Financial Sector Reform (Amendments and Transitional Provisions) Regulations 1999

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Statutory Rules 1999 No. 144 as amended

made under the

Financial Sector Reform (Amendments and Transitional Provisions) Act (No. 1) 1999

Consolidated as in force on 14 January 2000

(includes amendments up to SR 1999 No. 355)

Prepared by the Office of Legislative Drafting
Attorney-General’s Department, Canberra

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Financial Sector Reform (Amendments and Transitional Provisions) Regulations 1999

Statutory Rules 1999 No. 144 as amended

made under the

Financial Sector Reform (Amendments and Transitional Provisions) Act (No. 1) 1999

Contents

Page

Part 1 Preliminary

1 Name of regulations [see Note 1]

2 Commencement [see Note 1]

3 Definitions

4 Purpose of these regulations

Part 2 Transitional provision for protection of information given to APRA or ASIC

5 Protection of information given to APRA or ASIC

Part 3 Transitional provisions relating to certain instruments in force on the transfer date

Division 3.1 Instruments under a Friendly Societies Code or AFIC Code

6 Continued effect of certain instruments relating to transferring friendly societies

Division 3.2 Instruments for which no other arrangements are in force on the transfer date

7 Definition for Division 3.2

8 Continued effect of certain instruments made under replaced legislation

Part 4 Transitional provision relating to transfers of engagements and mergers

9 Completion of transfers of engagements and mergers commenced before the transfer date

Part 5 Transitional provisions relating to the application of the Banking Act 1959

Division 5.1 Continuing applications for registration under a Financial Institutions Code

10 Treatment of undetermined applications under a Financial Institutions Code

Division 5.2 Prudential standards

11 Definitions for Division 5.2

12 APRA transitional prudential standards

13 Application of APRA transitional prudential standards

13A Application of APRA transitional prudential standards to the Cairns Penny Bank Limited

14 Application of instruments under APRA transitional prudential standards

14A Application of APRA transitional prudential standards to the Cairns Penny Bank Limited

15 Interpretation of APRA transitional prudential standards and instruments

16 Variation, revocation and modification of APRA transitional prudential standards and instruments

17 Relationship between APRA transitional prudential standards and the Banking Act 1959

18 Inspection and purchase of APRA transitional prudential standards and instruments

Division 5.3 Priority of assets

19 Application of Financial Institutions Codes to FIC bodies in liquidation

Division 5.4 Enforcement action

20 APRA may take enforcement action

21 Action taken to be done by APRA

22 Continued effect of appointment as administrator (La Trobe Country Credit Cooperative Ltd)

23 Continued effect of certain instruments and actions

Division 5.5 Unclaimed moneys and operation of accounts

24 Definition for Division 5.5

25 Application of Banking Act 1959 to transfer to account

26 Application of Banking Act 1959 to transfer from account

27 Application of Banking Act 1959 to date of transfer of money to another account

Part 6 Transitional provisions relating to the application of the Financial Sector (Shareholdings) Act 1998

28 Definitions for Part 6

29 Stake in transferring body exceeding 15% on transfer day as a result of interests of associates

30 Stake in transferring body exceeding 15% after transfer day as a result of circumstances outside stakeholder’s control

31 National Mutual Health Insurance Pty Ltd’s shares in Territory Mutual Building Society Limited

Part 7 Transitional provisions relating to the application of the Life Insurance Act 1995

Division 7.1 Friendly societies taken to have been registered

32 Friendly societies taken to have been granted registration under section 21 of the Life Insurance Act 1995

Division 7.2 Continued effect of certain standards in force for friendly societies on the transfer date

33 Continued effect of certain prudential standards for friendly societies

34 Interpretation of continued prudential standards

Division 7.3 Matters in progress on the transfer date

35 Applications for registration

36 Applications for approval to establish a benefit fund

37 Applications for approval of amendments of benefit fund rules

38 Additional information

39 Approval of consequential amendments of company’s constitution

40 Continued application of Friendly Societies Code for certain amendments

Division 7.4 Enforcement action in relation to friendly societies

41 Definitions for Division 7.4

42 Continued effect of applied enforcement provisions of AFIC Codes and Friendly Society Codes

43 Investigations of business of friendly societies

44 Action for breach of AFIC Code, Friendly Societies Code or Life Insurance Act 1995

45 Continued effect of directions to friendly society under section 44 or 45 of Friendly Societies Code

46 Continued effect of administration of friendly society under Part 2 of Friendly Societies Code

Schedule 1 Transitional prudential standards administered by APRA

Notes

Part 1 Preliminary

1 Name of regulations [see Note 1]

These regulations are the Financial Sector Reform (Amendments and Transitional Provisions) Regulations 1999.

2 Commencement [see Note 1]

These regulations commence as follows:

(a) on gazettal — Parts 1 and 2;

(b) on the commencement of Schedule 4 to the Financial Sector Reform (Amendments and Transitional Provisions) Act (No. 1) 1999 — the remainder.

3 Definitions

In these regulations:

Act means the Financial Sector Reform (Amendments and Transitional Provisions) Act (No. 1) 1999.

AFIC means the Australian Financial Institutions Commission.

AFIC Code has the meaning given by item 1 of Schedule 8 to the Act.

APRA means the Australian Prudential Regulation Authority.

ASIC means the Australian Securities and Investments Commission.

authorised deposit-taking institution, or ADI, has the meaning given by section 5 of the Banking Act 1959.

FIC body has the meaning given by item 1 of Schedule 8 to the Act.

Financial Institutions Code has the meaning given by item 1 of Schedule 8 to the Act.

Friendly Societies Code has the meaning given by item 1 of Schedule 8 to the Act.

friendly society has the meaning given by item 1 of Schedule 8 to the Act.

