PART I | 1. This Act may be cited as the Securities Industry Act. |
2.—(1) In this Act, unless the context otherwise requires —| “agent”, in relation to a dealer, includes a person who is, or has at any time been, a banker of the dealer; |
| “approved securities organisation” means a body corporate that is approved by the Minister under section 17; |
| “auditor” means an approved company auditor within the meaning of the Companies Act [Cap. 50]; |
| “Authority” means the Monetary Authority of Singapore; |
| “book” includes any register, document or other record of information and any account or accounting record, however compiled, recorded or stored whether in written or printed form or microfilm by electronic process or otherwise; |
| “committee”, in relation to a securities exchange, means the persons for the time being in whom the management of the securities exchange is vested; |
| “company” has the same meaning as is assigned to that expression in the Companies Act; |
| “dealer” means a person who carries on a business of dealing in securities as a body corporate whether or not he carries on any other business, but does not include an exempt dealer; |
| “dealer’s representative” means a person, by whatever name described, in the direct employment of, or acting for, or by arrangement with, a dealer, who performs for that dealer any of the functions of a dealer (other than work ordinarily performed by accountants, clerks or cashiers) whether his remuneration is by way of salary, wages, commission or otherwise; and includes any director or officer of a body corporate who performs for the body corporate any of those functions (whether or not his remuneration is as aforesaid); |
“dealing in securities” means (whether as principal or agent) making or offering to make with any person, or inducing or attempting to induce any person to enter into or to offer to enter into —| (a) | any agreement for or with a view to acquiring, disposing of, subscribing for, or underwriting securities; or | | (b) | any agreement the purpose or pretended purpose of which is to secure a profit to any of the parties from the yield of securities or by reference to fluctuations in the price of securities; |
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| “director” has the same meaning as is assigned to that expression in the Companies Act [Cap. 50]; |
| “executive officer”, in relation to a body corporate, means any person by whatever name called and whether or not he is a director of the body corporate who is concerned or takes part in the management of the body corporate; |
| “exempt dealer” means a person or a body corporate specified in section 40; |
| “exempt stock market” means a stock market in relation to which, or a stock market included in a class of stock markets, being a class in relation to which, a declaration under section 15(2) is in force; |
“investment adviser” means a person who —| (a) | carries on a business of advising others concerning securities; | | (b) | as part of a regular business issues or promulgates analyses or reports concerning securities; or | | (c) | pursuant to a contract or arrangement with a client, undertakes on behalf of the client (whether on a discretionary authority granted by the client or otherwise) the management of a portfolio of securities for the purpose of investment, |
| but that expression does not include — |
| (i) | a bank as defined in section 2 of the Banking Act [Cap. 19]; | | (ii) | a company or society registered under the Insurance Act [Cap. 142]; | | (iii) | an advocate and solicitor or accountant in practice whose carrying on of that business is solely incidental to the practice of his profession; | | (iv) | a company registered under the Trust Companies Act [Cap. 336]; | | (v) | a dealer or his employee or a dealer’s representative or an exempt dealer whose carrying on of that business is solely incidental to the conduct of his business of dealing in securities; or | | (vi) | a person who is the proprietor of a newspaper and holder of a permit issued under the Newspaper and Printing Presses Act [Cap. 206], where —| (A) | insofar as the newspaper is distributed generally to the public it is distributed only to subscribers to, and purchasers of, the newspaper for value; | | (B) | the advice is given or the analyses or reports are issued or promulgated only through that newspaper; | | (C) | that person receives no commission or other consideration for giving the advice or for issuing or promulgating the analyses or reports; and | | (D) | the advice is given and the analyses and reports are issued or promulgated solely as incidental to the conduct of that person’s business as a newspaper proprietor; |
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| “investment representative” means a person, in the direct employment of or acting for or by arrangement with an investment adviser, who performs for such investment adviser any of the functions of an investment adviser (other than work ordinarily performed by accountants, clerks or cashiers) whether his remuneration is by way of salary, wages, commission or otherwise; and includes any director or officer of a body corporate who performs for such body corporate any of those functions (whether or not his remuneration is as aforesaid); |
“licence” means —| (a) | a dealer’s licence; | | (b) | an investment adviser’s licence; or | | (c) | a representative’s licence, |
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“listing rules”, in relation to a body corporate that maintains or provides, or proposes to maintain or provide, a stock market of a securities exchange, means rules governing or relating to —| (a) | the admission to the official list of the body corporate, of bodies corporate, governments, unincorporate bodies or other persons for the purpose of the quotation on the stock market, or made available by bodies corporate, governments, unincorporate bodies or other persons or the removal from that official list and for other purposes; or | | (b) | the activities or conduct of bodies corporate, governments, unincorporate bodies and other persons who are admitted to that list, |
| (i) | are made by the body corporate or are contained in any of the constituent documents of the body corporate; or | | (ii) | are made by another person and adopted by the body corporate; |
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| “member company” means a company which carries on a business of dealing in securities and is recognised as a member company by a securities exchange; |
