REPUBLIC OF SINGAPORE
GOVERNMENT GAZETTE
ACTS SUPPLEMENT
Published by Authority

NO. 4]Friday, February 25 [2005

The following Act was passed by Parliament on 25th January 2005 and assented to by the President on 3rd February 2005:—
Securities and Futures (Amendment) Act 2005

(No. 1 of 2005)


I assent.

S R NATHAN,
President,
3rd February 2005.
Date of Commencement: 1st July 2005 (Except sections 2(c), (g) and (y), 42 to 82, 83(a) to (d) and (f), 84 to 103, 105 and 109
Date of Commencement: 15th October 2005 (For sections 2(c), (g) and (y), 42 to 82, 83(a) to (d) and (f), 84 to 103, 105 and 109
An Act to amend the Securities and Futures Act (Chapter 289 of the 2002 Revised Edition).
Be it enacted by the President with the advice and consent of the Parliament of Singapore, as follows:
Short title and commencement
1.  This Act may be cited as the Securities and Futures (Amendment) Act 2005 and shall come into operation on such date as the Minister may, by notification in the Gazette, appoint.
Amendment of section 2
2.  Section 2(1) of the Securities and Futures Act (referred to in this Act as the principal Act) is amended —
(a)by deleting the definition of “accredited investor”;
(b)by inserting, immediately after the definition of “advocate and solicitor”, the following definitions:
“ “approved exchange” means a corporation that is approved by the Authority under section 8(1) as an approved exchange;
“approved holding company” means a corporation that is approved by the Authority under section 81W as an approved holding company;”;
(c)by deleting the definition of “auditor” and substituting the following definition:
“ “auditor” means a public accountant who is registered or deemed to be registered under the Accountants Act 2004 (Act 4 of 2004) and, in Divisions 1 and 1A of Part XIII, when used in relation to an entity not being a company, includes —
(a)a person who is duly registered, licensed, approved or otherwise authorised to practise as an auditor (such practice to include the issue of any opinion, report or other document on the audit of any financial statement) —
(i)under the laws of the place where the entity is formed or constituted; or
(ii)under the laws of the place of his practice, if the auditing standards that are or will be applied to the financial statements of the entity are —
(A)auditing standards commonly applied in that place; or
(B)international auditing standards (by whatever name called); or
(b)such other person as may be approved by the Authority in any particular case to be an auditor for such entity;”;
(d)by inserting, immediately after the definition of “capital markets services licence”, the following definitions:
“ “chairman” means a chairman of a board of directors;
“chief executive officer”, in relation to an approved exchange, a recognised market operator, a designated clearing house, a person operating a clearing facility, an approved holding company or a holder of a capital markets services licence, means any person, by whatever name described, who is —
(a)in the direct employment of, or acting for or by arrangement with, the approved exchange, recognised market operator, designated clearing house, person operating a clearing facility, approved holding company or holder of a capital markets services licence, as the case may be; and
(b)principally responsible for the management and conduct of the business of the approved exchange, recognised market operator, designated clearing house, person operating a clearing facility, approved holding company or holder of a capital markets services licence, as the case may be, in Singapore;”;
(e)by deleting the definitions of “clearing facility”, “clearing house” and “closed-end fund” and substituting the following definitions:
“ “clearing facility” has the meaning given to it in Part II of the First Schedule;
“clearing or settlement” has the meaning given to it in Part II of the First Schedule;
“closed-end fund” means an arrangement referred to in paragraph (a) or (b) of the definition of “collective investment scheme” under which units that are issued are exclusively or primarily non-redeemable at the election of the holders of units, but does not include an arrangement referred to in paragraph (a) of that definition —
(a)that is a trust;
(b)that invests only in real estate and real estate-related assets specified by the Authority in the Code on Collective Investment Schemes; and
(c)all or any units of which are listed for quotation on a securities exchange;”;
(f)by deleting paragraphs (iv) and (iva) of the definition of “collective investment scheme” and substituting the following paragraphs:
(iv)an arrangement made by or on behalf of an entity solely for the benefit of persons, each of whom is —
(A)a bona fide director or equivalent person, a former director or equivalent person, a consultant, an adviser, an employee or a former employee of that entity or, where that entity is a corporation, a related corporation of that entity; or
(B)a spouse, widow or widower, or a child, adopted child or step-child below the age of 18 years, of such director or equivalent person, former director or equivalent person, employee or former employee;
(iva)an arrangement made by or on behalf of 2 or more entities solely for the benefit of persons, each of whom is —
(A)a bona fide director or equivalent person, a former director or equivalent person, a consultant, an adviser, an employee or a former employee of any of those entities or, where any of those entities is a corporation, a related corporation of the entity which is a corporation; or
(B)a spouse, widow or widower, or a child, adopted child or step-child below the age of 18 years, of such director or equivalent person, former director or equivalent person, employee or former employee;”;
(g)by deleting paragraph (x) of the definition of “collective investment scheme” and substituting the following paragraph:
(x)a closed-end fund constituted either as an entity or a trust;”;
(h)by deleting the definition of “commodity” and substituting the following definition:
“ “commodity”, in relation to a futures contract, means —
(a)a financial instrument; or
(b)gold;”;
(i)by deleting the definition of “customer” and substituting the following definition:
“ “customer” means —
(a)in relation to a holder of a capital markets services licence —
(i)for the purposes of Parts IV, VI, VII and XV, a person on whose behalf the holder carries on or will carry on any regulated activity; or
(ii)for the purposes of Part V, a person on whose behalf the holder carries on or will carry on any regulated activity, or any other person with whom the holder, as principal, enters or will enter into transactions —
(A)for the sale or purchase of securities;
(B)for the sale or purchase of futures contracts; or
(C)in connection with leveraged foreign exchange trading,
but does not include such person or class of persons as may be prescribed; or
(b)for the purposes of Part III, a person on whose behalf a member of a designated clearing house carries on any activity regulated under this Act, but does not include —
(i)the member, with respect to dealings for the member’s own account;
(ii)any officer, director, employee or representative of the member; or
(iii)a related corporation of the member, with respect to accepted instructions to deal for an account belonging to, and maintained wholly for the benefit of, that related corporation;”;
(j)by inserting, immediately after the definition of “defalcation”, the following definition:
“ “designated clearing house” means a person that is designated by the Authority under section 55(1) as a designated clearing house;”;
(k)by deleting the definition of “entity” and substituting the following definition:
“ “entity” includes a corporation, an unincorporated association, a partnership and the government of any state, but does not include a trust;”;
(l)by deleting the definitions of “exchange holding company”, “exempt clearing facility” and “exempt market” and substituting the following definition:
“ “exempt market operator” means —
(a)a corporation that is exempted under section 14(2);
(b)a corporation declared under section 14(8) to be an exempt market operator; or
(c)a corporation operating a market included in a class of markets in relation to which a declaration under section 14(9) is in force;”;
(m)by deleting the definition of “futures contract” and substituting the following definition:
“ “futures contract” means —
(a)for the purposes of Part I of the First Schedule —
(i)a contract the effect of which is that —
(A)one party agrees to deliver a specified commodity, or a specified quantity of a specified commodity, to another party at a specified future time and at a specified price payable at that time; or
(B)the parties will discharge their obligations under the contract by settling the difference between the value of a specified quantity of a specified commodity agreed at the time of the making of the contract and at a specified future time,
and includes a futures option transaction; or
(ii)such other contract or class of contracts as the Authority may prescribe;
(b)for the purposes of any other provision in this Act —
(i)a contract the effect of which is that —
(A)one party agrees to deliver a specified commodity, or a specified quantity of a specified commodity, to another party at a specified future time and at a specified price payable at that time pursuant to the terms and conditions set out in the business rules of a futures market or pursuant to the business practices of a futures market; or
(B)the parties will discharge their obligations under the contract by settling the difference between the value of a specified quantity of a specified commodity agreed at the time of the making of the contract and at a specified future time, such difference being determined in accordance with the business rules or practices of the futures market at which the contract is made,
and includes a futures option transaction; or
(ii)such other contract or class of contracts as the Authority may prescribe;”;
(n)by deleting the definitions of “futures exchange” and “futures market” and substituting the following definitions:
“ “futures exchange” means an approved exchange in respect of the operation of its futures market;
“futures market” has the meaning given to it in Part I of the First Schedule;”;
(o)by inserting, immediately after the definition of “manager”, the following definition:
“ “market” has the meaning given to it in Part I of the First Schedule;”;
(p)by deleting the definition of “member” and substituting the following definition:
“ “member”, in relation to an approved exchange, a recognised market operator or a designated clearing house, means a person who holds membership of any class or description in the approved exchange, recognised market operator or designated clearing house, whether or not he holds any share in the share capital of the approved exchange, recognised market operator or designated clearing house, as the case may be;”;
(q)by deleting the definition of “participant” and substituting the following definition:
“ “participant” means —
(a)for the purposes of Part II, a person who may participate in one or more of the services provided by an approved exchange, a recognised market operator or an exempt market operator, in its capacity as an approved exchange, a recognised market operator or an exempt market operator, respectively;
(b)for the purposes of Part III, a person who, under the business rules of a designated clearing house, may participate in one or more of the services provided by the designated clearing house in its capacity as a designated clearing house; or
(c)for the purposes of any other provision of this Act, a person who participates in a collective investment scheme by way of owning one or more units in a collective investment scheme;”;
(r)by deleting the definition of “quote” and substituting the following definition:
“ “quote”, in relation to securities and a securities market of an approved exchange or of a recognised market operator, means to display or provide, on the securities market of the approved exchange or recognised market operator, information concerning the particular prices or particular consideration at which offers or invitations to sell, purchase or exchange issued or prescribed securities are made on that securities market, being offers or invitations that are intended or may reasonably be expected, to result, directly or indirectly, in the making or acceptance of offers to sell, purchase or exchange issued or prescribed securities;”;
(s)by deleting the definition of “recognised trading system provider” and substituting the following definitions:
“ “recognised market operator” means a corporation that is recognised by the Authority under section 8(2) as a recognised market operator;
“registered business trust” has the same meaning as in section 2 of the Business Trusts Act 2004 (Act 30 of 2004);”;
(t)by inserting, immediately after the definition of “representative’s licence”, the following definition:
“ “responsible person”, in relation to a collective investment scheme, means —
(a)in the case of a scheme which is constituted as a corporation, the corporation; or
(b)in the case of a scheme which is not constituted as a corporation, the manager for the scheme;”;
(u)by deleting paragraph (i) of the definition of “securities” and substituting the following paragraph:
(i)futures contracts which are traded on a futures market;”;
(v)by deleting the definition of “securities exchange” and substituting the following definition:
“ “securities exchange” means an approved exchange in respect of the operation of its securities market;”;
(w)by deleting the definition of “securities market” and substituting the following definition:
“ “securities market” has the meaning given to it in Part I of the First Schedule;”;
(x)by inserting, immediately after the definition of “substantial shareholding”, the following definition:
“ “substantial unitholder”, in relation to a collective investment scheme, means a participant who has an interest or interests in units in the scheme representing not less than 5% of the total voting rights of all the participants of the scheme;”;
(y)by deleting the definition of “take-over offer” and substituting the following definition:
“ “take-over offer” means —
(a)an offer for the acquisition by or on behalf of a person of —
(i)in the case of a public company, or of a corporation all or any of the shares of which are listed for quotation on a securities exchange —
(A)some or all of the shares, or some or all of the shares of a particular class, in the company or corporation made to all members of the company or corporation, or where the person already holds shares in the company or corporation, made to all other members of the company or corporation; or
(B)all of the remaining shares in the company or corporation made to all other members of the company or corporation as a result of the person acquiring or consolidating effective control of that company or corporation within the meaning of the Take-over Code; or
(ii)in the case of a registered business trust, or of a business trust all or any of the units of which are listed for quotation on a securities exchange —
(A)some or all of the units, or some or all of the units of a particular class, in the business trust made to all unitholders of the business trust, or where the person already holds units in the business trust, made to all other unitholders of the business trust; or
(B)all of the remaining units in the business trust made to all other unitholders of the business trust as a result of the person acquiring or consolidating effective control of that business trust within the meaning of the Take-over Code; or
(b)a proposed compromise or arrangement which —
(i)in the case of a public company, is referred to in section 210 of the Companies Act (Cap. 50); or
(ii)in the case of a corporation all or any of the shares of which are listed for quotation on a securities exchange, complies with the laws, codes and other requirements (whether or not having the force of law) relating to take-overs, compromises and arrangements of the country or territory in which that corporation was incorporated,
and which, if executed, would result in a change in effective control of the public company or corporation within the meaning of the Take-over Code;”;
(z)by inserting, immediately after the definition of “trading in futures contracts”, the following definition:
“ “transaction information” means information relating to —
(a)offers or invitations to purchase, sell, or exchange securities or futures contracts;
(b)executed transactions in securities or futures contracts; or
(c)transactions cleared or settled by a designated clearing house;”; and
(za)by deleting the definition of “unit” and substituting the following definitions:
“ “unit”  —
(a)in relation to a collective investment scheme, means a right or interest (however described) in a collective investment scheme (whether or not constituted as an entity), and includes an option to acquire any such right or interest in the collective investment scheme; and
(b)in relation to a business trust, has the same meaning as in section 2 of the Business Trusts Act 2004 (Act 30 of 2004);
“user”, in relation to an approved exchange or a designated clearing house, means a person who is —
(a)a member; or
(b)a customer of a member,
of the approved exchange or designated clearing house;
“user information” means transaction information that is referable to —
(a)a named user; or
(b)a group of users, from which the name of a user can be directly inferred;”.
New section 4A
3.  The principal Act is amended by inserting, immediately after section 4, the following section:
Specific classes of investors
4A.—(1)  Subject to subsection (2), unless the context otherwise requires —
(a)“accredited investor” means —
(i)an individual —
(A)whose net personal assets exceed in value $2 million (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe in place of the first amount; or
(B)whose income in the preceding 12 months is not less than $300,000 (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe in place of the first amount;
(ii)a corporation with net assets exceeding $10 million in value (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe, in place of the first amount, as determined by —
(A)the most recent audited balance-sheet of the corporation; or
(B)where the corporation is not required to prepare audited accounts regularly, a balance-sheet of the corporation certified by the corporation as giving a true and fair view of the state of affairs of the corporation as of the date of the balance-sheet, which date shall be within the preceding 12 months;
(iii)the trustee of such trust as the Authority may prescribe, when acting in that capacity; or
(iv)such other person as the Authority may prescribe;
(b)“expert investor” means —
(i)a person whose business involves the acquisition and disposal, or the holding, of capital markets products, whether as principal or agent;
(ii)the trustee of such trust as the Authority may prescribe, when acting in that capacity; or
(iii)such other person as the Authority may prescribe;
(c)“institutional investor” means —
(i)a bank that is licensed under the Banking Act (Cap. 19);
(ii)a merchant bank that is approved as a financial institution under section 28 of the Monetary Authority of Singapore Act (Cap. 186);
(iii)a finance company that is licensed under the Finance Companies Act (Cap. 108);
(iv)a company or society registered under the Insurance Act (Cap. 142) as an insurer;
(v)a company registered under the Trust Companies Act (Cap. 336);
(vi)the Government;
(vii)a statutory body established under any Act;
(viii)a pension fund or collective investment scheme;
(ix)the holder of a capital markets services licence for —
(A)dealing in securities;
(B)fund management;
(C)providing custodial services for securities;
(D)securities financing; or
(E)trading in futures contracts;
(x)a person (other than an individual) who carries on the business of dealing in bonds with accredited investors or expert investors;
(xi)the trustee of such trust as the Authority may prescribe, when acting in that capacity; or
(xii)such other person as the Authority may prescribe.