FSR (State or Territory) Act means any of the following Acts of a State or Territory:

(a) the Financial Sector Reform (New South Wales) Act 1999 of New South Wales;

(b) the Financial Sector Reform (Victoria) Act 1999 of Victoria;

(d) the Acts Amendment and Repeal (Financial Sector Reform) Act 1999 of Western Australia;

(e) the Financial Sector Reform (South Australia) Act 1999 of South Australia;

(f) the Financial Sector Reform (Tasmania) Act 1999 of Tasmania;

(g) the Financial Sector Reform (ACT) Act 1999 of the Australian Capital Territory;

(h) the Financial Sector Reform (Northern Territory) Act 1999 of the Northern Territory.

replaced legislation has the meaning given by subitem 22 (7) of Schedule 8 to the Act.

SSA has the meaning given by item 1 of Schedule 8 to the Act.

transferring friendly society has the meaning given by item 10 of Schedule 8 to the Act.

Note Transfer date is defined in section 2 of the Act as the date that is, by Proclamation made by the Governor-General under subsection 3 (16) of the Act, specified as the transfer date for the purposes of the Act.

4 Purpose of these regulations

For Schedule 8 to the Act, these regulations deal with matters of a transitional, saving or application nature relating to:

(a) the transition from the application of provisions of the replaced legislation to the application of provisions of the Banking Act 1959, the Life Insurance Act 1995, the Financial Sector (Transfers of Business) Act 1999, the Financial Sector (Shareholdings) Act 1998 and the Australian Prudential Regulation Authority Act 1998; and

(b) the amendments and repeals made by the Schedules to the Act.

Part 2 Transitional provision for protection of information given to APRA or ASIC

5 Protection of information given to APRA or ASIC

(1) This regulation applies to information that:

(a) on or after 9 June 1999, is given to APRA or ASIC by a State or Territory body for a temporary period, or permanently under a transfer agreement, for the purposes of the transition, for a transferring body, from the application of the provisions of the replaced legislation to the application of the provisions of the Banking Act 1959, the Life Insurance Act 1995, the Financial Sector (Transfers of Business) Act 1999, the Financial Sector (Shareholdings) Act 1998 or the Australian Prudential Regulation Authority Act 1998; and

(b) immediately before being so given, was:

(i) a protected document or protected information within the meaning of section 155 of an AFIC Code, Division 4 of Part 14 of a Financial Institutions Code, or Division 4 of Part 14 of a Friendly Societies Code; or

(ii) information held by AFIC, or an SSA, that was not otherwise publicly available.

(2) If the information is given to, or copied by, APRA, it is to be treated as being, and as having been since it was given to APRA, a protected document or protected information within the meaning of Part 6 of the Australian Prudential Regulation Authority Act 1998 for the period in which APRA holds the information or the copy.

(3) If the information is given to, or copied by, ASIC, it is to be treated as being, and as having been since it was given to ASIC, protected information within the meaning of Division 2 of Part 7 of the Australian Securities and Investments Commission Act 1989 for the period in which ASIC holds the information or the copy.

(4) In this regulation:

information includes documents or records.

transfer agreement has the meaning given by item 1 of Schedule 8 to the Act.

transferring body has the meaning given by item 1 of Schedule 8 to the Act.

Part 3 Transitional provisions relating to certain instruments in force on the transfer date

Division 3.1 Instruments under a Friendly Societies Code or AFIC Code

6 Continued effect of certain instruments relating to transferring friendly societies

(1) This regulation applies to the following instruments made by an SSA under a Friendly Societies Code:

(a) an instrument under subsection 29 (1) that extends, to 31 December 1999, the time within which to comply with Prudential Standard 6.2 issued by AFIC under Part 4 of an AFIC Code;

(b) a notice given to a society under subsection 326 (4) directing it to comply with subsection 326 (1) (relating to the financial year of the society);

(2) This regulation also applies to an exemption from the asset concentration component given under paragraph 6.2.3e of Prudential Standard 6.2.3, issued by AFIC under Part 4 of an AFIC Code.

(3) If, immediately before the transfer date, an instrument to which this regulation applies had effect in relation to a friendly society that is a transferring friendly society, the instrument continues to have effect in relation to the society after the transfer date.

(4) A reference to AFIC or an SSA in the instrument is to be read as if it were a reference to APRA.

(5) A reference to Prudential Standard 6.2 in an instrument mentioned in paragraph (1) (a) is to be read as if it were a reference to the following actuarial standards made under section 101 of the Life Insurance Act 1995:

(a) ASFS2.01 (Friendly Society Solvency Standard);

(b) ASFS6.01 (Friendly Society Management Capital Standard).

(6) A reference to Prudential Standard 6.2.3 in an exemption mentioned in subregulation (2) is to be read as if it were a reference to actuarial standard ASFS2.01 (Friendly Society Solvency Standard) made under section 101 of the Life Insurance Act 1995.

(7) APRA may, in writing, vary, revoke or modify the instrument.

Division 3.2 Instruments for which no other arrangements are in force on the transfer date

7 Definition for Division 3.2

In this Division:

transferring body means a body (other than a transferring friendly society) that, by item 3 of Schedule 4 to the Corporations Law, is taken to become registered as a company under that Law on the transfer date.

8 Continued effect of certain instruments made under replaced legislation

(1) This regulation applies to an instrument:

(a) that was made by AFIC or an SSA under a provision of the replaced legislation; and

(b) that was in force immediately before the transfer date; and

(c) for which there is no provision of a transitional, saving or application nature in force on the transfer date in any of the following:

(i) the Act;

(ii) another Act (including an Act that is amended or modified by this Act);

(iii) any regulation other than this regulation;

(iv) any other instrument made under the Act.

(2) If the instrument relates to a matter for which APRA has responsibility, APRA may make either or both of the following determinations, in writing:

(a) a determination that the instrument has had effect, between the transfer date and the date of the determination, in relation to any of the following:

(i) a transferring body;

(ii) a class of transferring body;

(iii) a specified act or transaction;

(b) a determination that the instrument continues to have effect, on and after the date of the determination, in relation to any of the matters in paragraph (a).

(3) The determination may:

(a) set out modifications subject to which the instrument is to continue to have effect; and

(b) continue the instrument in effect for a period ending not more than 18 months after the transfer date.

(4) APRA must not make a determination under subregulation (2) more than 18 months after the transfer date.

(5) If a determination made by APRA would also relate to a matter for which ASIC has responsibility, APRA must consult with ASIC before making the determination.

