Division 3 — Compulsory transfer of shares
of pertinent financial institution
General provisions
65.—(1)  In this Division, unless the context otherwise requires —
“business” includes affairs, property, right, obligation and liability;
“certificate” means a certificate of transfer issued by the Minister under section 67(1);
“determination” means a determination made by the Authority under section 66(2);
“property” includes property, right and power of every description;
“significant shareholder”, in relation to a pertinent financial institution, means any person prescribed by regulations made under section 126 as a significant shareholder for that pertinent financial institution;
“significant shareholder provisions”, in relation to any pertinent financial institution, means such provisions of written law as may be prescribed by regulations made under section 126 as significant shareholder provisions for that pertinent financial institution;
“transferee” means any person to whom a transferor’s shares are, are to be, or are proposed to be, transferred under this Division;
“transferor” means a shareholder of a pertinent financial institution whose shares in the pertinent financial institution are, are to be, or are proposed to be, transferred under this Division.
[9/2013; 31/2017]
(2)  This Division does not apply where the pertinent financial institution is a co‑operative society.
[31/2017]
Compulsory transfer of shares
66.—(1)  The Authority may make a determination that all or any of the shares held by a transferor in a pertinent financial institution incorporated in Singapore must be transferred to a transferee, if —
(a)any ground exists for the Authority to exercise any power under the relevant provisions in relation to the pertinent financial institution, whether or not the Authority has exercised the power;
(b)the transferee or, where the transferee is a corporation or co-operative society, the board of directors of the transferee (in any case where the transferee is a corporation), or the committee of management of the transferee (in any case where the transferee is a co‑operative society), has consented to the transfer; and
(c)the Authority is satisfied that the transfer is appropriate, having regard to —
(i)in any case where the pertinent financial institution is a bank licensed under the Banking Act 1970 —
(A)the interests of the depositors of the pertinent financial institution given priority and the order of priority of each class of depositors under section 62 of the Banking Act 1970;
(B)if the transferee is a bank licensed under the Banking Act 1970, the interests of the depositors of the transferee given priority and the order of priority of each class of depositors under section 62 of the Banking Act 1970;
(C)the stability of the financial system in Singapore; and
(D)any other matter that the Authority considers relevant;
(ii)in any case where the pertinent financial institution is a finance company licensed under the Finance Companies Act 1967 —
(A)the interests of the depositors of the pertinent financial institution given priority and the order of priority of each class of depositors under section 44A of the Finance Companies Act 1967;
(B)if the transferee is a finance company licensed under the Finance Companies Act 1967, the interests of the depositors of the transferee given priority and the order of priority of each class of depositors under section 44A of the Finance Companies Act 1967;
(C)the stability of the financial system in Singapore; and
(D)any other matter that the Authority considers relevant;
(iia)in any case where the pertinent financial institution is an insurer licensed under the Insurance Act 1966 —
(A)the interests of the policy owners of the insurer given priority and the order of priority of each class of policy owners under section 123 of the Insurance Act 1966;
(B)if the transferee is an insurer licensed under the Insurance Act 1966, the interests of the policy owners of the transferee given priority and the order of priority of each class of policy owners under section 123 of the Insurance Act 1966;
(C)the stability of the financial system in Singapore;
(D)whether the PPF Agency has to make a payout from any of the PPF Funds to the transferee and the amount of such payout, if any; and
(E)any other matter that the Authority considers relevant; or
(iii)in any other case —
(A)the interests of the affected persons of the pertinent financial institution;
(B)the interests of the affected persons (if any) of the transferee;
(C)the stability of the financial system in Singapore; and
(D)any other matter that the Authority considers relevant.
[9/2013; 31/2017]
(2)  The Authority may, before making a determination, appoint one or more persons —
(a)to perform an independent assessment of —
(i)the proposed transfer of shares; and
(ii)the consideration (if any) that should be paid by the transferee; and
(b)to provide to the Authority a report on the assessment and on the proposed transfer.
[9/2013]
(3)  The remuneration and expenses of any person appointed under subsection (2) must be paid by the pertinent financial institution.
