PART V | EXPOSURES AND LIMITS ON INVESTMENTS |
28.—(1) A designated financial holding company shall not grant any credit facility except to —| (a) | any company within its FHC group; or | | (b) | any company within the FHC group of the ultimate financial holding company of the designated financial holding company. |
(2) The Authority may, by notice in writing to any designated financial holding company, or any class of designated financial holding companies, impose such requirements as may be necessary or expedient for the purposes of limiting the exposure of the designated financial holding company, or a designated financial holding company within the class of designated financial holding companies, to any one or more of the following:| (a) | a substantial shareholder group of the designated financial holding company; | | (b) | the financial group of the designated financial holding company; | | (c) | a director group of the designated financial holding company; | | (d) | a third party single counterparty group of the designated financial holding company; | | (e) | any other person or class of persons as may be prescribed. |
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(3) Without prejudice to the generality of subsection (2), the Authority may in a notice issued under that subsection —| (a) | specify the limit on any exposure; | | (b) | exclude any exposure from any limit; | | (c) | specify the method of measuring any exposure; | | (d) | exclude any designated financial holding company or class of designated financial holding companies from any requirement imposed under subsection (2); and | | (e) | vary any limit in a particular case. |
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| (4) A designated financial holding company shall not grant any credit facility against the security of its own shares or those of any of its subsidiaries. |
| (5) Any designated financial holding company which fails to comply with subsection (1) or (4) or any requirement imposed under subsection (2) or (3) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 and, in the case of a continuing offence, to a further fine not exceeding $10,000 for every day or part thereof during which the offence continues after conviction. |
(6) In this section —| (a) | the words “director group”, “exposure”, “financial group”, “substantial shareholder group” and “third party single counterparty group” have the meanings given to them in the Schedule; and | | (b) | a financial holding company is the “ultimate financial holding company” of another corporation if —| (i) | the other corporation is a subsidiary of the financial holding company; and | | (ii) | the financial holding company is not itself a subsidiary of any other financial holding company. |
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| Disclosure of interests by directors |
29.—(1) Every director of a designated financial holding company who has in any manner, directly or indirectly, an interest in an exposure of, or a proposed exposure of —| (a) | that designated financial holding company; or | | (b) | any of the companies within the FHC group of the designated financial holding company, |
| shall as soon as practicable declare the nature of his interest to the board of directors of that designated financial holding company and the secretary of that designated financial holding company shall cause the declaration to be circulated immediately to all the directors. |
| (2) The requirements in subsection (1) shall not apply in any case where the interest of the director consists only of being a member or creditor of a company which is interested in an exposure of, or a proposed exposure of, that designated financial holding company if the interest of the director may properly be regarded as of a trivial nature. |
(3) For the purposes of subsection (1), a general notice given to the board of directors of a designated financial holding company to the effect that he is an officer or a member of a specified company, or a partner or manager of a specified firm or specified limited liability partnership, and that he is to be regarded as having an interest in any exposure which may, after the date of the notice, be acquired in respect of that company, firm or limited liability partnership, shall be deemed to be a sufficient declaration of interest in relation to any exposure so acquired if —| (a) | the notice specifies the nature and extent of his interest in that company, firm or limited liability partnership; | | (b) | his interest is not different in nature from or greater in extent than the nature and extent so specified in the notice at the time any exposure is so acquired; and | | (c) | it is given at a meeting of the board of directors or the director takes reasonable steps to ensure that it is brought up and read at the next meeting of the board of directors after it is given. |
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| (4) Every director of a designated financial holding company who holds any office or possesses any property whereby, directly or indirectly, duties or interest might be created in conflict with his duties or interest as director shall declare at a meeting of the directors of that designated financial holding company the fact and the nature, character and extent of the conflict. |
(5) The declaration referred to in subsection (4) shall be made at the first meeting of the directors held —| (a) | after he becomes a director of the designated financial holding company; or | | (b) | if already a director, after he commences to hold the office or to possess the property, as the case may be. |
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(6) The secretary of the designated financial holding company shall —| (a) | cause to be brought up and read any declaration made under subsection (1) or (4) at the next meeting of the directors after it is given; and | | (b) | record any declaration made under this section in the minutes of the meeting at which it was made or at which it was brought up and read. |
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| (7) Any director who acts in contravention of subsection (1) or (4) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $125,000 or to imprisonment for a term not exceeding 3 years or to both. |
| (8) In this section, “exposure” has the meaning given to it in the Schedule. |
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| Limit on equity investments |