(2)  The definitions in subsection (1) may be subject to such modifications as the Authority may prescribe for any specified provision of this Act.”.
Repeal and re-enactment of Parts II and III and new Part IIIA
4.  Parts II and III of the principal Act are repealed and the following Parts substituted therefor:
PART II
MARKETS
Objectives of this Part
5.  The objectives of this Part are —
(a)to promote fair, orderly and transparent markets;
(b)to facilitate efficient markets for the allocation of capital and the transfer of risks; and
(c)to reduce systemic risk.
Division 1 — Establishment of Markets
Requirement for approval or recognition
6.—(1)  No person shall establish or operate a market, or hold himself out as operating a market, unless the person is —
(a) an approved exchange; or
(b)a recognised market operator.
(2)  No person shall hold himself out —
(a)as an approved exchange unless he is an approved exchange; or
(b)as a recognised market operator unless he is a recognised market operator.
(3)  Except with the written approval of the Authority, no person other than an approved exchange shall take or use, or have attached to or exhibited at any place —
(a)the title or description “securities exchange”, “stock exchange”, “futures exchange” or “derivatives exchange” in any language; or
(b)any title or description which resembles a title or description referred to in paragraph (a).
(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 thereof during which the offence continues after conviction.
(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 thereof during which the offence continues after conviction.
Subdivision (1) — Approved exchange and recognised market operator
Application for approval or recognition
7.—(1)  A corporation may apply to the Authority to be —
(a)approved as an approved exchange; or
(b)recognised as a recognised market operator.
(2)  An application made under subsection (1) shall be —
(a)made in such form and manner as the Authority may prescribe; and
(b)accompanied by a non-refundable prescribed application fee, which shall be paid in the manner specified by the Authority.
(3)  The Authority may require an applicant to furnish it with such information or documents as the Authority considers necessary in relation to the application.
Power of Authority to approve exchanges and recognise market operators
8.—(1)  Where —
(a)a corporation has made an application under section 7(1)(a);
(b)a corporation which is a recognised market operator has made an application under section 11(1) to change its status to that of an approved exchange; or
(c)the Authority has conducted a review under section 11(5) and has determined that a corporation would be more appropriately regulated as an approved exchange,
the Authority may approve the corporation as an approved exchange.
(2)  Where —
(a)a corporation has made an application under section 7(1)(b);
(b)a corporation which is an approved exchange has made an application under section 11(1) to change its status to that of a recognised market operator; or
(c)the Authority has conducted a review under section 11(5) and has determined that a corporation would be more appropriately regulated as a recognised market operator,
the Authority may recognise the corporation as a recognised market operator.
(3)  Notwithstanding subsections (1) and (2), the Authority may, with the consent of the applicant —
(a)treat an application under section 7(1)(a) as an application under section 7(1)(b) if it is of the opinion that the applicant would be more appropriately regulated as a recognised market operator; or
(b)treat an application under section 7(1)(b) as an application under section 7(1)(a) if it is of the opinion that the applicant would be more appropriately regulated as an approved exchange.
(4)  The Authority may approve a corporation as an approved exchange under subsection (1) or recognise a corporation as a recognised market operator under subsection (2) subject to such conditions or restrictions as the Authority may think fit to impose by notice in writing, including conditions or restrictions relating to —
(a)the activities that the corporation may undertake;
(b)the securities or futures contracts that may be traded on any market established or operated by the corporation; and
(c)the nature of the investors or participants who may use, invest in or participate in the securities or futures contracts traded on any market established or operated by the corporation.
(5)  The Authority may, at any time, by notice in writing to the corporation, vary any condition or restriction or impose such further condition or restriction as it may think fit.
(6)  An approved exchange or a recognised market operator shall, for the duration of the approval or recognition, satisfy all conditions and restrictions that may be imposed on it under subsections (4) and (5).
(7)  The Authority may refuse to approve a corporation as an approved exchange or recognise a corporation as a recognised market operator if —
(a)the corporation has not provided the Authority with such information 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,
as the Authority may require;
(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)execution 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;
(e)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 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 involving fraud or dishonesty or the conviction for which involved a finding that the corporation, shareholder or officer, as the case may be, acted fraudulently or dishonestly; or
(ii)has been convicted of an offence under this Act;
(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 market;
(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 market;
(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 market that the corporation operates, the Authority has reason to believe that the corporation, or any of its officers or employees, will not operate a fair, orderly and transparent market;
(o)the corporation does not satisfy the criteria prescribed under section 9 to be approved as an approved exchange or recognised as a recognised market operator, 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.
(8)  Subject to subsection (9), the Authority shall not refuse to approve a corporation as an approved exchange or recognise a corporation as a recognised market operator under subsection (7) without giving the corporation an opportunity to be heard.
(9)  The Authority may refuse to approve a corporation as an approved exchange or recognise a corporation as a recognised market operator 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 an equivalent person 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 involving fraud or dishonesty or the conviction for which involved a finding that it had acted fraudulently or dishonestly.
(10)  The Authority shall give notice in the Gazette of any corporation approved as an approved exchange under subsection (1) or recognised as a recognised market operator under subsection (2), and such notice may include the conditions or restrictions imposed by the Authority on the corporation under subsection (4)(b) in relation to the securities or futures contracts that may be traded on any market established or operated by the corporation.
(11)  Any applicant who is aggrieved by a refusal of the Authority to grant an approval under subsection (1) or a recognition under subsection (2) may, within 30 days after the applicant is notified of the decision, appeal to the Minister whose decision shall be final.
(12)  Any approved exchange or recognised market operator 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 thereof during which the offence continues after conviction.
General criteria to be taken into account by Authority
9.—(1)  The Authority may prescribe the criteria which it may take into account for the purposes of deciding —
(a)whether an applicant referred to in section 7(1) or 11 (1) should be approved as an approved exchange or recognised as a recognised market operator;
(b)whether an approved exchange or a recognised market operator that is subject to a review by the Authority under section 11(5) should be approved as an approved exchange or recognised as a recognised market operator; and
(c)the conditions or restrictions that the Authority may impose under section 8(4) or (5).
(2)  Without prejudice to section 8 and subsection (1), the Authority may, for the purposes of recognising an operator of an overseas market as a recognised market operator under section 8(2), have regard, in addition to any criteria prescribed under subsection (1), to —
(a)whether adequate arrangements exist for co-operation between the Authority and the financial services regulatory authority responsible for the supervision of the operator in the country or territory in which the head office or principal place of business of the operator is situated; and
(b)whether the operator is, in the country or territory in which the head office or principal place of business of the operator is situated, subject to requirements and supervision comparable, in the degree to which the objectives specified in section 5 are achieved, to the requirements and supervision to which approved exchanges and recognised market operators are subject under this Act.
(3)  In considering whether it is satisfied that the operator of an overseas market has met the requirements mentioned in subsection (2), 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 operator is situated; and
(b)the rules and practices of the operator.
(4)  In this section, “operator of an overseas market” means a person whose head office is situated in a country or territory outside Singapore, and who is authorised to operate a market by a financial services regulatory authority of —
(a)that country or territory; or
(b)the country or territory in which the principal place of business of that person is situated.
Annual fees payable by approved exchange and recognised market operator
10.—(1)  Every approved exchange and recognised market operator shall pay to the Authority such annual fees as may be prescribed in such manner as may be specified by the Authority.
(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.
Change in status
11.—(1)  A corporation which is an approved exchange or a recognised market operator may apply to the Authority to change its status in the manner referred to in subsection (6).
(2)  An application under subsection (1) shall be made in such form and manner as the Authority may prescribe.
(3)  An application made under subsection (1) shall be accompanied by a non-refundable prescribed application fee, which shall be paid in the manner specified by the Authority.
(4)  The Authority may require an applicant to furnish it with such information or documents as the Authority considers necessary in relation to the application.
(5)  The Authority may, from time to time, on its own initiative, review the status of a corporation that is an approved exchange or a recognised market operator under this Part in accordance with the criteria prescribed under section 9.
(6)  Where an application is made by a corporation under subsection (1) or where a review of the status of a corporation is conducted by the Authority under subsection (5), the Authority may —
(a)where the corporation is an approved exchange, withdraw the approval as such and recognise the corporation as a recognised market operator under section 8(2);
(b)where the corporation is a recognised market operator, withdraw the recognition as such and approve the corporation as an approved exchange under section 8(1); or
(c)make no change to the status of the corporation as an approved exchange or a recognised market operator.
(7)  Where an application is made under subsection (1), the Authority shall not exercise its power under subsection (6)(c) without giving the corporation an opportunity to be heard.
(8)  Where a review of the status of a corporation is conducted by the Authority on its own initiative under subsection (5), the Authority shall not exercise its powers under subsection (6)(a) or (b) without giving the corporation an opportunity to be heard.
(9)  Any corporation which is aggrieved by a decision of the Authority made in relation to the corporation after a review under subsection (5) may, within 30 days after the corporation is notified of the decision, appeal to the Minister whose decision shall be final.
Cancellation of approval or recognition
12.—(1)  An approved exchange or a recognised market operator which intends to cease operating its market or, where it operates more than one market, all of its markets, may apply to the Authority to cancel its approval as an approved exchange or recognition as a recognised market operator, as the case may be.
(2)  The Authority may cancel the approval or recognition if it is satisfied that the approved exchange or recognised market operator referred to in subsection (1) has ceased operating its market or all of its markets, as the case may be.
Power of Authority to revoke approval and recognition
13.—(1)  The Authority may revoke any approval of a corporation as an approved exchange under section 8(1) or any recognition of a corporation as a recognised market operator under section 8(2) if —
(a)there exists a ground under section 8(7) on which the Authority may refuse an application;
(b)the corporation does not commence operating its market or, where it operates more than one market, all of its markets, within 12 months from the date on which it was granted the approval under section 8(1) or recognition under section 8(2), as the case may be;
(c)the corporation ceases to operate its market or, where it operates more than one market, all of its markets;
(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;
(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.
(2)  Subject to subsection (3), the Authority shall not revoke under subsection (1) any approval under section 8(1) or recognition under section 8(2) that was granted to a corporation without giving the corporation an opportunity to be heard.
(3)  The Authority may revoke an approval under section 8(1) or a recognition under section 8(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 an equivalent person 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 —
(i)involving fraud or dishonesty; or
(ii)the conviction for which involved a finding that it had acted fraudulently or dishonestly.
(4)  For the purposes of subsection (1)(c), a corporation shall be deemed to have ceased to operate its market if —
(a)it has ceased to operate the market 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 market under a direction issued by the Authority under section 46.
(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 shall be final.
(6)  Notwithstanding the lodging of an appeal under subsection (5), any action taken by the Authority under this section shall continue to have effect pending the decision of the Minister.
(7)  The Minister may, when deciding an appeal under subsection (5), make such modification as he considers necessary to any action taken by the Authority under this section, and such modified action shall have effect from the date of the Minister’s decision.
(8)  Any revocation of approval or recognition of a corporation referred to in subsection (1) shall not operate so as to —
(a)avoid or affect any agreement, transaction or arrangement entered into on a market operated by the corporation, whether the agreement, transaction or arrangement was entered into before or after the revocation of the approval or recognition; or
(b)affect any right, obligation or liability arising under such agreement, transaction or arrangement.
(9)  The Authority shall give notice in the Gazette of any revocation of approval or recognition referred to in subsection (1).
Subdivision (2) — Exempt Market Operator
Power of Authority to exempt corporations from approval or recognition
14.—(1)  A corporation that wishes to establish or operate a market may apply to the Authority, in such form and manner as the Authority may prescribe, to be exempted from the requirement under section 6(1) to be an approved exchange or a recognised market operator.
(2)  The Authority may exempt a corporation referred to in subsection (1) from the requirement under section 6(1) if, in the opinion of the Authority, the objectives specified in section 5 can be achieved without regulating the corporation as an approved exchange or a recognised market operator.
(3)  An application made under subsection (1) shall be accompanied by a non-refundable prescribed application fee, which shall be paid in the manner specified by the Authority.
(4)  The Authority may require an applicant to furnish it with such information or documents as the Authority considers necessary in relation to the application.
(5)  The Authority may, by notice in writing, impose on a corporation exempted under subsection (2) such conditions or restrictions relating to the exemption as the Authority may think fit, including conditions or restrictions relating to —
(a)the activities that the corporation may undertake;
(b)the securities or futures contracts that may be traded on any market established or operated by the corporation; and
(c)the nature of the investors or participants who may use, participate or invest in the securities or futures contracts traded on any market established or operated by the corporation.
(6)  The Authority may, at any time, by notice in writing to a corporation exempted under subsection (2), vary any condition or restriction referred to in subsection (5) or impose such further condition or restriction relating to the exemption as the Authority may think fit.
(7)  The Authority shall give notice in the Gazette of any corporation exempted under subsection (2), and such notice may include the conditions or restrictions imposed by the Authority on the corporation under subsection (5)(b) in relation to the securities or futures contracts that may be traded on any market established or operated by the corporation.
(8)  The Authority may —
(a)exempt any corporation operating any market from the requirement under section 6(1) to be an approved exchange or a recognised market operator;
(b)by order published in the Gazette, declare that corporation to be an exempt market operator; and
(c)by notice in writing to that corporation, impose such conditions or restrictions relating to the exemption as the Authority may think fit.
(9)  The Authority may —
(a)exempt corporations operating any class of markets from the requirement under section 6(1) to be approved exchanges or recognised market operators, subject to such conditions or restrictions as the Authority may think fit to impose by regulations; and
(b)by order published in the Gazette, declare such corporations to be exempt market operators.
(10)  An exempt market operator shall comply with all conditions or restrictions imposed on it under subsection (5), (6) or (8), as the case may be.
(11)  Any corporation which contravenes subsection (10) 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 thereof during which the offence continues after conviction.
