Title Financial Sector (Transfers of Business) Bill 1999
Database Bills & Legislation
Long Title a Bill for an Act to provide for transfers of business between some kinds of financial institutions
Date 10-03-1999
Source House of Reps
Parl No. 39
Bill Number 99030
Bill Type Government
Portfolio Treasurer's portfolio
Reps Bill Code O
Status Act
System Id legislation/bills/r741_act/0004


Financial Sector (Transfers of Business) Bill 1999

Part 3—Voluntary transfers

Division 1—Outline of Part

9  Outline of Part

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

                     (a)  receive an application for the transfer from the regulated bodies concerned (the transferring body and the receiving body) (see section 10); and

                     (b)  approve the application in writing (the voluntary transfer approval) (see section 11); and

                     (c)  issue a certificate (the certificate of transfer) stating that the transfer is to take effect (see section 18).

             (2)  APRA must make the voluntary transfer approval if specified criteria are met (see section 11).

             (3)  The voluntary transfer approval 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 16).

             (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 18).

             (5)  The transfer of business takes effect when the certificate of transfer comes into force (see section 22).


 

Division 2—Approval of voluntary transfers

10  Application for approval of voluntary transfer

             (1)  2 regulated bodies of the same kind may apply in writing to APRA for approval of a transfer of business from one of the bodies to the other body. The transfer cannot relate only to business of the transferring body that is not regulated business.

             (2)  The application must be in the form prescribed by the transfer rules and must contain or be accompanied by the information required by the transfer rules.

Note:          APRA may impose a charge in respect of the application—see section 51 of the Australian Prudential Regulation Authority Act 1998.

             (3)  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.

11  Approval of applications

             (1)  Subject to subsection (2), APRA must, in writing (the voluntary transfer approval), approve a transfer of business if APRA considers that:

                     (a)  application for approval of the transfer has been made in accordance with section 10; and

                     (b)  the transfer has been adequately adopted (see section 13) by:

                              (i)  the transferring body; and

                             (ii)  the receiving body; and

                     (c)  the transfer should be approved, having regard to:

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

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

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

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

                     (d)  legislation to facilitate the transfer that satisfies the requirements of section 14 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

                     (e)  either:

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

                             (ii)  the Minister’s consent to the transfer is not required (see section 15).

             (2)  APRA must not approve the transfer of business if it considers that the transfer should not be approved, having regard to provisions of another Act:

                     (a)  that are prescribed for the purposes of subsection 43(4); or

                     (b)  referred to in subsection 43(5), (6), (7) or (8).

             (3)  The voluntary transfer approval must be signed by an authorised APRA officer.

12  Consultation about approving the application

             (1)  In deciding whether to approve the transfer of business, APRA may consult with any or all of the following:

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

                     (b)  the Reserve Bank of Australia;

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

             (2)  Subject to subsections (3) and (4), in deciding whether to approve the transfer of business, APRA must consult with:

                     (a)  the Australian Competition and Consumer Commission; and

                     (b)  the Australian Securities and Investments Commission.

             (3)  APRA does not have to consult with the Australian Competition and Consumer Commission in relation to the transfer of business if the Commission has notified APRA, in writing, that it does not wish to be consulted about:

                     (a)  the transfer; or

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

             (4)  APRA does not have to consult with the Australian Securities and Investments Commission in relation to the transfer of business if the Commission has notified APRA, in writing, that it does not wish to be consulted about:

                     (a)  the transfer; or

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

13  Adequate adoption

                   For the purposes of paragraph 11(1)(b), the transfer of business has been adequately adopted by a body if:

                     (a)  the transfer has been adopted by or on behalf of the body, or by or on behalf of the members or a class of the members of the body, in a way prescribed by the transfer rules; and

                     (b)  APRA considers that adoption of the transfer in that way adequately takes into account the interests of members of the body.

14  Complementary State or Territory legislation

                   State or Territory legislation referred to in paragraph 11(1)(d) 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 there is an approved section 20 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.

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

                   The Minister’s consent to the transfer of business (see paragraph 11(1)(e)) 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.

16  Approval may impose conditions

             (1)  The voluntary transfer approval 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 1:       Failure to comply with a condition referred to in paragraph (a) will mean that a certificate of transfer cannot be issued (see subsection 18(1)).

Note 2:       Failure to comply with a condition referred to in paragraph (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 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)(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.

17  Notice of decision

             (1)  If APRA approves the transfer of business, APRA must give a copy of the voluntary transfer approval to the transferring body and the receiving body.

             (2)  If APRA refuses to approve the transfer of business, APRA must give written notice of the refusal to the transferring body and the receiving body. The notice must include a statement of the reasons why the approval was refused.


 

Division 3—Process by which voluntary transfers take effect

18  Certificate of transfer

             (1)  If APRA:

                     (a)  has made a voluntary transfer approval; and

                     (b)  considers that all conditions of a kind referred to in paragraph 16(1)(a) that are imposed by the approval have been complied with; and

                     (c)  if the transfer is a partial transfer—has been given a statement of detail in relation to the partial transfer (see section 19); and

                     (d)  is not aware of any reason why the transfer should not go ahead;

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)  the statement of detail (see section 19); and

                             (ii)  any approved section 20 statement; and

                     (d)  subject to subsection (3), 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)  APRA must, in deciding when the certificate is to come into force, take into account the wishes of the transferring body and the receiving body.

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

19  Partial transfer—statement of detail to be provided

                   If the transfer is a partial transfer, before APRA issues a certificate of transfer in relation to the transfer, APRA must be provided with a written statement:

                     (a)  that lists, in detail, the assets and liabilities of the transferring body that are to be transferred to the receiving body; and

                     (b)  that APRA is satisfied has been agreed to by the transferring body and the receiving body.

20  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.

Note:          If the transfer is a partial transfer, the statement may be included with the statement of detail under section 19.

             (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.

21  Notice of decision

             (1)  If APRA issues the certificate of transfer, APRA must give a copy of the certificate to the transferring body and the receiving body.

             (2)  If APRA refuses to issue the certificate of transfer, APRA must give written notice of the refusal to the transferring body and the receiving body. The notice must include a statement of the reasons why the certificate was not issued.

22  Time and effect of voluntary 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 of assets and liabilities specified in the statement of detail, 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 there is an approved section 20 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.

             (3)  Subject to subsection (2), 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:          An alternative way of dealing with substitution of parties (which is available for total or partial transfers) is to deal with the matter in an approved section 20 statement (see subsection (2)).

             (4)  Subject to subsection (2), 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:          An alternative way of dealing with admissibility of evidence (which is available for total or partial transfers) is to deal with the matter in an approved section 20 statement (see subsection (2)).

             (5)  Subject to subsection (2), 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 an Act or other legislative instrument) 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:          An alternative way of dealing with references in instruments (which is available for total or partial transfers) is to deal with the matter in an approved section 20 statement (see subsection (2)).

             (6)  Subject to subsection (2), 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:          An alternative way of dealing with places of business is to deal with the matter in an approved section 20 statement (see subsection (2)).

23  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 11(1)(d).