Commonwealth Numbered Regulations - Explanatory Statements

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BANKS (SHAREHOLDINGS) REGULATIONS (AMENDMENT) 1996 NO. 146

STATUTORY RULES 1996 No. 146

Issued by the Authority of the Assistant Treasurer

Banks (Shareholdings) Act 1972

Banks (Shareholdings) Regulations (Amendment)

Section 10 of the Banks (Shareholdings) Act 1972 (the Act) limits the 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 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, if the Governor-General is satisfied that to do so is in the national interest, fix a higher percentage for that person by 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, declare by instrument in writing published in the Gazette 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.

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

ANZ Grindlays Bank plc (Grindlays) expects to move its place of incorporation from the United Kingdom to Australia (where the company will be incorporated under the Corporations Law as ANZ Grindlays Bank Limited) in July 1996. For the purposes of the move, Grindlays has applied for an authority to carry on banking business under the Banking Act 1959. This will require a separate determination by the GovernorGeneral (papers prepared separately). On its relocation to Australia, all of Grindlays share capital will be held by ANZ Holdings (UK) plc (75 per cent) and Australia and New Zealand Banking Group Limited (ANZ - 25 per cent) respectively. It is then planned to transfer all of Grindlays shares to ANZ in the month or so following its relocation to Australia. These shareholdings are in excess of the 10 per cent ownership limit set down in section 10 of the Act.

Two instruments under subsection 10(4) of the Act have been prepared, fixing a percentage of 100 for ANZ and 75 per cent for ANZ Holdings (UK) plc, in relation to their respective interests in Grindlays.

Under section 9 of the Act the associates (including officers, partners, subsidiaries and related companies) of ANZ and ANZ Holdings (UK) plc would also be deemed to have the same interest in Grindlays as these corporations. In the case of officers of ANZ and ANZ Holdings (UK) plc, two instruments pursuant to subsection 10(5A) of the Act are proposed which would fix a percentage of 100 and 75 in relation to interests in Grindlays for those persons who are from time to time relevant officers of ANZ and ANZ Holdings (UK) plc respectively.

Under the Act, it is not possible to make a 'class' instrument for the interests of the associates of ANZ and ANZ Holdings (UK) plc, other than its relevant officers. These other associates represent a large and everchanging 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) of the Act.

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 Grindlays arising froth associate relationships with ANZ and ANZ Holdings (UK) plc.

The details of the proposed Regulations are as follows:

The Schedule to the Banks (Shareholdings) Regulations is amended by adding the following corporation to column 2:

ANZ Grindlays Bank Limited

and by adding the following corporations to column 3:

Australia and New Zealand Banking Group Limited; and

ANZ Holdings (UK) plc