Power of Authority to revoke exemption
15.—(1)  The Authority may revoke any exemption granted to a corporation under section 14(2), (8) or (9) if —
(a)the corporation does not commence operating its market or, where it operates more than one market, all of its markets, within 12 months from the date on which it was granted the exemption;
(b)the corporation ceases to operate its market or, where it operates more than one market, all of its markets;
(c)the corporation contravenes —
(i)any condition or restriction relating to the exemption;
(ii)any direction issued to it by the Authority under this Act; or
(iii)any provision in this Act;
(d)the Authority is of the opinion that the corporation has operated in a manner that is contrary to the interests of the public;
(e)the corporation is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere;
(f)a receiver, a receiver and manager or an equivalent person has been appointed, whether in Singapore or elsewhere, in relation to, or in respect of, any property of the corporation;
(g)the corporation has been convicted, whether in Singapore or elsewhere, of an offence involving fraud or dishonesty or the conviction for which involved a finding that it had acted fraudulently or dishonestly;
(h)the Authority is of the opinion that the corporation would be more appropriately regulated as an approved exchange or a recognised market operator; or
(i)any information or document provided by the corporation to the Authority is false or misleading.
(2)  Subject to subsection (3), the Authority shall not revoke under subsection (1) any exemption granted to a corporation without giving the corporation an opportunity to be heard.
(3)  The Authority may revoke an exemption 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 an equivalent person 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 involving fraud or dishonesty or the conviction for which involved a finding that it had acted fraudulently or dishonestly.
(4)  For the purposes of subsection (1)(b), a corporation shall be deemed to have ceased to operate its market if —
(a)it has ceased to operate the market 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 market under a direction issued by the Authority under section 46.
(5)  A 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 shall be final.
(6)  Notwithstanding the lodging of an appeal under subsection (5), any action taken by the Authority under this section shall continue to have effect pending the decision of the Minister.
(7)  The Minister may, when deciding an appeal under subsection (5), make such modification as he considers necessary to any action taken by the Authority under this section, and such modified action shall have effect from the date of the Minister’s decision.
(8)  Any revocation under subsection (1) of an exemption granted to a corporation shall not operate so as to —
(a)avoid or affect any agreement, transaction or arrangement entered into on a market operated by the corporation, whether the agreement, transaction or arrangement was entered into before or after the revocation of the exemption; or
(b)affect any right, obligation or liability arising under such agreement, transaction or arrangement.
(9)  The Authority shall give notice in the Gazette of any revocation of an exemption referred to in subsection (1).
Division 2 — Regulation of Approved Exchanges
Subdivision (1) — Obligations of Approved Exchanges
General obligations
16.—(1)  An approved exchange shall, in respect of every market it operates —
(a)as far as is reasonably practicable, ensure that the market is fair, orderly and transparent;
(b)manage any risks associated with its business and operations prudently;
(c)in discharging its obligations under this Act, not act contrary to the interests of the public, having particular regard to the interests of the investing public;
(d)ensure that access for participation in its facilities is subject to criteria that are fair and objective, and that are designed to ensure the orderly functioning of the market and to protect the interests of the investing public;
(e)maintain business rules and, where appropriate, listing rules that make satisfactory provision for —
(i)a fair, orderly and transparent market in securities or futures contracts that are traded through its facilities; and
(ii)the proper regulation and supervision of its members;
(f)enforce compliance with its business rules and, where appropriate, its listing rules;
(g)have sufficient financial, human and system resources —
(i)to operate a fair, orderly and transparent market;
(ii)to meet contingencies or disasters; and
(iii)to provide adequate security arrangements; and
(h)ensure that it appoints or employs fit and proper persons as its chairman, chief executive officer, directors and key management officers.
(2)  In subsection (1)(g), “contingencies or disasters” includes technical disruptions occurring within automated systems.
Obligation to notify Authority of certain matters
17.—(1)  An approved exchange shall, as soon as practicable after the occurrence of any of the following circumstances, notify the Authority of the circumstance:
(a)any material change to the information provided by the approved exchange in its application under section 7(1) or 11 (1);
(b)the carrying on of any business by the approved exchange other than —
(i)the business of operating a market;
(ii)a business incidental to operating a market; or
(iii)such business or class of businesses as the Authority may prescribe;
(c)the acquisition by the approved exchange of a substantial shareholding in a corporation which does not carry on —
(i)the business of operating a market;
(ii)a business incidental to operating a market; or
(iii)such business or class of businesses as the Authority may prescribe;
(d)the approved exchange becoming aware of a 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 exchange to meet its financial obligations to the approved exchange;
(e)the approved exchange reprimanding, fining, suspending, expelling or otherwise taking disciplinary action against a member of the approved exchange;
(f)any other matter that the Authority may prescribe by regulations or specify by notice in writing to the approved exchange.
(2)  Without prejudice to the generality of section 46(1), the Authority may, at any time after receiving a notification referred to in subsection (1), issue directions to the approved exchange —
(a)where the notification relates to a matter referred to in subsection (1)(b) —
(i)to cease carrying on the first-mentioned business referred to in subsection (1)(b); or
(ii)to carry on the first-mentioned business referred to in subsection (1)(b) 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 46(1); or
(b)where the notification relates to a matter referred to in subsection (1)(c) —
(i)to dispose of the shareholding referred to in subsection (1)(c); or
(ii)to exercise its rights relating to such shareholding 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 46(1),
and the approved exchange shall comply with such directions.
Obligation to maintain proper records
18.  An approved exchange shall maintain a record of all transactions effected through its facilities in such form and manner as the Authority may prescribe, including —
(a)the extent to which the record includes details of each transaction; and
(b)the period of time that the record is to be maintained.
Obligation to submit periodic reports
19.  An approved exchange shall submit to the Authority such reports in such form, manner and frequency as the Authority may prescribe.
Obligation to assist Authority
20.  An approved exchange shall provide such assistance to the Authority as the Authority may require for the performance of the functions and duties of the Authority, including the furnishing of such returns and the provision of —
(a)such books and other information —
(i)relating to the business of the approved exchange; or
(ii)in respect of such dealings in securities or trading in futures contracts; and
(b)such other information,
as the Authority may require for the proper administration of this Act.
Obligation to maintain confidentiality
21.—(1)  Subject to subsection (2), an approved exchange and its officers and employees shall maintain, and aid in maintaining, the confidentiality of all user information that —
(a)comes to the knowledge of the approved exchange or any of its officers or employees; or
(b)is in the possession of the approved exchange or any of its officers or employees.
(2)  Subsection (1) shall 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 furnished; or
(c)the disclosure of user information pursuant to any requirement imposed under any written law or order of court in Singapore.
(3)  For the avoidance of doubt, nothing in this section shall be construed as preventing an approved exchange from entering into a written agreement with a user which obliges the approved exchange to maintain a higher degree of confidentiality than that specified in this section.
Penalties under this Subdivision
22.  Any approved exchange which contravenes section 16(1), 17, 18, 19, 20 or 21 (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 thereof during which the offence continues after conviction.
Subdivision (2) — Rules of Approved Exchanges
Business rules and listing rules of approved exchanges
23.—(1)  Without limiting the generality of sections 16 and 45 —
(a)the Authority may prescribe the matters that an approved exchange shall make provision for in the business rules or listing rules of the approved exchange; and
(b)the approved exchange shall make provision for those matters in its business rules or listing rules, as the case may be.
(2)  An approved exchange shall not make any amendment to its business rules or listing rules unless it complies with such requirements as the Authority may prescribe.
(3)  In this Subdivision, any reference to an amendment to a business rule or listing rule shall be construed as a reference to a change to the scope of, or to any requirement, obligation or restriction under, the business rule or listing rule, as the case may be, whether the change is made by an alteration to the text of the rule or by any other notice issued by or on behalf of the approved exchange.
(4)  Any approved exchange 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 thereof during which the offence continues after conviction.
Business rules of approved exchanges have effect as contract
24.—(1)  The business rules of an approved exchange shall be deemed to be, and shall operate as, a binding contract —
(a)between the approved exchange and each member; and
(b)between each member and every other member.
(2)  The approved exchange and each member shall be deemed to have agreed to observe and perform the provisions of the business rules that are in force for the time being, so far as those provisions are applicable to the approved exchange or that member, as the case may be.
Power of court to order observance or enforcement of business rules or listing rules
25.—(1)  Where any person who is under an obligation to comply with, observe, enforce or give effect to the business rules or listing rules of an approved exchange fails to do so, the High Court may, on the application of the Authority, an approved exchange or a person aggrieved by the failure, and after giving the first-mentioned person an opportunity to be heard, make an order directing the first-mentioned person to comply with, observe, enforce or give effect to those business rules or listing rules.
(2)  A person against whom an order under subsection (1) may be made shall be —
(a)a corporation which —
(i)has been admitted to the official list of an approved exchange; and
(ii)has not been removed from that official list;
(b)a person associated with a corporation which —
(i)has been admitted to the official list of an approved exchange; and
(ii)has not been removed from that official list,
to the extent to which the business rules or listing rules purport to apply to him; or
(c)an approved exchange.
(3)  This section is in addition to, and not in derogation of, any other remedy available to an aggrieved person referred to in subsection (1).
Non-compliance with business rules or listing rules not to substantially affect rights of person
26.  Any failure by an approved exchange to comply with —
(a)this Act;
(b)its business rules; or
(c)where applicable, its listing rules,
in relation to a matter shall not prevent the matter from being treated, for the purposes of this Act, as done in accordance with the business rules or listing rules so long as the failure does not substantially affect the rights of any person entitled to require compliance with the business rules or listing rules.
Subdivision (3) — Matters Requiring Approval of Authority
Control of substantial shareholding in approved exchanges
27.—(1)  No person shall enter into any agreement to acquire shares in an approved exchange by virtue of which he would, if the agreement had been carried out, become a substantial shareholder of the approved exchange without first obtaining the approval of the Authority to enter into the agreement.
(2)  No person shall become —
(a)a 12% controller; or
(b)a 20% controller,
of an approved exchange without first obtaining the approval of the Authority.
(3)  In subsection (2) —
“12% controller” means a person, not being a 20% controller, who alone or together with his associates —
(a)holds not less than 12% of the shares in the approved exchange; or
(b)is in a position to control not less than 12% of the votes in the approved exchange;
“20% controller” means a person who, alone or together with his associates —
(a)holds not less than 20% of the shares in the approved exchange; or
(b)is in a position to control not less than 20% of the votes in the approved exchange.
(4)  In this section —
(a)a person holds a share if —
(i)he is deemed to have an interest in that share under section 7(6) to (10) of the Companies Act (Cap. 50); or
(ii)he 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;
(b)a reference to the control of a percentage of the votes in an approved exchange shall 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 exchange; 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 corporation 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 or, where B is a corporation, of the directors of B;
(iii)B is a corporation 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 A or, where A is a corporation, of the directors of A;
(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)B 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 A;
(vi)A is a related corporation of B;
(vii)A is a corporation in which B, alone or together with other associates of B as described in sub-paragraphs (ii) to (vi), is in a position to control not less than 20% of the votes in A;
(viii)B is a corporation in which A, alone or together with other associates of A as described in sub-paragraphs (ii) to (vi), is in a position to control not less than 20% of the votes in B; or
(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 exchange.
(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.
(6)  Without prejudice to subsection (11), the Authority may, for the purposes of securing compliance with subsection (1) or (2), or any condition or restriction imposed under subsection (5), by notice in writing, direct the transfer or disposal of all or any of the shares of an approved exchange in which a substantial shareholder, 12% controller or 20% controller of the approved exchange has an interest.
(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 notwithstanding anything to the contrary in the Companies Act (Cap. 50) or the memorandum or articles of association or other constituent document or documents of the approved exchange —
(a)no voting rights shall be exercisable in respect of the shares which are the subject of the direction;
(b)the approved exchange shall 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 exchange, the approved exchange shall 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.
(8)  Any issue of shares by an approved exchange in contravention of subsection (7)(b) shall be deemed to be null and void, and a person to whom a direction has been issued under subsection (6) shall immediately return those shares to the approved exchange, upon which the approved exchange shall return to the person any payment received from him in respect of those shares.
(9)  Any payment made by an approved exchange in contravention of subsection (7)(c) shall be deemed to be null and void, and a person to whom a direction has been issued under subsection (6) shall immediately return the payment he has received to the approved exchange.
(10)  The Authority may 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) or (2), subject to such conditions or restrictions as may be imposed by the Authority.
(11)  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 thereof during which the offence continues after conviction.
(12)  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 thereof during which the offence continues after conviction.
Approval of chairman, chief executive officer, director and key persons
28.—(1)  No approved exchange shall appoint a person as its chairman, chief executive officer or director unless the approved exchange has obtained the approval of the Authority.
(2)  The Authority may, by notice in writing, require an approved exchange to obtain the approval of the Authority for the appointment of any person to any key management position or committee of the approved exchange and the approved exchange shall comply with the notice.
(3)  An application for approval under subsection (1) or (2) shall be made in such form and manner as the Authority may prescribe.
(4)  Without prejudice to the generality of section 45 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 the Authority may prescribe or specify in directions issued by notice in writing.
(5)  Subject to subsection (6), the Authority shall not refuse an application for approval under this section without giving the approved exchange an opportunity to be heard.
(6)  The Authority may refuse an application for approval on any of the following grounds without giving the approved exchange 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 —
(i)involving fraud or dishonesty or the conviction for which involved a finding that he had acted fraudulently or dishonestly; and
(ii)punishable with imprisonment for a term of 3 months or more.
(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)  An approved exchange shall, as soon as practicable, give written notice to the Authority of the resignation or removal of its chairman, chief executive officer, director or person referred to in the notice issued by the Authority under subsection (2).
(9)  Without prejudice to the generality of section 45, the Authority may make regulations relating to the composition and duties of the board of directors or any committee of an approved exchange.
(10)  In this section, “committee” includes any committee of directors, disciplinary committee, appeals committee or any body responsible for disciplinary action against a member of an approved exchange.
(11)  The Authority may exempt any approved exchange or class of approved exchanges from the requirement under subsection (1) or (8), subject to such conditions or restrictions as may be imposed by the Authority.
(12)  Any approved exchange 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 thereof during which the offence continues after conviction.
Power of Authority to approve instruments, contracts and transactions
29.—(1)  No approved exchange shall, without the approval of the Authority, list, de-list or permit the trading of —
(a)any futures contract;
(b)any right, option or derivative in respect of any debentures, stocks or shares;
(c)any right under a contract for differences or under any other contract the purpose or purported purpose of which is to secure a profit or avoid a loss by reference to fluctuations in —
(i)the value or price of any debentures, stocks or shares;
(ii)the value or price of any group of debentures, stocks or shares; or
(iii)an index of any debentures, stocks or shares; or
(d)such other instrument, contract or transaction, or class of instruments, contracts or transactions as the Authority may prescribe,
on any market operated by the approved exchange.
(2)  The Authority may grant approval for an approved exchange to list, de-list or permit the trading of any instrument, contract or transaction, or any class of instruments, contracts or transactions, referred to subsection (1), subject to such conditions or restrictions as the Authority may think fit to impose by notice in writing to the approved exchange.
(3)  Any approved exchange which contravenes subsection (1) or any of the conditions or restrictions imposed under subsection (2) 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 thereof during which the offence continues after conviction.
