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BANKS (SHAREHOLDINGS) REGULATION (AMENDMENT) 1994 NO. 331

BANKS (SHAREHOLDINGS) REGULATION (AMENDMENT) 1994 NO. 331

EXPLANATORY STATEMENT

STATUTORY RULES 1994 No. 331

Issued by the Authority of the Treasurer

Banks (Shareholdings) Act 1922

Banks (Shareholdings) Regulation (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 in 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 that corporation in respect of a bank, after application made to the Treasurer by that 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 those corporations in respect of the bank.

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

Rabobank Nederland is incorporated in the Netherlands and has acquired Primary Industry Bank of Australia Limited (PIBA) from the Bank of Western Australia Limited. PIBA is a specialist provider of rural finance in Australia and New Zealand, and was granted a banking authority in 1987 under the Banking Act 1959.

Rabobank Nederland is seeking to broaden its well developed expertise in food and agricultural business throughout Australia and New Zealand by acquiring PIBA. As PIBA is a subsidiary of a holding company, Rabobank International Holding BV, PIBA is effectively 100 per cent owned by the parent bank. Rabobank Nederland. (Re Banks (Shareholdings) Regulations Amendment has included both corporations in the schedule.) Since 1993, Rabobank Nederland has been operating in Australia through its money market corporation. Rabo Australia Limited.

The Reserve Bank of Australia has supported Rabobank International Holding BV and Rabobank Nederland acquiring 100 per cent of the shares in PIBA. The arrangement is also consistent with the Government's foreign investment policy.

Instruments have been gazetted in accordance with the Act, effectively fixing a percentage of 100 under subsection 10(4) for Rabobank International Holding BV and Rabobank Nederland in relation to its interest in PIBA.

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

Under the Act, it is not possible to make a 'class' instrument for the interests of the associates of Rabobank International Holding BV and Rabobank Nederland 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 amendments to the Regulations would be to disregard, for the purposes of the Act, interests in PIBA arising from associate relationships with Rabobank International Holding BV and Rabobank Nederland.

The details of the Regulations are as follows:

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

R and I Investment Holdings Pty. Ltd.

The Commissioners of the Rural and Industries Bank of Western Australia

and including the following corporations:

Rabobank International Holding BV, being the corporation formed or incorporated under that name in the Netherlands

Rabobank Nederland, being the corporation formed or incorporated under that name in the Netherlands

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