REPUBLIC OF SINGAPORE
GOVERNMENT GAZETTE
ACTS SUPPLEMENT
Published by Authority

NO. 43]Friday, November 16 [2018

The following Act was passed by Parliament on 1 October 2018 and assented to by the President on 31 October 2018:—
Variable Capital Companies Act 2018

(No. 44 of 2018)


I assent.

HALIMAH YACOB,
President.
31 October 2018.
An Act to provide for the incorporation, operation and regulation of bodies corporate to be known as variable capital companies and to provide for related matters, and to make consequential and related amendments to certain other Acts.
Be it enacted by the President with the advice and consent of the Parliament of Singapore, as follows:
PART 1
PRELIMINARY
Short title and commencement
1.  This Act is the Variable Capital Companies Act 2018 and comes into operation on a date that the Minister appoints by notification in the Gazette.
General interpretation
2.—(1)  In this Act, unless the contrary intention appears —
“Accounting Standards”, in relation to a VCC, means —
(a)the accounting standards mentioned in section 100(8)(a) or the accounting standards or practices prescribed under section 100(8)(b); or
(b)where those accounting standards or practices (as the case may be) are substituted with other accounting standards under section 100(9) in relation to that VCC, the other accounting standards;
“accounts” means profit and loss accounts and balance sheets and includes notes (other than auditors’ reports or directors’ reports) attached or intended to be read with any of those profit and loss accounts or balance sheets;
“ACRA” means the Accounting and Corporate Regulatory Authority established under section 3 of the Accounting and Corporate Regulatory Authority Act (Cap. 2A);
“book-entry securities” has the meaning given by section 81SF of the Securities and Futures Act (Cap. 289);
“books” has the meaning given by section 4(1) of the Companies Act (Cap. 50);
“borrowing VCC” means a VCC that is or will be under a liability (whether or not such liability is present or future) to repay any money received or to be received by it in response to an invitation to the public to subscribe for or purchase debentures of the VCC;
“business day” means any day other than a Saturday, Sunday or public holiday;
“certified” —
(a)in relation to a copy of a document, means certified in the prescribed manner to be a true copy of the document; and
(b)in relation to a translation of a document, means certified in the prescribed manner to be a correct translation of the document into the English language;
“charge” includes a mortgage and any agreement to give or execute a charge or mortgage whether upon demand or otherwise;
“closed-end fund” has the meaning given by section 2(1) of the Securities and Futures Act;
“collective investment scheme” has the meaning given by section 2(1) of the Securities and Futures Act;
“company” has the meaning given by section 4(1) of the Companies Act;
“consolidated financial statements” has the meaning given by the Accounting Standards;
“constitution”, in relation to a VCC, means the constitution of the VCC that is registered with the Registrar under section 16(4), as may be amended from time to time;
“contributory” —
(a)in relation to a VCC, means a person liable to contribute to the assets of the VCC in the event of its being wound up, and includes the holder of fully paid shares in the VCC and (before the final determination of the persons who are contributories) any person alleged to be a contributory of the VCC; and
(b)in relation to a sub-fund, means a person liable to contribute to the assets of the sub‑fund in the event of its being wound up, and includes the holder of fully paid shares in the VCC that are issued in respect of that sub‑fund and (before the final determination of the persons who are contributories) any person alleged to be a contributory of the sub‑fund;
“corporation” has the meaning given by section 4(1) of the Companies Act and (to avoid doubt) includes a VCC;
“Court” means the High Court or a judge of the High Court;
“creditors’ voluntary winding up” means a winding up under Division 3 of Part X of the Companies Act as applied by section 130, but not a members’ voluntary winding up;
“custodian” —
(a)in relation to a non-umbrella VCC, means an entity to which the assets of the VCC are entrusted for safekeeping; and
(b)in relation to a sub-fund, means an entity to which the assets of the sub‑fund are entrusted for safekeeping;
“debenture” includes debenture stock, bonds, notes and any other securities of a VCC whether constituting a charge on the assets of the VCC or not, but does not include —
(a)a cheque, letter of credit, order for the payment of money or bill of exchange;
(b)subject to the regulations made under section 165, a promissory note having a face value of not less than $100,000 and having a maturity period of not more than 12 months; and
(c)for the purposes of a prescribed provision of this Act, such instrument or class of instruments as may be prescribed;
“default penalty” means a default penalty within the meaning of section 147;
“director” has the meaning given by section 4(1) of the Companies Act;
“document” includes any summons, order and other legal process, and any notice and register;
“electronic communication” has the meaning given by section 4(1) of the Companies Act;
“emoluments”, in relation to any director or auditor of a VCC, includes any fees, percentages and other payments made (including the money value of any allowances or perquisites) or consideration given, directly or indirectly, to the director or auditor by that VCC or by a holding company or a subsidiary of that VCC, whether made or given to him or her in his or her capacity as a director or an auditor or otherwise in connection with the affairs of that VCC or of the holding company or the subsidiary;
