PART 5B
PRIMARY DEALERS FOR SECURITIES
ISSUED BY AUTHORITY
Appointment as primary dealer
145.—(1)  The Authority may, on application, appoint as a primary dealer any financial institution which carries on or intends to carry on, or holds itself out as carrying on or willing to carry on, the business of either or both of the following:
(a)applying to the Authority to purchase securities issued by the Authority on behalf of another person in pursuance of any public invitation under section 142;
(b)offering to redeem any securities issued by the Authority on behalf of another person in pursuance of any public invitation under section 141 or otherwise.
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(2)  In determining whether to appoint a financial institution as a primary dealer, the Authority must consider the following:
(a)the financial standing of the financial institution;
(b)the experience of that financial institution in carrying on the business referred to in subsection (1), and its ability to perform the duties which would be imposed on it by or under this Act; and
(c)the public interest.
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(3)  The Authority may, in any particular case, require a financial institution applying to be appointed as a primary dealer (called in this section an applicant) to provide such information or document as the Authority deems relevant to its consideration under subsection (2).
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(4)  The Authority may refuse an application under subsection (1) if —
(a)the applicant does not provide the Authority with such information or document as is required under subsection (3);
(b)in the Authority’s opinion, the applicant does not meet, or is unlikely to be able to continue to meet, such requirements as may be prescribed by regulations made under section 151 in relation to carrying on any business referred to in subsection (1); or
(c)the applicant makes any statement, or provides any information or document, in relation to its application that is false or misleading in any material particular, or omits to state any matter or thing without which its application is false or misleading in a material particular.
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(5)  Every appointment as a primary dealer under this section continues in force for such period as may be specified by the Authority, unless the appointment is earlier cancelled or suspended.
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(6)  Any financial institution which, immediately before 18 April 2013, was appointed as a primary dealer under section 29A of the Government Securities Act 1992 is, for so long as that appointment remains in force, deemed —
(a)to be appointed as a primary dealer under this section; and
(b)to be subject, under section 146, to the conditions and restrictions to which the financial institution’s appointment as a primary dealer under section 29A of the Government Securities Act 1992 is subject.
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(7)  If a person who is not a primary dealer carries on, or holds himself, herself or itself out as carrying on or willing to carry on, any business referred to in subsection (1), the person 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.
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Conditions of appointment as primary dealer
146.—(1)  The Authority may appoint any financial institution as a primary dealer subject to such conditions or restrictions as the Authority thinks fit.
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(2)  Without limiting subsection (1), the Authority may impose such conditions or restrictions with respect to the type of services which may or may not be provided by the primary dealer as the Authority may consider appropriate.
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(3)  Subject to subsections (4), (5) and (6), the Authority may at any time add to, vary or revoke any condition or restriction of the appointment of any financial institution as a primary dealer.
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(4)  Before making any modification to the conditions or restrictions of the appointment of any financial institution as a primary dealer under this section, the Authority must, unless the Authority in respect of any particular case considers that it is not practicable or desirable to do so, give notice to the financial institution concerned —
(a)stating that the Authority proposes to make the modification in the manner specified in the notice;
(b)stating the reasons why the Authority proposes to make the modification; and
(c)specifying the time (being at least 28 days after the date of service of the notice on the financial institution) within which written representations with respect to the proposed modification may be made.
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(5)  Where the Authority receives any written representation under subsection (4)(c) —
(a)the Authority must consider the representation and may —
(i)reject the representation; or
(ii)withdraw or amend the proposed modification in accordance with the representation or otherwise; and
(b)in either case, the Authority must thereupon issue a written notice to the primary dealer concerned requiring that effect be given, within a reasonable time, to the proposed modification specified in the notice or to such modification as may subsequently be amended by the Authority.
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(6)  If no written representation is received by the Authority within the time specified under subsection (4)(c), or if any written representation made under that subsection is subsequently withdrawn, the modification takes effect as specified in the notice given under that subsection.
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Directions to primary dealers
147.—(1)  The Authority may give directions to be observed by any primary dealer or class of primary dealers —
(a)to ensure the continuity or reliability of the provision of services by the primary dealer or class of primary dealers to its customers; or
(b)in the public interest.