Listing of approved exchanges on securities market
30.—(1)  The securities of an approved exchange shall not be listed for quotation on a securities market that is operated by the approved exchange or any of its related corporations unless the approved exchange and the operator of the securities 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 of the approved exchange on the securities market.
(2)  Where the securities of an approved exchange are listed for quotation on a securities market operated by the approved exchange or any of its related corporations, the listing rules of the securities market shall be deemed to allow the Authority to act in place of the operator of the securities market in making decisions and taking action, or to require the operator of the securities market to make decisions and to take action on behalf of the Authority, on —
(a)the admission or removal of the approved exchange to or from the official list of the securities market; and
(b)granting approval for the securities of the approved exchange to be, or stopping or suspending the securities of the approved exchange from being, listed for quotation or quoted on the securities market.
(3)  The Authority may, by notice in writing to the operator of the securities market —
(a)modify the listing rules of the securities market for the purpose of their application to the listing for quotation or trading of the securities of the approved exchange; or
(b)waive the application of any listing rule of the securities market to the approved exchange.
(4)  Any approved exchange 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 thereof during which the offence continues after conviction.
Subdivision (4) — Powers of Authority
Fixing of position and trading limits in futures contracts
31.—(1)  For the purpose of diminishing, eliminating or preventing excessive speculation in any commodity under a futures contract, the Authority, or an approved exchange with the approval of the Authority, may, by notice in writing from time to time, establish and fix such limits as it considers necessary on the amount of trading which may be done, or positions which may be held, by any person, generally or specifically, under a futures contract traded on the futures market, or traded subject to the business rules, of —
(a)in the case of the establishing and fixing of limits by the Authority, any approved exchange; or
(b)in the case of the establishing and fixing of limits by an approved exchange, that approved exchange.
(2)  In determining whether a person has exceeded such limits, the positions held and trading done by any other person directly or indirectly controlled by the first-mentioned person shall be included with the positions held and trading done by the first-mentioned person.
(3)  Such limits upon positions and trading shall apply to positions held by, and trading done by, 2 or more persons acting pursuant to an express or implied agreement or understanding as if the positions were held by, or the trading was done by, a single person.
(4)  This section shall not apply to positions as defined by an approved exchange in accordance with such regulations as may be prescribed.
(5)  No person shall, directly or indirectly —
(a)buy or sell, or agree to buy or sell, under a futures contract traded on the futures market of, or subject to the business rules of, an approved exchange, any amount of a commodity in excess of the trading limits fixed for one business day, or any other stated period set by the Authority or the approved exchange; or
(b)hold or control a net buy or sell position under a futures contract traded on the futures market of, or subject to the business rules of, an approved exchange in excess of any position limit fixed by the Authority or the approved exchange.
(6)  Nothing in this section shall preclude the Authority, or an approved exchange with the approval of the Authority, from —
(a)establishing or fixing different trading or position limits for different futures contracts, for different delivery months or for different days remaining until the last day of trading in a futures contract;
(b)fixing different limits for the purposes of subsection (5); or
(c)excluding transactions from the limits established or fixed under this section.
Power of Authority in securities market
32.—(1)  Without prejudice to the generality of section 46, where the Authority is of the opinion that it is necessary to prohibit trading in —
(a)particular securities of, or made available by, an entity;
(b)particular units or derivatives of units in a business trust; or
(c)particular units of a collective investment scheme,
on a securities market of an approved exchange —
(i)in order to protect persons buying or selling the securities, units or derivatives of units in a business trust or units in a collective investment scheme; or
(ii)in the interests of the public,
the Authority may give notice in writing to the approved exchange stating that it is of that opinion and setting out the reasons for its opinion.
(2)  If, after the receipt of the notice given under subsection (1), the approved exchange fails to take any action in relation to those securities, units or derivatives of units in a business trust or units in a collective investment scheme on that securities market and the Authority continues to be of the opinion that it is necessary to prohibit trading in those securities, units or derivatives of units in a business trust or units in a collective investment scheme on that securities market, the Authority may, by notice in writing to the approved exchange, prohibit trading in those securities, units or derivatives of units in a business trust or units in a collective investment scheme on that securities market for such period, not exceeding 14 days, as is specified in the notice.
(3)  Where the Authority gives a notice to an approved exchange under subsection (2), the Authority shall —
(a)at the same time send a copy of the notice to —
(i)in the case of securities, the entity;
(ii)in the case of units or derivatives of units in a business trust, the trustee of the business trust; or
(iii)in the case of units in a collective investment scheme, the responsible person of the collective investment scheme,
together with a statement setting out the reasons for the giving of the notice; and
(b)as soon as practicable, furnish to the Minister a written report setting out the reasons for the giving of the notice and send a copy of the report to the approved exchange.
(4)  Any person who is aggrieved by any action taken by the Authority or an approved exchange under this section may, within 30 days after the person is notified of the action, appeal to the Minister whose decision shall be final.
(5)  Notwithstanding the lodging of an appeal under subsection (4), any action taken by the Authority or an approved exchange under this section shall continue to have effect pending the decision of the Minister.
(6)  The Minister may, when deciding an appeal under subsection (4), make such modification as he considers necessary to any action taken by the Authority or an approved exchange under this section, and such modified action shall have effect from the date of the Minister’s decision.
(7)  Any approved exchange which permits trading in securities on the securities market of the approved exchange in contravention of a notice given under subsection (2) 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 thereof during which the offence continues after conviction.
Additional powers of Authority in respect of auditors
33.—(1)  If an auditor of an approved exchange, in the course of the performance of his duties, becomes aware of —
(a)any matter which, in his opinion, adversely affects or may adversely affect the financial position of the approved exchange to a material extent;
(b)any matter which, in his opinion, constitutes or may constitute a breach of any provision of this Act or an offence involving fraud or dishonesty; or
(c)any irregularity that has or may have a material effect upon the accounts of the approved exchange, including any irregularity that affects or jeopardises, or may affect or jeopardise, the funds or property of investors in securities or futures contracts,
the auditor shall immediately send to the Authority a written report of the matter or the irregularity.
(2)  An auditor of an approved exchange shall not, in the absence of malice on his part, be liable to any action for defamation at the suit of any person in respect of any statement made in his report under subsection (1).
(3)  Subsection (2) shall not restrict or affect any right, privilege or immunity that the auditor of an approved exchange may have, apart from this section, as a defendant in an action for defamation.
(4)  The Authority may impose all or any of the following duties on an auditor of an approved exchange:
(a)a duty to submit such additional information and reports in relation to his audit as the Authority considers necessary;
(b)a duty to enlarge, extend or alter the scope of his audit of the business and affairs of the approved exchange;
(c)a duty to carry out any other examination or establish any procedure in any particular case;
(d)a duty to submit a report on any matter arising out of his audit, examination or establishment of procedure referred to in paragraph (b) or (c),
and the auditor shall carry out such duties.
(5)  The approved exchange shall remunerate the auditor in respect of the discharge by him of all or any of the duties referred to in subsection (4).
Emergency powers of Authority
34.—(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 notice in writing an approved exchange to take such action as it considers necessary to maintain or restore orderly trading in securities or futures contracts or any class of securities or futures contracts.
(2)  Without prejudice to subsection (1), the actions which the Authority may direct an approved exchange to take shall include —
(a)terminating or suspending trading on the approved exchange;
(b)confining trading to liquidation of securities or futures contracts positions;
(c)ordering the liquidation of all positions or any part thereof or the reduction in such positions;
(d)limiting trading to a specific price range;
(e)modifying trading days or hours;
(f)altering conditions of delivery;
(g)fixing the settlement price at which positions are to be liquidated;
(h)requiring any person to act in a specified manner in relation to trading in securities or futures contracts or any class of securities or futures contracts;
(i)requiring margins or additional margins for any securities or futures contracts; and
(j)modifying or suspending any of the business rules of the approved exchange.
(3)  Where the approved exchange 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 in any securities or futures contract or class of securities or futures contracts to cater for the emergency;
(b)set limits that may apply to market 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 may think fit to maintain or restore orderly trading in any securities or futures contracts or class of securities or futures contracts, or liquidation of any position in respect of any securities or futures contract or class of securities or futures contracts.
(4)  In this section, “emergency” means any threatened or actual market manipulation or cornering, and includes —
(a)any act of any government affecting a commodity or securities;
(b)any major market disturbance which prevents the market from accurately reflecting the forces of supply and demand for such commodity or securities; or
(c)any undesirable situation or practice which, in the opinion of the Authority, constitutes an emergency.
(5)  The Authority may modify any action taken by an approved exchange under subsection (1), including the setting aside of that action.
(6)  Any person who is aggrieved by any action taken by the Authority or an approved exchange under this section may, within 30 days after the person is notified of the action, appeal to the Minister whose decision shall be final.
(7)  Notwithstanding the lodging of an appeal under subsection (6), any action taken by the Authority or an approved exchange under this section shall continue to have effect pending the decision of the Minister.
(8)  The Minister may, when deciding an appeal under subsection (6), make such modification as he considers necessary to any action taken by the Authority or an approved exchange under this section, and such modified action shall have effect from the date of the Minister’s decision.
(9)  Any approved exchange 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 thereof during which the offence continues after conviction.
Power of Authority to exempt approved exchanges from provisions of this Part
35.  The Authority may exempt an approved exchange or a class of approved exchanges from any of the provisions of this Part if it is satisfied that the non-compliance by such approved exchange or class of approved exchanges with such provision would not detract from the objectives specified in section 5, subject to such conditions or restrictions as may be imposed by the Authority.
Subdivision (5) — Immunity
Immunity from criminal or civil liability
36.  No criminal or civil liability shall be incurred by —
(a)an approved exchange; or
(b)any person acting on behalf of an approved exchange, including —
(i)any director of the approved exchange; or
(ii)any member of any committee established by the approved exchange,
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 its obligations under this Act or the business rules or, where appropriate, listing rules of the approved exchange.
Division 3 — Regulation of Recognised Market Operators
General obligations
37.—(1)  A recognised market operator shall, in respect of every market which it operates —
(a)as far as is reasonably practicable, ensure that the market is fair, orderly and transparent;
(b)manage any risks associated with its business and operations prudently;
(c)in discharging its obligations under this Act, not act contrary to the interests of the public, having particular regard to the interests of the investing public; and
(d)have sufficient financial, human and system resources —
(i)to operate a fair, orderly and transparent market;
(ii)to meet contingencies or disasters; and
(iii)to provide adequate security arrangements.
(2)  In subsection (1)(d), “contingencies or disasters” includes technical disruptions occurring within automated systems.
Obligation to notify Authority of certain matters
38.  A recognised market operator shall, as soon as practicable after the occurrence of any of the following circumstances, notify the Authority of the circumstance:
(a)any material change to the information provided by the recognised market operator in its application under section 7(1) or 11 (1);
(b)any change of a director or the chief executive officer of the recognised market operator;
(c)the recognised market operator becoming aware of a 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 participant of the recognised market operator to meet its financial obligations to the recognised market operator;
(d)any other matter that the Authority may prescribe by regulations or specify by notice in writing to the recognised market operator.
Obligation to maintain proper records
39.  A recognised market operator shall maintain a record of all transactions effected through its facilities in such form and manner as the Authority may prescribe, including —
(a)the extent to which the record includes details of each transaction; and
(b)the period of time that the record is to be maintained.
Obligation to submit periodic reports
40.  A recognised market operator shall submit to the Authority such reports in such form, manner and frequency as the Authority may prescribe.
Obligation to assist Authority
41.  A recognised market operator shall provide such assistance to the Authority as the Authority may require for the performance of the functions and duties of the Authority, including the furnishing of such returns and the provision of —
(a)such books and other information —
(i)relating to the business of the recognised market operator; or
(ii)in respect of such dealings in securities or trading in futures contracts; and
(b)such other information,
as the Authority may require for the proper administration of this Act.
Power of Authority to approve instruments, contracts and transactions
42.—(1)  No recognised market operator shall, without the approval of the Authority, list, de-list or permit the trading of —
(a)any futures contract;
(b)any right, option or derivative in respect of any debentures, stock or shares;
(c)any right under a contract for differences or under any other contract the purpose or purported purpose of which is to secure a profit or avoid a loss by reference to fluctuations in —
(i)the value or price of any debentures, stock or shares;
(ii)the value or price of any group of debentures, stock or shares; or
(iii)an index of any debentures, stock or shares, and
(d)such other instrument, contract or transaction, or class of instruments, contracts or transactions, as the Authority may prescribe,
on any market operated by the recognised market operator.
(2)  The Authority may grant approval for any instrument, contract or transaction, or any class of instruments, contracts or transactions, referred to in subsection (1), subject to such conditions or restrictions as the Authority may think fit to impose by notice in writing to the recognised market operator.
(3)  The recognised market operator shall comply with the conditions and restrictions imposed under subsection (2).
Penalties under this Division
43.  Any recognised market operator which contravenes section 37(1), 38, 39, 40, 41 or 42 (1) or (3) 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 thereof during which the offence continues after conviction.
Division 4 — General Powers of Authority
Power of Authority to remove officers
44.—(1)  Where the Authority is satisfied that an officer of an approved exchange or a recognised market operator —
(a)has wilfully contravened or wilfully caused that approved exchange or recognised market operator to contravene —
(i)this Act;
(ii)where applicable, its business rules; or
(iii)where applicable, its listing rules;
(b)has, without reasonable excuse, failed to ensure compliance by that approved exchange or recognised market operator, a member of that approved exchange or recognised market operator, or a person associated with that member with —
(i)this Act;
(ii)where applicable, the business rules of that approved exchange or recognised market operator; or
(iii)where applicable, the listing rules of that approved exchange or recognised market operator;
(c)has failed to discharge the duties or functions of his office or employment;
(d)is an undischarged bankrupt, whether in Singapore or elsewhere;
(e)has had execution against him in respect of a judgment debt returned unsatisfied in whole or in part;
(f)has, whether in Singapore or elsewhere, made a compromise or scheme of arrangement with his creditors, being a compromise or scheme of arrangement that is still in operation; or
(g)has been convicted, whether in Singapore or elsewhere, of an offence involving fraud or dishonesty or the conviction for which involved a finding that he acted fraudulently or dishonestly,
the Authority may, if it thinks it necessary in the interests of the public or a section of the public or for the protection of investors, by notice in writing direct that approved exchange or recognised market operator to remove the officer from his office or employment, and that approved exchange or recognised market operator shall comply with such notice, notwithstanding the provisions of section 152 of the Companies Act (Cap. 50).
(2)  Without prejudice to any other matter that the Authority may consider relevant, the Authority may, in determining whether an officer of an approved exchange or a recognised market operator has failed to discharge the duties or functions of his office or employment for the purposes of subsection (1)(c), have regard to such criteria as the Authority may prescribe or specify in directions issued by notice in writing.
(3)  Subject to subsection (4), the Authority shall not direct an approved exchange or a recognised market operator to remove an officer from his office or employment without giving the approved exchange or recognised market operator an opportunity to be heard.
