PART 3 [34/2012] 47. The objectives of this Part are —| (a) | to promote safe and efficient clearing facilities; and | | (b) | to reduce systemic risk. [34/2012] |
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| Interpretation of this Part |
48.—(1) In this Part, unless the context otherwise requires —| “default proceedings” means any proceedings or other action taken by an approved clearing house or a recognised clearing house under its default rules; |
| “default rules”, in relation to an approved clearing house or a recognised clearing house, means the business rules of the approved clearing house or recognised clearing house which provide for the taking of proceedings or other action if a participant has failed, or appears to be unable or to be likely to become unable, to meet the participant’s obligations for any unsettled or open market contract to which the participant is a party; |
| “defaulter” means a participant who is the subject of any default proceedings; |
| “foreign corporation” means a corporation which is incorporated or formed outside Singapore; |
| “market charge” means a security interest, whether fixed or floating, granted in favour of an approved clearing house, or a recognised clearing house, over market collateral; |
| “market collateral” means any property held by or deposited with an approved clearing house or a recognised clearing house, for the purpose of securing any liability arising directly in connection with the ensuring of the performance of market contracts by the approved clearing house or recognised clearing house; |
“market contract” means —| (a) | a contract subject to the business rules of an approved clearing house or a recognised clearing house, that is entered into between the approved clearing house or recognised clearing house and a participant pursuant to a novation (however described), whether before or after default proceedings have commenced, which is in accordance with those business rules and for the purposes of the clearing or settlement of transactions using the clearing facility of the approved clearing house or recognised clearing house; or | | (b) | a transaction which is being cleared or settled using the clearing facility of an approved clearing house or a recognised clearing house, and in accordance with the business rules of the approved clearing house or recognised clearing house, whether or not a novation referred to in paragraph (a) is to take place; |
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“property”, in relation to a market charge or market collateral, means —| (a) | any money, letter of credit, banker’s draft, certified cheque, guarantee or other similar instrument; | | (b) | any securities; | | (c) | any unit in a collective investment scheme; | | (d) | any derivatives contract; or | | (e) | any other asset of value acceptable to an approved clearing house or a recognised clearing house; |
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“relevant office holder” means —| (a) | the Official Assignee exercising his or her powers under the Insolvency, Restructuring and Dissolution Act 2018; | | (b) | a person acting in relation to a corporation as the liquidator, the provisional liquidator, the receiver, the receiver and manager or the judicial manager of the corporation, or acting in an equivalent capacity in relation to a corporation; or | | (c) | a person acting in relation to an individual as the trustee in bankruptcy, or the interim receiver of the property, of the individual, or acting in an equivalent capacity in relation to an individual; |
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| “settlement”, in relation to a market contract, includes partial settlement; |
| “Singapore corporation” means a corporation which is incorporated in Singapore; [Act 12 of 2024 wef 24/01/2025] |
| “Singapore recognised clearing house” means a recognised clearing house that is a Singapore corporation. [34/2012; 4/2017; 40/2018] [Act 12 of 2024 wef 24/01/2025] |
| (2) Where a charge is granted partly for the purpose specified in the definition of “market charge” in subsection (1) and partly for any other purpose or purposes, the charge is treated as a market charge under this Part insofar as it has effect for that specified purpose. [34/2012] |
| (3) Where any collateral is granted partly for the purpose specified in the definition of “market collateral” in subsection (1) and partly for any other purpose or purposes, the collateral is treated as market collateral under this Part insofar as it has been provided for that specified purpose. [34/2012] |
(4) Any references in this Part to the law of insolvency is a reference to —| (a) | the Insolvency, Restructuring and Dissolution Act 2018; and | | (b) | [Deleted by Act 40 of 2018] | | (c) | any other written law, whether in Singapore or elsewhere, which is concerned with, or in any way related to, the bankruptcy or insolvency of a person, other than the Banking Act 1970. [34/2012; 40/2018] |
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| (5) Any reference in this Part to a settlement, in relation to a market contract, is a reference to the discharge of the rights and liabilities of the parties to the market contract, whether by performance, compromise or otherwise. [34/2012] |
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| Division 1 — Establishment of Clearing Facilities |
| Requirement for approval or recognition |
49.—(1) A person must not establish or operate a clearing facility, or hold out that the person is operating a clearing facility, unless the person is —| (a) | an approved clearing house; or | | (b) | a recognised clearing house. [34/2012] |
(2) A person must not hold out that the person is —| (a) | an approved clearing house, unless the person is an approved clearing house; or | | (b) | a recognised clearing house, unless the person is a recognised clearing house. [34/2012] |
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(3) Except with the written approval of the Authority, no person, other than an approved clearing house or a recognised clearing house, may take or use, or have attached to or exhibited at any place —| (a) | the title or description “securities clearing house” or “futures clearing house” in any language; or | | (b) | any title or description which resembles a title or description referred to in paragraph (a). [34/2012] |
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| (4) Any person who contravenes subsection (1) or (3) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $250,000 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 $25,000 for every day or part of a day during which the offence continues after conviction. [34/2012] |
| (5) Any person who contravenes subsection (2) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000 and, in the case of a continuing offence, to a further fine not exceeding $2,000 for every day or part of a day during which the offence continues after conviction. [34/2012] |
| (6) Without affecting section 337(1), the Authority may, by regulations made under section 81Q, exempt any corporation or class of corporations from subsection (1), subject to such conditions or restrictions as the Authority may prescribe in those regulations. [34/2012] |
| (7) Without affecting section 337(3) and (4), the Authority may, by written notice, exempt any corporation from subsection (1), subject to such conditions or restrictions as the Authority may specify by written notice, if the Authority is satisfied that the exemption will not detract from the objectives specified in section 47. [34/2012] |
| (8) It is not necessary to publish any exemption granted under subsection (7) in the Gazette. [34/2012] |
(9) The Authority may, at any time, by written notice —| (a) | add to the conditions and restrictions referred to in subsection (7); or | | (b) | vary or revoke any condition or restriction referred to in that subsection. [34/2012] |
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| (10) Every corporation that is granted an exemption under subsection (6) must satisfy every condition or restriction imposed on it under that subsection. [34/2012] |
| (11) Every corporation that is granted an exemption under subsection (7) must, for the duration of the exemption, satisfy every condition or restriction imposed on it under that subsection or subsection (9). [34/2012] |
| (12) Any corporation which contravenes subsection (10) or (11) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part of a day during which the offence continues after conviction. [34/2012] |
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| Application for approval or recognition |
50.—(1) A Singapore corporation may apply to the Authority to be —| (a) | approved as an approved clearing house; or | | (b) | recognised as a recognised clearing house. [34/2012] |
| (2) A foreign corporation may apply to the Authority to be recognised as a recognised clearing house. [34/2012] |
(3) An application under subsection (1) or (2) must be —| (a) | made in such form and manner as the Authority may prescribe; and | | (b) | accompanied by a non‑refundable prescribed application fee, which must be paid in the manner specified by the Authority. [34/2012] |
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| (4) The Authority may require an applicant to provide the Authority with such information or documents as the Authority considers necessary in relation to the application. [34/2012] |
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| Power of Authority to approve or recognise clearing house |
51.—(1) Where a Singapore corporation has made an application under section 50(1), the Authority may —| (a) | in the case of an application to be approved as an approved clearing house, approve the Singapore corporation as an approved clearing house; or | | (b) | in the case of an application to be recognised as a recognised clearing house, recognise the Singapore corporation as a recognised clearing house. [34/2012] |
| (2) Where a foreign corporation has made an application under section 50(2), the Authority may recognise the corporation as a recognised clearing house. [34/2012] |
(3) Despite subsection (1), the Authority may, with the consent of the applicant —| (a) | treat an application under section 50(1)(a) as an application under section 50(1)(b), if the Authority is of the opinion that the applicant would be more appropriately regulated as a recognised clearing house; or | | (b) | treat an application under section 50(1)(b) as an application under section 50(1)(a), if the Authority is of the opinion that the applicant would be more appropriately regulated as an approved clearing house. [34/2012] |
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(4) The Authority may approve a Singapore corporation as an approved clearing house under subsection (1)(a), recognise a Singapore corporation as a recognised clearing house under subsection (1)(b) or recognise a foreign corporation as a recognised clearing house under subsection (2), subject to such conditions or restrictions as the Authority thinks fit to impose by written notice, including conditions or restrictions, either of a general or specific nature, relating to —| (a) | the activities that the corporation may undertake; | | (b) | the products that may be cleared or settled by any clearing facility established or operated by the corporation; and | | (c) | the nature of the investors or participants who may use or have an interest in any clearing facility established or operated by the corporation. [34/2012] |
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| (5) The Authority may, at any time, by written notice to the corporation, vary any condition or restriction or impose such further condition or restriction as the Authority may think fit. [34/2012] |
| (6) An approved clearing house or a recognised clearing house must, for the duration of the approval or recognition, satisfy every condition or restriction that may be imposed on it under subsection (4) or (5). [34/2012] |
| (7) The Authority must not approve an applicant as an approved clearing house, or recognise an applicant as a recognised clearing house, unless the applicant meets such requirements, including minimum financial requirements, as the Authority may prescribe, either generally or specifically. [34/2012] |
(8) The Authority may refuse to approve a Singapore corporation as an approved clearing house, or recognise a Singapore corporation or foreign corporation as a recognised clearing house, if —| (a) | the corporation has not provided the Authority with such information as the Authority may require, relating to —| (i) | the corporation or any person employed by or associated with the corporation for the purposes of the corporation’s business; or | | (ii) | any circumstances likely to affect the corporation’s manner of conducting business; |
| | (b) | any information or document provided by the corporation to the Authority is false or misleading; | | (c) | the corporation or a substantial shareholder of the corporation is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere; | | (d) | an enforcement order against the corporation or a substantial shareholder of the corporation in respect of a judgment debt has been returned unsatisfied in whole or in part; [Act 25 of 2021 wef 01/04/2022] | | (e) | a receiver, a receiver and manager, a judicial 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 corporation or a substantial shareholder of the corporation; | | (f) | the corporation or a substantial shareholder of the corporation has, whether in Singapore or elsewhere, entered into a compromise or scheme of arrangement with the creditors of the corporation or shareholder (as the case may be) being a compromise or scheme of arrangement that is still in operation; | | (g) | the corporation, a substantial shareholder of the corporation or any officer of the corporation —| (i) | has been convicted, whether in Singapore or elsewhere, of an offence committed before, on or after 1 August 2013, involving fraud or dishonesty or the conviction for which involved a finding that the corporation, shareholder or officer (as the case may be) had acted fraudulently or dishonestly; or | | (ii) | has been convicted of an offence under this Act committed before, on or after 1 August 2013; |
| | (h) | the Authority is not satisfied as to the educational or other qualifications or experience of the officers or employees of the corporation, having regard to the nature of the duties they are to perform in connection with the establishment or operation of any clearing facility; | | (i) | the corporation fails to satisfy the Authority that the corporation is a fit and proper person or that all of its officers, employees and substantial shareholders are fit and proper persons; | | (j) | the Authority has reason to believe that the corporation may not be able to act in the best interests of investors or its members, participants or customers, having regard to the reputation, character, financial integrity and reliability of the corporation or its officers, employees or substantial shareholders; | | (k) | the Authority is not satisfied as to —| (i) | the financial standing of the corporation or any of its substantial shareholders; or | | (ii) | the manner in which the business of the corporation is to be conducted; |
| | (l) | the Authority is not satisfied as to the record of past performance or expertise of the corporation, having regard to the nature of the business which the corporation may carry on in connection with the establishment or operation of any clearing facility; | | (m) | there are other circumstances which are likely to —| (i) | lead to the improper conduct of business by the corporation or any of its officers, employees or substantial shareholders; or | | (ii) | reflect discredit on the manner of conducting the business of the corporation or any of its substantial shareholders; |
| | (n) | in the case of any clearing facility that the corporation operates, the Authority has reason to believe that the corporation, or any of its officers or employees, will not operate a safe and efficient clearing facility; | | (o) | the corporation does not satisfy the criteria prescribed under section 52 to be approved as an approved clearing house or recognised as a recognised clearing house, as the case may be; or | | (p) | the Authority is of the opinion that it would be contrary to the interests of the public to approve or recognise the corporation. [34/2012] |
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| (9) Subject to subsection (10), the Authority must not refuse to approve a Singapore corporation as an approved clearing house, or recognise a Singapore corporation or foreign corporation as a recognised clearing house, under subsection (8) without giving the corporation an opportunity to be heard. [34/2012] |
(10) The Authority may refuse to approve a Singapore corporation as an approved clearing house, or recognise a Singapore corporation or foreign corporation as a recognised clearing house, on any of the following grounds without giving the corporation an opportunity to be heard:| (a) | the corporation is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere; | | (b) | 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 corporation; | | (c) | the corporation has been convicted, whether in Singapore or elsewhere, of an offence committed before, on or after 1 August 2013, involving fraud or dishonesty or the conviction for which involved a finding that it had acted fraudulently or dishonestly. [34/2012] |
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| (11) The Authority must give notice in the Gazette of any corporation approved as an approved clearing house under subsection (1)(a) or recognised as a recognised clearing house under subsection (1)(b) or (2), and such notice may include all or any of the conditions and restrictions imposed by the Authority on the corporation under subsections (4) and (5). [34/2012] |
| (12) Any applicant which is aggrieved by a refusal of the Authority to grant to the applicant an approval under subsection (1)(a) or a refusal of the Authority to recognise the applicant under subsection (1)(b) or (2) may, within 30 days after the applicant is notified of the refusal, appeal to the Minister, whose decision is final. [34/2012] |
| (13) Any approved clearing house or recognised clearing house which contravenes subsection (6) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part of a day during which the offence continues after conviction. [34/2012] |
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| General criteria to be taken into account by Authority |
52.—(1) The Authority may prescribe the criteria which it may take into account for the purposes of deciding —| (a) | whether a Singapore corporation referred to in section 50(1) or 54(1) should be approved as an approved clearing house or recognised as a recognised clearing house; | | (b) | whether a foreign corporation referred to in section 50(2) should be recognised as a recognised clearing house; and | | (c) | whether an approved clearing house or a recognised clearing house that is subject to a review by the Authority under section 54(4) should be approved as an approved clearing house or recognised as a recognised clearing house. [34/2012] |
