Commonwealth Numbered Regulations - Explanatory Statements

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BANKS (SHAREHOLDINGS) REGULATIONS (AMENDMENT) 1993 NO. 259

STATUTORY RULES 1993 No. 259

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 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(7) provides that 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, revoke an instrument under subsection 10(4) (including such an instrument that has been varied under subsection 10(5)). In that event, under subsection 10(7B) any related instrument published under subsection 10(5A) shall be deemed to have been revoked.

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

To reflect the overall reorganisation of the Lloyds Bank Group, instruments have been gazetted in accordance with the Act, effectively fixing a percentage of 100% under subsection 10(4) for Black Horse Holdings Limited, Lloyds Bank Plc, Lloyds Bank Subsidiaries Limited, The National Bank of New Zealand Limited, and NBNZ Holdings Limited (those corporations) in relation to their interests in Lloyds Bank NZA Limited (LBNZA).

Under section 9 of the Act the associates (including officers, partners, subsidiaries and related companies) of those corporations would also be deemed to have the same interest in LBNZA as those corporations. In the case of officers of those corporations, 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 LBNZA for those persons who are from time to time relevant officers of those corporations.

Under the Act, it is not possible to make a 'class' instrument for the interests of the associates of those corporations 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 Regulation, 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 LBNZA arising from associate relationships with those corporations.

The details of the proposed Regulations are as follows:

The Schedule to the Banks (Shareholdings) Regulations is amended replacing the current list of corporations with the following list in relation to Lloyds Bank NZA Limited:

Black Horse Holdings Limited, being the corporation formed or incorporated under that name in New Zealand

Lloyds Bank Plc, being the corporation formed or incorporated under that name in the United Kingdom

Lloyds Bank Subsidiaries Limited, being the corporation formed or incorporated under that name in the United Kingdom

The National Bank of New Zealand Limited, being the corporation formed or incorporated under that name in New Zealand

NBNZ Holdings Limited, being the corporation formed or incorporated under that name in New Zealand.