitute “sub-section (2)”.

Sub-section 9 (4)—

(a) Omit “the last preceding sub-section”, substitute “sub-section (3)”.

(b) Omit “of this section”.

Sub-section 10 (5)—

Insert “or her” after “his”.

Sub-section 10 (7)—

(a) Omit “date” (wherever occurring), substitute “day”.

(b) Omit “three”, substitute “3”.

Sub-section 10 (8)—

(a) Omit “of this section”.

(b) Omit “date” (wherever occurring), substitute “day”.

Sub-section 12 (4)—

Omit “of this section” (wherever occurring).

SCHEDULE—continued

Paragraph 12 (4) (a)—

Omit “his” (wherever occurring).

Sub-section 12 (8)—

Omit “The last preceding sub-section”, substitute “Sub-section (7)”.

Sub-section 13 (1)—

(a) Omit “his failure”, substitute “the failure”.

(b) Omit “his” (last occurring).

Sub-section 13 (2)—

(a) Omit “the last preceding sub-section”, substitute “sub-section (1)”.

(b) Omit “his master’s or principal’s interest or interests”, substitute “the interest or interests of the servant’s or agent’s master or principal”.

Section 17—

Repeal the section, substitute the following section:

Regulations

“17. The Governor-General may make regulations, not inconsistent with this Act, prescribing all matters—

(a) required or permitted by this Act to be prescribed; or

(b) necessary or convenient to be prescribed for carrying out or giving effect to this Act.”.

NOTE

1. No. 2, 1972, as amended. For previous amendments, see No. 216, 1973 (as amended by No. 20, 1974); and No. 92, 1981.

[Minister’s second reading speech made in—

House of Representatives on 17 April 1985

Senate on 9 May 1985]