(4)  The Authority may direct an approved exchange or a recognised market operator to remove an officer from his office or employment under subsection (1) on any of the following grounds without giving the approved exchange or recognised market operator an opportunity to be heard:
(a)the officer is an undischarged bankrupt, whether in Singapore or elsewhere;
(b)the officer has been convicted, whether in Singapore or elsewhere, of an offence —
(i)involving fraud or dishonesty or the conviction for which involved a finding that he had acted fraudulently or dishonestly; and
(ii)punishable with imprisonment for a term of 3 months or more.
(5)  Where the Authority directs an approved exchange or a recognised market operator to remove an officer from his office or employment under subsection (1), the Authority need not give that officer an opportunity to be heard.
(6)  Any approved exchange or a recognised market operator that is aggrieved by a direction of the Authority made in relation to the approved exchange or recognised market operator, as the case may be, under subsection (1) may, within 30 days after the approved exchange or recognised market operator, as the case may be, is notified of the direction, appeal to the Minister whose decision shall be final.
(7)  Notwithstanding the lodging of an appeal under subsection (6), any action taken by the Authority under this section, shall continue to have effect pending the decision of the Minister.
(8)  The Minister may, when deciding an appeal under subsection (6), make such modification as he considers necessary to any action taken by the Authority under this section, and such modified action shall have effect from the date of the Minister’s decision.
(9)  Subject to subsection (10), no criminal or civil liability shall be incurred by an approved exchange or a recognised market operator in respect of any thing 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.
(10)  Any approved exchange or a recognised market operator which, without reasonable excuse, contravenes a written notice 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 thereof during which the offence continues after conviction.
Power of Authority to make regulations
45.—(1)  Without prejudice to section 341, the Authority may make regulations relating to the exemption, recognition or approval of, and the requirements applicable to, persons who establish, operate or assist in establishing or operating markets.
(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, a further penalty not exceeding a fine of 10% of the maximum fine prescribed for that offence for every day or part thereof during which the offence continues after conviction.
Power of Authority to issue directions
46.—(1)  The Authority may, if it thinks it necessary or expedient —
(a)for ensuring fair, orderly and transparent markets;
(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 as may be imposed by the Authority under section 8(4) or (5), 14 (5), (6), (8) or (9), 17 (2), 27 (5) or (10), 28 (11), 29 (2), 35 or 42 (2), or such other obligations or requirements under this Act or as may be prescribed by the Authority,
issue directions, whether of a general or specific nature, by notice in writing, to an approved exchange, a recognised market operator or an exempt market operator, and the approved exchange, recognised market operator or exempt market operator shall comply with such directions.
(2)  Any approved exchange, a recognised market operator or an exempt market operator which, without reasonable excuse, contravenes 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 thereof during which the offence continues after conviction.
(3)  For the avoidance of doubt, a direction issued under subsection (1) shall be deemed not to be subsidiary legislation.
PART III
CLEARING FACILITIES
Objectives of this Part
47.  The objectives of this Part are —
(a)to promote the safety and efficiency of clearing facilities that support systemically-important markets or form an integral part of the financial infrastructure; and
(b)to reduce systemic risk.
Interpretation of this Part
48.—(1)  In this Part, unless the context otherwise requires —
“default proceedings” means proceedings or other action taken by a designated clearing house under its default rules;
“default rules”, in relation to a designated clearing house, means the business rules of the designated 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 his obligations for all unsettled or open market contracts to which he is a party;
“defaulter” means a participant who is the subject of any default proceedings;
“market charge” means a security interest, whether fixed or floating, granted in favour of a designated clearing house —
(a)over property held by or deposited with the designated clearing house; and
(b)to secure liabilities arising directly in connection with the designated clearing house ensuring the performance of a market contract;
“market collateral” means property held by, or deposited with, a designated clearing house for the purpose of securing liabilities arising directly in connection with the designated clearing house ensuring the performance of market contracts;
“market contract” means —
(a)a contract subject to the business rules of a designated clearing house that is entered into between the designated 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 designated clearing house; or
(b)a transaction which is being cleared or settled using the clearing facility of a designated clearing house and in accordance with the business rules of the designated clearing house, whether or not a novation referred to in paragraph (a) is to take place;
“property”, in relation to a market charge or market collateral, means —
(a)money, letters of credit, banker’s drafts, certified cheques, guarantees or other similar instruments;
(b)securities;
(c)futures contracts and any similar financial contract; or
(d)other assets of value acceptable to a designated clearing house;
“relevant office holder” means —
(a)the Official Assignee exercising his powers under the Bankruptcy Act (Cap. 20);
(b)a person acting in relation to a company as its liquidator, its provisional liquidator, its receiver, its receiver and manager, its judicial manager or an equivalent officer; or
(c)a person acting in relation to an individual as his trustee in bankruptcy, the interim receiver of his property or an equivalent officer;
“settlement”, in relation to a market contract, includes partial settlement.
(2)  Where a charge is granted partly for the purpose specified in the definition of “market charge” and partly for any other purpose or purposes, the charge shall be treated as a market charge under this Part insofar as it has effect for that specified purpose.
(3)  Where collateral is granted partly for the purpose specified in the definition of “market collateral” and partly for any other purpose or purposes, the collateral shall be treated as market collateral under this Part insofar as it has been provided for that specified purpose.
(4)  References in this Part to the law of insolvency are references to —
(a)the Bankruptcy Act;
(b)Parts VIIIA, IX and X of the Companies Act (Cap. 50); and
(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 (Cap. 19).
(5)  References in this Part to settlement, in relation to a market contract, are references to the discharge of the rights and liabilities of the parties to the market contract, whether by performance, compromise or otherwise.
Division 1 — Establishment of Clearing Facilities
Requirement to notify
49.—(1)  Subject to subsection (2), no person shall establish or operate a clearing facility unless that person has notified the Authority of its intent to establish or operate a clearing facility at least 60 business days prior to the establishment, or commencement of operation, of the clearing facility.
(2)  A person may apply to the Authority to reduce the period referred to in subsection (1) and the Authority may, in its discretion and in relation only to that person, substitute such other period as may be determined by the Authority in place of the period referred to in subsection (1).
(3)  The notice referred to in subsection (1) shall provide information in such form and manner as may be prescribed by the Authority.
(4)  The application referred to in subsection (2) shall provide information in such form and manner as may be prescribed by the Authority.
(5)  The Authority may require a person providing the notice referred to in subsection (1) to furnish the Authority with such information or documents as the Authority considers necessary in relation to the notice.
(6)  In subsection (1), “business day” has the same meaning as in section 4(1) of the Companies Act (Cap. 50).
(7)  Any person who contravenes subsection (1) 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 thereof during which the offence continues after conviction.
(8)  Any person who contravenes subsection (5) 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 thereof during which the offence continues after conviction.
Provision of information to Authority
50.—(1)  A person operating a clearing facility shall submit to the Authority such reports in such form, manner and frequency as the Authority may prescribe.
(2)  Any person who contravenes 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 thereof during which the offence continues after conviction.
Notification of change of particulars
51.—(1)  A person operating a clearing facility shall, no later than 14 days after the occurrence of any of the following circumstances, notify the Authority of the circumstance:
(a)a change of its chief executive officer;
(b)a change of the address of the principal place of business at which it carries on the business of operating a clearing facility;
(c)a material change in the business of the clearing facility;
(d)an intention to cease operations of the clearing facility;
(e)such other matter as the Authority may prescribe.
(2)  Any person who contravenes 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 thereof during which the offence continues after conviction.
Obligation to assist Authority
52.—(1)  A person operating a clearing facility shall provide such assistance to the Authority as the Authority may require for the performance of the functions and duties of the Authority, including the furnishing of such returns and the provision of —
(a)such books and other information —
(i)relating to the business of the clearing facility; or
(ii)in respect of any transaction or class of transactions cleared or settled by the clearing facility; and
(b)such other information,
as the Authority may require for the proper administration of this Act.
(2)  Any person who contravenes 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 thereof during which the offence continues after conviction.
Exemption
53.  Sections 49, 50 and 51 shall not apply to such persons or class of persons as may be prescribed by the Authority.
Power to stop commencement or order cessation
54.—(1)  The Authority may, prior to the end of the notification period referred to in section 49(1) or such other period as may be substituted by the Authority under section 49(2), by notice in writing, order a person who has given notice under section 49(1) not to establish or commence operation of a clearing facility if —
(a)the person did not furnish the Authority with such information or documents as required under section 49(5);
(b)any information or document provided by the person to the Authority is false or misleading; or
(c)the Authority is of the opinion that it is in the interests of the public to do so.
(2)  The Authority may, by notice in writing, order a person to cease operating its clearing facility if —
(a)the person has contravened any provision of this Act or any other written law in the course of operating its clearing facility;
(b)the person provided any information or document to the Authority that is false or misleading;
(c)in the opinion of the Authority, the person is operating the clearing facility in a manner that is likely to pose systemic risk to the financial system of Singapore;
(d)the person is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere;
(e)a receiver, a receiver and 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;
(f)the person has been convicted, whether in Singapore or elsewhere, of an offence involving fraud or dishonesty or the conviction for which involved a finding that it had acted fraudulently or dishonestly; or
(g)the Authority is of the opinion that it is in the interests of the public to do so.
(3)  Subject to subsection (4), the Authority shall not make an order under subsection (1) or (2) without giving the person an opportunity to be heard.
(4)  The Authority may order a person not to establish or commence operation of a clearing facility under subsection (1) or to cease operating its clearing facility under subsection (2) on any of the following grounds without giving the person an opportunity to be heard:
(a)the person is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere;
(b)a receiver, a receiver and 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)the person has been convicted, whether in Singapore or elsewhere, of an offence involving fraud or dishonesty or the conviction for which involved a finding that it had acted fraudulently or dishonestly.
(5)  Any person who is aggrieved by an order of the Authority made in relation to the person under subsection (1) or (2) may, within 30 days after the person is notified of that order, appeal to the Minister whose decision shall be final.
(6)  Notwithstanding the lodging of an appeal under subsection (5), any action taken by the Authority under this section shall continue to have effect pending the decision of the Minister.
(7)  The Minister may, when deciding an appeal under subsection (5), make such modification as he considers necessary to any action taken by the Authority, and such modified action shall have effect from the date of the Minister’s decision.
(8)  Any order made under subsection (2) shall 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 person, whether the agreement, transaction or arrangement was entered into before or after the order of the cessation; or
(b)affect any right, obligation or liability arising under such agreement, transaction or arrangement.
(9)  Any person who contravenes an order made under subsection (1) or (2) 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 thereof during which the offence continues after conviction.
Division 2 — Designation of Persons Operating Clearing Facilities
Designation of persons operating clearing facilities
55.—(1)  The Authority may designate a person operating a clearing facility as a designated clearing house for the purposes of this Act, if it is satisfied that —
(a)a disruption in the operations of the clearing facility could trigger, cause or transmit further systemic disruptions to capital markets or the financial system of Singapore;
(b)a disruption in the operations of the clearing facility could affect public confidence in capital markets, financial institutions or the financial system of Singapore; or
(c)it is in the interests of the public to do so.
(2)  The Authority shall give notice in the Gazette of any person designated under subsection (1).
(3)  A designation by the Authority under subsection (1) shall continue to have effect until it is withdrawn by the Authority.
(4)  The Authority shall not designate any person operating a clearing facility as a designated clearing house without giving that person an opportunity to be heard.
(5)  Any person operating a clearing facility who is aggrieved by a decision of the Authority to designate the person as a designated clearing house under subsection (1) may, within 30 days after the person is notified of the decision, appeal to the Minister whose decision shall be final.
(6)  Notwithstanding the lodging of an appeal under subsection (5), the designation by the Authority under this section shall continue to have effect pending the decision of the Minister.
(7)  The Minister may, when deciding an appeal under subsection (5), direct that the Authority shall not designate the person as a designated clearing house, and such order shall have effect from the date of the Minister’s decision.
Prohibition on holding out
56.—(1)  No person shall hold himself out as a designated clearing house unless he has been designated by the Authority under section 55(1).
(2)  Any person who contravenes subsection (1) 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 thereof during which the offence continues after conviction.
General criteria to be taken into account by Authority
57.  Without affecting the generality of section 55, the Authority may have regard to the following matters in determining whether it is satisfied of the considerations in section 55(1):
(a)the size and structure, or proposed size and structure, of the clearing facility;
(b)the nature of the services provided, or to be provided, by the clearing facility;
(c)the nature of the transactions cleared, or to be cleared, by the clearing facility;
(d)the market where the transactions cleared through the clearing facility are traded or to be traded;
(e)the nature of the investors or participants, or proposed investors or participants, who may use or have an interest in the clearing facility;
(f)whether the person operating the clearing facility is otherwise regulated by the Authority under this Act or any other written law;
(g)whether the clearing facility takes on counterparty risks, through novation or otherwise, in the clearing or settlement of transactions;
(h)the parties who may be affected in the event that the clearing facility runs into difficulties;
(i)the interests of the public; and
(j)any other circumstances that the Authority may deem relevant.
Withdrawal of designation
58.—(1)  The Authority may withdraw the designation of any designated clearing house at any time, on its own initiative or on the application of the designated clearing house, if the Authority is of the opinion that the considerations in section 55(1) are no longer valid or satisfied.
(2)  The Authority shall give notice in the Gazette of any withdrawal under subsection (1).
(3)  The Authority shall not withdraw on its own initiative the designation of any person operating a clearing facility as a designated clearing house without giving the person an opportunity to be heard.
Division 3 — Regulation of Designated Clearing Houses
Subdivision (1) — Obligations of Designated Clearing Houses
General obligations
59.—(1)  A designated clearing house shall —
(a)as far as is reasonably practicable, operate a safe and efficient clearing facility;
(b)manage any risks associated with its business and operations prudently;
(c)in discharging its obligations under this Act, not act contrary to the interests of the public, having particular regard to the interests of the investing public;
(d)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)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)enforce compliance by its members with its business rules;
(g)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; and
(h)ensure that it appoints or employs fit and proper persons as its chairman, chief executive officer, directors and key management officers.
(2)  The obligations imposed on the designated clearing house under this Act shall apply to all facilities for clearing or settlement operated by the designated clearing house.
(3)  Notwithstanding subsection (2), the Authority may by notice in writing exempt any clearing facility operated by a designated 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.
(4)  In subsection (1)(g), “contingencies or disasters” includes technical disruptions occurring within automated systems.
Obligation to notify Authority of certain matters
60.—(1)  A designated clearing house shall, as soon as practicable after the occurrence of any of the following circumstances, notify the Authority of the circumstance:
(a)the carrying on of any business by the designated clearing house other than —
(i)the business of operating a clearing facility;
(ii)a business incidental to operating a clearing facility; or
(iii)such business or class of businesses as the Authority may prescribe;
(b)the acquisition by the designated clearing house of a substantial shareholding in a corporation which does not carry on —
(i)the business of operating a clearing facility;
(ii)a business incidental to operating a clearing facility; or
(iii)such business or class of businesses as the Authority may prescribe;
(c)the designated clearing house becoming aware of a 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 designated clearing house to meet its financial obligations to the designated clearing house;
(d)the designated clearing house reprimanding, fining, suspending, expelling or otherwise taking disciplinary action against a member of the designated clearing house;
(e)any other matter that the Authority may prescribe by regulations or specify by notice in writing to the designated clearing house.