30.—(1) The Authority may by regulations impose such requirements for the purposes of limiting the amount of equity investment in a single company which the designated financial holding company or class of designated financial holding companies may acquire or hold.(2) This section shall not apply to —| (a) | any interest held by way of security for the purposes of a transaction entered into in the ordinary course of the business of the designated financial holding company; | | (b) | any shareholding or interest acquired or held by the designated financial holding company in the course of satisfaction of debts due to it which is disposed of at the earliest suitable opportunity; or | | (c) | any major stake approved, or deemed to have been approved, by the Authority under section 31. |
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(3) Without prejudice to the generality of subsection (1), the Authority may, by regulations —| (a) | provide for the manner of valuation of investments for the purposes of compliance with this section; and | | (b) | exclude the operation of this section in respect of any investment or class of investments which may be held by any designated financial holding company, subject to such conditions as may be prescribed. |
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| (4) Any designated financial holding company which contravenes any regulation made under this section or fails to comply with any condition imposed or prescribed thereunder shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 and, in the case of a continuing offence, to a further fine not exceeding $10,000 for every day or part thereof during which the offence continues after conviction. |
(5) In this section, “equity investment” means —| (a) | any beneficial interest in the share capital of a company; and | | (b) | such other investment, interest or right as may be prescribed. |
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31.—(1) No designated financial holding company shall acquire or hold, directly or indirectly, a major stake in any company without the prior approval of the Authority.(2) Notwithstanding subsection (1) —| (a) | a designated financial holding company may, within 6 months after its designation date or such longer period as the Authority may allow in any particular case, hold directly or indirectly, a major stake in any company without the prior approval of the Authority; but | | (b) | the designated financial holding company shall not continue to hold the major stake after the period referred to in paragraph (a) unless it has obtained the approval of the Authority. |
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(3) Subject to subsection (4), the approval of the Authority for a designated financial holding company to acquire or hold, directly or indirectly, a major stake in a company shall be deemed to have been granted in the following circumstances:| (a) | the major stake is acquired or held indirectly through a subsidiary of the designated financial holding company —| (i) | that is a bank incorporated in Singapore which acquisition or holding of the major stake was approved by the Authority under section 32 of the Banking Act (Cap. 19) prior to the financial holding company being designated under section 4, and which approval has not been revoked; or | | (ii) | that is a licensed insurer which acquisition or holding of the major stake was approved, or deemed to have been approved, by the Authority under section 30B of the Insurance Act (Cap. 142) prior to the financial holding company being designated under section 4, and which approval has not been revoked; or |
| | (b) | the Authority had, prior to the financial holding company being designated under section 4, given the financial holding company approval to acquire or hold the major stake pursuant to the requirements of directions made under section 28(3) of the Monetary Authority of Singapore Act (Cap. 186), and which approval has not been revoked. |
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| (4) Any approval granted, or deemed to have been granted, by the Authority under this section to a designated financial holding company to acquire or hold, directly or indirectly, a major stake in a company may be subject to such conditions as the Authority may determine, including any condition relating to the operations or activities of the company. |
| (5) For the avoidance of doubt, the conditions imposed by the Authority under subsection (4) may be specified by notice in writing to a designated financial holding company or any class of designated financial holding companies. |
| (6) The Authority may at any time add to, vary or revoke any condition imposed under subsection (4). |
(7) This section shall not apply to —| (a) | any interest held by way of security for the purposes of a transaction entered into in the ordinary course of the business of the designated financial holding company; | | (b) | any shareholding or interest acquired or held by a designated financial holding company in the course of satisfaction of debts due to it which is disposed of at the earliest suitable opportunity; and | | (c) | such other interest as may be prescribed. |
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(8) The Authority may, by regulations —| (a) | exclude the operation of this section in respect of any company or class of companies, subject to such conditions as may be prescribed; | | (b) | provide for the manner of computation of major stakes; and | | (c) | provide that any interest or control referred to in the definition of “major stake” in subsection (10), that is acquired or held, directly or indirectly, by a company in which a designated financial holding company has, directly or indirectly, a major stake shall be deemed to be acquired or held by the designated financial holding company. |
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| (9) Any designated financial holding company which contravenes this section or fails to comply with any condition imposed or prescribed under this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $250,000 and, in the case of a continuing offence, to a further fine not exceeding $25,000 for every day or part thereof during which the offence continues after conviction. |