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(2)  A direction under subsection (1) —
(a)must require the primary dealer or every primary dealer in that class of primary dealers concerned (according to the circumstances of the case) to do, or not to do, such things as are specified in the direction or are of a description as specified therein, including but not limited to the manner in which the primary dealer conducts the business referred to in section 145(1) with its customers;
(b)takes effect at such time, being the earliest practicable time, as is determined by or under that direction; and
(c)may be varied or revoked at any time by the Authority.
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(3)  Every primary dealer must comply with every direction of the Authority given to the dealer under this section.
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(4)  It is not necessary to publish any direction under subsection (1) in the Gazette.
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Cancellation, etc., of appointment as primary dealer
148.—(1)  If the Authority is satisfied that —
(a)a primary dealer is contravening, is likely to contravene or has contravened —
(i)any provision of this Act applicable to the primary dealer; or
(ii)any condition or restriction of its appointment as a primary dealer;
(b)a primary dealer has not complied with any direction issued by the Authority under section 147;
(c)a primary dealer has gone or is likely to go into compulsory or voluntary liquidation other than for the purpose of amalgamation or reconstruction;
(d)a receiver, a receiver and manager or a person in an equivalent capacity has been appointed, whether in Singapore or elsewhere, in relation to or in respect of any property of the primary dealer;
(e)a primary dealer has obtained the primary dealer’s appointment as such by fraud or misrepresentation;
(f)a primary dealer has failed to satisfy any of its obligations under or arising from this Act;
(g)a primary dealer has been convicted, whether in Singapore or elsewhere, of an offence committed before, on or after 18 April 2013, involving fraud or dishonesty or the conviction for which involved a finding that it had acted fraudulently or dishonestly;
(h)a primary dealer is no longer in a position to effectively carry out its duties or responsibilities as a primary dealer under this Act or under any regulations made under section 151; or
(i)a primary dealer is carrying on its business referred to in section 145(1) in a manner that is likely to be detrimental to its clients or contrary to the public interest,
the Authority may by order cancel the appointment as a primary dealer.
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(2)  The Authority may, if it considers it desirable to do so, in lieu of an order cancelling the appointment as a primary dealer, by order do either or both of the following:
(a)suspend the appointment for such period (not exceeding 6 months) as the Authority thinks fit;
(b)reprimand the primary dealer in writing.
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(3)  In the case of a failure by a primary dealer to comply with any direction issued by the Authority under section 147, the Authority may, in addition to any order that may be made under subsection (2), order the primary dealer to pay to the Authority, for every day or part of a day of such failure, a financial penalty in accordance with such formula as the Minister may, by notification published in the Gazette, prescribe.
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(4)  A financial penalty collected by the Authority under subsection (3) must be paid into the Consolidated Fund.
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(5)  The Authority must not make any order under subsection (1), (2) or (3) against a primary dealer unless the Authority has given to the primary dealer an opportunity of being heard by a representative in writing, being a period of at least 21 days but not more than 28 days.
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(6)  Where the Authority has made any order under subsection (1), (2) or (3) against any primary dealer, it must serve on the primary dealer a notice of the order.
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(7)  Subject to subsections (8) and (9), any order made by the Authority under subsection (1), (2) or (3) against any primary dealer does not take effect until the expiration of 21 days after the Authority has served the notice of the order on the primary dealer.
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(8)  Any order cancelling or suspending an appointment as a primary dealer does not operate so as to —
(a)prejudice the enforcement by any person of any right or claim against the financial institution formerly appointed as a primary dealer, or by the financial institution formerly so appointed of any right or claim against any person; or
(b)affect the validity or enforceability of any agreement, transaction or arrangement in respect of any securities issued by the Authority entered into (whenever) by the primary dealer.
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(9)  An order of reprimand under subsection (2) takes effect on the date it is served on the primary dealer concerned.
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(10)  The Authority may recover on behalf of the Government any financial penalty ordered under subsection (3) as though the financial penalty were a civil debt due to the Authority.
