Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Financial Sector (Transfers of Business) Bill 1999

Part 4 Compulsory transfers

Division 1 Outline of Part

24   Outline of Part

             (1)  For a compulsory transfer of business to take effect, APRA must:

                     (a)  make a determination (the compulsory transfer determination ) that there is to be a transfer of business between the regulated bodies concerned (the transferring body and the receiving body ) (see section 25); and

                     (b)  issue a certificate (the certificate of transfer ) stating that the transfer is to take effect (see section 33).

             (2)  APRA may only make the compulsory transfer determination if specified criteria are met (including that APRA is satisfied that the board of directors of the receiving body has consented to the transfer) (see section 25).

             (3)  The compulsory transfer determination may impose conditions to be complied with by the transferring body or the receiving body either before or after the certificate of transfer is issued (see section 31).

             (4)  APRA may only issue the certificate of transfer if specified criteria are met. The certificate must specify when it comes into force (see section 33).

             (5)  The transfer of business takes effect when the certificate of transfer comes into force (see section 35).



 

Division 2 Compulsory transfer determinations

25   Compulsory transfer determinations

             (1)  APRA may, in writing, make a determination (the compulsory transfer determination ) that there is to be a transfer of business from one regulated body to another regulated body. The transfer cannot relate only to business of the transferring body that is not regulated business.

             (2)  APRA may only make the determination if:

                     (a)  APRA is satisfied that one or more of the following applies:

                              (i)  the transferring body has contravened a provision of its regulatory legislation;

                             (ii)  the transfer is in the interests of depositors or policy owners of the transferring body when viewed as a group; and

                     (b)  APRA is satisfied that the transferring body and the receiving body are regulated bodies of the same kind; and

                     (c)  APRA is satisfied that the board of directors of the receiving body has consented to the transfer; and

                     (d)  APRA is satisfied that the transfer is appropriate, having regard to:

                              (i)  the interests of depositors or policy owners of the receiving body when viewed as a group; and

                             (ii)  the interests of the financial sector as a whole; and

                            (iii)  any other matters that APRA considers relevant; and

                     (e)  APRA is satisfied that legislation to facilitate the transfer that satisfies the requirements of section 28 has been enacted in the State or Territory in which the transferring body is established and the State or Territory in which the receiving body is established; and

                      (f)  either:

                              (i)  the Minister has consented to the transfer; or

                             (ii)  the Minister’s consent to the transfer is not required (see section 29).

             (3)  The determination must include particulars of the transfer, including:

                     (a)  the names of the transferring body and the receiving body; and

                     (b)  whether it will be a total transfer or a partial transfer; and

                     (c)  if it will be a partial transfer—an identification of the part of the transferring body’s business that is to be transferred.

             (4)  The determination must include a statement of the reasons why the determination has been made.

             (5)  The determination must be signed by an authorised APRA officer.

             (6)  For the purposes of this section, 2 regulated bodies are of the same kind if:

                     (a)  they are both ADIs; or

                     (b)  they are both life insurance companies.

26   Consultation about making the d etermination

                   In deciding whether to make the compulsory transfer determination, APRA may consult with any or all of the following:

                     (a)  officers or employees of the States and Territories;

                     (b)  the Australian Competition and Consumer Commission;

                     (c)  the Australian Securities and Investments Commission;

                     (d)  the Reserve Bank of Australia;

                     (e)  any other person or body that APRA considers should be consulted.

27   When consent of receiving body is in force

             (1)  The consent referred to in paragraph 25(2)(c) remains in force until it is withdrawn by the receiving body’s board of directors with the agreement of APRA.

             (2)  APRA may agree to the consent being withdrawn if APRA considers it appropriate to allow the consent to be withdrawn having regard to:

                     (a)  circumstances that have arisen since the consent was given; or

                     (b)  circumstances that were in existence at or before the time when the consent was given but which were not known to the receiving body’s board when it gave its consent; or

                     (c)  any other relevant matter.