“expert” includes an engineer, a valuer, an accountant and any other person whose profession or reputation gives authority to a statement made by him or her;
“financial statements”, in relation to a VCC, means the financial statements of the VCC required to be prepared in accordance with the Accounting Standards;
“financial year”, in relation to a VCC, means —
(a)the period in respect of which its financial statements are made up, whether that period is a year or not; and
(b)which is determined in accordance with section 98;
“fund administration service” includes valuation, accounting, settlement of expenses and acting as a transfer agent;
“holding company” has the meaning given by section 5 of the Companies Act;
“liquidator” includes the Official Receiver when acting as the liquidator of a VCC or a sub‑fund;
“manager”, in relation to a VCC, means the manager appointed by the VCC to manage its property or to operate the collective investment scheme or schemes that comprise the VCC;
“marketable securities” has the meaning given by section 4(1) of the Companies Act;
“MAS” means the Monetary Authority of Singapore established under section 3 of the MAS Act;
“MAS Act” means the Monetary Authority of Singapore Act (Cap. 186);
“members’ voluntary winding up” means a winding up under Division 3 of Part X of the Companies Act as applied by section 130, where a declaration has been made and lodged pursuant to section 293 of that Act as applied by section 130;
“net asset value”, in relation to a VCC, means the total assets less the total liabilities of the VCC, as determined in accordance with the Accounting Standards;
“non-umbrella VCC” means a VCC that is not an umbrella VCC;
“officer”, in relation to a VCC or other corporation, includes —
(a)any director or secretary of the corporation or a person employed in an executive capacity by the corporation;
(b)a receiver and manager of any part of the undertaking of the corporation appointed under a power contained in any instrument; and
(c)any liquidator of the corporation (being a VCC or company) appointed in a voluntary winding up,
but does not include —
(d)any receiver who is not also a manager;
(e)any receiver and manager appointed by the Court;
(f)any liquidator appointed by the Court or by the creditors; or
(g)a judicial manager appointed by the Court under Part VIIIA of the Companies Act (if applicable);
“Official Receiver” means the Official Assignee appointed under the Bankruptcy Act (Cap. 20), and includes the deputy of any such Official Assignee and any person appointed as Assistant Official Assignee;
“profit and loss account” includes income and expenditure account, revenue account or any other account showing the results of the business of a corporation for a period;
“prospectus” means any prospectus, notice, circular, material, advertisement, publication or other document used to make an offer of shares in a VCC or proposed VCC, but does not include —
(a)a profile statement mentioned in section 296(2) of the Securities and Futures Act;
(b)any material, advertisement or publication which is authorised by section 300 of that Act (other than subsection (3)); or
(c)a product highlights sheet mentioned in section 296A(1) of that Act;
“public accountant” means a person who is registered or treated as registered under the Accountants Act (Cap. 2) as a public accountant;
“qualified representative”, in relation to the manager of a VCC, means a representative (within the meaning of section 2(1) of the Securities and Futures Act) of the manager who is —
(a)a person described in section 99B(1)(a), (b), (c) or (d) of the Securities and Futures Act; or
(b)a person who is exempt from section 99B(1) of that Act under section 99B(2) of that Act;
“register of auditors” means a register of auditors kept by the Registrar under section 173 of the Companies Act as applied by section 71(1);
“register of directors” means a register of directors kept by the Registrar under section 173 of the Companies Act as applied by section 71(1);
“register of managers” means a register of managers kept by the Registrar under section 71(3);
“register of members” means a register of members kept by a VCC under section 81;
“register of secretaries” means a register of secretaries kept by the Registrar under section 173 of the Companies Act as applied by section 71(1);
“registered qualified individual” means a qualified individual registered under section 28G of the Accounting and Corporate Regulatory Authority Act;
“Registrar” means the Registrar of VCCs appointed under this Act, and includes any Deputy or Assistant Registrar of VCCs;
“registration number”, in relation to a sub-fund, means the registration number given by the Registrar to the sub‑fund upon its registration under section 27;
“related corporation”, in relation to a corporation, means a corporation that is treated as related to the firstmentioned corporation under section 4;
“share”, in relation to a VCC, means a unit in a collective investment scheme that is part of the VCC, and includes a share taken by a subscriber to the constitution of a VCC, whether or not it is such unit;
“solicitor” means an advocate and solicitor of the Supreme Court;
“sub-fund” means a collective investment scheme that is part of an umbrella VCC;
“subsidiary” has the meaning given by section 5 of the Companies Act;
“umbrella VCC” means a VCC the constitution of which provides that it consists of, or is to consist of, 2 or more collective investment schemes, or words to that effect;
“unit”, in relation to a collective investment scheme, has the meaning given by section 2(1) of the Securities and Futures Act;
“VCC” or “variable capital company” means a body corporate incorporated as such under this Act;
“wholly owned subsidiary” has the meaning given by section 5B of the Companies Act.