(6) A failure to comply with subregulation (5) does not affect the validity or operation of a determination made by APRA.

Part 4 Transitional provision relating to transfers of engagements and mergers

9 Completion of transfers of engagements and mergers commenced before the transfer date

The following Acts are prescribed for subitem 19 (2) of Schedule 8 to the Act:

(a) the Financial Sector (Transfers of Business) Act 1999;

(b) the Insurance Acquisitions and Takeovers Act 1991.

Part 5 Transitional provisions relating to the application of the Banking Act 1959

Division 5.1 Continuing applications for registration under a Financial Institutions Code

10 Treatment of undetermined applications under a Financial Institutions Code

(1) This regulation applies to an application for registration as a society, under section 115 of a Financial Institutions Code, if the application was:

(a) made by a proposed society formed under section 114 of a Financial Institutions Code; and

(b) not determined before the transfer date.

(2) This regulation also applies to an application for the registration of a building society, under section 115B of a Financial Institutions Code, if the application was not determined before the transfer date.

(3) The application is to be treated, on and after the transfer
date, as if it were an application for an authority under subsection 9 (2) of the Banking Act 1959.

(4) APRA may, by notice in writing given to the applicant for registration, request additional information to assist it in determining the application.

(5) APRA is not required to determine the application before it receives the information requested under subregulation (4).

Division 5.2 Prudential standards

11 Definitions for Division 5.2

In this Division:

APRA transitional prudential standard means a provision to which regulation 12 applies.

ASIC transitional standard has the meaning given by Schedule 12 to the Corporations Regulations 1990.

excluded standard means a provision of the Prudential Notes and Prudential Standards, issued by AFIC under Part 4 of an AFIC Code, that is not an APRA transitional prudential standard or an ASIC transitional standard.

transferring financial institution of this jurisdiction has the meaning given by Part 1 of Schedule 4 to the Corporations Law.

12 APRA transitional prudential standards

Each provision set out in Schedule 1 is an APRA transitional prudential standard that is to be administered by APRA.

Note Some of the provisions are also administered by ASIC under the Corporations Regulations 1990.

13 Application of APRA transitional prudential standards

(1) This regulation applies if:

(a) immediately before the transfer date:

(i) a body was an FIC body; and

(ii) a provision mentioned in Schedule 1 had effect in relation to the FIC body; and

(b) on the transfer date, the body becomes an ADI.

(2) The provision continues to have effect in relation to the ADI, after the transfer date, as an APRA transitional prudential standard.

13A Application of APRA transitional prudential standards to the Cairns Penny Bank Limited

The provisions mentioned in items 2, 4, 6 and 7 of Schedule 1 have effect, in relation to the Cairns Penny Bank Limited, as APRA transitional prudential standards.

Note The Cairns Penny Bank Limited was formerly known as the Cairns Cooperative Weekly Penny Savings Bank Limited, and is described in that way in the Act.

14 Application of instruments under APRA transitional prudential standards

(1) This regulation applies if:

(a) immediately before the transfer date:

(i) a body was an FIC body; and

(ii) a provision had effect in relation to the FIC body; and

(iii) an instrument made by AFIC or an SSA under the provision was in force; and

(b) on the transfer date:

(i) the body becomes an ADI; and

(ii) the provision becomes an APRA transitional prudential standard.

Examples of instruments

An approval, determination, direction, exemption or notice.

(2) The instrument has effect in relation to the ADI, after the transfer date, as if it were an instrument made by APRA under the APRA transitional prudential standard.

14A Application of APRA transitional prudential standards to the Cairns Penny Bank Limited

(1) This regulation applies if, immediately before the transfer date:

(a) a provision had effect in relation to the Cairns Penny Bank Limited; and

(b) an instrument made by AFIC or an SSA under the provision was in force; and

Examples of instruments
An approval, determination, direction, exemption or notice.

(2) The instrument has effect in relation to the Cairns Penny Bank Limited, after the transfer date, as if it were an instrument made by APRA under the APRA transitional prudential standard.

Note The Cairns Penny Bank Limited was formerly known as the Cairns Cooperative Weekly Penny Savings Bank Limited, and is described in that way in the Act.

15 Interpretation of APRA transitional prudential standards and instruments

(1) This regulation applies to an APRA transitional prudential standard, or an instrument to which regulation 14 or 14A applies, that refers to any of the following:

(a) AFIC or an SSA;

(b) a power exercised by AFIC or an SSA;

(d) the Financial Institutions Code, a provision of that Code, or a provision of an instrument that was made under a provision of that Code.

(2) A reference to AFIC or an SSA is to be read as if it were a reference to APRA.

(3) A reference to a power exercised by AFIC or an SSA is to be read as if it were a reference to a power exercised by APRA under the APRA transitional prudential standard, the Act, or another law of the Commonwealth that is equivalent to the power.

(4) A reference to any other matter mentioned in subregulation (1) is to be read in a way that:

(a) is consistent with, and promotes, the transitional arrangements made by the Act and these regulations; and

(b) is consistent with APRA’s powers, functions and responsibilities; and

16 Variation, revocation and modification of APRA transitional prudential standards and instruments

(1) APRA may, in writing, vary, revoke or modify:

(a) an APRA transitional prudential standard; or

(b) the application of an APRA transitional prudential standard; or

(2) However, APRA must act in the way described in subsections 11AF (4) to (6A) (inclusive) of the Banking Act 1959 if it proposes to vary, revoke or modify:

(a) an APRA transitional prudential standard; or

(b) the application of an APRA transitional prudential standard.

(3) Also, APRA must consult with ASIC before taking any action to vary, revoke or modify:

(a) a standard that is also an ASIC transitional standard; or

(b) the application of a standard that is also an ASIC transitional standard; or

(4) A failure to comply with subregulation (2) or (3) does not affect the validity of APRA’s action.

17 Relationship between APRA transitional prudential standards and the Banking Act 1959

For Division 1A, and Subdivision A of Division 1BA, of Part II of the Banking Act 1959, APRA may deal with an APRA transitional prudential standard as if it were a prudential standard made under section 11AF of that Act.

