ABA WELCOMES NON-OPERATING HOLDING COMPANY LEGISLATION 

Sydney, 18 June, 2007: The Australian Bankers’ Association (ABA) welcomed the passage of the Financial Sector Legislation Amendment (Restructures) Bill 2007.

David Bell, Chief Executive of the ABA, said this was an important step in continuing the reforms advocated by the Financial System Inquiry (the ‘Wallis Inquiry’) in 1997 and commenced with amendments to the Banking Act in 1998.

Mr Bell noted that a number of submissions to the Wallis Inquiry cited benefits from a Non-Operating Holding Company (NOHC) structure.

“NOHC structures are widely used in the global banking industry. In fact, they are the prevailing structure of all major global banks. These structures provide the means for effective risk management and protection of depositor interests through the legal separation between banking and non-banking activities within diversified financial conglomerates, while allowing for strategic flexibility. The implementation of a NOHC structure is being considered by a number of major Australian banks,” Mr Bell said.

“The ABA has been in regular consultation with our member banks, Commonwealth Treasury and regulators in identifying the issues faced by Australian banks in adopting a NOHC structure.”

The banks’ assessment of the merits of implementing NOHC structures will now be better informed as the passage of this legislation resolved a number of legal and tax uncertainties.

Mr Bell said the ABA acknowledged the Government’s receptiveness in addressing these issues and assisting to resolve them through this legislation.

“We also appreciate the support of the Opposition and acknowledge their recognition of the importance of the legislation in promoting a robust financial sector in Australia,” he said.


For further information:

Heather Wellard
Director, Public Relations
Phone: 02 8298 0411
Mobile: 0409 830 439

ENDS