“quotation”, in relation to securities and in relation to a stock market of a securities exchange, includes the displaying or providing, on a stock market of the securities exchange, of information concerning —| (a) | in a case where offers to sell, purchase or exchange the securities at particular prices, or for particular consideration, are made or accepted on that stock market — those prices or that consideration; | | (b) | in a case where offers or invitations are made on that stock market, being offers or invitations that are intended, or may reasonably be expected, to result, whether directly or indirectly, in the making or acceptance of offers to sell, purchase or exchange the securities at particular prices or for particular consideration — those prices or that consideration; or | | (c) | in any case — the price at which, or the consideration for which, particular persons, or particular classes of persons, propose, or may reasonably be expected, to sell, purchase or exchange the securities; |
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“relevant authority” —| (a) | in relation to a member company, means the securities exchange by which the company is recognised; and | | (b) | in relation to any other person, means the Authority; |
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| “repealed Act” means the Securities Industry Act 1973; [17/73] |
| “representative” means a dealer’s representative or an investment representative; |
| “rules”, in relation to a securities exchange, means the rules governing the conduct of the securities exchange or the members thereof by whatever name called and wherever contained and includes rules contained in the memorandum of association and the articles of association of the securities exchange; |
“securities” means —| (a) | debentures, stocks or bonds issued or proposed to be issued by a government; | | (b) | debentures, stocks, shares, bonds or notes issued or proposed to be issued by a body corporate or unincorporate; | | (c) | any right or option in respect of any such debentures, stocks, shares, bonds or notes; or | | (d) | any interest as defined in section 107 of the Companies Act [Cap. 50], |
| (e) | futures contracts that are governed by any written law regulating trading in futures contracts; | | (f) | bills of exchange; | | (g) | promissory notes; or | | (h) | certificates of deposit issued by a bank; |
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| “securities exchange” means a stock exchange or an approved securities organisation; |
| “Securities Industry Council” means the Securities Industry Council referred to in section 14; |
| “share” means share in the share capital of a body corporate and includes stock except where a distinction between stock and shares is express or implied; |
| “stockbroker” means a person who is a member of a securities exchange and a director of a member company; |
| “stock exchange” means any body corporate which has been approved by the Minister under section 16(2); |
“stock market” means a market, or other place at which, or a facility by means of which —| (a) | offers to sell, purchase or exchange securities are regularly made or accepted; | | (b) | offers or invitations are regularly made, being offers or invitations that are intended, or may reasonably be expected, to result, whether directly or indirectly, in the making or acceptance of offers to sell, purchase or exchange securities; or | | (c) | information is regularly provided concerning the prices at which, or the consideration for which, particular persons, or particular classes of persons, propose, or may reasonably be expected, to sell, purchase or exchange securities; |
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| “trust account” means a trust account established under section 58 or 65; |
| “unit trust scheme” means any arrangement made for the purpose, or having the effect, of providing facilities for the participation by persons as beneficiaries under a trust, in profits or income arising from the acquisition, holding, management or disposal of securities or any other property. |
(2) Regulations may provide that, subject to any terms and conditions prescribed, all or any of the provisions of this Act —| (a) | shall not have effect in relation to any specified person or to any person who is a member of a specified class of persons —| (i) | who is or may be a dealer or investment adviser by reason only of his doing anything which is merely incidental to another business; | | (ii) | who does not deal in securities for or on behalf of any other person; or | | (iii) | who is a dealer or investment adviser by reason only of the entering into by him of any specified transaction or class of transactions; |
| | (b) | shall not have effect in relation to the representative of any person referred to in paragraph (a); or | | (c) | shall have effect in relation to any person referred to in paragraph (a) or (b) to such extent as is prescribed. |
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3.—(1) A reference in this Act to a person associated with another person shall be construed as a reference to —| (a) | where the other person is a body corporate —| (i) | a director or secretary of the body corporate; | | (ii) | a body corporate that is related to the other person; or | | (iii) | a director or secretary of such a related body corporate; |
| | (b) | where the matter to which the reference relates is the extent of a power to exercise, or to control the exercise of, the voting power attached to voting shares in a body corporate, a person with whom the other person has, or proposes to enter into, an agreement, arrangement, understanding or undertaking, whether formal or informal and whether express or implied —| (i) | by reason of which either of those persons may exercise, directly or indirectly control the exercise of, or substantially influence the exercise of, any voting power attached to a share in the body corporate; | | (ii) | with a view to controlling or influencing the composition of the board of directors, or the conduct of affairs, of the body corporate; or | | (iii) | under which either of those persons may acquire from the other of them shares in the body corporate or may be required to dispose of such shares in accordance with the directions of the other of them; |
| | (c) | a person in concert with whom the other person is acting, or proposes to act, in relation to the matter to which the reference relates; | | (d) | where the matter to which the reference relates is a matter, other than the extent of a power to exercise, or to control the exercise of, the voting power attached to voting shares in a body corporate —| (i) | subject to subsection (2), a person who is a director of a body corporate that carries on a business of dealing in securities and of which the other person is also a director; | | (ii) | subject to subsection (2), a person who is a director of a body corporate of which the other person is a director, not being a body corporate that carries on a business of dealing in securities; or | | (iii) | a trustee of a trust in relation to which the other person benefits or is capable of benefiting otherwise than by reason of transactions entered into in the ordinary course of business in connection with the lending of money; |