(2)  Without prejudice to the generality of section 79(1), the Authority may, at any time after receiving a notification referred to in subsection (1), issue directions to the designated clearing house —
(a)where the notification relates to a matter referred to in subsection (1)(a) —
(i)to cease carrying on the first-mentioned business referred to in subsection (1)(a); or
(ii)to carry on the first-mentioned business referred to in subsection (1)(a) 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 79(1); or
(b)where the notification relates to a matter referred to in subsection (1)(b) —
(i)to dispose of the shareholding referred to in subsection (1)(b); or
(ii)to exercise its rights relating to such shareholding 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 79(1),
and the designated clearing house shall comply with such directions.
Obligation to manage risks prudently
61.—(1)  Without prejudice to the generality of section 59(1)(b), a designated clearing house shall ensure that the systems and controls concerning the assessment and management of risks to its clearing facility are adequate and appropriate for the scale and nature of its operations.
(2)  Without prejudice to the generality of section 81S, the Authority may make regulations relating to the matters in subsection (1), including —
(a)the limits in respect of positions held with the designated clearing house; and
(b)the measures to manage any risks assumed by the designated clearing house.
Obligation in relation to customers’ money and assets held by designated clearing house
62.—(1)  A designated clearing house which accepts money or assets deposited with or paid to it by its members in respect of or in relation to contracts of the customers of such members shall, in respect of all market contracts in relation to which money or assets are deposited with or paid to it (being market contracts which are cleared or settled by it), require each of its members to notify it in such manner as it may determine —
(a)whether a market contract is a contract of a customer of the member; and
(b)whether the money or assets being deposited with or paid to the designated clearing house is or are deposited or paid in respect of or in relation to a contract of a customer of the member.
(2)  Where a member has notified the designated clearing house under subsection (1) that the money or assets are deposited or paid in respect of or in relation to a contract of a customer of the member, the designated clearing house shall —
(a)account for all such money and assets on an aggregated basis, separate from all other money and assets received by the designated clearing house from the member; and
(b)subject to sections 63 and 64, ensure that such money is deposited in a trust account, or such assets are deposited in a custody account, to be held for the benefit of the customers of the member and disposed of or used only in respect of or in relation to contracts of customers of the member.
(3)  Where a designated clearing house has been convicted of an offence under section 70 for a contravention of subsection (2)(b), in so far as any money which has been deposited in a trust account, or any asset which has been deposited in a custody account, is used for any purpose other than —
(a)in respect of or in relation to contracts of a customer of the member; or
(b)in accordance with sections 63 and 64,
the designated clearing house shall —
(i)in the case of money, repay the money to the trust account referred to in subsection (2)(b); or
(ii)in the case of assets —
(A)return the asset to the custody account referred to in subsection (2)(b); or
(B)if the asset cannot be returned to the custody account, deposit an amount of money which is equivalent to the monetary value of the asset at the time of the contravention of subsection (2)(b) in a trust account referred to in subsection (2)(b) for the benefit of the customers of the member.
Permissible use of customers’ money and assets by designated clearing house
63.—(1)  Where a member of a designated clearing house fails to meet its obligations to the designated clearing house, the designated clearing house may use any money or assets deposited or paid in respect of or in relation to contracts of customers of the member and held by the designated clearing house, including any money deposited in the trust account and any assets deposited in the custody account referred to in section 62(2)(b), to meet the obligations of the member to the designated clearing house, if the designated clearing house has reasonable grounds for forming an opinion that —
(a)the failure of the member to meet the member’s obligations is directly attributable to the failure of any of the customers of the member to meet that customer’s obligations under any market contract; and
(b)the failure to use the money or assets to meet the obligations of the member may jeopardise the financial integrity of the designated clearing house.
(2)  A designated clearing house shall notify the Authority prior to using any such money or assets in the circumstances specified in subsection (1).
Permissible investments of customers’ money and assets by designated clearing house
64.—(1)  Subject to subsection (2), a designated clearing house may invest any money or assets deposited or paid in respect of or in relation to contracts of customers of a member and held by the designated clearing house in the course of its clearing or settlement activities, including any money deposited in the trust account and any assets deposited in the custody account referred to in section 62(2)(b), in any security, instrument or other form of investment arrangement as the Authority may prescribe.
(2)  The designated clearing house shall seek the approval of the Authority before investing any such money or assets under subsection (1).
(3)  The designated clearing house seeking the approval of the Authority under subsection (2) shall satisfy the Authority —
(a)that the management of the investments made by the designated clearing house is consistent with the principles of preserving principal and maintaining sufficient liquidity to meet the obligations of customers of members of the designated clearing house;
(b)that prudential measures have been adopted to manage the risks in respect of the designated clearing house’s investment activities; and
(c)of any other matter which the Authority considers necessary for the sound management of the investments.
(4)  The Authority may grant the approval referred to in subsection (2) subject to such conditions or restrictions as the Authority may think fit.
Obligation to maintain proper records
65.—(1)  A designated clearing house shall maintain a record of all transactions effected through its clearing facility in such form and manner as the Authority may prescribe.
(2)  The matters which the Authority may prescribe under subsection (1) shall include —
(a)the extent to which the record includes details of each transaction; and
(b)the period of time that the record is to be maintained.
Obligation to submit periodic reports
66.  A designated clearing house shall submit to the Authority such reports in such form, manner and frequency as the Authority may prescribe.
Obligation to assist Authority
67.  A designated clearing house shall provide such assistance to the Authority as the Authority may require for the performance of the functions and duties of the Authority, including the furnishing of such returns and the provision of —
(a)such books and other information —
(i)relating to the business of the designated clearing house; or
(ii)in respect of any transaction or class of transactions cleared or settled by the designated clearing house; and
(b)such other information,
as the Authority may require for the proper administration of this Act.
Obligation to maintain confidentiality
68.—(1)  Subject to subsection (2), a designated clearing house and its officers and employees shall maintain, and aid in maintaining, confidentiality of all user information that —
(a)comes to the knowledge of the designated clearing house or any of its officers or employees; or
(b)is in the possession of the designated clearing house or any of its employees.
(2)  Subsection (1) shall 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 furnished; or
(c)the disclosure of user information pursuant to any requirement imposed under any written law or order of court in Singapore.
(3)  For the avoidance of doubt, nothing in this section shall be construed as preventing a designated clearing house from entering into a written agreement with a user which obliges the designated clearing house to maintain a higher degree of confidentiality than that specified in this section.
Annual fees payable by designated clearing house
69.—(1)  Every designated clearing house shall pay to the Authority such annual fees as may be prescribed and in such manner as may be specified by the Authority.
(2)  The Authority may, where it considers appropriate, refund or remit the whole or part of any annual fee paid or payable to it.
Penalties under this Subdivision
70.  Any designated clearing house which contravenes section 59(1), 60, 61 (1), 62 (2) or (3), 63 (2), 64 (2), 65, 66, 67 or 68 (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 thereof during which the offence continues after conviction.
Subdivision (2) — Rules of Designated Clearing Houses
Business rules of designated clearing houses
71.—(1)  Without limiting the generality of sections 59 and 81S —
(a)the Authority may prescribe the matters that a designated clearing house shall make provision for in the business rules of the designated clearing house; and
(b)the designated clearing house shall make provision for these matters in its business rules.
(2)  A designated clearing house shall not make any amendment to its business rules unless it complies with such requirements as the Authority may prescribe.
(3)  In this Subdivision, any reference to an amendment to a business rule shall 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 rule or by any other notice issued by or on behalf of the designated clearing house.
(4)  Any designated 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 thereof during which the offence continues after conviction.
Business rules of designated clearing houses have effect as contract
72.—(1)  The business rules of a designated clearing house shall be deemed to be, and shall operate as, a binding contract —
(a)between the designated clearing house and each issuer of securities;
(b)between the designated clearing house and each participant;
(c)between each issuer of securities and each participant; and
(d)between each participant and every other participant.
(2)  The designated clearing house, each issuer of securities and each participant shall be deemed to have agreed to observe, and 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 designated clearing house, issuer or participant, as the case may be.
(3)  In this section, “issuer”, in relation to any securities, means a person who issued or made available, or proposes to issue or make available, the securities, being securities that are cleared or settled by the designated clearing house.
Power of court to order observance or enforcement of business rules
73.—(1)  Where any person who is under an obligation to comply with, observe, enforce or give effect to the business rules of a designated clearing house fails to do so, the High Court may, on the application of the Authority, a designated clearing house or a person aggrieved by the failure, after giving the first-mentioned person an opportunity to be heard, make an order directing the first-mentioned person to comply with, observe, enforce or give effect to those business rules.
(2)  In this section, “person” includes a designated clearing house.
(3)  This section is in addition to, and not in derogation of, any other remedies available to the aggrieved person referred to in subsection (1).
Non-compliance with business rules not to substantially affect rights of person
74.  Any failure by a designated clearing house to comply with this Act or its business rules in relation to a matter shall 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.
Subdivision (3) — Matters Requiring Approval of Authority
Control of substantial shareholding in designated clearing houses
75.—(1)  No person shall enter into any agreement to acquire shares in a designated clearing house by virtue of which he would, if the agreement had been carried out, become a substantial shareholder of the designated clearing house without first obtaining the approval of the Authority to enter into the agreement.
(2)  No person shall become —
(a)a 12% controller; or
(b)a 20% controller,
of a designated clearing house without first obtaining the approval of the Authority.
(3)  In subsection (2) —
“12% controller” means a person, not being a 20% controller, who alone or together with his associates —
(a)holds not less than 12% of the shares in the designated clearing house; or
(b)is in a position to control not less than 12% of the votes in the designated clearing house;
“20% controller” means a person who, alone or together with his associates —
(a)holds not less than 20% of the shares in the designated clearing house; or
(b)is in a position to control not less than 20% of the votes in the designated clearing house.
(4)  In this section —
(a)a person holds a share if —
(i)he is deemed to have an interest in that share under section 7(6) to (10) of the Companies Act (Cap. 50); or
(ii)he 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;
(b)a reference to the control of a percentage of the votes in a designated clearing house shall 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 designated 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 corporation 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 or, where B is a corporation, of the directors of B;
(iii)B is a corporation 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 A or, where A is a corporation, of the directors of A;
(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)B 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 A;
(vi)A is a related corporation of B;
(vii)A is a corporation in which B, alone or together with other associates of B as described in paragraphs (ii) to (vi), is in a position to control not less than 20% of the votes in A;
(viii)B is a corporation in which A, alone or together with other associates of A as described in paragraphs (ii) to (vi), is in a position to control not less than 20% of the votes in B; or
(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 designated clearing house.
(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.
(6)  Without prejudice to subsection (11), the Authority may, for the purposes of securing compliance with subsection (1) or (2) or any condition or restriction imposed under subsection (5), by notice in writing, direct the transfer or disposal of all or any of the shares of a designated clearing house in which a substantial shareholder, 12% controller or 20% controller of the designated clearing house has an interest.
(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 notwithstanding anything to the contrary in the Companies Act (Cap. 50) or the memorandum or articles of association or other constituent document or documents of the designated clearing house —
(a)no voting rights shall be exercisable in respect of the shares which are the subject of the direction;
(b)the designated clearing house shall 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 designated clearing house, the designated clearing house shall 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.
(8)  Any issue of shares by a designated clearing house in contravention of subsection (7)(b) shall be deemed to be null and void, and a person to whom a direction has been issued under subsection (6) shall immediately return those shares to the designated clearing house, upon which the designated clearing house shall return to the person any payment received from him in respect of those shares.
(9)  Any payment made by a designated clearing house in contravention of subsection (7)(c) shall be deemed to be null and void, and a person to whom a direction has been issued under subsection (6) shall immediately return the payment he has received to the designated clearing house.
(10)  The Authority may exempt —
(a)any person or class of persons; or
(b)any class or description of shares or interests in shares,
from subsection (1) or (2), subject to such conditions or restrictions as may be imposed by the Authority.
(11)  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 thereof during which the offence continues after conviction.
(12)  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 thereof during which the offence continues after conviction.
Approval of chairman, chief executive officer, director and key persons
76.—(1)  No designated clearing house shall appoint a person as its chairman, chief executive officer or director unless the designated clearing house has obtained the approval of the Authority.
(2)  The Authority may, by notice in writing, require a designated clearing house to obtain the approval of the Authority for the appointment of any person to any key management position or committee of the designated clearing house and the designated clearing house shall comply with the notice.
(3)  An application for approval under subsection (1) or (2) shall be made in such form and manner as the Authority may prescribe.
(4)  Without prejudice to the generality of section 81S and 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 the Authority may prescribe or specify in directions issued by notice in writing.
(5)  Subject to subsection (6), the Authority shall not refuse an application for approval under this section without giving the designated 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 designated 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 —
(i)involving fraud or dishonesty or the conviction for which involved a finding that he had acted fraudulently or dishonestly; and
(ii)punishable with imprisonment for a term of 3 months or more.
(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 designated clearing house shall, as soon as practicable, give written notice to the Authority of the resignation or removal of its chairman, chief executive officer, director or person referred to in the notice issued by the Authority under subsection (2).
(9)  Without prejudice to the generality of section 81S, the Authority may make regulations relating to the composition and duties of the board of directors or any committee of a designated clearing house.
(10)  In this section, “committee” includes any committee of directors, disciplinary committee, appeals committee or any body responsible for disciplinary action against a member of a designated clearing house.
(11)  The Authority may exempt any designated clearing house or a class of designated clearing houses from complying with subsection (1) or (8), subject to such conditions or restrictions as may be imposed by the Authority.
(12)  Subject to subsection (11), any designated 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 thereof during which the offence continues after conviction.
Listing of designated clearing houses on securities market
77.—(1)  The securities of a designated clearing house shall not be listed for quotation on a securities market that is operated by any of its related corporations unless the designated clearing house and the operator of the securities 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 of the designated clearing house.
(2)  Where the securities of a designated clearing house are listed for quotation on a securities market operated by any of its related corporations, the listing rules of the securities market shall be deemed to allow the Authority to act in place of the operator of the securities market in making decisions and taking action, or to require the operator of the securities market to make decisions and to take action on behalf of the Authority, on —
(a)the admission or removal of the designated clearing house to or from the official list of the securities market; and
(b)granting approval for the securities of a designated clearing house to be, or stopping or suspending the securities of the designated clearing house from being listed for quotation or quoted on the securities market.
(3)  The Authority may, by notice in writing to the operator of the securities market —
(a)modify the listing rules of the securities market for the purpose of their application to the listing of the securities of the designated clearing house for quotation or trading; or
(b)waive the application of any listing rule of the securities market to the designated clearing house.
