BANKS (SHAREHOLDINGS) REGULATIONS (AMENDMENT) 1994 NO. 207

BANKS (SHAREHOLDINGS) REGULATIONS (AMENDMENT) 1994 NO. 207

STATUTORY RULES 1994 No. 207

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.

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

To reflect the New South Wales (NSW) Government's continuing ownership to the percentage of 100 of the State Bank of New South Wales Limited (SBNSW) under Commonwealth legislation, instruments have been gazetted in accordance with the Act, effectively fixing a percentage of 100 under subsection 10(4) for the NSW Government in relation to its interest in SBNSW.

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

Under the Act, it is not possible to make a 'class' instrument for the interests of the associates of the NSW Government other than its 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 amendments to the Regulations would be to disregard, for the purposes of the Act, interests in SBNSW arising from associate relationships with the NSW Government.

The details of the Regulations are as follows:

The Schedule to the Banks (Shareholdings) Regulations is amended to include the following:

State Bank of New South Wales Limited