(2) Without affecting section 51 and subsection (1), the Authority may, for the purposes of deciding whether to recognise a foreign corporation as a recognised clearing house under section 51(2), have regard, in addition to any requirements prescribed under section 51(7) and any criteria prescribed under subsection (1), to —| (a) | whether adequate arrangements exist for co‑operation between the Authority and the primary financial services regulatory authority responsible for the supervision of the foreign corporation in the country or territory in which the head office or principal place of business of the foreign corporation is situated; and | | (b) | whether the foreign corporation is, in the country or territory in which the head office or principal place of business of the foreign corporation is situated, subject to requirements and supervision comparable, in the degree to which the objectives specified in section 47 are achieved, to the requirements and supervision to which approved clearing houses and recognised clearing houses are subject under this Act. [34/2012] |
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(3) In considering whether a foreign corporation has met the requirements mentioned in subsection (2)(b), the Authority may have regard to —| (a) | the relevant laws and practices of the country or territory in which the head office or principal place of business of the foreign corporation is situated; and | | (b) | the rules and practices of the foreign corporation. [34/2012] |
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| Annual fees payable by approved clearing house or recognised clearing house |
| 53.—(1) Every approved clearing house and every recognised clearing house must pay to the Authority such annual fees as may be prescribed in such manner as the Authority may specify. [34/2012] | (2) The Authority may, where it considers appropriate, refund or remit the whole or any part of any annual fee paid or payable to it. [34/2012] |
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| 54.—(1) A Singapore corporation which is an approved clearing house or a recognised clearing house may apply to the Authority to change its status in the manner referred to in subsection (5). [34/2012] (2) An application under subsection (1) must be —| (a) | made in such form and manner as the Authority may prescribe; and | | (b) | accompanied by a non‑refundable prescribed application fee, which must be paid in the manner specified by the Authority. [34/2012] |
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| (3) The Authority may require an applicant to provide the Authority with such information or documents as the Authority considers necessary in relation to the application. [34/2012] |
| (4) The Authority may, on its own initiative, review the status of a Singapore corporation that is an approved clearing house or a recognised clearing house in accordance with the requirements prescribed under section 51(7) and the criteria prescribed under section 52(1). [34/2012] |
(5) Where an application is made by a Singapore corporation under subsection (1), or where a review of the status of a Singapore corporation is conducted by the Authority under subsection (4), the Authority may —| (a) | if the corporation is an approved clearing house, withdraw the approval as such and recognise the corporation as a recognised clearing house under section 51(1)(b); | | (b) | if the corporation is a recognised clearing house, withdraw the recognition as such and approve the corporation as an approved clearing house under section 51(1)(a); or | | (c) | make no change to the status of the corporation as an approved clearing house or a recognised clearing house. [34/2012] |
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| (6) Where an application is made under subsection (1), the Authority must not exercise its power under subsection (5)(c) without giving the Singapore corporation an opportunity to be heard. [34/2012] |
| (7) Where a review of the status of a Singapore corporation is conducted by the Authority on its own initiative under subsection (4), the Authority must not exercise its powers under subsection (5)(a) or (b) without giving the corporation an opportunity to be heard. [34/2012] |
| (8) Any Singapore corporation which is aggrieved by a decision of the Authority made in relation to the corporation after a review under subsection (4) may, within 30 days after the corporation is notified of the decision, appeal to the Minister, whose decision is final. [34/2012] |
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| Cancellation of approval or recognition |
| 55.—(1) An approved clearing house or a recognised clearing house which intends to cease operating its clearing facility or, where it operates more than one clearing facility, all of its clearing facilities, may apply to the Authority to cancel its approval as an approved clearing house or recognition as a recognised clearing house, as the case may be. [34/2012] | (2) An application under subsection (1) must be made in such form and manner, and not later than such time, as the Authority may prescribe. [34/2012] |
(3) The Authority may cancel the approval of an approved clearing house, or the recognition of a recognised clearing house, on such application if the Authority is satisfied that —| (a) | the approved clearing house or recognised clearing house has ceased operating its clearing facility or all of its clearing facilities, as the case may be; and | | (b) | the cancellation of the approval or recognition (as the case may be) will not detract from the objectives specified in section 47. [34/2012] |
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| Power of Authority to revoke approval and recognition |
56.—(1) The Authority may revoke any approval of a Singapore corporation as an approved clearing house under section 51(1)(a), any recognition of a Singapore corporation as a recognised clearing house under section 51(1)(b) or any recognition of a foreign corporation as a recognised clearing house under section 51(2), if —| (a) | there exists at any time a ground under section 51(7) or (8) on which the Authority may refuse an application; | | (b) | the corporation does not commence operating its clearing facility, or, where it operates more than one clearing facility, all of its clearing facilities, within 12 months starting on the date on which it was granted the approval under section 51(1)(a) or was recognised under section 51(1)(b) or (2), as the case may be; | | (c) | the corporation ceases to operate its clearing facility or, where it operates more than one clearing facility, all of its clearing facilities; | | (d) | the corporation contravenes —| (i) | any condition or restriction applicable in respect of its approval or recognition, as the case may be; | | (ii) | any direction issued to it by the Authority under this Act; or | | (iii) | any provision in this Act; |
| | (da) | upon the Authority exercising any power under section 81SAA(2) or the Minister exercising any power under Division 2, 4, 5 or 6 of Part 8 of the Financial Services and Markets Act 2022 in relation to the corporation, the Authority considers that it is in the public interest to revoke the approval or recognition, as the case may be; [Act 18 of 2022 wef 10/05/2024] | | (e) | the corporation operates in a manner that is, in the opinion of the Authority, contrary to the interests of the public; or | | (f) | any information or document provided by the corporation to the Authority is false or misleading. [34/2012; 10/2013; 4/2017; 31/2017] |
| (2) Subject to subsection (3), the Authority must not revoke under subsection (1) any approval under section 51(1)(a) or recognition under section 51(1)(b) or (2) that was granted to a corporation without giving the corporation an opportunity to be heard. [34/2012] |
(3) The Authority may revoke an approval under section 51(1)(a), or a recognition under section 51(1)(b) or (2), that was granted to a corporation on any of the following grounds without giving the corporation an opportunity to be heard:| (a) | the corporation is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere; | | (b) | 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 corporation; | | (c) | the corporation has been convicted, whether in Singapore or elsewhere, of an offence committed before, on or after 1 August 2013, involving fraud or dishonesty or the conviction for which involved a finding that it had acted fraudulently or dishonestly. [34/2012] |
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(4) For the purposes of subsection (1)(c), a corporation is deemed to have ceased to operate its clearing facility if —| (a) | it has ceased to operate the clearing facility for more than 30 days, unless it has obtained the prior approval of the Authority to do so; or | | (b) | it has ceased to operate the clearing facility under a direction issued by the Authority under section 81R. [34/2012] |
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| (5) Any corporation which is aggrieved by a decision of the Authority made in relation to the corporation under subsection (1) may, within 30 days after the corporation is notified of the decision, appeal to the Minister, whose decision is final. [34/2012] |
| (6) Despite the lodging of an appeal under subsection (5), any action taken by the Authority under this section continues to have effect pending the Minister’s decision. [34/2012] |
| (7) The Minister may, when deciding an appeal under subsection (5), make such modification as he or she considers necessary to any action taken by the Authority under this section, and the modified action has effect from the date of the decision of the Minister. [34/2012] |
(8) Any revocation under subsection (1) or (3) of the approval or recognition of a corporation under section 51(1) or (2) does not operate so as to —| (a) | avoid or affect any agreement, transaction or arrangement entered into in connection with the use of a clearing facility operated by the corporation, whether the agreement, transaction or arrangement was entered into before, on or after the revocation of the approval or recognition; or | | (b) | affect any right, obligation or liability arising under any such agreement, transaction or arrangement. [34/2012] |
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| (9) The Authority must give notice in the Gazette of any revocation under subsection (1) or (3) of any approval or recognition of a corporation under section 51(1) or (2). [34/2012] |
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| Division 2 — Regulation of Approved Clearing Houses |
| Subdivision (1) — Obligations of approved clearing houses |
57.—(1) An approved clearing house —| (a) | must operate a safe and efficient clearing facility; | | (b) | must manage any risks associated with its business and operations prudently; | | (c) | in discharging its obligations under this Act, must not act contrary to the interests of the public, having particular regard to the interests of the investing public; | | (d) | must ensure that access for participation in its clearing facility is subject to criteria that are fair and objective, and that are designed to ensure the safe and efficient functioning of its facility and to protect the interests of the investing public; | | (e) | must maintain business rules that make satisfactory provision for —| (i) | the clearing facility to be operated in a safe and efficient manner; and | | (ii) | the proper regulation and supervision of its members; |
| | (f) | must enforce compliance by its members with its business rules; | | (g) | must have sufficient financial, human and system resources —| (i) | to operate a safe and efficient clearing facility; | | (ii) | to meet contingencies or disasters; and | | (iii) | to provide adequate security arrangements; |
| | (h) | must maintain governance arrangements that are adequate for the clearing facility to be operated in a safe and efficient manner; and | | (i) | must ensure that it appoints or employs fit and proper persons as its chairperson, chief executive officer, directors and key management officers. [34/2012] |
| (2) The obligations imposed on an approved clearing house under this Act apply to all facilities for clearing or settlement operated by the approved clearing house. [34/2012] |
| (3) Despite subsection (2), the Authority may by written notice exempt any clearing facility operated by an approved clearing house from all or any of the provisions of this Act, if the Authority is satisfied that such exemption would not detract from the objectives specified in section 47. [34/2012] |
| (4) It is not necessary to publish any exemption granted under subsection (3) in the Gazette. [34/2012] |
| (5) In subsection (1)(g), “contingencies or disasters” includes technical disruptions occurring within automated systems. [34/2012] |
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| Obligation to notify Authority of certain matters |
58.—(1) An approved clearing house must, as soon as practicable after the occurrence of any of the following circumstances, give the Authority notice of the circumstance:| (a) | any material change to the information provided by the approved clearing house in its application under section 50(1) or 54(1); | | (b) | the carrying on of any business (called in this section a proscribed business) by the approved clearing house other than such business or such class of businesses prescribed by regulations made under section 81Q; | | (c) | the acquisition by the approved clearing house of a substantial shareholding in any corporation (called in this section a proscribed corporation) that carries on any business other than such business or such class of businesses prescribed by regulations made under section 81Q; | | (d) | the approved clearing house becoming aware of any financial irregularity or other matter which in its opinion —| (i) | may affect its ability to discharge its financial obligations; or | | (ii) | may affect the ability of a member of the approved clearing house to meet its financial obligations to the approved clearing house; |
| | (e) | the approved clearing house reprimanding, fining, suspending, expelling or otherwise taking disciplinary action against a member of the approved clearing house; | | (f) | any other matter that the Authority may —| (i) | prescribe by regulations made under section 81Q for the purposes of this paragraph; or | | (ii) | specify by written notice to the approved clearing house in any particular case. [34/2012; 4/2017] |
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(2) Without limiting section 81R(1), the Authority may, at any time after receiving a notice referred to in subsection (1), issue directions to the approved clearing house —| (a) | where the notice relates to a matter referred to in subsection (1)(b) —| (i) | to cease carrying on the proscribed business; or | | (ii) | to carry on the proscribed business subject to such conditions or restrictions as the Authority may impose, if the Authority is of the opinion that this is necessary for any purpose referred to in section 81R(1); or |
| | (b) | where the notice relates to a matter referred to in subsection (1)(c) —| (i) | to dispose of all or any part of its shareholding in the proscribed corporation within such time and subject to such conditions as the Authority considers appropriate; or | | (ii) | to exercise its rights relating to such shareholding, or to not exercise such rights, subject to such conditions or restrictions as the Authority may impose, if the Authority is of the opinion that this is necessary for any purpose referred to in section 81R(1). [34/2012] |
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| (3) An approved clearing house must comply with every direction issued to it under subsection (2) despite anything to the contrary in the Companies Act 1967 or any other law. [34/2012] |
| (4) An approved clearing house must notify the Authority of any matter that the Authority may prescribe by regulations made under section 81Q for the purposes of this subsection, no later than such time as the Authority may prescribe by those regulations. [34/2012] |
| (5) An approved clearing house must notify the Authority of any matter that the Authority may specify by written notice to the approved clearing house, no later than such time as the Authority may specify in that notice. [34/2012; 4/2017] |
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| Obligation to manage risks prudently, etc. |
| 59. Without limiting section 57(1)(b), an approved clearing house must ensure that the systems and controls concerning the assessment and management of risks of the clearing facility that the approved clearing house operates are adequate and appropriate for the scale and nature of its operations. [4/2017] |
| Obligation in relation to customers’ money and assets held by approved clearing house |
60.—(1) Without affecting sections 81Q and 341, the Authority may make regulations —| (a) | relating to how any money or assets deposited with or paid to an approved clearing house by its members, for or in relation to any contracts of the customers of those members, are to be held by the approved clearing house and, in particular, requiring any such money or assets to be deposited in trust accounts or custody accounts; | | (b) | relating to the circumstances under which, and the purposes for which, the money or assets referred to in paragraph (a) may be used by the approved clearing house; | | (c) | relating to how the approved clearing house may invest the money or assets referred to in paragraph (a); and | | (d) | for any other purpose relating to the handling of the money and assets referred to in paragraph (a). [34/2012] |
(2) Regulations made under this section may provide —| (a) | that a contravention of any specified provision thereof shall be an offence; and | | (b) | for a penalty not exceeding a fine of $200,000 and, in the case of a continuing offence, for a further penalty not exceeding $20,000 for every day or part of a day during which the offence continues after conviction. [34/2012] |
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| Obligation to maintain proper records |
| 61.—(1) An approved clearing house must maintain a record of all transactions effected through its clearing facility. [34/2012] (2) The Authority may prescribe by regulations made under section 81Q —| (a) | the form and manner in which the record referred to in subsection (1) must be maintained; | | (b) | the extent to which the record includes details of each transaction; and | | (c) | the period of time that the record is to be maintained. [34/2012] |
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| Obligation to submit periodic reports |
| 62. An approved clearing house must submit to the Authority such reports in such form and manner, and at such frequency, as the Authority may prescribe. [34/2012] |
| Obligation to assist Authority |
63. An approved clearing house must provide such assistance to the Authority as the Authority may require for the performance of the functions and duties of the Authority, including —| (a) | the furnishing of such returns as the Authority may require for the proper administration of this Act; and | | (b) | the provision of —| (i) | such books and information as the Authority may require for the proper administration of this Act, being books and information —| (A) | relating to the business of the approved clearing house; or | | (B) | in respect of any transaction or class of transactions cleared or settled by the approved clearing house; and |