(4)  Any designated 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 thereof during which the offence continues after conviction.
Subdivision (4) — Powers of Authority
Power to impose conditions or restrictions
78.—(1)  The Authority may impose on a designated clearing house such conditions or restrictions as it thinks fit by notice in writing, in addition to the obligations imposed on the designated clearing house under this Division, for the purposes of furthering the objectives specified in section 47.
(2)  The Authority may, at any time, by notice in writing to the designated clearing house, vary any condition or restriction as it may think fit.
(3)  Without affecting the generality of subsection (1) or (2), the conditions or restrictions that the Authority may impose include conditions or restrictions relating to —
(a)the activities that the designated clearing house may undertake;
(b)the products that may be cleared by the clearing facility;
(c)the nature of investors or participants who may use or participate in the clearing facility; and
(d)the requirement for the designated clearing house to operate as a corporation.
(4)  Any designated clearing house which contravenes any condition or restriction imposed under 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 thereof during which the offence continues after conviction.
Power of Authority to issue directions
79.—(1)  The Authority may, if it thinks it necessary or expedient —
(a)for ensuring the safe and efficient clearing and settlement of transactions;
(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 as may be imposed by the Authority under section 60(2), 64 (4), 75 (5) or (10), 76 (11), 78 (1) or (2), or 81C, or such other obligations or requirements under this Act or as may be prescribed by the Authority,
issue directions by notice in writing either of a general or specific nature to a designated clearing house, and the designated clearing house shall comply with such directions.
(2)  Any designated clearing house which, without reasonable excuse, contravenes 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 thereof during which the offence continues after conviction.
(3)  For the avoidance of doubt, a direction issued under subsection (1) shall be deemed not to be subsidiary legislation.
Power to order cessation of designated clearing houses
80.—(1)  The Authority may, by notice in writing to a designated clearing house, order the designated clearing house to cease operating any of its clearing facilities if —
(a)the designated clearing house fails to comply with any obligation imposed on it under section 59(1);
(b)the designated clearing house contravenes any provision of this Act or any condition or restriction imposed on it, or direction issued to it, by the Authority under any provision of this Act;
(c)the designated clearing house is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere;
(d)the designated clearing house operates in a manner that is, in the opinion of the Authority, contrary to the interests of the public;
(e)a receiver, a receiver and manager or an equivalent person has been appointed, whether in Singapore or elsewhere, in relation to, or in respect of, any property of the designated clearing house;
(f)the designated clearing house has been convicted, whether in Singapore or elsewhere, of an offence involving fraud or dishonesty or the conviction for which involved a finding that it had acted fraudulently or dishonestly; or
(g)the designated clearing house has provided any information or document to the Authority that is false or misleading.
(2)  The Authority shall give notice in the Gazette of any order made under subsection (1).
(3)  Subject to subsection (4), the Authority shall not order a designated clearing house to cease operating a clearing facility under subsection (1) without giving the designated clearing house an opportunity to be heard.
(4)  The Authority may order a designated clearing house to cease operating a clearing facility under subsection (1) on any of the following grounds without giving the designated clearing house an opportunity to be heard:
(a)the designated clearing house is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere;
(b)a receiver, a receiver and manager or an equivalent person has been appointed, whether in Singapore or elsewhere, in relation to, or in respect of, any property of the designated clearing house;
(c)the designated clearing house has been convicted, whether in Singapore or elsewhere, of an offence involving fraud or dishonesty or the conviction for which involved a finding that it had acted fraudulently or dishonestly.
(5)  Any designated clearing house that is aggrieved by a decision of the Authority made in relation to the designated clearing house under subsection (1) may, within 30 days after the designated clearing house is notified of the decision, appeal to the Minister whose decision shall be final.
(6)  Notwithstanding the lodging of an appeal under subsection (5), any action taken by the Authority under this section shall continue to have effect pending the decision of the Minister.
(7)  The Minister may, when deciding an appeal under subsection (5), make such modification as he considers necessary to any action taken by the Authority under this section, and such modified action shall have effect from the date of the Minister’s decision.
(8)  The Authority may direct, by notice in writing, a designated clearing house, to whom an order to cease operations of its clearing facility has been made by the Authority under subsection (1), to take such action as it considers necessary, including any of the following actions:
(a)ordering the liquidation of all positions or part thereof or the reduction in such positions;
(b)altering 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;
(e)modifying or suspending any of the business rules of the designated clearing house,
and the designated clearing house shall comply with that direction.
(9)  The Authority may modify any action taken by a designated clearing house under subsection (8), including the setting aside of that action.
(10)  Any person who is aggrieved by any action taken by the Authority or a designated clearing house under subsection (8) or (9) may, within 30 days after the person is notified of the action, appeal to the Minister whose decision shall be final.
(11)  Notwithstanding the lodging of an appeal under subsection (10), any action taken by the Authority or a designated clearing house under this section shall continue to have effect pending the decision of the Minister.
(12)  The Minister may, when deciding an appeal under subsection (10), make such modification as he considers necessary to any action taken by the Authority or a designated clearing house under this section, and such modified action shall have effect from the date of the Minister’s decision.
(13)  Subject to any direction issued by the Authority under subsection (8) to the contrary, an order of cessation made under subsection (1) shall not operate so as to —
(a)avoid or affect any agreement, transaction or arrangement entered into in connection with the use of the clearing facility operated by the designated clearing house, whether the agreement, transaction or arrangement was entered into before or after the order of the cessation; or
(b)affect any right, obligation or liability arising under such agreement, transaction or arrangement.
(14)  Any designated clearing house which contravenes an order of cessation made under subsection (1) 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 thereof during which the offence continues after conviction.
(15)  Any designated clearing house which fails to comply with a direction issued under subsection (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 thereof during which the offence continues after conviction.
Emergency powers of Authority
81.—(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 notice in writing a designated clearing house to take such action as it considers necessary to maintain or restore safe and efficient operations of the clearing facilities operated by the designated clearing house.
(2)  Without prejudice to subsection (1), the actions which the Authority may direct a designated clearing house to take include —
(a)ordering the liquidation of all positions or part thereof or the reduction of such positions;
(b)altering 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 designated clearing house.
(3)  Where a designated 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 market 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 safe and efficient operations of the clearing facilities operated by the designated clearing house.
(4)  In this section, “emergency” means any threatened or actual market manipulation or cornering, and includes —
(a)any act of any government affecting a commodity or securities;
(b)any major market disturbance which prevents the market from accurately reflecting the forces of supply and demand for such commodity or securities; or
(c)any undesirable situation or practice which, in the opinion of the Authority, constitutes an emergency.
(5)  The Authority may modify any action taken by a designated clearing house under subsection (1), including the setting aside of that action.
(6)  Any person who is aggrieved by any action taken by the Authority or a designated clearing house under this section may, within 30 days after the person is notified of the action, appeal to the Minister whose decision shall be final.
(7)  Notwithstanding the lodging of an appeal under subsection (6), any action taken by the Authority or a designated clearing house under this section shall continue to have effect pending the decision of the Minister.
(8)  The Minister may, when deciding an appeal under subsection (6), make such modification as he considers necessary to any action taken by the Authority or a designated clearing house under this section, and such modified action shall have effect from the date of the Minister’s decision.
(9)  Any designated 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 thereof during which the offence continues after conviction.
Power of Authority to remove officers
81A.—(1)  Where the Authority is satisfied that an officer of a designated clearing house —
(a)has wilfully contravened or wilfully caused that designated clearing house to contravene this Act or its business rules;
(b)has, without reasonable excuse, failed to ensure compliance with this Act or the business rules of that designated clearing house, by that designated clearing house or a member of that designated clearing house or a person associated with that member;
(c)has failed to discharge the duties or functions of his office or employment;
(d)is an undischarged bankrupt, whether in Singapore or elsewhere;
(e)has had execution against him in respect of a judgment debt returned unsatisfied in whole or in part;
(f)has, whether in Singapore or elsewhere, made a compromise or scheme of arrangement with his creditors, being a compromise or scheme of arrangement that is still in operation; or
(g)has been convicted, whether in Singapore or elsewhere, of an offence involving fraud or dishonesty or the conviction for which involved a finding that he acted fraudulently or dishonestly,
the Authority may, if it thinks it necessary in the interests of the public or a section of the public or for the protection of investors, by notice in writing direct that designated clearing house to remove the officer from his office or employment, and that designated clearing house shall comply with such notice, notwithstanding the provisions of section 152 of the Companies Act (Cap. 50).
(2)  Without prejudice to any other matter that the Authority may consider relevant, the Authority may, in determining whether an officer of a designated clearing house has failed to discharge the duties or functions of his office or employment for the purposes of subsection (1)(c), have regard to such criteria as the Authority may prescribe or specify in directions issued by notice in writing.
(3)  Subject to subsection (4), the Authority shall not direct a designated clearing house to remove an officer from his office or employment without giving the designated clearing house an opportunity to be heard.
(4)  The Authority may direct a designated clearing house to remove an officer from his office or employment under subsection (1) on any of the following grounds without giving the designated clearing house an opportunity to be heard:
(a)the officer is an undischarged bankrupt, whether in Singapore or elsewhere;
(b)the officer has been convicted, whether in Singapore or elsewhere, of an offence —
(i)involving fraud or dishonesty or the conviction for which involved a finding that he had acted fraudulently or dishonestly; and
(ii)punishable with imprisonment for a term of 3 months or more.
(5)  Where the Authority directs a designated clearing house to remove an officer from his office or employment under subsection (1), the Authority need not give that officer an opportunity to be heard.
(6)  Any designated clearing house that is aggrieved by a direction of the Authority made in relation to the designated clearing house under subsection (1) may, within 30 days after the designated clearing house is notified of the direction, appeal to the Minister whose decision shall be final.
(7)  Notwithstanding the lodging of an appeal under subsection (6), any action taken by the Authority under this section shall continue to have effect pending the decision of the Minister.
(8)  The Minister may, when deciding an appeal under subsection (6), make such modifications as he considers necessary to any action taken by the Authority under this section, and such modified action shall have effect from the date of the Minister’s decision.
(9)  Subject to subsection (10), no criminal or civil liability shall be incurred by a designated clearing house in respect of any thing 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.
(10)  Any designated clearing house which, without reasonable excuse, contravenes a written notice 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 thereof during which the offence continues after conviction.
Additional powers of Authority in respect of auditors
81B.—(1)  If an auditor of a designated clearing house, in the course of the performance of his duties, becomes aware of —
(a)any matter which, in his opinion, adversely affects or may adversely affect the financial position of the designated clearing house to a material extent;
(b)any matter which, in his opinion, constitutes or may constitute a breach of any provision of this Act or an offence involving fraud or dishonesty; or
(c)any irregularity that has or may have a material effect upon the accounts of the designated clearing house, including any irregularity that affects or jeopardises, or may affect or jeopardise, the funds or property of investors,
the auditor shall immediately send to the Authority a written report of the matter or the irregularity.
(2)  An auditor shall not, in the absence of malice on his part, be liable to any action for defamation at the suit of any person in respect of any statement made in his report under subsection (1).
(3)  Subsection (2) shall not restrict or affect any right, privilege or immunity that the auditor may have, apart from this section, as a defendant in an action for defamation.
(4)  The Authority may impose all or any of the following duties on an auditor of a designated clearing house:
(a)a duty to submit such additional information and reports in relation to his audit as the Authority considers necessary;
(b)a duty to enlarge, extend or alter the scope of his audit of the business and affairs of the designated clearing house;
(c)a duty to carry out any other examination or establish any procedure in any particular case;
(d)a duty to submit a report on any matter arising out of his audit, examination or establishment of procedure referred to in paragraph (b) or (c),
and the auditor shall carry out such duties.
(5)  The designated clearing house shall remunerate the auditor in respect of the discharge by him of all or any of the duties referred to in subsection (4).
Power of Authority to exempt designated clearing houses from provisions of this Part
81C.  The Authority may exempt a designated clearing house or a class of designated clearing houses from any of the provisions of this Part if it is satisfied that the non-compliance by such designated clearing house or class of designated clearing houses with such provision would not detract from the objectives specified in section 47, subject to such conditions or restrictions as may be imposed by the Authority.
Subdivision (5) — Immunity
Immunity from criminal or civil liability
81D.  No criminal or civil liability shall be incurred by —
(a)a designated clearing house; or
(b)any person acting on behalf of a designated clearing house, including —
(i)any director of the designated clearing house; or
(ii)any member of any committee established by the designated clearing house,
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 its or his obligations under this Act or the business rules of the designated clearing house, including its default rules.
Division 4 — Insolvency
Application of this Division
81E.  This Division shall apply to such transaction or class of transactions cleared or settled by any designated clearing house or class of designated clearing houses, and to such extent as may be prescribed by the Authority.
Proceedings of designated clearing house shall take precedence over law of insolvency
81F.—(1)  The following shall not be invalid to any extent at law by reason only of inconsistency with any 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 an equivalent officer 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 a designated 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 a designated clearing house as 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.
(2)  A relevant office holder, or a court applying the law relating to insolvency in Singapore, shall not exercise his or its power to prevent, or interfere with —
(a)the settlement of a market contract in accordance with the business rules of a designated clearing house, or proceedings or other action taken under those business rules; or
(b)default proceedings.
(3)  Subsection (2) shall not operate to prevent a relevant office holder from recovering an amount under section 81L after the completion of a specified event referred to in section 81L(3).
(4)  Where a participant which is also a bank licensed under the Banking Act (Cap. 19) 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 (Cap. 231) shall have priority over unsecured liabilities of the bank accorded priority under the provisions of this Division.
Supplementary provisions as to default proceedings
81G.—(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 office that are affected by default proceedings if default proceedings have been, could be, or could have been, taken.
(2)  The functions of the relevant office holder shall be construed subject to an order made under subsection (1).
(3)  Sections 45, 74 and 76 of the Bankruptcy Act (Cap. 20) and sections 210, 258, 260, 262 (3), 299 (1) and 309 of the Companies Act (Cap. 50) shall not prevent, or interfere with, any default proceedings.
Duty to report on completion of default proceedings
81H.—(1)  A designated clearing house shall, upon the conclusion of any default proceeding commenced by it, make a report on those proceedings stating in respect of each defaulter who is a subject of those proceedings —
(a)the net sum, if any, certified by the designated clearing house to be payable by or to the defaulter; or
(b)the fact that no sum is so payable,
as the case may be, and the designated clearing house may include in that report such other particulars in respect of those proceedings as it thinks fit.
(2)  A designated clearing house which has made a report under subsection (1) shall 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.
(3)  The designated clearing house shall 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.
(4)  Where a relevant office holder or defaulter receives under subsection (2) a report made under subsection (1), he shall, 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 all or any part of that report.
(5)  In subsections (2), (3) and (4), “report” includes a copy of a report.
Net sum payable on completion of default proceedings
81I.—(1)  This section shall apply to any net sum certified under section 81H(1)(a) by a designated clearing house, upon the completion by it of any default proceedings, to be payable by or to a defaulter.