18 Inspection and purchase of APRA transitional prudential standards and instruments

(1) APRA must take reasonable steps to ensure that copies of the current text of APRA transitional prudential standards are available for inspection and purchase.

(2) APRA must take reasonable steps to ensure that copies of instruments to which regulation 14 or 14A applies are available for inspection and purchase.

(3) A failure to comply with subregulation (1) or (2) does not affect the validity or operation of an APRA transitional prudential standard or an instrument.

Division 5.3 Priority of assets

19 Application of Financial Institutions Codes to FIC bodies in liquidation

(1) This regulation applies to:

(a) an FIC body for which the appointment of a liquidator was in force immediately before the transfer date; and

(b) the liquidator’s appointment.

(2) The arrangements in subsection 13A (3) of the Banking
Act 1959 relating to the priority of assets do not apply to the liquidation of the FIC body.

(3) APRA is authorised to terminate the liquidator’s appointment, in addition to any other person who is authorised by the Financial Institutions Code to terminate the appointment.

(4) However, APRA must terminate the appointment in the way described in the Financial Institutions Code.

Division 5.4 Enforcement action

20 APRA may take enforcement action

(1) This regulation applies in relation to a function or power that was performed or exercised by AFIC, or by an SSA, under:

(a) section 50 or 53 of an AFIC Code; or

(b) section 77 of a Financial Institutions Code.

(2) If the provision is section 50 of an AFIC Code, APRA may apply to revoke or vary an injunction that had been granted on application under that section as if the section continued in force after the transfer date.

(3) If the provision is section 53 of an AFIC Code, or section 77 of a Financial Institutions Code, APRA may, by instrument:

(a) revoke the appointment of a person appointed as an inspector under the section; or

(b) confer on the person a function or power conferred by subsection 13 (4) or section 13A, 13B or 61 of the Banking Act 1959 on a person who is appointed as an investigator under subsection 13 (4) or section 13A or 61 of that Act.

(4) A function or power mentioned in paragraph (3) (b) is in addition to any function or power conferred on the person by the Act that repeals an AFIC Code or Financial Institutions Code.

(5) An instrument under subregulation (3) takes effect:

(a) when the person to whom the instrument applies is:

(i) given the instrument; or

(ii) otherwise told of the effect of the instrument by APRA for the purposes of subregulation (3); or

(b) on a later day:

(i) stated in the instrument; or

(ii) of which the person is otherwise told by APRA for the purposes of subregulation (3).

21 Action taken to be done by APRA

(1) This regulation applies if:

(a) AFIC or an SSA requested information from a person under:

(i) section 51 of an AFIC Code; or

(ii) section 75 of a Financial Institutions Code; and

(b) the person did not comply with the request before the transfer date.

(2) The request for information is taken to be a request made by APRA under section 62 of the Banking Act 1959.

22 Continued effect of appointment as administrator (La Trobe Country Credit Cooperative Ltd)

If the appointment of a person as the administrator of the
La Trobe Country Credit Cooperative Ltd was in force immediately before the transfer date, the appointment is taken to be an appointment of the person under subsection 13A (1) of the Banking Act 1959.

23 Continued effect of certain instruments and actions

(1) This regulation applies:

(a) if:

(i) an instrument was made under a provision of a Financial Institutions Code; and

(ii) the instrument had not been revoked before the transfer date; or

(b) if something else was done before the transfer date under a provision of an AFIC Code or a Financial Institutions Code.

(2) If the provision is section 52 of an AFIC Code, or section 76 of a Financial Institutions Code, evidence obtained under that section is to be treated as if it had been obtained for the purposes of the Banking Act 1959 or the relevant Code.

(3) If the provision is section 88 or 89 of a Financial Institutions Code, a direction given under that section is taken to have been given under section 11CA of the Banking Act 1959.

(4) If the provision is section 90 of a Financial Institutions Code (relating to the appointment of a person as the administrator in relation to a society under that section), the appointment is taken to be an appointment of the person under subsection 13A (1) of the Banking Act 1959 in relation to the same body.

(5) If the provision is section 348 of a Financial Institutions Code (relating to the appointment of a person as a special investigator in relation to a society), the appointment is taken to be an appointment of the person under section 61 of the Banking Act 1959 in relation to the same body.

Division 5.5 Unclaimed moneys and operation of accounts

24 Definition for Division 5.5

In this Division:

society has the meaning given by a Financial Institutions Code.

25 Application of Banking Act 1959 to transfer to account

(1) This regulation applies to:

(a) a transfer of money by a society, from a person’s deposit account with the society to another account, under paragraph 138A (4) (c) of a Financial Institutions Code; and

(b) the meaning of unclaimed moneys in subsection 69 (1) of the Banking Act 1959.

(2) However, this regulation does not apply to a transfer of money if, on the transfer date, the society that transferred the money is being wound up for section 340 of the Financial Institutions Code.

(3) The transfer is taken not to be a withdrawal from the account for subsection 69 (1) of the Banking Act 1959.

(4) The debiting of a fee or charge to the account, or to another account, in relation to the transfer, is taken not to be a withdrawal from the account.

(5) The crediting to the account, or to another account, of interest payable in the account, in relation to the transfer, is taken not to be a deposit.

(6) The outcome of the transfer is that the account to which the transfer relates is to be taken not to have been operated on.

26 Application of Banking Act 1959 to transfer from account

(1) This regulation applies to:

(a) a transfer of money to a deposit account that is taken to have happened under:

(i) subsection 70 (2) of the Financial Sector Reform (Queensland) Act 1999 of Queensland; or

(ii) a similar provision of the FSR (State or Territory) Act of another State or Territory; and

(b) the meaning of unclaimed moneys in subsection 69 (1) of the Banking Act 1959.

(3) The transfer is taken not to be a deposit to the account for subsection 69 (1) of the Banking Act 1959.

(4) The debiting of a fee or charge to the account, or to another account, in relation to the transfer, is taken not to be a withdrawal.

(5) The crediting to the account, or to another account, of interest payable in the account, in relation to the transfer, is taken not to be a deposit.

(6) The outcome of the transfer is that the deposit account is to be taken not to have been operated on.