| | (ii) | such other information as the Authority may require for the proper administration of this Act. [34/2012] |
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| Obligation to maintain confidentiality |
64.—(1) Subject to subsection (2), an approved clearing house and its officers and employees must maintain, and aid in maintaining, confidentiality of all user information that —| (a) | comes to the knowledge of the approved clearing house or any of its officers or employees; or | | (b) | is in the possession of the approved clearing house or any of its officers or employees. [34/2012] |
(2) Subsection (1) does not apply to —| (a) | the disclosure of user information for such purposes, or in such circumstances, as the Authority may prescribe; | | (b) | any disclosure of user information which is authorised by the Authority to be disclosed or provided; or | | (c) | the disclosure of user information pursuant to any requirement imposed under any written law or order of court in Singapore. [34/2012] |
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| (3) To avoid doubt, nothing in this section is to be construed as preventing an approved clearing house from entering into a written agreement with a user which obliges the approved clearing house to maintain a higher degree of confidentiality than that specified in this section. [34/2012] |
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| Penalties under this Subdivision |
| 65. Any approved clearing house which contravenes section 57(1), 58(1) or (3), 59, 61(1), 62, 63 or 64(1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $200,000 and, in the case of a continuing offence, to a further fine not exceeding $20,000 for every day or part of a day during which the offence continues after conviction. [34/2012; 4/2017] |
| Subdivision (2) — Rules of approved clearing houses |
| Business rules of approved clearing houses |
66.—(1) Without limiting sections 57 and 81Q —| (a) | the Authority may prescribe the matters that an approved clearing house must provide for in the business rules of the approved clearing house; and | | (b) | the approved clearing house must provide for those matters in its business rules. [34/2012] |
| (2) An approved clearing house must not make any amendment to its business rules unless it complies with such requirements as the Authority may prescribe. [34/2012] |
| (3) In this Subdivision, any reference to an amendment to a business rule is to be construed as a reference to a change to the scope of, or to any requirement, obligation or restriction under, the business rule, whether the change is made by an alteration to the text of the business rule or by any other notice issued by or on behalf of the approved clearing house. [34/2012] |
| (4) Any approved clearing house which contravenes subsection (1) or (2) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part of a day during which the offence continues after conviction. [34/2012] |
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| Business rules of approved clearing houses have effect as contract |
67.—(1) The business rules of an approved clearing house are treated as, and are to operate as, a binding contract —| (a) | between the approved clearing house and each issuer; | | (b) | between the approved clearing house and each participant; | | (c) | between each issuer and each participant; and | | (d) | between each participant and every other participant. [4/2017] |
| (2) The approved clearing house, each issuer and each participant are treated as having agreed to observe, and to perform the obligations under, the provisions of the business rules that are in force for the time being, so far as those provisions are applicable to the approved clearing house, issuer or participant, as the case may be. [4/2017] |
| (3) In this section, “issuer” means a person who issued or made available, or proposes to issue or make available, securities, securities‑based derivatives contracts or units in a collective investment scheme that are cleared or settled by the approved clearing house. [4/2017] |
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| Power of court to order observance or enforcement of business rules |
| 68.—(1) Where any person who is under an obligation to comply with, observe, enforce or give effect to the business rules of an approved clearing house fails to do so, the General Division of the High Court may, on the application of the Authority, the approved clearing house or a person aggrieved by the failure, and after giving the firstmentioned person an opportunity to be heard, make an order directing the firstmentioned person to comply with, observe, enforce or give effect to those business rules. [34/2012; 40/2019] | (2) In this section, “person” includes an approved clearing house. [34/2012] |
| (3) This section is in addition to, and not in derogation of, any other remedy available to the aggrieved person referred to in subsection (1). [34/2012] |
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| Non‑compliance with business rules not to substantially affect rights of person |
| 69. Any failure by an approved clearing house to comply with this Act or its business rules in relation to a matter does not prevent the matter from being treated, for the purposes of this Act, as done in accordance with the business rules, so long as the failure does not substantially affect the rights of any person entitled to require compliance with the business rules. [34/2012] |
| Subdivision (3) — Matters requiring approval of Authority |
| Control of substantial shareholding in approved clearing house |
| 70.—(1) A person must not enter into any agreement to acquire shares in an approved clearing house, being an agreement by virtue of which the person would, if the agreement had been carried out, become a substantial shareholder of the approved clearing house, without first obtaining the approval of the Authority to enter into the agreement. [34/2012] (2) A person must not become either of the following without first obtaining the approval of the Authority:| (a) | a 12% controller of an approved clearing house; | | (b) | a 20% controller of an approved clearing house. [34/2012] |
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(3) In subsection (2) —“12% controller”, in relation to an approved clearing house, means a person, not being a 20% controller, who alone or together with the person’s associates —| (a) | holds not less than 12% of the shares in the approved clearing house; or | | (b) | is in a position to control not less than 12% of the votes in the approved clearing house; |
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“20% controller”, in relation to an approved clearing house, means a person who, alone or together with the person’s associates —| (a) | holds not less than 20% of the shares in the approved clearing house; or | | (b) | is in a position to control not less than 20% of the votes in the approved clearing house. [34/2012] |
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(4) In this section —| (a) | a person holds a share if —| (i) | the person is deemed to have an interest in that share under section 7(6) to (10) of the Companies Act 1967; or | | (ii) | the person otherwise has a legal or an equitable interest in that share, except such interest as is to be disregarded under section 7(6) to (10) of the Companies Act 1967; |
| | (b) | a reference to the control of a percentage of the votes in an approved clearing house is to be construed as a reference to the control, whether direct or indirect, of that percentage of the total number of votes that might be cast in a general meeting of the approved clearing house; and | | (c) | a person, A, is an associate of another person, B, if —| (i) | A is the spouse, a parent, remoter lineal ancestor or step‑parent, a son, daughter, remoter issue, stepson or stepdaughter or a brother or sister of B; | | (ii) | A is a body corporate that is, or a majority of the directors of which are, accustomed or under an obligation whether formal or informal to act in accordance with the directions, instructions or wishes of B; | | (iii) | [Deleted by Act 35 of 2014] | | (iv) | A is a person who is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of B; | | (v) | A is a subsidiary of B; | | (vi) | [Deleted by Act 35 of 2014] | | (vii) | A is a body corporate in which B, whether alone or together with other associates of B as described in sub‑paragraphs (ii), (iv) and (v), is in a position to control not less than 20% of the votes in A; or | | (viii) | [Deleted by Act 35 of 2014] | | (ix) | A is a person with whom B has an agreement or arrangement, whether oral or in writing and whether express or implied, to act together with respect to the acquisition, holding or disposal of shares or other interests in, or with respect to the exercise of their votes in relation to, the approved clearing house. [34/2012; 35/2014] |
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| (5) The Authority may grant its approval referred to in subsection (1) or (2) subject to such conditions or restrictions as the Authority may think fit. [34/2012] |
| (6) Without affecting subsection (13), the Authority may, for the purposes of securing compliance with subsection (1) or (2) or any condition or restriction imposed under subsection (5), by written notice, direct the transfer or disposal of all or any of the shares of an approved clearing house in which a substantial shareholder, 12% controller or 20% controller of the approved clearing house has an interest. [34/2012] |
(7) Until a person to whom a direction has been issued under subsection (6) transfers or disposes of the shares which are the subject of the direction, and despite anything to the contrary in the Companies Act 1967 or the memorandum or articles of association or other constituent document or documents of the approved clearing house —| (a) | no voting rights are exercisable in respect of the shares which are the subject of the direction; | | (b) | the approved clearing house must not offer or issue any shares (whether by way of rights, bonus, share dividend or otherwise) in respect of the shares which are the subject of the direction; and | | (c) | except in a liquidation of the approved clearing house, the approved clearing house must not make any payment (whether by way of cash dividend, dividend in kind or otherwise) in respect of the shares which are the subject of the direction. [34/2012] |
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| (8) Any issue of shares by an approved clearing house in contravention of subsection (7)(b) is deemed to be void, and a person to whom a direction has been issued under subsection (6) must immediately return those shares to the approved clearing house, upon which the approved clearing house must return to the person any payment received from the person in respect of those shares. [34/2012] |
| (9) Any payment made by an approved clearing house in contravention of subsection (7)(c) is deemed to be void, and a person to whom a direction has been issued under subsection (6) must immediately return the payment that the person has received to the approved clearing house. [34/2012] |
(10) Without affecting sections 81SB(1) and 337(1), the Authority may, by regulations made under section 81Q, exempt all or any of the following from subsection (1) or (2), subject to such conditions or restrictions as the Authority may prescribe in those regulations:| (a) | any person or class of persons; | | (b) | any class or description of shares or interests in shares. [34/2012] |
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| (11) Without affecting sections 81SB(2) and 337(3) and (4), the Authority may, by written notice, exempt any person, shares or interests in shares from subsection (1) or (2), subject to such conditions or restrictions as the Authority may specify by written notice. [34/2012] |
| (12) It is not necessary to publish any exemption granted under subsection (11) in the Gazette. [34/2012] |
| (13) Any person who contravenes subsection (1) or (2), or any condition or restriction imposed by the Authority under subsection (5), shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $200,000 and, in the case of a continuing offence, to a further fine not exceeding $20,000 for every day or part of a day during which the offence continues after conviction. [34/2012] |
| (14) Any person who contravenes subsection (7)(b) or (c), (8) or (9) or any direction issued by the Authority under subsection (6) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part of a day during which the offence continues after conviction. [34/2012] |
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| Approval of chairperson, chief executive officer, director and key persons |
| 71.—(1) An approved clearing house must not appoint a person as its chairperson, chief executive officer or director unless the approved clearing house has obtained the approval of the Authority. [34/2012] | (2) The Authority may, by written notice, require an approved clearing house to obtain the approval of the Authority for the appointment of any person to any key management position or committee of the approved clearing house, and the approved clearing house must comply with the notice. [34/2012] |
| (3) An application for approval under subsection (1) or (2) must be made in such form and manner as the Authority may specify. [34/2012] [Act 12 of 2024 wef 30/08/2024] |
| (4) Without limiting section 81Q and to any other matter that the Authority may consider relevant, the Authority may, in determining whether to grant its approval under subsection (1) or (2), have regard to such criteria as may be prescribed by regulations made under section 81Q or notified by the Authority to the approved clearing house in writing. [34/2012] [Act 12 of 2024 wef 30/08/2024] |
| (5) Subject to subsection (6), the Authority must not refuse an application for approval under this section without giving the approved clearing house an opportunity to be heard. [34/2012] |
(6) The Authority may refuse an application for approval on any of the following grounds without giving the approved clearing house an opportunity to be heard:| (a) | the person is an undischarged bankrupt, whether in Singapore or elsewhere; | | (b) | the person has been convicted, whether in Singapore or elsewhere, of an offence committed before, on or after 1 August 2013 —| (i) | involving fraud or dishonesty or the conviction for which involved a finding that the person had acted fraudulently or dishonestly; and | | (ii) | punishable with imprisonment for a term of 3 months or more. [34/2012] |
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| (7) Where the Authority refuses an application for approval under this section, the Authority need not give the person who was proposed to be appointed an opportunity to be heard. [34/2012] |
| (8) An approved clearing house must, as soon as practicable, give written notice to the Authority of the resignation or removal of its chairperson, chief executive officer or director or of any person referred to in any notice issued by the Authority to the approved clearing house under subsection (2). [34/2012] |
| (9) The Authority may make regulations under section 81Q relating to the composition and duties of the board of directors or any committee of an approved clearing house. [34/2012] |
| (10) In this section, “committee” includes any committee of directors, disciplinary committee or appeals committee of an approved clearing house, and any body responsible for disciplinary action against a member of an approved clearing house. [34/2012] |
| (11) Without affecting sections 81SB(1) and 337(1), the Authority may, by regulations made under section 81Q, exempt any approved clearing house or class of approved clearing houses from complying with subsection (1) or (8), subject to such conditions or restrictions as the Authority may prescribe in those regulations. [34/2012] |
| (12) Without affecting sections 81SB(2) and 337(3) and (4), the Authority may, by written notice, exempt any approved clearing house from complying with subsection (1) or (8), subject to such conditions or restrictions as the Authority may specify by written notice. [34/2012] |
| (13) It is not necessary to publish any exemption granted under subsection (12) in the Gazette. [34/2012] |
| (14) Any approved clearing house which contravenes subsection (1), (2) or (8) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $200,000 and, in the case of a continuing offence, to a further fine not exceeding $20,000 for every day or part of a day during which the offence continues after conviction. [34/2012; 4/2017] |
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| Listing of approved clearing houses on organised market |
72.—(1) The securities or securities‑based derivatives contracts of an approved clearing house must not be listed for quotation on an organised market that is operated by any of its related corporations, unless the approved clearing house and the operator of the organised market have entered into such arrangements as the Authority may require —| (a) | for dealing with possible conflicts of interest that may arise from such listing; and | | (b) | for the purpose of ensuring the integrity of the trading of the securities or securities‑based derivatives contracts (as the case may be) of the approved clearing house. [4/2017] |
(2) Where the securities or securities‑based derivatives contracts of an approved clearing house are listed for quotation on an organised market operated by any of its related corporations, the Authority may act in place of the operator of the organised market in making decisions and taking action, or require the operator of the organised market to make decisions and to take action on behalf of the Authority, on —| (a) | the admission of the approved clearing house to, or the removal of the approved clearing house from, the official list of the organised market; and | | (b) | the granting of approval for the securities or securities‑based derivatives contracts (as the case may be) of the approved clearing house to be, or the stopping or suspending of the securities or securities‑based derivatives contracts (as the case may be) of the approved clearing house from being, listed for quotation or quoted on the organised market. [4/2017] |
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(3) The Authority may, by written notice to the operator of the organised market —| (a) | modify the listing rules of the organised market for the purpose of their application to the listing for quotation or trading of the securities or securities‑based derivatives contracts of the approved clearing house; or | | (b) | waive the application of any listing rule of the organised market to the approved clearing house. [4/2017] |
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| (4) Any approved clearing house which contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $200,000 and, in the case of a continuing offence, to a further fine not exceeding $20,000 for every day or part of a day during which the offence continues after conviction. [34/2012] |