[9/2013]
(4)  The Authority must serve a copy of any report provided under subsection (2) on the transferor and the transferee.
[9/2013]
(5)  Upon making a determination, the Authority must submit the determination to the Minister for the Minister’s approval.
[9/2013]
(6)  Before approving the determination, the Minister must, unless he or she decides that it is not practicable or desirable to do so —
(a)publish in the Gazette and in such newspaper or newspapers as the Minister may determine a notice of the Minister’s intention to approve the determination, specifying such particulars as the Minister considers appropriate; and
(b)cause to be given to the transferor written notice of the Minister’s intention to approve the determination, specifying such particulars as the Minister considers appropriate and the date by which the transferor may make written representations to the Minister.
[9/2013]
(7)  In determining the period within which written representations have to be made under subsection (6), the Minister must take into account the need for the transfer to be effected expeditiously in the interest of the stability of the financial system in Singapore.
[9/2013]
(8)  Upon receipt of any written representation, the Minister must consider the representation for the purpose of deciding whether to approve the determination.
[9/2013]
(9)  Where the determination, if approved, will result in the transferee becoming a significant shareholder of the pertinent financial institution, the Minister must not approve the determination unless —
(a)the Authority is satisfied that —
(i)the transferee is a fit and proper person; and
(ii)having regard to the likely influence of the transferee, the pertinent financial institution will or will continue to conduct its business prudently and comply with the provisions of this Act and the relevant Act applicable to the pertinent financial institution; and
(b)the Minister is satisfied that —
(i)in any case where the pertinent financial institution is a bank incorporated in Singapore, it is in the national interest to do so; or
(ii)in any other case, it is in the public interest to do so.
[9/2013]
(10)  The Minister may —
(a)approve the determination without modification;
(b)approve the determination subject to any modification the Minister considers appropriate, if the transferee or, where the transferee is a corporation or co‑operative society, the board of directors of the transferee (in any case where the transferee is a corporation), or the committee of management of the transferee (in any case where the transferee is a co‑operative society), has agreed to the modification; or
(c)refuse to approve the determination.
[9/2013]
(11)  Any approval under subsection (10) is subject to such conditions as the Minister may determine, and the Minister may add to, vary or revoke any such condition.
[9/2013]
(12)  The transferor must comply with every condition referred to in subsection (11) that applies to the transferor and of which it has been given written notice by the Authority.
[9/2013; 31/2017]
(13)  The transferee must comply with every condition referred to in subsection (11) that applies to the transferee and of which it has been given written notice by the Authority.
[9/2013; 31/2017]
(13A)  A person that contravenes subsection (12) or (13) 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 of a day during which the offence continues after conviction.
[31/2017]
(14)  A determination, an approval under subsection (10) of a determination or the issue of a certificate does not preclude the exercise of any power by the Authority or the Minister under this Act or the relevant Act applicable to the pertinent financial institution.
[9/2013]
Certificate of transfer
67.—(1)  If the Minister approves a determination, he or she must, as soon as practicable, issue a certificate of transfer, which comes into effect on the date specified by him or her in the certificate.
[9/2013; 31/2017]
(2)  The certificate must specify such information as may be prescribed by regulations made under section 126.
[9/2013; 31/2017]
(3)  The certificate may make provision for all or any of the following matters:
(a)the transfer to the transferee of all or any of the shares of the transferor in the pertinent financial institution;
(b)any share in the pertinent financial institution which is held by the transferor as trustee;
(c)the consideration (if any) to be paid by the transferee to the transferor, and the period within which the consideration is to be paid;
(d)such incidental, consequential and supplementary matters as are, in the Minister’s opinion, necessary to secure that the transfer is fully effective, including conditions relating to the transfer.
[9/2013]
(4)  The Minister may at any time before the certificate comes into effect add to, vary or revoke any matter specified in the certificate.
[9/2013]
(5)  On or before the date on which the certificate comes into effect, the Authority must cause the certificate and any addition, variation or revocation referred to in subsection (4) to be served on the pertinent financial institution and published in the Gazette and in such newspaper or newspapers as the Minister may determine.