(2)  In this Act (including a provision of the Companies Act applied by this Act) —
(a)a reference to the directors of a VCC is, in the case of a VCC that has only one director, to that director; and
(b)a reference to the doing of any act by 2 or more directors is, in the case of a VCC that has only one director, to the doing of that act by that director.
(3)  In this Act —
(a)a reference to a debt, obligation or liability of a sub‑fund is to a debt, obligation or liability that is incurred by the umbrella VCC concerned on behalf of or that is attributable to that sub‑fund;
(b)a reference to a debenture of a sub-fund is to a debenture issued by the umbrella VCC concerned in respect of a debt, obligation or liability of the sub‑fund;
(c)a reference to any asset, property or undertaking of a sub‑fund is to any asset, property or undertaking that is held by the umbrella VCC concerned on behalf of or that is attributable to that sub‑fund; and
(d)a reference to a creditor of a sub-fund is to a creditor of the umbrella VCC concerned in respect of a debt, obligation or liability of the sub‑fund.
(4)  Subject to section 5, section 4(2), (5), (5A) and (7) of the Companies Act applies for the purposes of interpreting this Act, including a provision of the Companies Act applied by this Act.
(5)  A reference to the Minister in any of the following provisions includes the Minister of State for the Ministry of the Minister, who is authorised by the Minister for the purposes of hearing an appeal under that provision:
(a)sections 18(3), 21(4), 135(9) and 136(3);
(b)sections 27(5), (5AA), (5A) and (12C), and 28(3), (3D), (3DA) and (3E) of the Companies Act as applied by section 21;
(c)section 155B(8) of the Companies Act as applied by section 59.
(6)  Subject to section 5 and the modifications in subsection (7), section 7 (except subsections (1) and (6A)) of the Companies Act applies for the purposes of —
(a)section 66;
(b)section 163 of the Companies Act as applied by section 65; and
(c)section 165 of the Companies Act as applied by section 67.
(7)  The modifications mentioned in subsection (6) are as follows:
(a)subsection (3) of section 7 of the Companies Act only applies in relation to a share of a corporation other than a VCC;
(b)paragraph (ca) of section 7(9) of that Act is omitted;
(c)a book-entry security is treated as an interest in a share;
(d)a person that is a subsidiary of a VCC does not have an interest in the shares of the VCC by reason only that that interest is purchased or otherwise acquired by the subsidiary under section 22(6) or (11).
(8)  For the purposes of any provision of this Act (including a provision of the Companies Act applied by this Act) that provides that an officer of a corporation who is in default is guilty of an offence or is liable to a penalty or punishment, an officer of the corporation is in default if the officer knowingly and wilfully —
(a)commits the offence; or
(b)authorises or permits the commission of the offence.
(9)  Where it is necessary, in a proceeding for an offence under this Act, to establish the conduct of the manager of a VCC or the custodian of a non‑umbrella VCC or sub‑fund, any conduct engaged in or on behalf of the manager or custodian —
(a)by a director, an employee or an agent of the manager or custodian within the scope of his or her actual or apparent authority; or
(b)by any other person at the direction or with the consent or agreement (whether express or implied) of a director, an employee or an agent of the manager or custodian, where the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the director, employee or agent,
is treated as having been engaged in by the manager or custodian.