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| Auditors of approved clearing houses — appointment and duties |
73.—(1) Despite any other provision of this Act or any other written law, every approved clearing house must —| (a) | on an annual basis, appoint an auditor and obtain the approval of the Authority to such appointment; and | | (b) | where, for any reason, the auditor ceases to act for the approved clearing house, as soon as practicable thereafter, appoint another auditor and obtain the approval of the Authority to such appointment. |
| (2) An auditor must not be approved by the Authority as an auditor for an approved clearing house unless the auditor is able to comply with such conditions in relation to the discharge of an auditor’s duties as the Authority may determine. |
(3) The Authority may appoint an auditor for an approved clearing house —| (a) | if the approved clearing house fails to appoint an auditor in accordance with subsection (1); or | | (b) | if the Authority considers it desirable that another auditor should act with an auditor for the approved clearing house appointed under subsection (1), |
| and may at any time fix the remuneration to be paid by the approved clearing house to that auditor. |
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(4) The duties of an auditor appointed under subsections (1) and (3) are —| (a) | to carry out, for the year in respect of which the auditor is appointed, an audit of the accounts of the approved clearing house; and | | (b) | to make a report in respect of the latest financial statements of the approved clearing house or, where the approved clearing house is a parent company for which consolidated financial statements are prepared, the consolidated financial statements, in accordance with section 207 of the Companies Act 1967. |
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(5) The Authority may, by written notice, impose all or any of the following duties on an auditor in addition to those in subsection (4):| (a) | a duty to submit to the Authority such additional information in relation to the auditor’s audit as the Authority considers necessary; | | (b) | a duty to enlarge or extend the scope of the auditor’s audit of the business and affairs of the approved clearing house; | | (c) | a duty to carry out any other examination or establish any procedure in any particular case; | | (d) | a duty to submit to the Authority a report on any of the matters mentioned in paragraphs (b) and (c). |
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| (6) An auditor to whom a notice is given under subsection (5) must comply with each direction specified in the notice. |
| (7) The approved clearing house must remunerate the auditor in respect of the discharge by the auditor of the duties mentioned in subsection (5). |
(8) Despite any other provision of this Act or the provisions of the Companies Act 1967, the Authority may, if it is not satisfied with the performance of any duty by an auditor of an approved clearing house, at any time —| (a) | direct the approved clearing house to remove the auditor; and | | (b) | direct the approved clearing house to appoint another auditor approved by the Authority, as soon as practicable after the removal, |
| and the approved clearing house must comply with such direction. |
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| (9) If an auditor discloses in good faith to the Authority any information mentioned in subsection (5)(a) or report mentioned in subsection (5)(d), the disclosure is not to be treated as a breach of any restriction on the disclosure imposed by any law, contract or rules of professional conduct, and the auditor is not liable for any loss arising from the disclosure or any act or omission as a result of the disclosure. |
| (10) An approved clearing house that contravenes 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 of a day during which the offence continues after conviction. |
| (11) An approved clearing house that fails to comply with a direction under subsection (8) 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. |
| (12) Any auditor who fails to carry out any duty mentioned in subsection (4), or who fails to comply with subsection (6), 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 of a day during which the offence continues after conviction. [Act 12 of 2024 wef 24/01/2025] |
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| Auditors of approved clearing houses to report certain matters and irregularities to Authority |
73A.—(1) If an auditor of an approved clearing house, in the course of performing the auditor’s duties mentioned in section 73(4) or (5), becomes aware of any matter or irregularity mentioned in the following paragraphs, the auditor must immediately send to the Authority a written report of that matter or irregularity:| (a) | any matter that, in the auditor’s opinion, adversely affects or may adversely affect the financial position of the approved clearing house to a material extent; | | (b) | any matter that, in the auditor’s opinion, constitutes or may constitute a breach of any provision of this Act or an offence involving fraud or dishonesty; | | (c) | any irregularity that has or may have a material effect upon the accounts of the approved clearing house, including any irregularity that affects or jeopardises, or may affect or jeopardise, the funds or property of investors. |
| (2) An auditor of an approved clearing house is not, in the absence of malice on the auditor’s part, liable to any action for defamation at the suit of any person in respect of any statement made in the auditor’s report under subsection (1). |
| (3) Subsection (2) does not restrict or affect any right, privilege or immunity that the auditor of an approved clearing house may have, apart from this section, as a defendant in an action for defamation. [Act 12 of 2024 wef 24/01/2025] |
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| Power of Authority to appoint auditor to examine and audit books of approved clearing house |
73B.—(1) Where —| (a) | an approved clearing house is required under section 62 to submit to the Authority an auditor’s report but fails to do so; or | | (b) | the Authority receives a report under section 73A(1), |
| the Authority may, without affecting its powers under section 73, if it is satisfied that it is in the interests of the approved clearing house, the participants of the approved clearing house or the general public to do so, appoint in writing an auditor to examine and audit (either generally or in relation to any particular matter) the books of the approved clearing house. |
| (2) Where the Authority is of the opinion that the whole or any part of the costs and expenses of an auditor appointed by the Authority under subsection (1) should be borne by the approved clearing house, the Authority may, in writing, direct the approved clearing house to pay a specified amount, being the whole or part of such costs and expenses, within such time and in such manner as may be specified in the direction. |
| (3) Where an approved clearing house fails to comply with a direction under subsection (2), the amount specified in the direction may be sued for and recovered by the Authority as a civil debt. |
| (4) An auditor appointed under subsection (1) must, on the conclusion of the examination and audit, submit a report to the Authority. [Act 12 of 2024 wef 24/01/2025] |
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| Restriction on auditor’s and employee’s right to communicate certain matters |
73C. Except as may be necessary for carrying into effect the provisions of this Act or so far as may be required for the purposes of any legal proceedings (whether civil or criminal), an auditor who is carrying out any duty imposed under section 73(5) or who is appointed under section 73B, or any employee of such auditor, must not disclose any information which may come to his or her knowledge or possession in the course of performing his or her duties as such auditor or employee (as the case may be) to any person other than —| (a) | the Authority; | | (b) | in the case of an employee of such auditor, the auditor; and | | (c) | any other person authorised by the Authority in writing to receive such information. [Act 12 of 2024 wef 24/01/2025] |
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| Subdivision (4) — Immunity |
| Immunity from criminal or civil liability |
| 74.—(1) No criminal or civil liability shall be incurred by an approved clearing house, or by any person specified in subsection (2), for any thing done (including any statement made) or omitted to be done with reasonable care and in good faith in the course of, or in connection with, the discharge or purported discharge of the obligations of the approved clearing house under this Act or under the business rules of the approved clearing house (including the default rules of the approved clearing house). [34/2012] (2) For the purposes of subsection (1), the specified person is any person acting on behalf of the approved clearing house, including —| (a) | any director of the approved clearing house; or | | (b) | any member of any committee established by the approved clearing house. [34/2012] |
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| Division 3 — Regulation of Recognised Clearing Houses |
75.—(1) A recognised clearing house —| (a) | must operate a safe and efficient clearing facility; | | (b) | must manage any risks associated with its business and operations prudently; | | (c) | in discharging its obligations under this Act, must not act contrary to the interests of the public, having particular regard to the interests of the investing public; | | (d) | must ensure that access for participation in its clearing facility is subject to criteria that are fair and objective, and that are designed to ensure the safe and efficient functioning of its facility and to protect the interests of the investing public; | | (e) | must maintain business rules that make satisfactory provision for —| (i) | the clearing facility to be operated in a safe and efficient manner; and | | (ii) | the proper regulation and supervision of its members; |
| | (f) | must enforce compliance by its members with its business rules; | | (g) | must have sufficient financial, human and system resources —| (i) | to operate a safe and efficient clearing facility; | | (ii) | to meet contingencies or disasters; and | | (iii) | to provide adequate security arrangements; |
| | (h) | must maintain governance arrangements that are adequate for the clearing facility to be operated in a safe and efficient manner; and | | (i) | must ensure that it appoints or employs fit and proper persons as its chairperson, chief executive officer, directors and key management officers. [34/2012] |
| (2) The obligations imposed on a recognised clearing house under this Act apply to all facilities for clearing or settlement operated by the recognised clearing house. [34/2012] |
| (3) Despite subsection (2), the Authority may by written notice exempt any clearing facility operated by a recognised clearing house from all or any of the provisions of this Act, if the Authority is satisfied that such exemption would not detract from the objectives specified in section 47. [34/2012] |
| (4) It is not necessary to publish any exemption granted under subsection (3) in the Gazette. [34/2012] |
| (5) In subsection (1)(g), “contingencies or disasters” includes technical disruptions occurring within automated systems. [34/2012] |
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| Obligation to notify Authority of certain matters |
76.—(1) A recognised clearing house must, as soon as practicable after the occurrence of any of the following circumstances, give the Authority notice of the circumstance:| (a) | any material change to the information provided by the recognised clearing house in its application under section 50(1) or (2) or 54(1); | | (b) | the recognised clearing house becoming aware of any financial irregularity or other matter which in its opinion —| (i) | may affect its ability to discharge its financial obligations; or | | (ii) | may affect the ability of a member of the recognised clearing house to meet its financial obligations to the recognised clearing house; |
| | (c) | any other matter that the Authority may —| (i) | prescribe by regulations made under section 81Q for the purposes of this paragraph; or | | (ii) | specify by written notice to the recognised clearing house in any particular case. [34/2012] |
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| (2) A recognised clearing house must notify the Authority of any matter that the Authority may prescribe by regulations made under section 81Q for the purposes of this subsection, no later than such time as the Authority may prescribe by those regulations. [34/2012] |
| (3) A recognised clearing house must notify the Authority of any matter that the Authority may specify by written notice to the recognised clearing house, no later than such time as the Authority may specify in that notice. [34/2012] |
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| Obligation in relation to customers’ money and assets held by recognised clearing house |
77.—(1) Without affecting sections 81Q and 341, the Authority may make regulations —| (a) | relating to how any money or assets deposited with or paid to a recognised clearing house by its members, for or in relation to any contracts of the customers of those members, are to be held by the recognised clearing house and, in particular, requiring any such money or assets to be deposited in trust accounts or custody accounts; | | (b) | relating to the circumstances under which, and the purposes for which, the money or assets referred to in paragraph (a) may be used by the recognised clearing house; | | (c) | relating to how the recognised clearing house may invest the money or assets referred to in paragraph (a); and | | (d) | for any other purpose relating to the handling of the money or assets referred to in paragraph (a). [34/2012] |
(2) Regulations made under this section may provide —| (a) | that a contravention of any specified provision thereof shall be an offence; and | | (b) | for a penalty not exceeding a fine of $150,000 and, in the case of a continuing offence, for a further penalty not exceeding $15,000 for every day or part of a day during which the offence continues after conviction. [34/2012] |
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| Obligation to maintain proper records |
| 78.—(1) A recognised clearing house must maintain a record of all transactions effected through its clearing facility. [34/2012] (2) The Authority may prescribe by regulations made under section 81Q —| (a) | the form and manner in which the record referred to in subsection (1) must be maintained; | | (b) | the extent to which the record includes details of each transaction; and | | (c) | the period of time that the record is to be maintained. [34/2012] |
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| Obligation to submit periodic reports |
| 79. A recognised clearing house must submit to the Authority such reports in such form and manner, and at such frequency, as the Authority may prescribe. [34/2012] |
| Obligation to assist Authority |
80. A recognised clearing house must provide such assistance to the Authority as the Authority may require for the performance of the functions and duties of the Authority, including —| (a) | the furnishing of such returns as the Authority may require for the proper administration of this Act; and | | (b) | the provision of —| (i) | such books and information as the Authority may require for the proper administration of this Act, being books and information —| (A) | relating to the business of the recognised clearing house; or | | (B) | in respect of any transaction or class of transactions cleared or settled by the recognised clearing house; and |
| | (ii) | such other information as the Authority may require for the proper administration of this Act. [34/2012] |
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| Obligation to maintain confidentiality |
81.—(1) Subject to subsection (2), a recognised clearing house and its officers and employees must maintain, and aid in maintaining, confidentiality of all user information that —| (a) | comes to the knowledge of the recognised clearing house or any of its officers or employees; or | | (b) | is in the possession of the recognised clearing house or any of its officers or employees. [34/2012] |
(2) Subsection (1) does not apply to —| (a) | the disclosure of user information for such purposes, or in such circumstances, as the Authority may prescribe; | | (b) | any disclosure of user information which is authorised by the Authority to be disclosed or provided; or | | (c) | the disclosure of user information pursuant to any requirement imposed under any written law or order of court in Singapore. [34/2012] |
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| (3) To avoid doubt, nothing in this section is to be construed as preventing a recognised clearing house from entering into a written agreement with a user which obliges the recognised clearing house to maintain a higher degree of confidentiality than that specified in this section. [34/2012] |
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| Control of shareholding in Singapore recognised clearing house |
81AA.—(1) A person must not become a 20% controller of a Singapore recognised clearing house without first obtaining the approval of the Authority.(2) In this section and section 81AB, “20% controller”, in relation to a Singapore recognised clearing house, means a person who, alone or together with the person’s associates —| (a) | holds not less than 20% of the shares in the Singapore recognised clearing house; or | | (b) | is in a position to control not less than 20% of the votes in the Singapore recognised clearing house. |
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(3) In this section —| (a) | a person holds a share if —| (i) | the person is deemed to have an interest in that share under section 7(6) to (10) of the Companies Act 1967; or | | (ii) | the person otherwise has a legal or an equitable interest in that share, except such interest as is to be disregarded under section 7(6) to (10) of the Companies Act 1967; |
| | (b) | a reference to the control of a percentage of the votes in a Singapore recognised clearing house is a reference to the control, whether direct or indirect, of that percentage of the total number of votes that might be cast in a general meeting of the Singapore recognised clearing house; and | | (c) | a person (A) is an associate of another person (B) if —| (i) | A is the spouse, a parent, remoter lineal ancestor or step-parent, a son, daughter, remoter issue, step-son or step-daughter or a brother or sister of B; | | (ii) | A is a body corporate that is, or a majority of the directors of which are, accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of B; | | (iii) | A is a person who is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of B; | | (iv) | A is a subsidiary of B; | | (v) | A is a body corporate in which B, whether alone or together with other associates of B as described in sub-paragraphs (ii), (iii) and (iv), is in a position to control not less than 20% of the votes in A; or | | (vi) | A is a person with whom B has an agreement or arrangement, whether oral or in writing and whether express or implied, to act together with respect to the acquisition, holding or disposal of shares or other interests in, or with respect to the exercise of their votes in relation to, the Singapore recognised clearing house. |