[9/2013]
(6)  Despite any written law or rule of law, or anything in the memorandum and articles of association of the pertinent financial institution, upon the certificate coming into effect —
(a)any share of the transferor that is to be transferred under the certificate is transferred to and vests in the transferee, free from any claim or encumbrance, without other or further assurance, act or deed; and
(b)the certificate has effect according to its tenor and is binding on any person affected by it.
[9/2013]
(7)  To avoid doubt, the shares of the transferor are transferred to and vest in the transferee in accordance with subsection (6), despite the death or dissolution, the bankruptcy or winding up, or the mental or other incapacity, of the transferor.
[9/2013]
(8)  Section 130(1) of the Insolvency, Restructuring and Dissolution Act 2018 does not apply to the transfer of any share under the certificate.
[9/2013; 40/2018]
(9)  Where the transfer of shares under the certificate results in the transferee becoming a significant shareholder of the pertinent financial institution, upon the coming into effect of the certificate, the transferee —
(a)is deemed to have obtained the approval of the Minister or the Authority (as the case may be) under the significant shareholder provisions applicable to the pertinent financial institution, in respect of the shares; and
(b)is not required to make a take-over offer or be required to acquire the shares of the other shareholders of the pertinent financial institution, despite the provisions of the Companies Act 1967 or the Take‑over Code.
[9/2013]
(10)  A transferor or a transferee who fails to comply with any provision in the certificate shall be guilty of an offence and shall be liable on conviction —
(a)in the case of an individual, to a fine not exceeding $125,000 or to imprisonment for a term not exceeding 3 years or to both and, in the case of a continuing offence, to a further fine not exceeding $12,500 for every day or part of a day during which the offence continues after conviction; or
(b)in any other case, 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 of a day during which the offence continues after conviction.
[9/2013]
(11)  Where a person is charged with an offence under subsection (10), it is a defence for the person to prove that —
(a)the person was not aware he or she had contravened any provision in the certificate; and
(b)the person has complied with the provision within a reasonable time after becoming aware of the contravention.
[9/2013]
(12)  Except as provided in subsection (11), it is not a defence for a person charged with an offence under subsection (10) that the person did not intend to or did not knowingly contravene any provision in the certificate.
[9/2013]
(13)  Despite section 53(2) but subject to section 125, during the period beginning on the date on which the Minister publishes the notice under section 66(6) in the Gazette on the transfer of any share in a pertinent financial institution or, where the notice is not published in the Gazette, the date on which the Authority publishes the certificate under subsection (5) in the Gazette on the transfer of the share, and ending on the date on which the transfer of the share comes into effect —
(a)no enforcement order or other legal process may be commenced or continued against the share;
[Act 25 of 2021 wef 01/04/2022]
(b)no steps may be taken to enforce any security over the share;
(c)any sale, transfer, assignment or other disposition of the share is void;
(d)no voting rights are exercisable in respect of the share, unless the Minister expressly permits such rights to be exercised;
(e)no shares in the pertinent financial institution may be issued or offered (whether by ways of rights, bonus or otherwise) in respect of the share, unless the Minister expressly permits such issue or offer;
(f)no payment may be made by the pertinent financial institution of any amount (whether by dividends or otherwise) in respect of the share, unless the Minister expressly authorises such payment;
(g)no resolution may be passed, and no order may be made, for the winding up of the pertinent financial institution;
(h)no judicial manager may be appointed under Part 7 of the Insolvency, Restructuring and Dissolution Act 2018 in relation to the pertinent financial institution;
(i)no proceedings may be commenced or continued against the pertinent financial institution in respect of any business of the pertinent financial institution;
(j)no enforcement order, distress or other legal process may be commenced, levied or continued against any property of the pertinent financial institution;
[Act 25 of 2021 wef 01/04/2022]
(k)no steps may be taken to enforce any security over any property of the pertinent financial institution; and
(l)any sale, transfer, assignment or other disposition of any property of the pertinent financial institution is void, except for (where the pertinent financial institution is an insurer licensed under the Insurance Act 1966) any payment of claims to policy owners or claimants, other than policy owners who are related corporations of the pertinent financial institution.
[9/2013; 31/2017; 40/2018]