27 Application of Banking Act 1959 to date of transfer of money to another account

(1) This regulation applies if:

(a) money has been transferred on a particular date (the date of transfer to another account) by a society from a person’s deposit account with the society to another account, under paragraph 138A (4) (c) of a Financial Institutions Code; and

(b) the society had not retained (or it is not practicable for the society to recover) records of transactions that:

(i) relate to the person’s account; and

(ii) occurred before the date of the transfer to another account.

(3) The period of 7 years mentioned in subsection 69 (1) of the Banking Act 1959 is taken to commence on the date of transfer to another account.

Part 6 Transitional provisions relating to the application of the Financial Sector (Shareholdings) Act 1998

28 Definitions for Part 6

In this Part:

stake, in relation to a transferring financial sector company, has the meaning given by clause 10 of Schedule 1 to the Financial Sector (Shareholdings) Act 1998.

transferring financial sector company has the meaning given by subsection 48 (6) of the Financial Sector (Shareholdings) Act 1998.

29 Stake in transferring body exceeding 15% on transfer day as a result of interests of associates

(1) This regulation applies in relation to a particular person and a particular transferring financial sector company if subregulation (2) or (3) applies to the person and the company.

(2) This subregulation applies to a particular person and a particular transferring financial sector company if:

(a) immediately before the transfer date, the person held a stake in the company of 15% or less; and

(b) the holding of that stake did not, to any extent, involve a contravention of a provision of the replaced legislation; and

(c) on the transfer date, as a consequence of the operation of the definition of associate in clause 4 of Schedule 1 to the Financial Sector (Shareholdings) Act 1998, the person holds a stake in the company of more than 15%.

(3) This subregulation applies to a particular person and a particular transferring financial sector company if, on the transfer date:

(a) the Treasurer is taken, under subsection 48 (2) of the Financial Sector (Shareholdings) Act 1998, to have approved the person holding a stake in the company of more than 15%; and

(b) as a consequence of the operation of the definition of associate in clause 4 of Schedule 1 to the Financial Sector (Shareholdings) Act 1998, the person holds a stake in the company of more than that higher percentage.

(4) The Treasurer is taken, on the transfer date, by written notice under section 14 of the Financial Sector (Shareholdings)
Act 1998, to have approved the person holding the same percentage stake in the company.

(5) The approval is taken to specify the period of 18 months starting on the transfer date as the period during which it remains in force.

(6) An approval taken by subregulation (4) to have been granted by the Treasurer may be dealt with under the Financial Sector (Shareholdings) Act 1998 as if it had actually been granted under section 14 of that Act. However, subsections 14 (2) and (4) of that Act do not apply to the approval.

(7) For the purposes of this regulation, Part 1 and Schedule 1 of the Financial Sector (Shareholdings) Act 1998 are taken to have been applicable to transferring financial sector companies immediately before the transfer date.

(8) For the purposes of this regulation, a transferring financial sector company that is, on the transfer date:

(a) an authorised deposit-taking institution; or

(b) a company registered under the Life Insurance Act 1995;

is taken to have been a body of that kind immediately before the transfer date.

30 Stake in transferring body exceeding 15% after transfer day as a result of circumstances outside stakeholder’s control

(1) This regulation applies in relation to a particular person and a particular transferring financial sector company if:

(a) at any time on or after the transfer date, the person’s stake in the company changes as a consequence of circumstances outside the person’s control (for example, because of the withdrawal of funds from the company by other stakeholders); and

(b) the change results in the person holding a stake in the company of more than:

(i) 15%; or

(ii) if the Treasurer is taken, under subsection 48 (2) of the Financial Sector (Shareholdings) Act 1998 or subregulation 29 (4), to have approved the person holding a higher percentage stake in the company — that higher percentage.

(2) The Treasurer is taken, on the date when the change in the person’s stake takes place, by written notice under section 14 of the Financial Sector (Shareholdings) Act 1998, to have approved the person holding the same percentage stake in the company.

(3) The approval is taken to specify the period starting on the date when the change in the person’s stake takes place and ending at the end of 18 months after the transfer date as the period during which it remains in force.

(4) An approval taken by subregulation (2) to have been granted by the Treasurer may be dealt with under the Financial Sector (Shareholdings) Act 1998 as if it had actually been granted under section 14 of that Act. However, subsections 14 (2) and (4) of that Act do not apply to the approval.

31 National Mutual Health Insurance Pty Ltd’s shares in Territory Mutual Building Society Limited

(1) This regulation applies to the shares held by National Mutual Health Insurance Pty Ltd in Territory Mutual Building Society Limited immediately before the transfer date.

(2) The shares are not a stake for the Financial Sector (Shareholdings) Act 1998.

(3) Subregulation (2) ceases to apply if National Mutual Health Insurance Pty Ltd ceases to comply with the conditions mentioned in Schedule D to the notice of exemption dated 26 May 1998 relating to National Mutual Health Insurance Pty Ltd, made under section 199 of the Financial Institutions (NT) Code of the Northern Territory, as in force immediately before the transfer date.

(4) For the purposes of subregulation (3), a reference to the Registrar in Schedule D of the notice of exemption mentioned in that subregulation is to be read as if it were a reference to the Treasurer.

(5) This regulation ceases to apply at the end of 26 May 2008.

Part 7 Transitional provisions relating to the application of the Life Insurance Act 1995

Division 7.1 Friendly societies taken to have been registered

32 Friendly societies taken to have been granted registration under section 21 of the Life Insurance Act 1995

For paragraph 11 (1) (d) of Schedule 8 to the Act, a company that is, immediately before the transfer date, a society for any of the following Codes is specified:

(a) the Friendly Societies (New South Wales) Code;

(b) the Friendly Societies (Victoria) Code;

(d) the Friendly Societies (Western Australia) Code;

(e) the Friendly Societies (South Australia) Code;

(f) the Friendly Societies (Tasmania) Code;

(g) the Friendly Societies (NT) Code.