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| (4) The Authority may grant its approval mentioned in subsection (1) subject to such conditions or restrictions as the Authority may impose. |
| (5) Without affecting subsection (12), the Authority may, for the purposes of securing compliance with subsection (1) or any condition or restriction imposed under subsection (4), by written notice, direct the transfer or disposal of all or any of the shares of a Singapore recognised clearing house in which a 20% controller of the Singapore recognised clearing house has an interest. |
(6) Until a person to whom a direction has been issued under subsection (5) transfers or disposes of the shares that are the subject of the direction, and despite anything to the contrary in the Companies Act 1967 or the constitution or other constituent document or documents of the Singapore recognised clearing house —| (a) | no voting rights are exercisable in respect of the shares that are the subject of the direction; | | (b) | the Singapore recognised clearing house must not offer or issue any shares (whether by way of rights, bonus, share dividend or otherwise) in respect of the shares that are the subject of the direction; and | | (c) | except in a liquidation of the Singapore recognised clearing house, the Singapore recognised clearing house must not make any payment (whether by way of cash dividend, dividend in kind or otherwise) in respect of the shares that are the subject of the direction. |
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| (7) Any issue of shares by a Singapore recognised clearing house in contravention of subsection (6)(b) is void, and a person to whom a direction has been issued under subsection (5) must immediately return those shares to the Singapore recognised clearing house, upon which the Singapore recognised clearing house must return to the person any payment received from the person in respect of those shares. |
| (8) Any payment made by a Singapore recognised clearing house in contravention of subsection (6)(c) is void, and a person to whom a direction has been issued under subsection (5) must immediately return the payment the person has received to the Singapore recognised clearing house. |
(9) The Authority may, by regulations made under section 81Q, exempt —| (a) | any person or class of persons; or | | (b) | any class or description of shares or interests in shares, |
| from the requirement under subsection (1), subject to such conditions or restrictions as may be prescribed in those regulations. |
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| (10) The Authority may, by written notice, exempt any person, shares or interests in shares from subsection (1), subject to such conditions or restrictions as the Authority may specify by written notice. |
| (11) It is not necessary to publish any exemption granted under subsection (10) in the Gazette. |
| (12) Any person who contravenes subsection (1), or any condition or restriction imposed by the Authority under subsection (4), shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part of a day during which the offence continues after conviction. |
| (13) Any person who contravenes subsection (6)(b) or (c), (7) or (8) or any direction issued by the Authority under subsection (5) 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 of a day during which the offence continues after conviction. [Act 12 of 2024 wef 24/01/2025] |
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| Objection to control of Singapore recognised clearing house |
81AB.—(1) The Authority may serve a written notice of objection on —| (a) | any person required to obtain the Authority’s approval or who has obtained the approval under section 81AA; or | | (b) | any person who, whether before, on or after the date of commencement of section 47 of the Financial Institutions (Miscellaneous Amendments) Act 2024, is a 20% controller of a Singapore recognised clearing house, |
| if the Authority is satisfied that — |
| (c) | any condition of approval imposed on the person under section 81AA(4) has not been complied with; | | (d) | the person is not or ceases to be a fit and proper person to be a 20% controller of the Singapore recognised clearing house; | | (e) | having regard to the likely influence of the person, the Singapore recognised clearing house is not able to or is no longer likely to conduct its business prudently or to comply with the provisions of this Act or any direction made thereunder; | | (f) | the person does not or ceases to satisfy such criteria as may be prescribed; | | (g) | the person has provided false or misleading information or documents in connection with an application under section 81AA; or | | (h) | the Authority would not have granted its approval under section 81AA had it been aware, at that time, of circumstances relevant to the person’s application for such approval. |
(2) The Authority must not serve a notice of objection on any person without giving the person an opportunity to be heard, except in the following circumstances:| (a) | the person is in the course of being wound up or otherwise dissolved or, in the case of an individual, is an undischarged bankrupt whether in Singapore or elsewhere; | | (b) | a receiver, a receiver and manager, a judicial manager or an equivalent person has been appointed, whether in Singapore or elsewhere, in relation to or in respect of any property of the person; | | (c) | a section 101A prohibition order or an FSMA prohibition order has been made, and remains in force, against the person; | | (d) | the person has been convicted, whether in Singapore or elsewhere, of any offence involving fraud or dishonesty or the conviction for which involved a finding that the person had acted fraudulently or dishonestly. |
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(3) The Authority must, in any written notice of objection, specify a reasonable period within which the person to be served the written notice of objection must —| (a) | take such steps as are necessary to ensure that the person ceases to be a 20% controller of a Singapore recognised clearing house; or | | (b) | comply with such other requirements as the Authority may specify. |
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| (4) Any person served with a notice of objection under this section must comply with the notice. |
| (5) Any person who contravenes subsection (4) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 or to imprisonment for a term not exceeding 3 years or to both. [Act 12 of 2024 wef 24/01/2025] |
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| Chairperson, chief executive officer, director and key persons, etc., of Singapore recognised clearing house |
81AC.—(1) A Singapore recognised clearing house must not appoint a person as its chairperson, chief executive officer or director unless the Singapore recognised clearing house has obtained the approval of the Authority.| (2) The Authority may, by written notice, require a Singapore recognised clearing house to obtain the approval of the Authority for the appointment of any person to any key management position or committee of the Singapore recognised clearing house, and the Singapore recognised clearing house must comply with the notice. |
| (3) An application for approval under subsection (1) or (2) must be made in such form and manner as the Authority may specify. |
| (4) The Authority may, in determining whether to grant its approval under subsection (1) or (2), have regard to such criteria as the Authority may prescribe by regulations made under section 81Q or notify the Singapore recognised clearing house in writing, or to any other matter that the Authority may consider relevant. |
| (5) Subject to subsection (6), the Authority must not refuse an application for approval under this section without giving the Singapore recognised clearing house an opportunity to be heard. |
(6) The Authority may refuse an application for approval on any of the following grounds without giving the Singapore recognised clearing house an opportunity to be heard:| (a) | the person is an undischarged bankrupt, whether in Singapore or elsewhere; | | (b) | the person has been convicted, whether in Singapore or elsewhere, of an offence, committed before, on or after the date of commencement of section 47 of the Financial Institutions (Miscellaneous Amendments) Act 2024 —| (i) | involving fraud or dishonesty or the conviction for which involved a finding that the person had acted fraudulently or dishonestly; and | | (ii) | punishable with imprisonment for a term of 3 months or more. |
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| (7) Where the Authority refuses an application for approval under this section, the Authority need not give the person who was proposed to be appointed an opportunity to be heard. |
| (8) A Singapore recognised clearing house must, as soon as practicable, give written notice to the Authority of the resignation or removal of its chairperson, chief executive officer or director, or of any person mentioned in any notice issued by the Authority to the Singapore recognised clearing house under subsection (2). |
| (9) The Authority may make regulations under section 81Q relating to the composition and duties of the board of directors or any committee of a Singapore recognised clearing house. |
| (10) In this section, “committee” includes any committee of directors, disciplinary committee or appeals committee of a Singapore recognised clearing house, or any body responsible for disciplinary action against a member of a Singapore recognised clearing house. |
| (11) The Authority may, by regulations made under section 81Q, exempt any Singapore recognised clearing house or class of Singapore recognised clearing houses from complying with subsection (1) or (8), subject to such conditions or restrictions as the Authority may prescribe in those regulations. |
| (12) The Authority may, by written notice, exempt any Singapore recognised clearing house from complying with subsection (1) or (8), subject to such conditions or restrictions as the Authority may specify by written notice. |
| (13) It is not necessary to publish any exemption granted under subsection (12) in the Gazette. |
| (14) Any Singapore recognised clearing house which contravenes subsection (1), (2) or (8) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part of a day during which the offence continues after conviction. [Act 12 of 2024 wef 24/01/2025] |
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| Penalties under this Division |
| 81A. Any recognised clearing house which contravenes section 75(1), 76, 78(1), 79, 80 or 81(1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part of a day during which the offence continues after conviction. [34/2012] |
| Application of this Division |
| 81B. This Division applies to such transaction or class of transactions cleared or settled by any approved clearing house or recognised clearing house, or by any class of approved clearing houses or recognised clearing houses, and to such extent, as the Authority may prescribe. [34/2012] |
| Proceedings of approved clearing house or recognised clearing house take precedence over law of insolvency |
81C.—(1) The following are not invalid to any extent at law by reason only of inconsistency with any written law or rule of law relating to the distribution of the assets of a person on insolvency, bankruptcy or winding up, or on the appointment of a receiver, a receiver and manager or a person in an equivalent capacity over any of the assets of a person:| (a) | a market contract; | | (b) | a disposition of property pursuant to a market contract; | | (c) | the provision of market collateral; | | (d) | a contract effected by an approved clearing house or a recognised clearing house for the purpose of realising property provided as market collateral, or any disposition of property pursuant to such a contract; | | (e) | a disposition of property in accordance with the business rules of an approved clearing house, or a recognised clearing house, relating to the application of property provided as market collateral; | | (f) | a disposition of property as a result of which the property becomes subject to a market charge, or any transaction pursuant to which that disposition is made; | | (g) | a disposition of property for the purpose of enforcing a market charge; | | (h) | a market charge; | | (i) | any default proceedings. [34/2012] |
(2) A relevant office holder, or a court applying the law relating to insolvency in Singapore, must not exercise his, her or its power to prevent, or interfere with —| (a) | the settlement of a market contract in accordance with the business rules of an approved clearing house or a recognised clearing house, or any proceedings or other action taken under those business rules; or | | (b) | any default proceedings. [34/2012] |
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| (3) Subsection (2) does not operate to prevent a relevant office holder from recovering an amount under section 81I after the completion of a specified event referred to in section 81I(3). [34/2012] |
| (4) Where a participant which is also a bank licensed under the Banking Act 1970 becomes insolvent, the liabilities of the bank accorded priority under sections 61 and 62 of that Act and the Payment and Settlement Systems (Finality and Netting) Act 2002 have priority over any unsecured liabilities of the bank arising from and after the settlement of market contracts. [34/2012] |
| (4A) Where a participant that is also a merchant bank licensed under the Banking Act 1970 becomes insolvent, the liabilities of the merchant bank accorded priority under section 62B of that Act and the Payment and Settlement Systems (Finality and Netting) Act 2002 have priorities over any unsecured liabilities of the merchant bank arising from and after the settlement of market contracts. [1/2020] |
| (5) To avoid doubt, subsection (4) does not affect the settlement of market contracts in accordance with the business rules of an approved clearing house or a recognised clearing house. [34/2012] |
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| Supplementary provisions as to default proceedings |
| 81D.—(1) A court may, on the application of a relevant office holder, make an order to alter, or to release the relevant office holder from complying with, the functions of his or her office that are affected by default proceedings, if default proceedings have been, could be, or could have been, taken. [34/2012] | (2) The functions of the relevant office holder are to be construed subject to an order made under subsection (1). [34/2012] |
| (3) Section 210 of the Companies Act 1967 and sections 71, 129, 130(2), 133(1), 170(1), 187, 276, 325 and 327 of the Insolvency, Restructuring and Dissolution Act 2018 do not prevent, or interfere with, any default proceedings. [40/2018] |
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| Duty to report on completion of default proceedings |
81E.—(1) An approved clearing house or a recognised clearing house —| (a) | must, upon the conclusion of any default proceedings commenced by it, make a report on those proceedings stating (as the case may be) in respect of each defaulter who is a subject of those proceedings —| (i) | the net sum (if any) certified by it to be payable by or to the defaulter; or | | (ii) | the fact that no sum is so payable; and |
| | (b) | may include in that report such other particulars in respect of those proceedings as it thinks fit. [34/2012] |
(2) An approved clearing house, or a recognised clearing house, which has made a report under subsection (1) must supply the report to —| (a) | the Authority; | | (b) | any relevant office holder acting in relation to —| (i) | the defaulter to whom the report relates; or | | (ii) | the estate of that defaulter; and |
| | (c) | where there is no relevant office holder referred to in paragraph (b), the defaulter to whom the report relates. [34/2012] |
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| (3) The approved clearing house or recognised clearing house must publish a notice of the fact that a report has been made under subsection (1) in such manner as it thinks appropriate to bring that fact to the attention of the creditors of the defaulter to whom the report relates. [34/2012] |
(4) Where a relevant office holder or defaulter receives under subsection (2) a report made under subsection (1), the relevant office holder or defaulter must, at the request of a creditor of the defaulter to whom the report relates —| (a) | make the report available for inspection by the creditor; and | | (b) | on payment of such reasonable fee as the relevant office holder or defaulter (as the case may be) determines, supply to the creditor the whole or any part of that report. [34/2012] |
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| (5) In subsections (2), (3) and (4), “report” includes a copy of a report. [34/2012] |
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| Net sum payable on completion of default proceedings |
| 81F.—(1) This section applies to any net sum certified under section 81E(1)(a)(i) by an approved clearing house or a recognised clearing house, upon the completion by it of any default proceedings, to be payable by or to a defaulter. [34/2012] (2) Despite sections 218, 219, 345 and 346 of the Insolvency, Restructuring and Dissolution Act 2018, where, on or after 1 August 2013, a receiving order or winding up order has been made, or a resolution for voluntary winding up has been passed, any net sum as certified under section 81E(1)(a)(i) is —| (a) | provable in the bankruptcy or winding up or payable to the relevant office holder, as the case may be; and | | (b) | to be taken into account, where appropriate, under section 219 or 346 of the Insolvency, Restructuring and Dissolution Act 2018. [34/2012; 40/2018] |
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| Disclaimer of onerous property, rescission of contracts, etc. |
81G.—(1) Sections 230, 231, 373 and 374 of the Insolvency, Restructuring and Dissolution Act 2018 do not apply to —| (a) | a market contract; | | (b) | a contract effected by an approved clearing house, or a recognised clearing house, for the purpose of realising property provided as market collateral; | | (c) | a market charge; or | | (d) | any default proceedings. [34/2012; 40/2018] |