| | (e) | a person with whom the other person is, by virtue of any regulation that may be introduced, to be regarded as associated in respect of the matter to which the reference relates; | | (f) | a person with whom the other person is, or proposes to become, associated, whether formally or informally, in any other way in respect of the matter to which the reference relates; or | | (g) | where the other person has entered into, or proposes to enter into, a transaction, or has done, or proposes to do, any other act or thing, with a view to becoming associated with a person as mentioned in paragraph (a), (b), (c), (d), (e) or (f) — that last-mentioned person. |
| (2) Where, in proceedings under this Act, it is alleged that a person referred to in subsection (1)(d)(i) and (ii) was associated with another person at a particular time, that person shall be deemed not to have been so associated in relation to a matter to which the proceedings relate unless the person alleging the association proves that the first-mentioned person at that time knew or ought reasonably to have known the material particulars of that matter. |
| (3) A person shall not be taken to be associated with another person by virtue of subsection (1)(b), (c), (e) or (f) by reason only that one of those persons furnishes advice to, or acts on behalf of, the other person in the proper performance of the functions attaching to his professional capacity or to his business relationship with the other person. |
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4.—(1) Where any property held in trust consists of or includes securities in which a person knows, or has reasonable grounds for believing, that he has an interest, he shall be deemed to have interest in those securities.(2) A right does not constitute an interest in a security where —| (a) | a right, being a right or an interest described in the definition of “interest” in section 107 of the Companies Act [Cap. 50] was issued or offered to the public for subscription or purchase; | | (b) | the public was invited to subscribe for or purchase such a right, and the right was so subscribed for or purchased; or | | (c) | such a right is held by the management company and was issued for the purpose of an offer to the public within the meaning of section 107 of the Companies Act. |
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(3) A person shall be deemed to have an interest in a security where a body corporate has an interest in a security and —| (a) | the body corporate is, or its directors are, accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of that person in relation to that security; | | (b) | that person has a controlling interest in the body corporate; or | | (c) | that person is, or the associates of that person or that person and his associates are, entitled to exercise or control the exercise of not less than 15% of the votes attached to the voting shares in the body corporate. |
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(4) For the purposes of subsection (3)(c), a person is an associate of another person if the first-mentioned person is —| (a) | a corporation which, by virtue of section 6 of the Companies Act, is deemed to be related to that other person; | | (b) | a person in accordance with whose directions, instructions or wishes that other person is accustomed or is under an obligation, whether formal or informal, to act in relation to the security referred to in subsection (3); | | (c) | a person who is accustomed or is under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of that other person in relation to that security; | | (d) | a body corporate which is, or 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 that other person in relation to that security; or | | (e) | a body corporate in accordance with the directions, instructions or wishes of which, or of the directors of which, that other person is accustomed or under an obligation, whether formal or informal, to act in relation to that security. |
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(5) A person shall be deemed to have an interest in a security in any one or more of the following circumstances:| (a) | where he has entered into a contract to purchase a security; | | (b) | where he has a right, otherwise than by reason of having an interest under a trust, to have a security transferred to himself or to his order, whether the right is exercisable presently or in the future and whether on the fulfilment of a condition or not; | | (c) | where he has the right to acquire a security or an interest in a security, under an option, whether the right is exercisable presently or in the future and whether on the fulfilment of a condition or not; or | | (d) | where he is entitled, otherwise than by reason of his having been appointed a proxy or representative to vote at a meeting of members of a body corporate or of a class of its members, to exercise or control the exercise of a right attached to a security, not being a security of which he is the registered holder. |
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| (6) A person shall be deemed to have an interest in a security if that security is held jointly with another person. |
| (7) For the purpose of determining whether a person has an interest in a security, it is immaterial that the interest cannot be related to a particular security. |
(8) There shall be disregarded —| (a) | an interest in a security if the interest is that of a person who holds the security as bare trustee; | | (b) | an interest in a security of a person whose ordinary business includes the lending of money if he holds the interest only by way of security for the purposes of a transaction entered into in the ordinary course of business in connection with the lending of money; | | (c) | an interest of a person in a security being an interest held by him by reason of his holding a prescribed office; and | | (d) | a prescribed interest in a security being an interest of such person, or of the persons included in such class of persons, as is prescribed. |
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(9) An interest in a security shall not be disregarded by reason only of —| (a) | its remoteness; | | (b) | the manner in which it arose; or | | (c) | the fact that the exercise of a right conferred by the interest is, or is capable of being made subject to restraint or restriction. |
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