Division 7.2 Continued effect of certain standards in force for friendly societies on the transfer date

33 Continued effect of certain prudential standards for friendly societies

(1) This regulation applies to the following prudential standards for friendly societies, as in force under section 28 of the AFIC Code immediately before the transfer date:

(a) Prudential Standard 6.1 (relating to risk management);

(b) Prudential Standard 6.3C (relating to audit);

(d) Prudential Standard 6.4C (relating to guarantees);

(e) Prudential Standard 6.4D (relating to service contracts);

(f) Prudential Standard 6.4E (relating to overseas trading);

(g) Prudential Standard 6.7 (relating to non-benefit fund based funds management and associated market activities).

(2) Each prudential standard continues to have effect for the purpose of the provisions of the Life Insurance Act 1995 applying to friendly societies.

34 Interpretation of continued prudential standards

(1) This regulation applies if a prudential standard to which regulation 33 applies refers to any of the following:

(a) AFIC or an SSA;

(b) a power exercised by AFIC or an SSA;

(d) the Friendly Societies Code, a provision of that Code, or a provision of an instrument that was made under a provision of that Code.

(2) A reference to AFIC or an SSA is to be read as if it were a reference to APRA.

(3) A reference to a power exercised by AFIC or an SSA is to be read as if it were a reference to a power exercised by APRA under the prudential standard, the Act, or another law of the Commonwealth that is equivalent to the power.

(4) A reference to any other matter mentioned in subregulation (1) is to be read in a way that:

(a) is consistent with, and promotes, the transitional arrangements made by the Act and these regulations; and

(b) is consistent with APRA’s powers, functions and responsibilities; and

Division 7.3 Matters in progress on the transfer date

35 Applications for registration

(1) This regulation applies to an application for registration as a society, under section 60 of a Friendly Societies Code, that was not determined before the transfer date.

(2) The application is to be treated, on and after the transfer date, as if it were an application for registration under section 20 of the Life Insurance Act 1995.

36 Applications for approval to establish a benefit fund

(1) This regulation applies if:

(a) a friendly society made an application for approval to establish a benefit fund under section 98 of a Friendly Societies Code before the transfer date; and

(b) the application was not determined before the transfer date; and

(2) The application is to be treated, on and after the transfer date, as if it were an application for approval of benefit fund rules under section 16L of the Life Insurance Act 1995.

37 Applications for approval of amendments of benefit fund rules

(1) This regulation applies if:

(a) a friendly society made an application for registration of an amendment of its benefit fund rules under section 74 of a Friendly Societies Code before the transfer date; and

(b) the application was not determined before the transfer date; and

(2) The application is to be treated, on and after the transfer date, as if it were an application for approval of an amendment of approved benefit fund rules under section 16Q of the Life Insurance Act 1995.

Note If, before the transfer date:

Note: (a) a special resolution mentioned in section 72, or a resolution mentioned in section 73, of a Friendly Societies Code has been passed approving amendments of a society’s rules; but

Note: (b) the society has not applied to the relevant SSA for registration of the amendments;

Note: the society may apply under section 16L or 16Q of the Life Insurance Act 1995, as appropriate, for approval of the proposed amendments. However, unless APRA requires it, the resolution would not need to be passed again.

38 Additional information

(1) For an application mentioned in subregulation 35 (2), 36 (2) or 37 (2), APRA may, by notice in writing given to the applicant, request additional information:

(a) to ensure that the application complies with the appropriate legislation; or

(b) to assist APRA in determining the application.

(2) APRA is not required to determine the application before it receives the information requested under subregulation (1).

39 Approval of consequential amendments of company’s constitution

Section 16U of the Life Insurance Act 1995 applies to an application mentioned in regulation 36 or 37.

Note Section 16U of the Life Insurance Act 1995 provides that an application under section 16L or 16Q of that Act may also include an application for approval of consequential amendments of the company’s constitution.

40 Continued application of Friendly Societies Code for certain amendments

(1) This regulation applies to a transferring friendly society if:

(a) its rules were amended under section 73 of a Friendly Societies Code before the transfer date; and

(b) the amendments were registered by the relevant SSA under section 74 of the Code before the transfer date; and

(2) Subsection 73 (2) of the Code continues to apply to the society after the transfer date for the purpose of the amendments of those rules.

Division 7.4 Enforcement action in relation to friendly societies

41 Definitions for Division 7.4

In this Division:

enforcement action, in relation to a friendly society, includes conducting an investigation of the business of the friendly society.

health insurance business has the meaning given by section 67 of the National Health Act 1953.

jointly regulated friendly society has the meaning given by subsection 16ZB (2) of the Life Insurance Act 1995.

life insurance business has the meaning given by section 11 of the Life Insurance Act 1995.

42 Continued effect of applied enforcement provisions of AFIC Codes and Friendly Society Codes

(1) This regulation applies if:

(a) immediately before the transfer date, AFIC, or an SSA, was taking enforcement action in relation to a friendly society under:

(i) Part 8 of an AFIC Code; or

(ii) Subdivision 2 of Division 2 of Part 2 of a Friendly Societies Code; and

(b) on the transfer date, the enforcement action had not been completed; and

(2) On or after the transfer date:

(a) APRA is to perform any function, or exercise any power, in relation to the enforcement action in accordance with the applied enforcement provisions of the relevant Code; and

(b) to the extent that the provisions in Divisions 1, 2 and 3 of Part 7 of the Life Insurance Act 1995 differ from the applied enforcement provisions of the relevant Code, APRA may perform any function, or exercise any power, in relation to the enforcement action in accordance with those provisions of the Life Insurance Act 1995.