(2) Sections 130(1), 170(1) and 328 of the Insolvency, Restructuring and Dissolution Act 2018 do not apply to any act, matter or thing which has been done under —| (a) | a market contract; | | (b) | a disposition of property pursuant to a market contract; | | (c) | the provision of market collateral; | | (d) | a contract effected by an approved clearing house, or a recognised clearing house, for the purpose of realising property provided as market collateral, or any disposition of property pursuant to such a contract; | | (e) | a disposition of property in accordance with the business rules of an approved clearing house, or a recognised clearing house, relating to the application of property provided as market collateral; | | (f) | a disposition of property as a result of which the property becomes subject to a market charge, or any transaction pursuant to which that disposition is made; | | (g) | a disposition of property for the purpose of enforcing a market charge; | | (h) | a market charge; or | | (i) | any default proceedings. [34/2012; 40/2018] |
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| Adjustment of prior transactions |
81H.—(1) No order may be made, on or after 1 August 2013, in relation to any matter to which this section applies, by a court under any of the following provisions in any proceedings, whether instituted before, on or after 1 August 2013:| section 224, 225, 228, 361, 362, 366 or 438 of the Insolvency, Restructuring and Dissolution Act 2018. |
[34/2012; 40/2018] (2) The matters to which this section applies are as follows:| (a) | a market contract; | | (b) | a disposition of property pursuant to a market contract; | | (c) | the provision of market collateral; | | (d) | a contract effected by an approved clearing house, or a recognised clearing house, for the purpose of realising property provided as market collateral; | | (e) | a disposition of property in accordance with the business rules of an approved clearing house, or a recognised clearing house, relating to the application of property provided as market collateral; | | (f) | a disposition of property as a result of which the property becomes subject to a market charge, or any transaction pursuant to which that disposition is made; | | (g) | a disposition of property for the purpose of enforcing a market charge; | | (h) | a market charge; | | (i) | any default proceedings. [34/2012] |
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| Right of relevant office holder to recover certain amounts arising from certain transactions |
81I.—(1) Where a participant (called in this section the first participant) sells securities, securities‑based derivatives contracts or units in a collective investment scheme at an over‑value to, or purchases securities, securities‑based derivatives contracts or units in a collective investment scheme at an under‑value from, another participant (called in this section the second participant) in the circumstances referred to in subsection (3), and thereafter a relevant office holder acts for —| (a) | the second participant; | | (b) | the principal of the second participant in the sale or purchase; or | | (c) | the estate of the second participant or person referred to in paragraph (b), |
| then, unless a court otherwise orders, the relevant office holder may recover from the first participant, or the principal of the first participant, an amount equal to the specified gain obtained under the sale or purchase by the first participant, or the principal of the first participant. |
[34/2012; 4/2017] | (2) The amount equal to the specified gain is recoverable even if the sale or purchase may have been discharged according to the business rules of an approved clearing house, or a recognised clearing house, and replaced by a market contract. [34/2012] |
(3) The circumstances referred to in subsection (1) are that —| (a) | a specified event has occurred in relation to the second participant, or the principal of the second participant, within the period of 6 months immediately following the date on which the sale or purchase was entered into; and | | (b) | at the time the sale or purchase was entered into, the first participant, or the principal of the first participant, knew, or ought reasonably to have known, that a specified event was likely to occur in relation to the second participant, or the principal of the second participant. [34/2012] |
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(4) In this section —“specified event”, in relation to the second participant or a person who is or was, in respect of a sale or purchase referred to in subsection (1), the principal of the second participant, means —| (a) | the making of a bankruptcy order against the second participant or that person, as the case may be; | | (b) | the making of a statutory declaration in respect of the second participant or that person (as the case may be) under section 161(1) of the Insolvency, Restructuring and Dissolution Act 2018; | | (c) | the summoning of a meeting of creditors in relation to the second participant or that person (as the case may be) under section 166 of the Insolvency, Restructuring and Dissolution Act 2018; | | (d) | the making of an application for the winding up of the second participant or that person (as the case may be) before a court; or | | (e) | the appointment of a judicial manager under Part 7 of the Insolvency, Restructuring and Dissolution Act 2018 in respect of the second participant or that person, as the case may be; |
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“specified gain”, in relation to a sale or purchase referred to in subsection (1), means the difference, as at the time the sale or purchase was entered into, between —| (a) | the market value of the securities, securities‑based derivatives contracts or units in a collective investment scheme which are the subject of the sale or purchase; and | | (b) | the value of the consideration for the sale or purchase. [34/2012; 4/2017; 40/2018] |
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| Application of market collateral not affected by certain other interest, etc. |
| 81J.—(1) This section has effect with respect to the application by an approved clearing house, or a recognised clearing house, of property provided as market collateral (called in this section the property). [34/2012] (2) The property may be applied in accordance with the business rules or default rules of the approved clearing house or recognised clearing house, so far as it is necessary for it to be so applied, despite —| (a) | any prior equitable interest or right, or any right or remedy arising from a breach of fiduciary duty, unless the approved clearing house or recognised clearing house had actual notice of the interest, right or breach of duty (other than any interest or right arising from the situation referred to in paragraph (b)) (as the case may be) at the time the property was provided as market collateral; or | | (b) | that the property is deposited by the approved clearing house or recognised clearing house in a trust account held for the benefit of a participant. [34/2012] |
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| (3) No right or remedy arising subsequent to the provision of the property as market collateral may be enforced to prevent, or interfere with, the application of the property by the approved clearing house or recognised clearing house in accordance with its business rules or default rules. [34/2012] |
| (4) Where an approved clearing house, or a recognised clearing house, has power under this section to apply the property despite an interest, a right or a remedy, a person to whom the approved clearing house or recognised clearing house disposes of the property in accordance with its business rules or default rules takes free from that interest, right or remedy. [34/2012] |
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| Enforcement of judgments over property subject to market charge, etc. |
| 81K.—(1) Where, whether before, on or after 1 August 2013, any property is subject to a market charge or has been provided as market collateral, no enforcement order or other legal process for the enforcement of any judgment or order may be commenced or continued, and no distress may be levied, against the property by a person not seeking to enforce any interest in, or security over, the property, except with the consent of the approved clearing house or recognised clearing house in favour of which the market charge was granted. [34/2012] [Act 25 of 2021 wef 01/04/2022] | (2) Where by virtue of this section a person would not be entitled to enforce a judgment or an order against any property, any injunction or other remedy granted by any court with a view to facilitating the enforcement of any such judgment or order does not extend to that property. [34/2012] |
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| Law of insolvency in other jurisdictions |
81L.—(1) Despite any other written law or rule of law, a court is not to recognise or give effect to —| (a) | an order of a court exercising jurisdiction under the law of insolvency in any place outside Singapore; or | | (b) | an act of a person appointed in any place outside Singapore to perform a function under the law of insolvency in that place, |
| insofar as the making of the order by a court in Singapore, or the doing of the act by a relevant office holder, would be prohibited under this Act. |
[34/2012] | (2) In this section, “law of insolvency”, in relation to a place outside Singapore, means any law of that place which is similar to, or serves the same purposes as, any part of the law of insolvency in Singapore. [34/2012] |
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| Participant to be party to certain transactions as principal |
81M.—(1) Where —| (a) | a participant, in the participant’s capacity as such, enters into any transaction (including a market contract) with an approved clearing house or a recognised clearing house; and | | (b) | but for this subsection or any provision in the business rules or default rules of the approved clearing house or recognised clearing house, the participant would be a party to that transaction as agent, |
| then, despite any other written law or rule of law, as between, and only as between, the approved clearing house or recognised clearing house and the participant or the person who is the participant’s principal in respect of that transaction, the participant is, for all purposes (including any action, claim or demand, whether civil or criminal), deemed to be a party to that transaction as principal, and not as agent. |
[34/2012] (2) Where —| (a) | 2 or more participants, in their capacities as such, enter into any transaction; and | | (b) | but for this subsection, any of the participants would be a party to that transaction as agent, |
| then, despite any other written law or rule of law, except as between, and only as between, a participant to whom paragraph (b) applies and the person who is the participant’s principal in respect of that transaction, the participant is, for all purposes (including any action, claim or demand, whether civil or criminal), deemed to be a party to that transaction as principal, and not as agent. |
[34/2012] |
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| Preservation of rights, etc. |
81N. Except to the extent that it expressly provides, this Division does not operate to limit, restrict or otherwise affect —| (a) | any right, title, interest, privilege, obligation or liability of a person; or | | (b) | any investigation, legal proceedings or remedy in respect of any such right, title, interest, privilege, obligation or liability. [34/2012] |
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| Immunity from criminal or civil liability |
81O.—(1) No criminal or civil liability is incurred by —| (a) | a person discharging, by virtue of a delegation under the default rules of an approved clearing house or a recognised clearing house, an obligation of the approved clearing house or recognised clearing house in connection with any default proceedings; or | | (b) | any person acting on behalf of a person referred to in paragraph (a), including —| (i) | any member of the board of directors of the person referred to in paragraph (a); and | | (ii) | any member of any committee established by the person referred to in paragraph (a), |
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| for any thing done (including any statement made) or omitted to be done with reasonable care and in good faith in the course of, or in connection with, the discharge or purported discharge of that obligation. |
[34/2012] | (2) Where a relevant office holder takes action in relation to any property of a defaulter which is liable to be dealt with in accordance with the default rules of an approved clearing house or a recognised clearing house, and the relevant office holder reasonably believes or has reasonable grounds for believing that the relevant office holder is entitled to take that action, the relevant office holder shall not be liable to any person in respect of any loss or damage resulting from any action of the relevant office holder, except insofar as the loss or damage (as the case may be) is caused by the negligence of the relevant office holder. [34/2012] |
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| Division 5 — General Powers of Authority |
| Disqualification or removal of director or executive officer |
81P.—(1) Despite the provisions of any other written law, an approved clearing house or Singapore recognised clearing house must not, without the prior written consent of the Authority, permit an individual to act as its director or executive officer, if the individual —| (a) | has been convicted, whether in Singapore or elsewhere, of an offence committed before, on or after the date of commencement of section 48 of the Financial Institutions (Miscellaneous Amendments) Act 2024, being an offence —| (i) | involving fraud or dishonesty; | | (ii) | the conviction for which involved a finding that he or she had acted fraudulently or dishonestly; or | | (iii) | that is specified in the Third Schedule to the Registration of Criminals Act 1949; |
| | (b) | is an undischarged bankrupt, whether in Singapore or elsewhere; | | (c) | has had an enforcement order against him or her in respect of a judgment debt returned unsatisfied in whole or in part; | | (d) | has, whether in Singapore or elsewhere, entered into a compromise or scheme of arrangement with his or her creditors, being a compromise or scheme of arrangement that is still in operation; | | (e) | has had a related Acts prohibition order, a section 101A prohibition order, a section 123ZZC prohibition order, or an FSMA prohibition order made against him or her that remains in force; or | | (f) | has been a director of, or directly concerned in the management of, a regulated financial institution, whether in Singapore or elsewhere —| (i) | which is being or has been wound up by a court; or | | (ii) | the approval, authorisation, designation, recognition, registration or licence of which has been withdrawn, cancelled or revoked (without any application by the regulated financial institution for withdrawal, cancellation or revocation) by the Authority or, in the case of a regulated financial institution in a foreign country or jurisdiction, by the regulatory authority in that foreign country or jurisdiction. |
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| (2) Despite the provisions of any other written law, where the Authority is satisfied that a director or executive officer of an approved clearing house or Singapore recognised clearing house is not a fit and proper person to be a director or executive officer (as the case may be) of the approved clearing house or Singapore recognised clearing house (as the case may be), the Authority may, by notice in writing to the approved clearing house or Singapore recognised clearing house, direct it to remove the director or executive officer from his or her office or employment within such period as may be specified by the Authority in the notice, and the approved clearing house or Singapore recognised clearing house must comply with the notice. |
(3) For the purpose of subsection (2), the Authority may consider any matter which it considers relevant, including (but not limited to) whether —| (a) | the individual has wilfully contravened or wilfully caused the approved clearing house or Singapore recognised clearing house to contravene any provision of this Act or the business rules of the approved clearing house or Singapore recognised clearing house; | | (b) | the individual has, without reasonable excuse, failed to secure the compliance of the approved clearing house or Singapore recognised clearing house with this Act, the Monetary Authority of Singapore Act 1970, any of the written laws set out in the Schedule to that Act, or the business rules of the approved clearing house or Singapore recognised clearing house; | | (c) | the individual has failed to discharge any of the duties of his or her office or employment; | | (d) | the individual’s removal is necessary in the public interest or for the protection of investors; or | | (e) | the individual comes within any of the grounds mentioned in subsection (1). |
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| (4) The Authority must, in determining whether an individual has failed to discharge the duties of his or her office or employment for the purposes of subsection (3)(c), have regard to such criteria as may be prescribed. |
(5) The Authority must not direct an approved clearing house or Singapore recognised clearing house to remove an individual from his or her office or employment under subsection (2) without giving the approved clearing house or Singapore recognised clearing house and that individual, an opportunity to be heard except in any of the following circumstances: | (a) | the individual is an undischarged bankrupt, whether in Singapore or elsewhere; | | (b) | a section 101A prohibition order or an FSMA prohibition order against the individual has been made and remains in force; | | (c) | the individual has been convicted, whether in Singapore or elsewhere, of an offence, committed before, on or after the date of commencement of section 48 of the Financial Institutions (Miscellaneous Amendments) Act 2024 —| (i) | involving fraud or dishonesty or the conviction for which involved a finding that the individual had acted fraudulently or dishonestly; and | | (ii) | punishable with imprisonment for a term of 3 months or more. |
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| (6) An approved clearing house or Singapore recognised clearing house must, as soon as practicable after receiving a direction under subsection (2), notify the affected director or executive officer of the direction. |
| (7) Any approved clearing house or Singapore recognised clearing house who receives a direction under subsection (2), or any director or executive officer of an approved clearing house or Singapore recognised clearing house in relation to whom a direction under subsection (2) is given, may, within 30 days after the approved clearing house or Singapore recognised clearing house receives the direction, appeal to the Minister whose decision is final. |
| (8) Despite the lodging of an appeal under subsection (7), a direction under subsection (2) continues to have effect pending the Minister’s decision. |
| (9) The Minister may, when deciding an appeal under subsection (7), modify the direction under subsection (2), and such modified action has effect starting on the date of the Minister’s decision. |