28   Complementary State or Territory legislation

                   State or Territory legislation referred to in paragraph 25(2)(e) must include provision to ensure that, when a certificate of transfer comes into force under Division 3, the receiving body is taken to be the successor in law to the transferring body, to the extent of the transfer. In particular, the legislation must provide that:

                     (a)  assets of the transferring body vest in the receiving body, to the extent of the transfer; and

                     (b)  liabilities of the transferring body become liabilities of the receiving body, to the extent of the transfer; and

                     (c)  the duties, obligations, immunities, rights and privileges applying to the transferring body apply to the receiving body, to the extent of the transfer; and

                     (d)  if the certificate of transfer includes provisions of a kind referred to in subsection 33(3) specifying:

                              (i)  that particular things are to happen or are taken to be the case—those things are taken to happen, or to be the case, in accordance with those provisions; or

                             (ii)  a mechanism for determining things that are to happen or are taken to be the case—things determined in accordance with that mechanism are taken to happen, or to be the case, as determined in accordance with that mechanism; and

                     (e)  if there is an approved section 30 statement in relation to the transfer that specifies:

                              (i)  that particular things are to happen or are taken to be the case—those things are taken to happen, or to be the case, in accordance with the statement; or

                             (ii)  a mechanism for determining things that are to happen or are taken to be the case—things determined in accordance with that mechanism are taken to happen, or to be the case, as determined in accordance with that mechanism.

29   Minister’s power to decide that his or her consent is not required

                   The Minister’s consent to the transfer of business (see paragraph 25(2)(f)) is not required if the Minister has, in writing, determined that his or her consent is not required in relation to:

                     (a)  the transfer; or

                     (b)  a class of transfers that includes the transfer.

30   Agreements about matters connected with the transfer

             (1)  The transferring body or the receiving body, or both of those bodies, may provide APRA with a written statement specifying, or specifying a mechanism for determining, things that are to happen, or that are taken to be the case, in relation to assets and liabilities that are to be transferred, or in relation to the transfer of business that is to be effected.

             (2)  APRA may, in writing, approve the statement before issuing the certificate of transfer if APRA is satisfied that:

                     (a)  the statement has been agreed to by the transferring body and the receiving body; and

                     (b)  the matters specified in the statement are appropriate.

31   Determination may impose conditions

             (1)  The compulsory transfer determination may impose conditions of either or both of the following kinds:

                     (a)  conditions to be complied with by the transferring body or the receiving body before a certificate of transfer is issued in relation to the transfer of business;

                     (b)  conditions to be complied with by the transferring body or the receiving body after a certificate of transfer has been issued or has come into force in relation to the transfer of business.

Note:          Failure to comply with a condition referred to in paragraph (a) or (b) will not prevent the issue of a certificate of transfer, but will be an offence under subsection (4).

             (2)  The transferring body or the receiving body may apply in writing to APRA to have a condition of a kind referred to in paragraph (1)(b) that applies to it varied or revoked.

             (3)  APRA may, by notice in writing given to the body that made the application, approve the variation or revocation if it is satisfied that the variation or revocation is appropriate. A variation or revocation that is approved by APRA has effect accordingly.

             (4)  The transferring body or the receiving body is guilty of an offence if:

                     (a)  a condition of a kind referred to in paragraph (1)(a) or (b) applies to that body; and

                     (b)  that body fails to comply with the condition.

Maximum penalty for contravention of this subsection: 200 penalty units.

Note 1:       Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.

Note 2:       If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

32   Notice of determination

                   APRA must give a copy of the compulsory transfer determination to the transferring body and the receiving body.



 

Division 3 Process by which compulsory transfers take effect

33   Certificate of transfer

             (1)  If:

                     (a)  APRA has made a compulsory transfer determination; and

                     (b)  APRA considers that the transfer should go ahead; and

                     (c)  the consent referred to in paragraph 25(2)(c) is still in force (see section 27);

APRA must, in writing, issue a certificate (a certificate of transfer ) stating that the transfer is to take effect.

             (2)  The certificate must:

                     (a)  include the names of the transferring body and the receiving body; and

                     (b)  state whether the transfer is a total transfer or a partial transfer; and

                     (c)  if it is a partial transfer—include, or have attached to it:

                              (i)  a list of the assets and liabilities of the transferring body that are being transferred to the receiving body; and

                             (ii)  any approved section 30 statement; and

                     (d)  state when the certificate is to come into force (either by specifying a date as the date it comes into force, or by specifying that the date it comes into force is a date worked out in accordance with provisions of the certificate); and

                     (e)  be signed by an authorised APRA officer.

             (3)  The certificate may include provisions specifying, or specifying a mechanism for determining, other things that are to happen, or that are taken to be the case, in relation to assets and liabilities that are to be transferred, or in relation to the transfer of business that is to be effected, whether the transfer is total or partial.

             (4)  The certificate comes into force in accordance with the statement included in the certificate as required by paragraph (2)(d).

34   Notice of certificate

                   APRA must give a copy of the certificate of transfer to the transferring body and the receiving body.