(3) In this regulation:

applied enforcement provisions means:

(a) for the AFIC Code of a particular State or Territory — Part 8 of the Code (other than sections 50, 51, 55 and 58) and the other provisions of the Code relevant to Part 8, as applied under the FSR (State or Territory) Act of that State or Territory on and after the transfer date in relation to anything done or omitted to be done before that date as if the Code had not been repealed; and

(b) for the Friendly Societies Code of a particular State (other than Queensland) or the Northern Territory — Subdivision 2 of Division 2 of Part 2 of the Code (other than sections 31, 35 and 38), Divisions 3 and 4 of Part 4A of the Code, Part 10 of the Code, sections 460, 465, 466 and 471 of the Code, and the other provisions of the Code relevant to those provisions, as applied under the FSR (State or Territory) Act of that State or the Northern Territory on and after the transfer date in relation to anything done or omitted to be done before that date as if the Code had not been repealed; and

(c) for the Friendly Societies (Queensland) Code of Queensland — Subdivision 2 of Division 2 of Part 2 of the Code (other than sections 31, 35 and 38), Part 10 of the Code, sections 460, 465, 466 and 471 of the Code, and the other provisions of the Code relevant to those provisions, as applied under the Financial Sector Reform (Queensland) Act 1999 of Queensland on and after the transfer date in relation to anything done or omitted to be done before that date as if the Code had not been repealed.

43 Investigations of business of friendly societies

(1) This regulation applies in relation to an investigation of the business of a friendly society if:

(a) subregulation (2) or (3) applies in relation to the investigation; and

(b) the friendly society is a transferring friendly society.

(2) This subregulation applies in relation to an investigation of a friendly society if:

(a) immediately before the transfer date, AFIC, or an SSA, was conducting an investigation of the business of the friendly society under an AFIC Code or a Friendly Societies Code; and

(b) on or after the transfer date, APRA continues the investigation in accordance with subregulation 42 (2).

(3) This subregulation applies in relation to an investigation of a friendly society if, immediately before the transfer date, AFIC or an SSA:

(a) had completed an investigation of the business of the friendly society under an AFIC Code or a Friendly Societies Code; and

(b) had taken no further action in relation to the findings of the investigation.

(4) The investigation of the friendly society is taken to have been conducted under Division 3 of Part 7 of the Life Insurance Act 1995.

Note The investigation will therefore be an investigation for the purposes of section 158 of the Life Insurance Act 1995 (which relates to the Court’s power to order that a friendly society, or part of the business of a friendly society, be placed under judicial management) and section 181 of that Act (which relates to APRA’s power to apply to the Court for an order that a friendly society be wound up).

44 Action for breach of AFIC Code, Friendly Societies Code or Life Insurance Act 1995

(1) This regulation applies in relation to a friendly society if:

(a) immediately before the transfer date, AFIC, or an SSA, was taking enforcement action in relation to the friendly society under an AFIC Code or a Friendly Societies Code; and

(b) on or after the transfer date, APRA continues the enforcement action in accordance with subregulation 42 (2); and

(2) If:

(a) the findings of the enforcement action include a finding that, before the transfer date, the friendly society had committed an offence against a provision of the relevant AFIC Code or Friendly Societies Code; and

(b) APRA decides to take action in relation to the offence;

APRA is to take the action in accordance with the applied enforcement provisions of the relevant Code that relate to the offence.

Note The provisions of the Life Insurance Act 1995 apply in relation to any offence committed on or after the transfer date by a friendly society. If the friendly society is a jointly regulated friendly society, the provisions of the Life Insurance Act 1995 apply in relation to the offence to the extent that it relates to the society’s life insurance business, and the provisions of the National Health Act 1953 apply in relation to the offence to the extent that it relates to the society’s health insurance business.

45 Continued effect of directions to friendly society under section 44 or 45 of Friendly Societies Code

(1) This regulation applies if:

(a) immediately before the transfer date, a direction given to a friendly society by an SSA was in force under section 44 or 45 of a Friendly Societies Code; and

(b) the friendly society is a transferring friendly society.

(2) The direction continues to have effect on and after the transfer date as if it were a direction given to the friendly society by APRA under section 230B of the Life Insurance Act 1995.

46 Continued effect of administration of friendly society under Part 2 of Friendly Societies Code

(1) This regulation applies if:

(a) immediately before the transfer date, the affairs of a friendly society were being conducted by an administrator appointed under Subdivision 6 of Division 2 of Part 2 of a Friendly Societies Code; and

(b) the friendly society is a transferring friendly society.

(2) The administrator is to continue, on and after the transfer date, to conduct the affairs of the friendly society in accordance with Subdivision 6 of Division 2 of Part 2 of the relevant Friendly Societies Code, as in force immediately before the transfer date.

(3) However, if the Court makes an order under section 158 of the Life Insurance Act 1995 that the friendly society be placed under judicial management under that Act, the administrator is to cease to conduct the affairs of the friendly society on the day when the judicial management commences.

(4) For the purposes of subregulation (2), a reference in Subdivision 6 of Division 2 of Part 2 of a Friendly Societies Code to an SSA is to be read as if it were a reference to APRA.

(5) If the administrator:

(a) continues to conduct the affairs of the friendly society under Subdivision 6 of Division 2 of Part 2 of a Friendly Society Code in accordance with subregulation (2); and

(b) gives a report to APRA recommending that the friendly society be wound up;

the report is to be treated as if it were a report under section 175 of the Life Insurance Act 1995.

Schedule 1 Transitional prudential standards administered by APRA

(regulation 12)

1. The following provisions of Book 3 of the Prudential Notes and Prudential Standards issued by AFIC under Part 4 of an AFIC Code, as in force immediately before the transfer date:

(a) Prudential Note 3.1;

(b) Prudential Standards 3.1.1 to 3.1.6 (inclusive);

(d) Prudential Standards 3.2.1 to 3.2.8 (inclusive);

(e) Prudential Notes 3.3B and 3.3C;

(f) Paragraphs 3.3.2a and 3.3.2b of Prudential Standard 3.3.2;

(g) Prudential Standard 3.3.5, other than subparagraph 3.3.5a (ii);

(h) Prudential Standard 3.3.6;

(i) Prudential Notes 3.4A, 3.4C and 3.4E;

(j) Prudential Standards 3.4.1, 3.4.3 and 3.4.5;

(k) Prudential Note 3.6;

(l) Prudential Standards 3.6.1 to 3.6.7 (inclusive);

(m) Prudential Note 3.7;

(n) Prudential Standards 3.7.1 to 3.7.7 (inclusive).