| (10) No criminal or civil liability is incurred by an approved clearing house or Singapore recognised clearing house, or any person acting on behalf of an approved clearing house or Singapore recognised clearing house, in respect of anything done or omitted to be done with reasonable care and in good faith in the discharge or purported discharge of its obligations under this section. |
| (11) Any approved clearing house or Singapore recognised clearing house which, without reasonable excuse, contravenes subsection (1) or fails to comply with a notice issued under subsection (2) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part of a day during which the offence continues after conviction. [Act 12 of 2024 wef 24/01/2025] |
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| Power of Authority to make regulations |
81Q.—(1) Without affecting section 341, the Authority may make regulations for the purposes of this Part, including regulations —| (a) | relating to the approval of approved clearing houses and the recognition of recognised clearing houses; | | (b) | relating to the requirements applicable to any person who establishes, operates or assists in establishing or operating a clearing facility, whether or not the person is approved as an approved clearing house under section 51(1)(a) or recognised as a recognised clearing house under section 51(1)(b) or (2); and | | (c) | for the purposes of section 59 and, in particular, specifying measures to manage any risks assumed by an approved clearing house. [34/2012; 4/2017] |
(2) Regulations made under this section may provide —| (a) | that a contravention of any specified provision thereof shall be an offence; and | | (b) | for a penalty not exceeding a fine of $150,000 or imprisonment for a term not exceeding 12 months or both for each offence and, in the case of a continuing offence, for a further penalty not exceeding a fine of 10% of the maximum fine prescribed for that offence for every day or part of a day during which the offence continues after conviction. [34/2012] |
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| Power of Authority to issue directions |
81R.—(1) The Authority may issue directions, whether of a general or specific nature, by written notice, to an approved clearing house or a recognised clearing house, or a class of approved clearing houses or class of recognised clearing houses, if the Authority thinks it necessary or expedient —| (a) | for ensuring the safe and efficient operation of any clearing facility operated by the approved clearing house or recognised clearing house, or of clearing facilities operated by approved clearing houses or recognised clearing houses of the class or by approved clearing houses or recognised clearing houses, in general; [Act 12 of 2024 wef 30/08/2024] | | (b) | for ensuring the integrity and stability of the capital markets or the financial system; | | (c) | in the interests of the public or a section of the public or for the protection of investors; | | (d) | for the effective administration of this Act; or | | (e) | for ensuring compliance with any condition or restriction that the Authority may impose under section 51(4) or (5), 58(2), 70(5), (10) or (11), 71(11) or (12), 81AA(4), (9) or (10), 81AC(11) or (12) or 81SB(1) or (2), or such other obligations or requirements under this Act or as the Authority may prescribe. [34/2012] [Act 12 of 2024 wef 30/08/2024] [Act 12 of 2024 wef 24/01/2025] |
| (2) An approved clearing house or a recognised clearing house must comply with every direction issued to it under subsection (1). [34/2012] |
| (3) Any approved clearing house or recognised clearing house which, without reasonable excuse, contravenes a direction issued to it under subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part of a day during which the offence continues after conviction. [34/2012] |
| (4) It is not necessary to publish any direction issued under subsection (1) in the Gazette. [34/2012] |
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| Emergency powers of Authority |
| 81S.—(1) Where the Authority has reason to believe that an emergency exists, or thinks that it is necessary or expedient in the interests of the public or a section of the public or for the protection of investors, the Authority may direct by written notice an approved clearing house or a recognised clearing house to take such action as the Authority considers necessary to maintain or restore the safe and efficient operation of the clearing facilities operated by the approved clearing house or recognised clearing house. [34/2012] (2) Without affecting subsection (1), the actions which the Authority may direct an approved clearing house or a recognised clearing house to take include —| (a) | ordering the liquidation of all positions or any part thereof, or the reduction of such positions; | | (b) | altering the conditions of delivery of transactions cleared or settled, or to be cleared or settled, through the clearing facility; | | (c) | fixing the settlement price at which transactions are to be liquidated; | | (d) | requiring margins or additional margins for transactions cleared or settled, or to be cleared or settled, through the clearing facility; and | | (e) | modifying or suspending any of the business rules of the approved clearing house or recognised clearing house. [34/2012] |
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(3) Where an approved clearing house or a recognised clearing house fails to comply with any direction of the Authority under subsection (1) within such time as is specified by the Authority, the Authority may —| (a) | set margin levels for transactions cleared or settled, or to be cleared or settled, through the clearing facility to cater for the emergency; | | (b) | set limits that may apply to positions acquired in good faith prior to the date of the notice issued by the Authority; or | | (c) | take such other action as the Authority thinks fit to maintain or restore the safe and efficient operation of the clearing facilities operated by the approved clearing house or recognised clearing house. [34/2012] |
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(4) In this section, “emergency” means any threatened or actual market manipulation or cornering, and includes —| (a) | any act of any government affecting any commodity or financial instrument; | | (b) | any major market disturbance which prevents a market from accurately reflecting the forces of supply and demand for any commodity or financial instrument; or | | (c) | any undesirable situation or practice which, in the opinion of the Authority, constitutes an emergency. [34/2012; 4/2017] |
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| (5) The Authority may modify any action taken by an approved clearing house or a recognised clearing house under subsection (1), including the setting aside of that action. [34/2012] |
| (6) Any person who is aggrieved by any action taken by the Authority, or by an approved clearing house or a recognised clearing house, under this section may, within 30 days after the person is notified of the action, appeal to the Minister, whose decision is final. [34/2012] |
| (7) Despite the lodging of an appeal under subsection (6), any action taken by the Authority, or by an approved clearing house or recognised clearing house, under this section continues to have effect pending the Minister’s decision. [34/2012] |
| (8) The Minister may, when deciding an appeal under subsection (6), make such modification as he or she considers necessary to any action taken by the Authority, or by an approved clearing house or a recognised clearing house, under this section, and any such modified action has effect from the date of the Minister’s decision. [34/2012] |
| (9) Any approved clearing house or recognised clearing house which fails to comply with a direction issued under subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part of a day during which the offence continues after conviction. [34/2012] |
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| Interpretation of sections 81SA to 81SAE |
81SA. In this section and sections 81SAA to 81SAE, unless the context otherwise requires —| “business” includes affairs and property; |
| “office holder”, in relation to an approved clearing house or a recognised clearing house, means any person acting as the liquidator, the provisional liquidator, the receiver or the receiver and manager of the approved clearing house or recognised clearing house (as the case may be), or acting in an equivalent capacity in relation to the approved clearing house or recognised clearing house (as the case may be); |
“relevant business” means any business of an approved clearing house or a recognised clearing house —| (a) | which the Authority has assumed control of under section 81SAA; or | | (b) | in relation to which a statutory adviser or a statutory manager has been appointed under section 81SAA; |
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| “statutory adviser” means a statutory adviser appointed under section 81SAA; |
| “statutory manager” means a statutory manager appointed under section 81SAA. [10/2013] |
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| Action by Authority if approved clearing house or recognised clearing house unable to meet obligations, etc. |
81SAA.—(1) The Authority may exercise any one or more of the powers specified in subsection (2) as appears to it to be necessary, where —| (a) | an approved clearing house or a recognised clearing house informs the Authority that it is or is likely to become insolvent, or that it is or is likely to become unable to meet its obligations, or that it has suspended or is about to suspend payments; | | (b) | an approved clearing house or a recognised clearing house becomes unable to meet its obligations, or is insolvent, or suspends payments; | | (c) | the Authority is of the opinion that an approved clearing house or a recognised clearing house —| (i) | is carrying on its business in a manner likely to be detrimental to the interests of the public or a section of the public or the protection of investors, or to the objectives specified in section 47; | | (ii) | is or is likely to become insolvent, or is or is likely to become unable to meet its obligations, or is about to suspend payments; | | (iii) | has contravened any of the provisions of this Act; or | | (iv) | has failed to comply with any condition or restriction imposed on it under section 51(4) or (5); or |
| | (d) | the Authority considers it in the public interest to do so. [10/2013] |
(2) Subject to subsections (1) and (3), the Authority may —| (a) | require the approved clearing house or recognised clearing house (as the case may be) immediately to take any action or to do or not to do any act or thing whatsoever in relation to its business as the Authority may consider necessary; | | (b) | appoint one or more persons as statutory adviser, on such terms and conditions as the Authority may specify, to advise the approved clearing house or recognised clearing house (as the case may be) on the proper management of such of the business of the approved clearing house or recognised clearing house (as the case may be) as the Authority may determine; or | | (c) | assume control of and manage such of the business of the approved clearing house or recognised clearing house (as the case may be) as the Authority may determine, or appoint one or more persons as statutory manager to do so on such terms and conditions as the Authority may specify. [10/2013] |
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(3) In the case of a recognised clearing house which is incorporated outside Singapore, any appointment of a statutory adviser or statutory manager or any assumption of control by the Authority of any business of the recognised clearing house under subsection (2) is only in relation to —| (a) | the business or affairs of the recognised clearing house carried on in, or managed in or from, Singapore; or | | (b) | the property of the recognised clearing house located in Singapore, or reflected in the books of the recognised clearing house in Singapore (as the case may be) in relation to its operations in Singapore. [10/2013] |
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(4) Where the Authority appoints 2 or more persons as the statutory manager of an approved clearing house or a recognised clearing house, the Authority must specify, in the terms and conditions of the appointment, which of the duties, functions and powers of the statutory manager —| (a) | may be discharged or exercised by such persons jointly and severally; | | (b) | must be discharged or exercised by such persons jointly; and | | (c) | must be discharged or exercised by a specified person or such persons. [10/2013] |
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(5) Where the Authority has exercised any power under subsection (2), it may, at any time and without affecting its power under section 56(1)(da), do one or more of the following:| (a) | vary or revoke any requirement of, any appointment made by or any action taken by the Authority in the exercise of such power, on such terms and conditions as it may specify; | | (b) | further exercise any of the powers under subsection (2); | | (c) | add to, vary or revoke any term or condition specified by the Authority under this section. [10/2013] |
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(6) No liability shall be incurred by a statutory manager or a statutory adviser for anything done (including any statement made) or omitted to be done with reasonable care and in good faith in the course of or in connection with —| (a) | the exercise or purported exercise of any power under this Act; | | (b) | the performance or purported performance of any function or duty under this Act; or | | (c) | the compliance or purported compliance with this Act. [10/2013] |
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| (7) Any approved clearing house or recognised clearing house that fails to comply with a requirement imposed by the Authority under subsection (2)(a) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part of a day during which the offence continues after conviction. [10/2013] |
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| Effect of assumption of control under section 81SAA |
| 81SAB.—(1) Upon assuming control of the relevant business of an approved clearing house or a recognised clearing house, the Authority or statutory manager (as the case may be) must take custody or control of the relevant business. [10/2013] (2) During the period when the Authority or statutory manager is in control of the relevant business of an approved clearing house or a recognised clearing house, the Authority or statutory manager —| (a) | must manage the relevant business of the approved clearing house or recognised clearing house (as the case may be) in the name of and on behalf of the approved clearing house or recognised clearing house (as the case may be); and | | (b) | is deemed to be an agent of the approved clearing house or recognised clearing house (as the case may be). [10/2013] |
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(3) In managing the relevant business of an approved clearing house or a recognised clearing house, the Authority or statutory manager —| (a) | must consider the interests of the public or the section of the public referred to in section 81SAA(1)(c)(i), and the need to protect investors; and | | (b) | has all the duties, powers and functions of the members of the board of directors of the approved clearing house or recognised clearing house (as the case may be) (collectively and individually) under this Act, the Companies Act 1967 and the constitution of the approved clearing house or recognised clearing house (as the case may be), including powers of delegation, in relation to the relevant business of the approved clearing house or recognised clearing house (as the case may be); but nothing in this paragraph requires the Authority or statutory manager to call any meeting of the approved clearing house or recognised clearing house (as the case may be) under the Companies Act 1967 or the constitution of the approved clearing house or recognised clearing house (as the case may be). [10/2013] |
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| (4) Despite any written law or rule of law, upon the assumption of control of the relevant business of an approved clearing house or a recognised clearing house by the Authority or statutory manager, any appointment of a person as the chief executive officer or a director of the approved clearing house or recognised clearing house (as the case may be), which was in force immediately before the assumption of control, is deemed to be revoked, unless the Authority gives its approval, by written notice to the person and the approved clearing house or recognised clearing house (as the case may be), for the person to remain in the appointment. [10/2013] |
| (5) Despite any written law or rule of law, during the period when the Authority or statutory manager is in control of the relevant business of an approved clearing house or a recognised clearing house, except with the approval of the Authority, no person may be appointed as the chief executive officer or a director of the approved clearing house or recognised clearing house, as the case may be. [10/2013] |
| (6) Where the Authority has given its approval under subsection (4) or (5) to a person to remain in the appointment of, or to be appointed as, the chief executive officer or a director of an approved clearing house or a recognised clearing house, the Authority may at any time, by written notice to the person and the approved clearing house or recognised clearing house (as the case may be), revoke that approval, and the appointment is deemed to be revoked on the date specified in the notice. [10/2013] |
(7) Despite any written law or rule of law, if any person, whose appointment as the chief executive officer or a director of an approved clearing house or a recognised clearing house is revoked under subsection (4) or (6), acts or purports to act after the revocation as the chief executive officer or a director of the approved clearing house or recognised clearing house (as the case may be) during the period when the Authority or statutory manager is in control of the relevant business of the approved clearing house or recognised clearing house (as the case may be) —| (a) | the act or purported act of the person is invalid and of no effect; and | | (b) | the person shall be guilty of an offence. [10/2013] |
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(8) Despite any written law or rule of law, if any person who is appointed as the chief executive officer or a director of an approved clearing house or a recognised clearing house in contravention of subsection (5) acts or purports to act as the chief executive officer or a director of the approved clearing house or recognised clearing house (as the case may be) during the period when the Authority or statutory manager is in control of the relevant business of the approved clearing house or recognised clearing house (as the case may be) —| (a) | the act or purported act of the person is invalid and of no effect; and | | (b) | the person shall be guilty of an offence. [10/2013] |