(10)  Where it is necessary, in a proceeding for an offence under this Act, to establish the state of mind of a manager of a VCC, or a custodian of a non‑umbrella VCC or sub‑fund, in respect of conduct engaged in, or treated under subsection (9) as having been engaged in by the manager or custodian, it is sufficient to show that a director, an employee or an agent of the manager or custodian, being one by whom the conduct was engaged in within the scope of his or her actual or apparent authority, had that state of mind.
(11)  A reference in subsection (10) to the state of mind of a person includes the knowledge, intention, opinion, belief or purpose of the person and the person’s reasons for his or her intention, opinion, belief or purpose.
Affairs of corporation or sub-fund
3.—(1)  Unless the context otherwise requires, a reference to the affairs of a VCC or other corporation (called in this subsection the corporation) in the following provisions:
(a)Part 9, including a provision of the Companies Act applied by that Part;
(b)section 130(13);
(c)paragraph (f) of the provision that replaces section 254(1) of the Companies Act because of section 130(8);
(d)section 142;
(e)section 145;
(f)section 155,
is a reference to —
(g)the promotion, formation, membership, control, business, trading, transactions and dealings (whether alone or jointly with another person and including transactions and dealings as agent, bailee or trustee), property (whether held alone or jointly with another person and including property held as agent, bailee or trustee), liabilities (including liabilities owed jointly with another person and liabilities as trustee), profits and other income, receipts, losses, outgoings and expenditure of the corporation;
(h)in the case of a corporation (not being a trustee corporation) that is a trustee (but without affecting paragraph (g)), matters concerned with the ascertainment of the identity of the persons who are beneficiaries under the trust, their rights under the trust and any payments that they have received, or are entitled to receive, under the terms of the trust;
(i)the internal management and proceeding of the corporation;
(j)any act or thing done (including any contract made and any transaction entered into) by or on behalf of the corporation, or to or in relation to the corporation or its business or property, at a time when —
(i)a receiver, or a receiver and manager, is in possession of, or has control over, property of the corporation;
(ii)the corporation is under judicial management (where applicable);
(iii)a compromise or an arrangement made between the corporation and another person or other persons is being administered; or
(iv)the corporation or (if it is an umbrella VCC) the corporation or any of its sub‑funds, is being wound up,
and includes any conduct of the receiver, the receiver and manager, or the judicial manager of the person administering the compromise or arrangement or of any liquidator or provisional liquidator of the corporation or sub‑fund (where applicable);
(k)the ownership of shares in, debentures of, and interests issued by, the corporation;
(l)the power of persons to exercise, or to control the exercise of, the rights to vote attached to shares in the corporation or to dispose of, or to exercise control over the disposal of, such shares;
(m)matters concerned with the ascertainment of the persons who are or have been financially interested in the success or failure, or apparent success or failure, of the corporation or are or have been able to control or materially influence the policy of the corporation;
(n)the circumstances under which a person acquired or disposed of, or became entitled to acquire or dispose of, shares in, debentures of, or interests issued by, the corporation;
(o)where the corporation has issued interests, matters concerning the financial or business undertaking, scheme, common enterprise or investment contract to which those interests relate; and
(p)matters relating to or arising out of the audit of, or working papers or reports of an auditor concerning, any matters in paragraphs (g) to (o).
