Statute Details
- Title: Postal Services (Exemption from Section 26B) Order 2017
- Act Code: PSA1999-S260-2017
- Legislative Type: Subsidiary Legislation (SL)
- Authorising Act: Postal Services Act (Chapter 237A)
- Authorising Power: Section 60 of the Postal Services Act
- Enacting Date: Made on 12 May 2017
- Citation and Commencement: Comes into operation on 9 June 2017
- Current Version Status: Current version as at 27 Mar 2026 (per the legislation portal)
- Key Provisions: Sections 1 to 4 (exemptions relating to notice and prior approval under section 26B of the Act; definition of “pro forma transaction”)
What Is This Legislation About?
The Postal Services (Exemption from Section 26B) Order 2017 (“the Order”) is a targeted regulatory instrument that modifies how the Postal Services Act (the “Act”) applies to certain shareholding and control changes involving a “designated postal licensee”. In practical terms, it creates exemptions from two compliance steps that would otherwise be required under section 26B of the Act: (i) giving notice, and (ii) obtaining prior written approval.
Section 26B of the Act is designed to give the regulator advance visibility and control over changes in ownership and control that could affect the governance, independence, or operational integrity of a designated postal licensee. However, not every transaction that changes shareholdings or corporate structure should trigger the same level of regulatory friction—particularly where the transaction is “pro forma” (i.e., it does not truly change who controls the licensee).
The Order therefore carves out specific categories of transactions that are treated as “pro forma transactions”. For those transactions, the designated postal licensee or the relevant person may be exempt from the notice requirement in section 26B(1), and may also be exempt from the prior approval requirements in section 26B(2), (3), and (4). The Order is narrow in scope: it does not remove section 26B entirely, but it reduces compliance burdens for transactions that, despite formal changes, do not alter ultimate control.
What Are the Key Provisions?
1. Citation and commencement (section 1)
Section 1 provides the formal title and states that the Order comes into operation on 9 June 2017. This matters for practitioners assessing whether a transaction falls under the regime in force at the relevant time.
2. Exemption from notice requirement under section 26B(1) (section 2)
Section 2 addresses the notice obligation that would otherwise apply to a designated postal licensee. It provides that a designated postal licensee is exempt from the requirement in section 26B(1) to give notice in respect of any person who, because of a pro forma transaction, does either of the following:
- (a) acquires 5% or more but less than 12% of the voting shares in the designated postal licensee; or
- (b) controls 5% or more but less than 12% of the voting power in the designated postal licensee.
The key legal effect is that, where the relevant acquisition/control threshold is crossed only due to a pro forma transaction, the designated postal licensee does not have to issue the notice that would otherwise be required. This is a compliance relief provision, but it is conditional: the transaction must qualify as “pro forma” under section 4.
3. Exemption from prior written approval for control thresholds and consolidations (section 3)
Section 3 extends the exemption concept beyond notice to the more consequential requirement of prior written approval under section 26B(2), (3), and (4). It contains two distinct exemptions:
(1) Control threshold exemption (section 3(1))
A person is exempt from the requirement to obtain prior written approval under section 26B(2) if, by reason of a pro forma transaction, the person will become:
- a 12% controller, or
- a 30% controller
In other words, even if the transaction results in the person reaching those regulatory control thresholds, the approval requirement is lifted where the threshold is reached only because the transaction is pro forma.
(2) Consolidation exemption (section 3(2))
Section 3(2) provides that a person who intends to enter into a pro forma transaction that would constitute a consolidation with a designated postal licensee is exempt from the prior written approval requirements under section 26B(3) and (4).
This is particularly important for corporate reorganisations and internal restructurings that may be characterised as consolidations under the Act, even though the underlying control position is unchanged. The Order prevents such transactions from triggering a full approval process when they are, in substance, pro forma.
4. Meaning of “pro forma transaction” (section 4)
Section 4 is the definitional core of the Order. It sets out what transactions qualify as “pro forma” for the purposes of sections 2 and 3. There are two main categories:
(a) No change in ultimate voting power controlled by the same person (section 4(a))
A transaction qualifies as pro forma if it does not result in any change to the percentage of voting power in the designated postal licensee controlled by any person who, immediately before the transaction, controlled any voting power in the licensee.
This is the simplest case: if the same controller’s voting power percentage remains unchanged, the transaction is treated as pro forma even if there are formal steps in the transaction structure.