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(9) During the period when the Authority or statutory manager is in control of the relevant business of an approved clearing house or a recognised clearing house —| (a) | if there is any conflict or inconsistency between —| (i) | a direction or decision given by the Authority or statutory manager (including a direction or decision to a person or body of persons referred to in sub‑paragraph (ii)); and | | (ii) | a direction or decision given by any chief executive officer, director, member, executive officer, employee, agent or office holder, or the board of directors, of the approved clearing house or recognised clearing house, as the case may be, |
| the direction or decision referred to in sub‑paragraph (i), to the extent of the conflict or inconsistency, prevails over the direction or decision referred to in sub‑paragraph (ii); and |
| | (b) | no person may exercise any voting or other right attached to any share in the approved clearing house or recognised clearing house (as the case may be) in any manner that may defeat or interfere with any duty, function or power of the Authority or statutory manager, and any such act or purported act is invalid and of no effect. [10/2013] |
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| (10) Any person who is guilty of an offence under subsection (7) or (8) shall be liable on conviction to a fine not exceeding $150,000 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 $15,000 for every day or part of a day during which the offence continues after conviction. [10/2013; 4/2017] |
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81SAC.—(1) The Authority must cease to be in control of the relevant business of an approved clearing house or a recognised clearing house when the Authority is satisfied that —| (a) | the reasons for the Authority’s assumption of control of the relevant business have ceased to exist; or | | (b) | it is no longer necessary in the interests of the public or the section of the public referred to in section 81SAA(1)(c)(i) or for the protection of investors. [10/2013] |
| (2) A statutory manager is deemed to have assumed control of the relevant business of an approved clearing house or a recognised clearing house on the date of the statutory manager’s appointment as such. [10/2013] |
(3) The appointment of a statutory manager in relation to the relevant business of an approved clearing house or a recognised clearing house may be revoked by the Authority at any time —| (a) | if the Authority is satisfied that —| (i) | the reasons for the appointment have ceased to exist; or | | (ii) | it is no longer necessary in the interests of the public or the section of the public referred to in section 81SAA(1)(c)(i) or for the protection of investors; or |
| | (b) | on any other ground, |
| and upon such revocation, the statutory manager ceases to be in control of the relevant business of the approved clearing house or recognised clearing house, as the case may be. |
[10/2013] |
(4) The Authority must, as soon as practicable, publish in the Gazette the date, and such other particulars as the Authority thinks fit, of —| (a) | the Authority’s assumption of control of the relevant business of an approved clearing house or a recognised clearing house; | | (b) | the cessation of the Authority’s control of the relevant business of an approved clearing house or a recognised clearing house; | | (c) | the appointment of a statutory manager in relation to the relevant business of an approved clearing house or a recognised clearing house; and | | (d) | the revocation of a statutory manager’s appointment in relation to the relevant business of an approved clearing house or a recognised clearing house. [10/2013] |
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| Responsibilities of officers, member, etc., of approved clearing house or recognised clearing house |
81SAD.—(1) During the period when the Authority or statutory manager is in control of the relevant business of an approved clearing house or a recognised clearing house —| (a) | the General Division of the High Court may, on an application by the Authority or statutory manager, direct any person who has ceased to be or who is still any chief executive officer, director, member, executive officer, employee, agent, banker, auditor or office holder of, or trustee for, the approved clearing house or recognised clearing house (as the case may be) to pay, deliver, convey, surrender or transfer to the Authority or statutory manager, within such period as the General Division of the High Court may specify, any property or book of the approved clearing house or recognised clearing house (as the case may be) which is comprised in, forms part of or relates to the relevant business of the approved clearing house or recognised clearing house (as the case may be), and which is in the person’s possession or control; and | | (b) | any person who has ceased to be or who is still any chief executive officer, director, member, executive officer, employee, agent, banker, auditor or office holder of, or trustee for, the approved clearing house or recognised clearing house (as the case may be) must give to the Authority or statutory manager such information as the Authority or statutory manager may require for the discharge of the Authority’s or statutory manager’s duties or functions, or the exercise of the Authority’s or statutory manager’s powers, in relation to the approved clearing house or recognised clearing house (as the case may be), within such time and in such manner as the Authority or statutory manager may specify. [10/2013; 40/2019] |
(2) Any person who —| (a) | without reasonable excuse, fails to comply with subsection (1)(b); or | | (b) | in purported compliance with subsection (1)(b), knowingly or recklessly provides any information or document that is false or misleading in a material particular, |
| 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 3 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. |
[10/2013] |
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| Remuneration and expenses of Authority and others in certain cases |
81SAE.—(1) The Authority may at any time fix the remuneration and expenses to be paid by an approved clearing house or a recognised clearing house —| (a) | to a statutory manager or statutory adviser appointed in relation to the approved clearing house or recognised clearing house (as the case may be), whether or not the appointment has been revoked; and | | (b) | where the Authority has assumed control of the relevant business of the approved clearing house or recognised clearing house (as the case may be), to the Authority and any person appointed by the Authority under section 320 in relation to the Authority’s assumption of control of the relevant business, whether or not the Authority has ceased to be in control of the relevant business. [10/2013] |
| (2) The approved clearing house or recognised clearing house (as the case may be) must reimburse the Authority any remuneration and expenses payable by the approved clearing house or recognised clearing house (as the case may be) to a statutory manager or statutory adviser. [10/2013] |
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| Power of Authority to exempt approved clearing house or recognised clearing house from provisions of this Part |
| 81SB.—(1) Without affecting section 337(1), the Authority may, by regulations made under section 81Q, exempt any approved clearing house, recognised clearing house, or class of approved clearing houses or recognised clearing houses from any provision of this Part, subject to such conditions or restrictions as the Authority may prescribe in those regulations. [34/2012] | (2) Without affecting section 337(3) and (4), the Authority may, by written notice, exempt any approved clearing house or recognised clearing house from any provision of this Part, subject to such conditions or restrictions as the Authority may specify by written notice, if the Authority is satisfied that the non‑compliance by that approved clearing house or recognised clearing house with that provision will not detract from the objectives specified in section 47. [34/2012] |
| (2A) The Authority may, at any time, by written notice, add to, vary or revoke the conditions or restrictions mentioned in subsection (2). [4/2017] |
| (2B) An approved clearing house or a recognised clearing house that is exempted under subsection (1) must satisfy every condition or restriction imposed on it under that subsection. [4/2017] [Act 12 of 2024 wef 30/08/2024] |
| (2C) An approved clearing house or a recognised clearing house that is exempted under subsection (2) must, for the duration of the exemption, satisfy every condition or restriction imposed on it under that subsection and subsection (2A). [4/2017] [Act 12 of 2024 wef 30/08/2024] |
| (3) It is not necessary to publish any exemption granted under subsection (2) in the Gazette. [34/2012] |
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Division 6 — Voluntary Transfer of Business of
Approved Clearing House or Recognised
Clearing House |
| Interpretation of this Division |
81SC. In this Division, unless the context otherwise requires —| “business” includes affairs, property, right, obligation and liability; |
| “Court” means the General Division of the High Court; |
| “debenture” has the meaning given by section 4(1) of the Companies Act 1967; |
| “property” includes property, right and power of every description; |
| “Registrar of Companies” means the Registrar of Companies appointed under the Companies Act 1967 and includes any Deputy or Assistant Registrar of Companies appointed under that Act; |
| “transferee” means an approved clearing house or a recognised clearing house, or a corporation which has applied or will be applying for approval or recognition to carry on in Singapore the usual business of an approved clearing house or a recognised clearing house, to which the whole or any part of a transferor’s business is, is to be or is proposed to be transferred under this Division; |
| “transferor” means an approved clearing house or a recognised clearing house the whole or any part of the business of which is, is to be, or is proposed to be transferred under this Division. [10/2013; 40/2019] |
|
| Voluntary transfer of business |
81SD.—(1) A transferor may transfer the whole or any part of its business (including any business that is not the usual business of an approved clearing house or a recognised clearing house) to a transferee, if —| (a) | the Authority has consented to the transfer; | | (b) | the transfer involves the whole or any part of the business of the transferor that is the usual business of an approved clearing house or a recognised clearing house; and | | (c) | the Court has approved the transfer. [10/2013] |
| (2) Subsection (1) does not affect the right of an approved clearing house or a recognised clearing house to transfer the whole or any part of its business under any law. [10/2013] |
(3) The Authority may consent to a transfer under subsection (1)(a) if the Authority is satisfied that —| (a) | the transferee is a fit and proper person; and | | (b) | the transferee will conduct the business of the transferor prudently and comply with the provisions of this Act. [10/2013] |
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| (4) The Authority may at any time appoint one or more persons to perform an independent assessment of, and provide a report on, the proposed transfer of a transferor’s business (or any part thereof) under this Division. [10/2013] |
| (5) The remuneration and expenses of any person appointed under subsection (4) must be paid by the transferor and the transferee jointly and severally. [10/2013] |
| (6) The Authority must serve a copy of any report provided under subsection (4) on the transferor and the transferee. [10/2013] |
| (7) The Authority may require a person to provide, within the period and in the manner specified by the Authority, any information or document that the Authority may reasonably require for the discharge of its duties or functions, or the exercise of its powers, under this Division. [10/2013] |
(8) Any person who —| (a) | without reasonable excuse, fails to comply with any requirement under subsection (7); or | | (b) | in purported compliance with any requirement under subsection (7), knowingly or recklessly provides any information or document that is false or misleading in a material particular, |
| shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $200,000 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 $20,000 for every day or part of a day during which the offence continues after conviction. |
[10/2013] |
| (9) Where a person claims, before providing the Authority with any information or document that the person is required to provide under subsection (7), that the information or document might tend to incriminate the person, the information or document is not admissible in evidence against the person in criminal proceedings other than proceedings under subsection (8). [10/2013] |
|
| 81SE.—(1) A transferor must apply to the Court for its approval of the transfer of the whole or any part of the business of the transferor to the transferee under this Division. [10/2013] (2) Before making an application under subsection (1) —| (a) | the transferor must lodge with the Authority a report setting out such details of the transfer and provide such supporting documents as the Authority may specify; | | (b) | the transferor must obtain the consent of the Authority under section 81SD(1)(a); | | (c) | the transferor and the transferee must, if they intend to serve on their respective participants a summary of the transfer, obtain the Authority’s approval of the summary; | | (d) | the transferor must, at least 15 days before the application is made but not earlier than one month after the report referred to in paragraph (a) is lodged with the Authority, publish in the Gazette and in such newspaper or newspapers as the Authority may determine a notice of the transferor’s intention to make the application and containing such other particulars as may be prescribed; | | (e) | the transferor and the transferee must keep at their respective offices in Singapore, for inspection by any person who may be affected by the transfer, a copy of the report referred to in paragraph (a) for a period of 15 days after the publication of the notice referred to in paragraph (d) in the Gazette; and | | (f) | unless the Court directs otherwise, the transferor and the transferee must serve on their respective participants affected by the transfer, at least 15 days before the application is made, a copy of the report referred to in paragraph (a) or a summary of the transfer approved by the Authority under paragraph (c). [10/2013] |
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(3) The Authority and any person who, in the opinion of the Court, is likely to be affected by the transfer —| (a) | have the right to appear before and be heard by the Court in any proceedings relating to the transfer; and | | (b) | may make any application to the Court in relation to the transfer. [10/2013] |
|
| (4) The Court is not to approve the transfer if the Authority has not consented under section 81SD(1)(a) to the transfer. [10/2013] |
(5) The Court may, after taking into consideration the views (if any) of the Authority on the transfer —| (a) | approve the transfer without modification or subject to any modification agreed to by the transferor and the transferee; or | | (b) | refuse to approve the transfer. [10/2013] |
|
| (6) If the transferee is not approved as an approved clearing house or recognised as a recognised clearing house by the Authority, the Court may approve the transfer on terms that the transfer takes effect only in the event of the transferee being approved as an approved clearing house or recognised as a recognised clearing house by the Authority. [10/2013] |
(7) The Court may by the order approving the transfer or by any subsequent order provide for all or any of the following matters:| (a) | the transfer to the transferee of the whole or any part of the business of the transferor; | | (b) | the allotment or appropriation by the transferee of any share, debenture, policy or other interest in the transferee which under the transfer is to be allotted or appropriated by the transferee to or for any person; | | (c) | the continuation by (or against) the transferee of any legal proceedings pending by (or against) the transferor; | | (d) | the dissolution, without winding up, of the transferor; | | (e) | the provisions to be made for persons who are affected by the transfer; | | (f) | such incidental, consequential and supplementary matters as are, in the opinion of the Court, necessary to secure that the transfer is fully effective. [10/2013] |
|
(8) Any order under subsection (7) may —| (a) | provide for the transfer of any business, whether or not the transferor otherwise has the capacity to effect the transfer in question; | | (b) | make provision in relation to any property which is held by the transferor as trustee; and | | (c) | make provision as to any future or contingent right or liability of the transferor, including provision as to the construction of any instrument under which any such right or liability may arise. [10/2013] |
|
| (9) Subject to subsection (10), where an order made under subsection (7) provides for the transfer to the transferee of the whole or any part of the transferor’s business, then by virtue of the order the business (or part thereof) of the transferor specified in the order is transferred to and vests in the transferee, free in the case of any particular property (if the order so directs) from any charge which by virtue of the transfer is to cease to have effect. [10/2013] |
| (10) No order under subsection (7) has any effect or operation in transferring or otherwise vesting land in Singapore until the appropriate entries are made with respect to the transfer or vesting of that land by the appropriate authority. [10/2013] |
| (11) If any business specified in an order under subsection (7) is governed by the law of any foreign country or territory, the Court may order the transferor to take all necessary steps for securing that the transfer of the business to the transferee is fully effective under the law of that country or territory. [10/2013] |
(12) Where an order is made under this section, the transferor and the transferee must each lodge within 7 days after the order is made —| (a) | a copy of the order with the Registrar of Companies and with the Authority; and | | (b) | where the order relates to land in Singapore, an office copy of the order with the appropriate authority concerned with the registration or recording of dealings in that land. [10/2013] |
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| (13) A transferor or transferee which contravenes subsection (12), and every officer of the transferor or transferee (as the case may be) who fails to take all reasonable steps to secure compliance by the transferor or transferee (as the case may be) with that subsection, shall each be guilty of an offence and shall each be liable on conviction to a fine not exceeding $2,000 and, in the case of a continuing offence, to a further fine not exceeding $200 for every day or part of a day during which the offence continues after conviction. [10/2013] |
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