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Appeal to Minister
149.—(1)  Any primary dealer who is aggrieved by —
(a)any notice of a condition or restriction of the appointment of any financial institution as a primary dealer under section 146;
(b)any direction given by the Authority under section 147 or variation of any such direction; or
(c)any order of the Authority under section 148(1), (2) or (3), except an order of reprimand,
may, within 14 days after the receipt by the primary dealer of the notice of the condition or restriction, the direction (or variation thereof) or the order (as the case may be) appeal to the Minister whose decision is final.
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(2)  Where an appeal is lodged under this section —
(a)the order under section 148 cancelling the appointment as a primary dealer does not take effect unless the order is confirmed by the Minister or the appeal is for any reason dismissed by the Minister or withdrawn; and
(b)every other notice, direction (or variation thereof) or order appealed against takes effect and must be complied with until the determination of the appeal.
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(3)  Subject to subsection (4), the Minister may determine an appeal under this section by confirming, varying or reversing the notice, direction (or variation thereof) or order of the Authority that is appealed against.
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(4)  If the Minister is satisfied that an appeal by a primary dealer is instituted or pursued without reasonable ground, the Minister may, without calling for a reply from the Authority, but after giving the primary dealer an opportunity to be heard, determine the appeal by confirming the notice, direction (or variation thereof) or order of the Authority that is appealed against.
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Inspection of books
150.—(1)  The Authority may from time to time inspect, under conditions of secrecy, the books of a primary dealer relating to its business referred to in section 145(1) for the purposes of ensuring that —
(a)any condition or restriction imposed by the Authority under section 146 on the primary dealer is complied with;
(b)any direction given by the Authority under section 147 to the primary dealer is complied with; or
(c)the primary dealer has satisfied or satisfies any of its obligations under or arising from this Part.
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(2)  For the purposes of an inspection under this section —
(a)a primary dealer, and any person who is in possession of the books of the primary dealer relating to its business referred to in section 145(1), must produce such books (and afford the Authority access to the books) and provide such information and facilities as may be required by the Authority to conduct the inspection;
(b)the primary dealer must procure that any such person in paragraph (a) who is in possession of the primary dealer’s books produce the books to the Authority and give such information or facilities as may be required by the Authority; and
(c)the Authority may —
(i)make copies of, or take possession of, any of such books; and
(ii)retain possession of any of such books for so long as is necessary for the purposes of exercising a power conferred by this section (except subsection (4)).
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(3)  No person is entitled, as against the Authority, to claim a lien on any of the books, but such a lien is not otherwise prejudiced.
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(4)  While the books of a primary dealer are in the Authority’s possession, the Authority —
(a)must permit any other person to inspect at all reasonable times such (if any) of the books as that other person would be entitled to inspect if the books were not in the Authority’s possession; and
(b)may permit any other person to inspect any of the books.
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(5)  The Authority may require a person who produced any book to the Authority to explain, to the best of the person’s knowledge and belief, any matter about the compilation of the book or to which the book relates.
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(6)  Any person who, without reasonable excuse, fails to comply with subsection (2) or a requirement of the Authority under subsection (5) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000 or to imprisonment for a term not exceeding 2 years or to both and, in the case of a continuing offence, to a further fine not exceeding $5,000 for every day or part of a day during which the offence continues after conviction.
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(7)  In this section, “books” includes any record, register, document or other record of information, and any account or accounting record, however compiled, recorded or stored, whether in written or printed form or on microfilm or in any electronic form or otherwise.
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Power of Authority to make regulations for this Part
151.—(1)  The Authority may make regulations for the purposes of this Part, including regulations to prescribe anything which may be prescribed under this Part.
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(2)  Without limiting subsection (1), regulations made under this section may —
(a)prescribe the manner in which any application to be appointed as a primary dealer is to be made;
(b)prescribe the duties and obligations of a primary dealer; and
(c)provide that any contravention of any specified provision of the regulations shall be an offence punishable —
(i)in the case of an individual, with a fine not exceeding $12,500 or with imprisonment for a term not exceeding 12 months or with both and, in the case of a continuing offence, with a further fine not exceeding $1,250 for every day or part of a day during which the offence continues after conviction; or
(ii)in any other case, with a fine not exceeding $25,000 and, in the case of a continuing offence, with a further fine not exceeding $2,500 for every day or part of a day during which the offence continues after conviction.
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