Document ID: chunk:federal_register_of_legislation:F2023L01535:body:0:p8
Version: federal_register_of_legislation:F2023L01535
Segment Type: other
Provision Reference: 
Character Range: 19497–22490

is taken to be an associate of a shareholder for the purposes of this Prudential Standard if the director is an associate of the shareholder, or the shareholder is an associate of the director, according to the definition of associate in clause 4 of Schedule 1 of the Financial Sector (Shareholdings) Act 1998 (Financial Sector (Shareholdings) Act). That definition is to be applied for the purposes of this Prudential Standard as if subparagraph (1)(l) of that definition were omitted.
35.         Where an individual shareholding is greater than 15 per cent, as approved under the Financial Sector (Shareholdings) Act, the Board representation of that shareholding may be greater than allowed in paragraph 34, although it must still be broadly proportionate to the shareholding concerned.[6]
36.         For a locally incorporated ADI that operates as a special service provider, the ADI may apply to APRA for approval for alternative Board composition arrangements that meet the objectives of this Prudential Standard. APRA may approve alternative arrangements for the ADI if satisfied that those arrangements will, in APRA's opinion, achieve the objectives of this Prudential Standard.

Locally incorporated APRA-regulated institutions that are subsidiaries of other APRA-regulated institutions or overseas equivalents
37.         For a locally incorporated APRA-regulated institution that is a subsidiary of another APRA-regulated institution or an overseas equivalent, the Board must have a majority of non-executive directors, but these non-executive directors need not all be independent.
38.         An institution to which paragraph 37 applies will be required to have, at a minimum, two independent directors, in addition to an independent chairperson, where the Board has up to seven members. Where the Board has more than seven members, the institution will be required to have at least three independent directors, in addition to an independent chairperson.
39.         For the purposes of meeting the requirements in paragraph 38, the independent directors on the Board of the parent company or its other subsidiaries may also sit as independent directors on the Board of the institution.

Subsidiaries of a parent that is not prudentially regulated
40.         For a locally incorporated APRA-regulated institution that is a subsidiary of another entity not covered by the arrangements in paragraphs 37 to 39 of this Prudential Standard, the Board must have a majority of independent directors. However, independent directors on the Board of the parent company or its other subsidiaries may also sit as independent directors on the Board of the institution.

Joint ventures
41.         For the purposes of this Prudential Standard, a locally incorporated APRA-regulated institution that operates as a joint venture can be considered as part of the group of each parent entity. Independent directors of a parent may sit as independent directors on the Board of the joint venture