Financial Sector Legislation Amendment (Crisis Resolution Powers and Other Measures) Act 2018 (10 of 2018)

Schedule 1   Amendment of the Banking Act 1959

Part 1   Main amendments

Banking Act 1959

131   After section 14A

Insert:

14AAA Safeguards on exercise of Banking Act statutory manager's powers and functions

(1) Despite anything else in this Subdivision, a Banking Act statutory manager of a body corporate (the body corporate under management ) may not perform a function or exercise a power under section 14A if:

(a) either or both of subsections (2) and (3) apply; and

(b) the performance of the function or the exercise of the power is not for the purposes of:

(i) an act of the Banking Act statutory manager under subsection 14AA(1); or

(ii) Part 3 or 4 of the Financial Sector (Transfer and Restructure) Act 1999.

(2) This subsection applies if:

(a) the body corporate under management is not an ADI; and

(b) the performance or the exercise would result in:

(i) the provision of services by the body corporate under management to a related body corporate of the body corporate under management; or

(ii) the provision of services by a related body corporate of the body corporate under management to the body corporate under management; or

(iii) subject to subsection (4), the transfer of assets between the body corporateunder management and another body corporate (otherwise than in the ordinary course of business); and

(c) the performance or the exercise is not required or permitted by a binding arrangement that was in existence immediately before the Banking Act statutory manager started to be in control of the business of the body corporate under management; and

(d) the provision or transfer is not for fair value.

(3) This subsection applies if:

(a) the body corporate under management is an authorised NOHC of an ADI; and

(b) the performance or the exercise requires using funds of the body corporate or a subsidiary of the body corporate to increase the level of capital of the ADI to a specified level; and

(c) the shareholders of the body corporate have not agreed, by ordinary resolution, to that use of the funds.

(4) Treat the requirement in subparagraph (2)(b)(iii) as not being met if:

(a) the body corporate under management is an authorised NOHC of an ADI; and

(b) the transfer of assets mentioned in that subparagraph is a transfer of funds to increase the level of capital of the ADI to a specified level; and

(c) the shareholders of the body corporate have agreed, by ordinary resolution, to that use of the funds.