2. The following provisions of Book 4 of the Prudential Notes and Prudential Standards issued by AFIC under Part 4 of an AFIC Code, as in force immediately before the transfer date:

(a) Prudential Note 4.1;

(b) Prudential Standards 4.1.1 to 4.1.6 (inclusive);

(d) Prudential Standards 4.2.1 to 4.2.8 (inclusive);

(e) Prudential Notes 4.3B and 4.3C;

(f) Paragraphs 4.3.2a and 4.3.2b of Prudential Standard 4.3.2;

(g) Prudential Standard 4.3.5, other than subparagraph 4.3.5a (ii);

(h) Prudential Standard 4.3.6;

(i) Prudential Notes 4.4A, 4.4B and 4.4D;

(j) Prudential Standards 4.4.1, 4.4.2 and 4.4.4;

(k) Prudential Note 4.6;

(l) Prudential Standards 4.6.1 to 4.6.7 (inclusive);

(m) Prudential Note 4.7;

(n) Prudential Standards 4.7.1 to 4.7.7 (inclusive).

3. The following provisions of Book 5 of the Prudential Notes and Prudential Standards issued by AFIC under Part 4 of an AFIC Code, as in force immediately before the transfer date:

(a) Prudential Note 5.1;

(b) Prudential Standards 5.1, 5.1.1, 5.1.2 and 5.1.3;

(d) Prudential Note 5.2;

(e) Prudential Standards 5.2.1 to 5.2.9 (inclusive);

(f) Prudential Notes 5.3B and 5.3C;

(g) Prudential Standard 5.3.5, other than subparagraph 5.3.5a (iii);

(h) Prudential Standard 5.3.6;

(i) Prudential Notes 5.4A, 5.4C, 5.4D, 5.4E, 5.4F and 5.4H;

(j) Prudential Standards 5.4.1, 5.4.3, 5.4.4, 5.4.5. 5.4.6 and 5.4.8;

(k) Prudential Note 5.5;

(l) Prudential Standards 5.5.1 to 5.5.8 (inclusive).

4. Attachment B to the Prudential Notes and Prudential Standards issued by AFIC under Part 4 of an AFIC Code, as in force immediately before the transfer date.
5. Subsections 237 (2), and 245 (1) to (3) (inclusive), of a Financial Institutions Code.
6. An urgent prudential standard, made under section 30 of an AFIC Code, that was in force immediately before the transfer date.
7. A modification of a transitional prudential standard, made under section 31 of an AFIC Code, that was in force immediately before the transfer date.

Notes to the Financial Sector Reform (Amendments and Transitional Provisions) Regulations 1999

Note 1

Note: The Financial Sector Reform (Amendments and Transitional Provisions) Regulations 1999 (in force under the Financial Sector Reform (Amendments and Transitional Provisions) Act (No. 1) 1999) as shown in this consolidation comprise Statutory Rules 1999 No. 144 amended as indicated in the Tables below.

Note: Table of Statutory Rules

Year andnumber	Date of notificationin Gazette	Date ofcommencement	Application, saving ortransitional provisions
1999 No. 144	30 June 1999	Parts 1 and 2: 30 June 1999Remainder: 1 July 1999 (see r. 2 and Gazette 1999, No. S283) (a)
1999 No. 355	22 Dec 1999	1 July 1999: (b)	—

Note: (a) Schedule 4 to the Financial Sector Reform (Amendments and Transitional Provisions) Act (No. 1) 1999 commences on the transfer date. The transfer date is the date specified as the transfer date for the purposes of that Act by Proclamation made by the Governor-General under subsection 3 (16) of that Act.

Note: The transfer date is 1 July 1999.

Note: (b) Regulation 2 provides as follows:

Note: These Regulations are taken to have commenced on the commencement of Schedule 4 to the Financial Sector Reform (Amendments and Transitional Provisions) Act (No. 1) 1999.

Note See subitem 22 (5) of Sch 8 to that Act.

Note: Table of Amendments

<table cellspacing="0" cellpadding="0" style="border-collapse:collapse"><tbody><tr><td colspan="2" style="width:354.9pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableOfAmendHead" style="margin-right:0pt"><span>ad. = added or inserted</span><span> </span><span>am. = amended</span><span> </span><span>rep. = repealed</span><span> </span><span>rs. = repealed and substituted</span></p></td></tr><tr><td style="width:111.1pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableColHead"><span>Provision affected</span></p></td><td style="width:233pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableColHead"><span>How affected</span></p></td></tr><tr><td style="width:111.1pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableOfAmend" style="margin-right:0pt"><span>Rr. 13A, 14A</span><span style="width:61.87pt; text-indent:0pt; font-family:'Lucida Console', monospace; display:inline-block">...........</span></p></td><td style="width:233pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableOfAmend" style="margin-right:0pt"><span>ad. 1999 No. 355</span></p></td></tr><tr><td style="width:111.1pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableOfAmend" style="margin-right:0pt"><span>Rr. 15, 16</span><span style="width:73.88pt; text-indent:0pt; font-family:'Lucida Console', monospace; display:inline-block">.............</span></p></td><td style="width:233pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableOfAmend" style="margin-right:0pt"><span>am. 1999 No. 355</span></p></td></tr><tr><td style="width:111.1pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableOfAmend" style="margin-right:0pt"><span>R. 18</span><span style="width:91.89pt; text-indent:0pt; font-family:'Lucida Console', monospace; display:inline-block">................</span></p></td><td style="width:233pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableOfAmend" style="margin-right:0pt"><span>am. 1999 No. 355</span></p></td></tr><tr><td style="width:111.1pt; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableOfAmend" style="margin-right:0pt; margin-bottom:3pt"><span>Schedule 1</span><span style="width:68.36pt; text-indent:0pt; font-family:'Lucida Console', monospace; display:inline-block">............</span></p></td><td style="width:233pt; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableOfAmend" style="margin-right:0pt; margin-bottom:3pt"><span>am. 1999 No. 355</span></p></td></tr></tbody></table>

Financial Sector Reform (Amendments and Transitional Provisions) Regulations 1999

Plain English Summary

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Financial Sector Reform (Amendments and Transitional Provisions) Regulations 1999

Source text: opening excerpt

1 Financial Sector Reform (Amendments and Transitional Provisions) Regulations 1999