(2)  Unless the context otherwise requires, a reference to the affairs of a sub‑fund in the following provisions:
(a)section 114(5)(a)(ii);
(b)section 145;
(c)paragraph (f) of the provision that replaces section 254(1) of the Companies Act because of paragraph 14 of the First Schedule;
(d)paragraph 19 of the First Schedule,
is a reference to —
(e)the promotion, formation, control, business, trading, transactions and dealings of the sub‑fund (whether by the umbrella VCC alone or jointly with another person and including transactions and dealings as agent, bailee or trustee), property of the sub‑fund (whether held by the umbrella VCC alone or jointly with another person and including property held as agent, bailee or trustee), liabilities of the sub‑fund (including liabilities owed by the umbrella VCC jointly with another person and liabilities as trustee), profits and other income, receipts, losses, outgoings and expenditure of the umbrella VCC received or incurred on behalf of the sub‑fund;
(f)the internal management and proceeding of the umbrella VCC in respect of the sub‑fund;
(g)any act or thing done (including any contract made and any transaction entered into) —
(i)by the umbrella VCC on behalf of the sub-fund; or
(ii)to or in relation to the umbrella VCC in respect of the sub‑fund or the business or property of the sub‑fund,
at a time when —
(iii)a receiver, or a receiver and manager, is in possession of, or has control over, property of the sub‑fund;
(iv)a compromise or an arrangement made between the umbrella VCC (on behalf of the sub‑fund) and the creditors of the sub‑fund (or any class of them), members holding shares issued in respect of that sub‑fund (or any class of them), or another person or other persons, is being administered; or
(v)the sub-fund is being wound up,
and includes any conduct of the receiver, the receiver and manager, of the person administering the compromise or arrangement or of any liquidator or provisional liquidator of the sub‑fund, as the case may be;
(h)the ownership of shares in and interests issued by the umbrella VCC in respect of the sub‑fund, or the debentures of the sub‑fund;
(i)the power of persons to exercise, or to control the exercise of, the rights to vote attached to shares issued by the umbrella VCC in respect of the sub‑fund, or to dispose of, or to exercise control over the disposal of, such shares;
(j)matters concerned with the ascertainment of the persons who are or have been financially interested in the success or failure, or apparent success or failure, of the sub‑fund or are or have been able to control or materially influence the policy of the umbrella VCC in relation to the sub‑fund;
(k)the circumstances under which a person acquired or disposed of, or became entitled to acquire or dispose of, shares in or interests issued by the umbrella VCC in respect of the sub‑fund, or the debentures of the sub‑fund;
(l)matters concerning the financial or business undertaking, scheme, common enterprise or investment contract to which the shares of the umbrella VCC in respect of the sub-fund relate; and
(m)matters relating to or arising out of the audit of, or working papers or reports of an auditor concerning, any matters in paragraphs (e) to (l).
When corporations related to each other
4.  For the purposes of this Act, where a corporation —
(a)is the holding company of another corporation;
(b)is a subsidiary of another corporation; or
(c)is a subsidiary of the holding company of another corporation,
then the firstmentioned corporation and the other corporation are treated as related to each other.
Purpose of Act and application of Companies Act provisions in this Act
5.—(1)  The purpose of this Act is to enable a body corporate known as a variable capital company or VCC, to be formed, and to provide for its operation and regulation.
(2)  This Act (except for Part 7) applies the provisions of the Companies Act subject to the modifications set out by this Act.
(3)  Where a provision of the Companies Act (called in this section an incorporated provision) is incorporated by reference in this Act, whether with or without modifications, then, in addition to any specific modifications set out in this Act —
(a)the incorporated provision applies with the necessary modifications;
(b)a reference in the incorporated provision to another incorporated provision is to that other provision as applied by this Act;
(c)a reference in the incorporated provision to the Registrar of Companies is to the Registrar;
(d)subject to section 2(5), a reference in the incorporated provision to the Minister is to the Minister having charge of this Act;
(e)a reference in the incorporated provision to the Authority is to ACRA;
(f)a reference in the incorporated provision to a default penalty is to the default penalty in section 147;
(g)a reference in the incorporated provision to a prescribed matter is to the matter prescribed by regulations made under section 165; and
(h)the incorporated provision applies subject to such other modifications as may be prescribed by regulations made under subsection (4).
(4)  The Minister may, for a period of 2 years starting on the date of commencement of this Act, make regulations to prescribe further modifications to an incorporated provision in its application by this Act.
Application of Companies Act to VCC, etc.
6.—(1)  Where a provision of the Companies Act is incorporated by reference in this Act and applies to or in relation to a VCC, a person of a VCC or a matter concerning a VCC, as that Companies Act provision applies to or in relation to a corporation, a person of a corporation or a matter concerning a corporation, then (despite a VCC being a corporation within the meaning of the Companies Act) the Companies Act provision is disapplied, but only to the extent of such application in this Act.
(2)  Where a provision of the Companies Act has a corresponding provision in this Act that applies to or in relation to a VCC, a person of a VCC or a matter concerning a VCC, as that Companies Act provision applies to or in relation to a corporation, a person of a corporation or a matter concerning a corporation, then (despite a VCC being a corporation within the meaning of the Companies Act) the Companies Act provision is disapplied, but only to the extent of such application in the corresponding provision.
(3)  Despite anything in the Companies Act —
(a)Division 5 of Part X of that Act does not apply for the purpose of the winding up of a VCC or a sub‑fund of an umbrella VCC; and
(b)Division 6 of Part X of that Act does not apply to any proceedings concerning a VCC or a sub‑fund of an umbrella VCC.