Commonwealth Numbered Regulations - Explanatory Statements

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BANKS (SHAREHOLDINGS) REGULATIONS (AMENDMENT) 1991 NO. 57

STATUTORY RULES 1991 No. 57

ISSUED BY THE AUTHORITY OF THE TREASURER

BANKS (SHAREHOLDINGS) ACT 1972

BANKS (SHAREHOLDINGS) REGULATIONS (AMENDMENT)

Section 10 of the Banks (Shareholdings) Act 1972 (the Act) generally limits the nominal amount of the voting shares of a bank in which a person (including a corporation) may have an interest to 10 per cent, or 15 per cent with the approval of the Treasurer, of the total nominal amount of the voting shares of the bank. Under subsection 10(4) of the Act the Governor-General may, after application made to the Treasurer by a person, fix a higher percentage for that person by an instrument published in the Gazette. Subsection 10(5A) provides that the Governor-General may, on the publication under subsection 10(4) of an instrument 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 subsection (3), 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. Subsection 10(3) provides that where such percentage is applicable to a person, that person may not hold a greater nominal amount of shares than the percentage so fixed.

Under subsection 10(5) of the Act, the Governor-General may, if he is satisfied that to do so is in the national interest, by instrument in writing published in the Gazette, vary an instrument made under subsection 10(4) of the Act so that the percentage fixed by the instrument as varied exceeds 15 per cent.

Section 17 of the Act provides that the Governor-General may make regulations for the purposes of the Act.

Standard Chartered Bank Australia Limited (SCBAL) has made an application to the Government on behalf of its existing shareholders, Standard Chartered PLC, Standard Chartered Bank, Standard Chartered Holdings Limited and Standard Chartered Investments Pty Limited, to increase their interest in SCBAL from 75% to 100%.

An instrument under subsection 10(5) of the Act, permitting an increase from 75% to 100% in relation to the interests in SCBAL by the existing shareholders has therefore been prepared.

As SCBAL intends to remain a public company, it is required to have at least five shareholders. Therefore, three companies in the Standard Chartered group have been added to the shareholders in SCBAL.

As required by the Act an instrument has been gazetted which fixes a percentage of 100% under subsection 10(4) for Standard Chartered Nominees Limited (SCN), Stanchart Nominees Limited (SN), and Standard Chartered Overseas Holdings (SCOH) in relation to their interests in SCBAL.

Under section 9 of the Act the associates (including all officers, partners, subsidiaries and related companies) of SCN, SN and SCOH would also be deemed to have the same interest in SCBAL as these companies. In the case of officers of SCN, SN and SCOH, an instrument has been gazetted pursuant to subsection 10(5A) of the Act which would fix a percentage of 100% in relation to interests in SCBAL for those persons who are from time to time relevant officers of SCN, SN and SCOH. Similar instruments have been gazetted to cover the existing shareholders in SCBAL.

Under the Act, it is not possible to make a 'class' instrument for the interests of the associates of SCN, SN, and SCOH, other than their relevant officers. These other associates represent a large and ever-changing group of persons and corporations. Rather than make an instrument pursuant to subsection 10(4) for every person within the meaning of section 9, it is convenient to prescribe these interests - that is, to have them disregarded for the purposes of section 10 of the Act - by regulation, as provided for by section 17 and paragraph 8(9)(d).

Paragraph 8(9)(d) of the Act provides that a prescribed interest in a share that is an interest of such a person or class of persons as is prescribed shall be disregarded. The Banks (Shareholdings) Regulations (the Regulations) currently prescribe a class of persons in relation to their interests in the banks listed in the Schedule to the Regulations, where those interests are deemed to be held by virtue of an associate relationship. The effect of the proposed amendments to the Regulations would be to disregard for the purposes of the Act interests in SWAL arising from associate relationships with SCN, SN and SCOH. The present shareholders in SWAL are already included in the schedule to the Regulations.

The detail of the proposed Regulation is as follows:

The Schedule to the Banks (Shareholdings) Regulations is amended by adding the following corporations in relation to Standard Chartered Bank Australia Limited:

•       Standard Chartered Nominees Limited. being the corporation formed or incorporated under that name, in the United Kingdom;

•       Stanchart Nominees Limited, being the corporation formed or incorporated under that name in the United Kingdom;

•       Standard Chartered Overseas Holdings Limited, being the corporation formed or incorporated under that name in the United Kingdom.