(10) In this section —“major stake” means —| (a) | any beneficial interest in issued shares of a company exceeding 10% of the total number of issued shares in the company or, in the case of an umbrella VCC, either exceeding 10% of the total number of issued shares in the umbrella VCC that are not in respect of any of its sub-funds, or exceeding 10% of the total number of issued shares in the umbrella VCC in respect of any one of its sub-funds; | | (b) | control over more than 10% of the voting power in a company or, in the case of an umbrella VCC, either more than 10% of the voting power in the umbrella VCC that is not in respect of any of its sub-funds or, more than 10% of the voting power in the umbrella VCC in respect of any one of its sub-funds; or | | (c) | any interest in a company, where the directors of the company are accustomed or under an obligation, whether formal or informal, to act in accordance with the designated financial holding company’s directions, instructions or wishes, or where the designated financial holding company is in a position to determine the policy of the company; |
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| “sub-fund”, in relation to an umbrella VCC, has the meaning given by section 2(1) of the Variable Capital Companies Act 2018; |
| “umbrella VCC” has the meaning given by section 2(1) of the Variable Capital Companies Act 2018. [S 26/2022 wef 30/06/2022] |
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32.—(1) No designated financial holding company shall acquire or hold interests in or rights over immovable property, wherever situated.(2) Notwithstanding subsection (1) —| (a) | a designated financial holding company may, within 6 months after its designation date or such longer period as the Authority may allow in any particular case, hold interests in or rights over immovable property, wherever situated; but | | (b) | the designated financial holding company shall not continue to hold the interests in or rights over immovable property, after the period referred to in paragraph (a) unless it obtained the approval of the Authority. |
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| (3) In addition to the restriction under subsection (1), the Authority may make such regulations as may be necessary or expedient for the purpose of limiting, in relation to a designated financial holding company, the acquisition or holding of interests in or rights over immovable property by the FHC group of the designated financial holding company in such manner as the Authority may determine. |
| (4) For the purposes of complying with regulations under subsection (3), a designated financial holding company shall aggregate, in such manner as may be prescribed, the value of every interest in or right over immovable property that is acquired or held by any company within the FHC group of the designated financial holding company. |
(5) In this section, “immovable property” shall exclude the following:| (a) | any interest in or right over immovable property or any part thereof used for the purposes of conducting the business of any of the companies within its FHC group or housing or providing amenities for the officers of any of the companies within its FHC group; | | (b) | any interest in or right over immovable property held by way of security for the purposes of a transaction entered into in the ordinary course of the business of any of the companies within its FHC group; | | (c) | any interest in or right over immovable property held by way of enforcement of such security referred to in paragraph (b), provided that it is disposed of at the earliest suitable opportunity; | | (d) | any interest in or right over immovable property or any part thereof held for the benefit of persons other than any company in the FHC group pursuant to an obligation imposed under any written law, rule of law, contract or order of court; and | | (e) | such other interest in or right over immovable property as the Authority may prescribe. |
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| (6) The Authority may make regulations to provide for the manner of valuation or apportionment of immovable property for the purposes of this section. |
| (7) Any designated financial holding company which contravenes subsection (1), (2) or (4) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 and, in the case of a continuing offence, to a further fine not exceeding $10,000 for every day or part thereof during which the offence continues after conviction. |
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| Power of Authority to secure compliance with provisions of this Part |
33.—(1) Any designated financial holding company, if at any time called upon in writing by the Authority to do so, shall satisfy the Authority by the production of such evidence or information as it may require, that the designated financial holding company is not in contravention of any of the provisions in this Part.(2) Without prejudice to sections 28, 30 and 31, the Authority may, for the purposes of securing compliance with those sections on a consolidated basis, from time to time by notice in writing, require any designated financial holding company to aggregate, in such manner as may be specified in the notice, its accounts, with the accounts of all or any of —| (a) | the designated financial holding company’s related corporations; and | | (b) | companies in which the designated financial holding company acquires or holds, directly or indirectly, a major stake as defined in section 31(10). |
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| (3) The designated financial holding company shall comply with the requirement referred to in subsection (2) within such time as is specified in the notice. |
| (4) Any designated financial holding company that fails to provide any of the evidence or information required by the Authority under subsection (1), shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 and, in the case of a continuing offence, to a further fine not exceeding $10,000 for every day or part thereof during which the offence continues after conviction. |
| (5) Any designated financial holding company that fails, within the time referred to in subsection (3), to comply with a requirement referred to in subsection (2) relating to the aggregation of accounts for the purposes of complying with section 28, 30 or 31 on a consolidated basis shall be guilty of an offence and shall be liable on conviction to the same punishment provided under section 28, 30 or 31, whichever is applicable, for failure to comply with that section. |
| (6) In this section, “accounts” means any item on the profit and loss accounts and balance-sheet. |
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