(b) Share transfers within corporate groups or between entities without changing the controller’s voting power (section 4(b))
Section 4(b) covers transactions involving transfers of shares from one entity to another, provided the transfer does not change the percentage of voting power controlled by the relevant person at the relevant time. The provision is detailed and includes four sub-scenarios:
- (i) Transfer of shares from a person to a corporation where a person controls voting power or holds shares in the corporation, without any change to the percentage of voting power in the designated postal licensee controlled by that person immediately before the transaction.
- (ii) Transfer from a corporation to any shareholder of the corporation, again without any change to the percentage of voting power in the designated postal licensee controlled by that shareholder immediately before the transaction.
- (iii) Transfer from a corporation to its wholly owned subsidiary, or from a wholly owned subsidiary to its corporation, whether or not the subsidiary is a direct subsidiary.
- (iv) Transfer from one corporation to another corporation where the same person controls voting power or holds shares in both corporations, without any change to the percentage of voting power in the designated postal licensee controlled by that person immediately before the transaction.
For practitioners, the practical takeaway is that the Order is designed to accommodate intra-group reorganisations and transfers that are effectively “paper movements” of shares or intermediate holding structures, so long as the ultimate controller’s voting power in the designated postal licensee does not change.
How Is This Legislation Structured?
The Order is structured as a short instrument with four sections:
- Section 1 sets out the citation and commencement date.
- Section 2 provides an exemption from the notice requirement under section 26B(1) of the Act for certain threshold crossings (5% to <12%) caused by pro forma transactions.
- Section 3 provides exemptions from prior written approval under section 26B(2), (3), and (4), including for reaching 12% and 30% controller thresholds and for consolidations, again where the underlying transaction is pro forma.
- Section 4 defines “pro forma transaction” and specifies the transaction types that qualify.
Because the Order is concise, its legal effect depends heavily on how the Act defines “designated postal licensee”, “controller”, and the thresholds referenced in section 26B. Practitioners should therefore read the Order together with the relevant provisions of the Postal Services Act.
Who Does This Legislation Apply To?
The Order applies in relation to a designated postal licensee under the Postal Services Act. It also applies to persons whose acquisition of voting shares or control of voting power in such a licensee occurs because of a pro forma transaction.
In terms of compliance roles, section 2 is framed as an exemption for the designated postal licensee from giving notice under section 26B(1). Sections 3(1) and 3(2), by contrast, are framed as exemptions for the person who would otherwise need to obtain prior written approval under section 26B(2), (3), or (4). Accordingly, parties to corporate reorganisations—holding companies, shareholders, and group entities—should assess whether the transaction qualifies as pro forma and who bears the regulatory compliance obligation under the Act.
Why Is This Legislation Important?
This Order is important because it reduces regulatory friction for transactions that do not change ultimate control. In the postal sector, ownership and control can affect licensing conditions, governance, and the regulator’s ability to manage systemic risks. Section 26B of the Act reflects that policy by requiring notice and prior approval for certain ownership/control changes. The Order ensures that the policy does not overreach into transactions that are, in substance, internal restructurings.
From a practitioner’s perspective, the Order can materially affect deal timelines and documentation. If a transaction is correctly characterised as a pro forma transaction, parties may avoid:
- the need for the designated postal licensee to issue a notice under section 26B(1) (for the 5% to <12% threshold range); and
- the need for prior written approval under section 26B(2), (3), or (4) even where formal thresholds (12% and 30% controller) or consolidation concepts are triggered.
However, the exemptions are conditional and fact-sensitive. The definition of “pro forma transaction” turns on whether there is any change to the percentage of voting power controlled by the relevant person immediately before and after the transaction. Practitioners should therefore conduct a careful voting power analysis, including how voting power is calculated under the Act and how intermediate entities and shareholdings affect the “ultimate controller” position.
Finally, because the Order is current as at 27 March 2026 and was made in 2017, it is likely to be relied upon in ongoing corporate group restructurings. It provides a clear regulatory pathway for reorganisations that preserve control, which is valuable for corporate counsel planning transactions involving designated postal licensees.
Related Legislation
- Postal Services Act (Chapter 237A) — in particular section 26B (notice and prior approval requirements relating to control and consolidation) and section 60 (power to make subsidiary legislation).
- Postal Services Act — Legislation Timeline (for version control and amendments affecting section 26B definitions and thresholds).
Source Documents
This article provides an overview of the Postal Services (Exemption from Section 26B) Order 2017 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.