35   Time and effect of compulsory transfer

             (1)  When the certificate of transfer comes into force, the receiving body becomes the successor in law of the transferring body, to the extent of the transfer. In particular:

                     (a)  if the transfer is a total transfer—all the assets and liabilities of the transferring body, wherever those assets and liabilities are located, become (respectively) assets and liabilities of the receiving body without any transfer, conveyance or assignment; and

                     (b)  if the transfer is a partial transfer—all the assets and liabilities of the transferring body that are included in the list referred to in paragraph 33(2)(c), wherever those assets and liabilities are located, become (respectively) assets and liabilities of the receiving body without any transfer conveyance or assignment; and

                     (c)  to the extent of the transfer, the duties, obligations, immunities, rights and privileges applying to the transferring body apply to the receiving body.

             (2)  If the certificate includes provisions of a kind referred to in subsection 33(3):

                     (a)  if the provisions specify that particular things are to happen or are taken to be the case—those things are, by force of this section, taken to happen, or to be the case, in accordance with those provisions; and

                     (b)  if the provisions specify a mechanism for determining things that are to happen or are taken to be the case—things determined in accordance with that mechanism are, by force of this section, taken to happen, or to be the case, as determined in accordance with that mechanism.

             (3)  If there is an approved section 30 statement in relation to the transfer, then:

                     (a)  if the statement specifies that particular things are to happen or are taken to be the case—those things are, by force of this section, taken to happen, or to be the case, in accordance with the statement; and

                     (b)  if the statement specifies a mechanism for determining things that are to happen or are taken to be the case—things determined in accordance with that mechanism are, by force of this section, taken to happen, or to be the case, as determined in accordance with that mechanism.

             (4)  Subject to subsections (2) and (3), if:

                     (a)  the transfer is a total transfer; and

                     (b)  immediately before the certificate comes into force, proceedings (including arbitration proceedings) to which the transferring body was a party were pending or existing in any court or tribunal;

the receiving body is, on and after the day when the certificate comes into force, substituted for the transferring body as a party to the proceedings and has the same rights in the proceedings as the transferring body had.

Note:          Alternative ways of dealing with substitution of parties (which are available for total or partial transfers) are:

(a)           to deal with the matter in the certificate of transfer (see subsection (2)); or

(b)           to deal with the matter in an approved section 30 statement (see subsection (3)).

             (5)  Subject to subsections (2) and (3), if:

                     (a)  the transfer is a total transfer; and

                     (b)  on the day when the certificate comes into force, documentary or other evidence would (disregarding the transfer) have been admissible for or against the interests of the transferring body;

that evidence is admissible, on or at any time after that day, for or against the interests of the receiving body.

Note:          Alternative ways of dealing with admissibility of evidence (which are available for total or partial transfers) are:

(a)           to deal with the matter in the certificate of transfer (see subsection (2)); or

(b)           to deal with the matter in an approved section 30 statement (see subsection (3)).

             (6)  Subject to subsections (2) and (3), if the transfer is a total transfer, on and after the day when the certificate comes into force, each translated instrument continues to have effect, according to its tenor, as if a reference in the instrument to the transferring body were a reference to the receiving body. For this purpose:

translated instrument means an instrument (including a legislative instrument other than this Act) subsisting immediately before the day when the certificate comes into force:

                     (a)  to which the transferring body is a party; or

                     (b)  that was given to, by or in favour of, the transferring body; or

                     (c)  that refers to the transferring body; or

                     (d)  under which money is, or may become, payable, or other property is, or may become, liable to be transferred, to or by the transferring body.

Note:          Alternative ways of dealing with references in instruments (which are available for total or partial transfers) are:

(a)           to deal with the matter in the certificate of transfer (see subsection (2)); or

(b)           to deal with the matter in an approved section 30 statement (see subsection (3)).

             (7)  Subject to subsections (2) and (3), on and after the day when the certificate comes into force, a place that, immediately before that day, was a place of business for the transferring body in relation to business that was transferred to the receiving body is taken to be a place of business for the receiving body.

Note:          Alternative ways of dealing with places of business are:

(a)           to deal with the matter in the certificate of transfer (see subsection (2)); or

(b)           to deal with the matter in an approved section 30 statement (see subsection (3)).

36   Employment unaffected

             (1)  This section applies to every person who, immediately before the day when the certificate of transfer comes into force, was performing duty in the transferring body.

             (2)  The terms and conditions of employment (including any accrued entitlement to employment benefits) of each person to whom this section applies are not affected by the operation or effect of this Part or of any State or Territory legislation referred to in paragraph 25(2)(e).