(2)  Notwithstanding section 87 or 88 of the Bankruptcy Act (Cap. 20), and section 327 of the Companies Act (Cap. 50), where a receiving or winding up order has been made, or a resolution for voluntary winding up has been passed, any net sum as certified under section 81H(1)(a) shall —
(a)be provable in the bankruptcy or winding up or payable to the relevant office holder, as the case may be; and
(b)be taken into account, where appropriate, under section 88 of the Bankruptcy Act or section 327 of the Companies Act.
Disclaimer of onerous property, rescission of contracts, etc.
81J.—(1)  Section 110 of the Bankruptcy Act and section 332 of the Companies Act shall not apply —
(a)to a market contract;
(b)to a contract effected by a designated clearing house for the purpose of realising property provided as market collateral;
(c)to a market charge; or
(d)to any default proceedings.
(2)  Section 77 of the Bankruptcy Act and sections 259 and 299 (1) of the Companies Act shall 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 a designated 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 a designated 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.
Adjustment of prior transactions
81K.—(1)  No order shall be made by a court under —
(a)section 98 or 99 of the Bankruptcy Act (Cap. 20);
(b)section 227T, 329 or 331 of the Companies Act (Cap. 50); or
(c)section 73B of the Conveyancing and Law of Property Act (Cap. 61),
in relation to any matter to which this section applies.
(2)  The matters to which this section applies are —
(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 a designated clearing house for the purpose of realising property provided as market collateral;
(e)a disposition of property in accordance with the business rules of a designated 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.
Right of relevant office holder to recover certain amounts arising from certain transactions
81L.—(1)  Where a participant (referred to as the first participant) sells securities at an over-value to, or purchases securities at an under-value from, another participant (referred to as 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.
(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 a designated clearing house and replaced by a market contract.
(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.
(4)  In this section —
“specified event”, in relation to a 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 291(1) of the Companies Act (Cap. 50);
(c)the summoning of a meeting of creditors in relation to the second participant or that person, as the case may be, under section 296 of the Companies Act;
(d)the presentation of a petition for the winding up of the second participant or that person, as the case may be, before a court; or
(e)the making of a judicial management order by a court under Part VIIIA of the Companies Act in respect of the second participant or that person, as the case may be;
“specified gain”, in relation to a sale or purchase referred to in subsection (1), means the difference between —
(a)the market value of the securities which are the subject of the sale or purchase; and
(b)the value of the consideration for the sale or purchase,
as at the time the sale or purchase was entered into.
Application of market collateral not affected by certain other interest, etc.
81M.—(1)  This section shall have effect with respect to the application of a designated clearing house of property provided as market collateral (referred to in this section as the property).
(2)  The property may be applied in accordance with the business or default rules of a designated clearing house so far as it is necessary for it to be so applied notwithstanding —
(a)any prior equitable interest or right, or any right or remedy arising from a breach of fiduciary duty, unless the designated 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 designated clearing house in a trust account held for the benefit of a participant.
(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 designated clearing house in accordance with its business or default rules.
(4)  Where a designated clearing house has power under this section to apply the property notwithstanding an interest, a right or a remedy, a person to whom the designated clearing house disposes of the property in accordance with its business or default rules shall take free from that interest, right or remedy.
Enforcement of judgments over property subject to market charge, etc.
81N.—(1)  Where property is subject to a market charge or has been provided as market collateral, no execution or other legal process for the enforcement of a judgment or an 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 designated clearing house concerned.
(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 shall not extend to that property.
Law of insolvency in other jurisdictions
81O.—(1)  Notwithstanding any other written law or rule of law, a court shall not recognise or give effect to —
(a)an order of a court exercising jurisdiction under the law of insolvency in a place outside Singapore; or
(b)an act of a person appointed in a place outside Singapore to perform a function under the law of insolvency in that place,
insofar as the making of the order or doing of the act would be prohibited under this Act for a court in Singapore or a relevant office holder respectively.
(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.
Participant to be party to certain transactions as principal
81P.—(1)  Where a participant —
(a)in his capacity as such enters into any transaction (including a market contract) with a designated clearing house; and
(b)but for this subsection or any provision in the business rules or default rules of a designated clearing house, would be a party to that transaction as agent,
then, notwithstanding any other written law or rule of law, as between, but only as between, the designated clearing house and any other person (including the participant and the person who is his principal in respect of that transaction), the participant shall for all purposes (including any action, claim or demand, whether civil or criminal) —
(i)be deemed not to be a party to that transaction as agent; and
(ii)be deemed to be a party to that transaction as principal.
(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, notwithstanding any other written law or rule of law, a participant to whom paragraph (b) applies shall for all purposes (including any action, claim or demand, whether civil or criminal), except as between, but only as between, him and the person who is his principal in respect of that transaction —
(i)be deemed not to be a party to the transaction as agent; and
(ii)be deemed to be a party to the transaction as principal.
Preservation of rights, etc.
81Q.  Except to the extent that it expressly provides, this Division shall 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.
Immunity from criminal or civil liability
81R.—(1)  No criminal or civil liability shall be incurred by —
(a)a person discharging, by virtue of a delegation under the default rules of a designated clearing house, an obligation of the designated 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 last-mentioned person; and
(ii)any member of any committee established by the last-mentioned person,
in respect of any thing done or omitted to be done with reasonable care and in good faith in the discharge or purported discharge of that obligation.
(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 a designated clearing house, and reasonably believes or has reasonable grounds for believing that he is entitled to take that action, he shall not be liable to any person in respect of any loss or damage resulting from his action except insofar as the loss or damage, as the case may be, is caused by the negligence of the office holder.
Division 5 — General Powers of Authority
Power of Authority to make regulations
81S.—(1)  Without prejudice to section 341, the Authority may make regulations relating to requirements applicable to any person operating a clearing facility, whether or not the person has been designated by the Authority as a designated clearing house under section 55(1).
(2)  Regulations made under this section may provide —
(a)that a contravention of any specified provision thereof shall be an offence; and
(b)for penalties 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, to a further penalty not exceeding a fine of 10% of the maximum fine prescribed for that offence for every day or part thereof during which the offence continues after conviction.
PART IIIA
APPROVED HOLDING COMPANIES
Objectives of this Part
81T.  The objectives of this Part are —
(a)to provide a regulatory framework for the establishment and operation of holding companies of —
(i)approved exchanges;
(ii)designated clearing houses; and
(iii)corporations that are approved holding companies,
and to ensure that such holding companies are fit and proper to perform their functions; and
(b)to reduce systemic risk.
Division 1 — Establishment of Approved Holding Companies
Requirement for approval
81U.—(1)  No corporation shall be the holding company of any approved exchange, designated clearing house, or corporation which is an approved holding company, unless the first-mentioned corporation is an approved holding company.
(2)  Any corporation which contravenes subsection (1) 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 thereof during which the offence continues after conviction.
Application for approval
81V.—(1)  A corporation may apply to the Authority to be approved as an approved holding company.
(2)  An application made under subsection (1) shall be —
(a)made in such form and manner as the Authority may prescribe; and
(b)accompanied by a non-refundable prescribed application fee, which shall be paid in the manner specified by the Authority.
(3)  The Authority may require an applicant to furnish it with such information or documents as the Authority considers necessary in relation to the application.
Power of Authority to approve holding companies
81W.—(1)  Where an application is made under section 81V(1), the Authority may approve the corporation as an approved holding company subject to such conditions or restrictions as the Authority may think fit to impose by notice in writing, if the Authority is satisfied that —
(a)it would not be contrary to the interests of the public or contrary to the objectives specified in section 81T to approve the corporation; and
(b)the grounds referred to in subsection (5) for refusing such approval do not apply.
(2)  The Authority may, at any time, by notice in writing to the corporation, vary any condition or restriction or impose such further conditions or restrictions as the Authority may think fit.
(3)  An approved holding company shall, for the duration of the approval, satisfy all conditions and restrictions that may be imposed on it under subsections (1) and (2).
(4)  Subject to subsection (5), the Authority shall not refuse to approve a corporation under subsection (1) without giving the corporation an opportunity to be heard.
(5)  The Authority may refuse to approve 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 an equivalent person 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 involving fraud or dishonesty or the conviction for which involved a finding that it had acted fraudulently or dishonestly.
(6)  The Authority shall give notice in the Gazette of any corporation approved under subsection (1).
(7)  Any applicant that is aggrieved by the refusal of the Authority to grant an approval under subsection (1) may, within 30 days after the applicant is notified of the decision, appeal to the Minister whose decision shall be final.
(8)  Any corporation which contravenes subsection (3) 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 thereof during which the offence continues after conviction.
Annual fees payable by approved holding company
81X.—(1)  Every approved holding company shall pay to the Authority such annual fees as may be prescribed and in such manner as may be specified by the Authority.
(2)  The Authority may, where it considers appropriate, refund or remit the whole or part of any annual fee paid or payable to it.
Cancellation of approval
81Y.—(1)  An approved holding company which intends to cease its activities as an approved holding company may apply to the Authority to cancel its approval.
(2)  The Authority may cancel the approval if it is satisfied that the approved holding company referred to in subsection (1) has ceased its activities as an approved holding company.
Power of Authority to revoke approval
81Z.—(1)  The Authority may revoke any approval of a corporation as an approved holding company under section 81W(1) if —
(a)the corporation ceases to be the holding company of any approved exchange, designated clearing house or corporation which is an approved holding company;
(b)the corporation is being wound up or otherwise dissolved, whether in Singapore or elsewhere;
(c)the corporation contravenes —
(i)any condition or restriction applicable in respect of its approval;
(ii)any direction issued to it by the Authority under this Act; or
(iii)any provision in this Act;
(d)the corporation operates in a manner that is, in the opinion of the Authority, contrary to the interests of the public;
(e)a receiver, a receiver and manager or an equivalent person has been appointed, whether in Singapore or elsewhere, in relation to or in respect of any property of the corporation;
(f)the corporation has been convicted, whether in Singapore or elsewhere, of an offence involving fraud or dishonesty or the conviction for which involved a finding that it had acted fraudulently or dishonestly; or
(g)any information or document provided by the corporation to the Authority is false or misleading.
(2)  Subject to subsection (3), the Authority shall not revoke under subsection (1) any approval under section 81W(1) that was granted to a corporation without giving the corporation an opportunity to be heard.
(3)  The Authority may revoke an approval under section 81W(1) that was granted to a corporation on any of the following circumstances 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 an equivalent person 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 involving fraud or dishonesty or the conviction for which involved a finding that it had acted fraudulently or dishonestly.
(4)  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 shall be final.
(5)  Notwithstanding the lodging of an appeal under subsection (4), any action taken by the Authority under this section shall continue to have effect pending the decision of the Minister.
(6)  The Minister may, when deciding an appeal under subsection (4), make such modification as he considers necessary to any action taken by the Authority under this section, and such modified action shall have effect from the date of the Minister’s decision.
(7)  The Authority shall give notice in the Gazette of any revocation of approval referred to in subsection (1).
Division 2 — Regulation of Approved Holding Companies
Obligation to notify Authority of certain matters
81ZA.—(1)  An approved holding company shall, as soon as practicable after the occurrence of any of the following circumstances, notify the Authority of the circumstance:
(a)any material change to the information provided by the approved holding company in its application under section 81V(1);
(b)the carrying on of any activity by the approved holding company other than —
(i)the activities of a holding company of any approved exchange, designated clearing house or corporation that is an approved holding company;
(ii)an activity incidental to being a holding company of any approved exchange, designated clearing house or corporation that is an approved holding company; or
(iii)such activity or class of activities as the Authority may prescribe;
(c)the acquisition by the approved holding company of a substantial shareholding in a corporation which does not carry on —
(i)any activity of a holding company of any approved exchange, designated clearing house or corporation that is an approved holding company;
(ii)any activity incidental to being a holding company of any approved exchange, designated clearing house or corporation that is an approved holding company; or
(iii)such activity or class of activities as the Authority may prescribe;
(d)any other matter that the Authority may prescribe by regulations or specify by notice in writing to the approved holding company.
(2)  Without prejudice to the generality of section 81ZL(1), the Authority may, at any time after receiving a notification referred to in subsection (1), issue directions to the approved holding company —
(a)where the notification relates to a matter referred to in subsection (1)(b) —
(i)to cease carrying on the first-mentioned activity referred to in subsection (1)(b); or
(ii)to carry on the first-mentioned activity referred to in subsection (1)(b) 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 81ZL(1); or
(b)where the notification relates to a matter referred to in subsection (1)(c) —
(i)to dispose of the shareholding referred to in subsection (1)(c); or
(ii)to exercise its rights relating to such shareholding 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 81ZL(1),
and the approved holding company shall comply with such directions.
(3)  Any approved holding company which contravenes subsection (1) or (2) 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 thereof during which the offence continues after conviction.
Obligation to submit periodic reports
81ZB.—(1)  An approved holding company shall submit to the Authority such reports in such form, manner and frequency as the Authority may prescribe.
(2)  Any approved holding company 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 thereof during which the offence continues after conviction.
Obligation to assist Authority
81ZC.—(1)  An approved holding company shall provide such assistance to the Authority as the Authority may require for the performance of the functions and duties of the Authority, including the furnishing of such returns and the provision of —
(a)such books and other information relating to the activities of the approved holding company; and
(b)such other information,
as the Authority may require for the proper administration of this Act.
(2)  Any approved holding company 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 thereof during which the offence continues after conviction.
Obligation to maintain confidentiality
81ZD.—(1)  Subject to subsection (2), an approved holding company and its officers and employees shall maintain, and aid in maintaining, the confidentiality of all user information that —
(a)comes to the knowledge of the approved holding company or any of its officers or employees; or
(b)is in the possession of the approved holding company or any of its officers or employees.
(2)  Subsection (1) shall 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 furnished; or
(c)the disclosure of user information pursuant to any requirement imposed under any written law or order of court in Singapore.
(3)  Any person who 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 thereof during which the offence continues after conviction.
(4)  For the avoidance of doubt, nothing in this section shall be construed as preventing an approved holding company from entering into a written agreement with a user which obliges the approved holding company to maintain a higher degree of confidentiality than that specified in this section.
Control of substantial shareholding in approved holding companies
81ZE.—(1)  No person shall enter into any agreement to acquire shares in an approved holding company by virtue of which he would, if the agreement had been carried out, become a substantial shareholder of the approved holding company without first obtaining the approval of the Authority to enter into the agreement.
(2)  No person shall become —
(a)a 12% controller; or
(b)a 20% controller,
of an approved holding company without first obtaining the approval of the Authority.
(3)  In subsection (2) —
“12% controller” means a person, not being a 20% controller, who alone or together with his associates —
(a)holds not less than 12% of the shares in the approved holding company; or
(b)is in a position to control not less than 12% of the votes in the approved holding company;
“20% controller” means a person who, alone or together with his associates —
(a)holds not less than 20% of the shares in the approved holding company; or
(b)is in a position to control not less than 20% of the votes in the approved holding company.
(4)  In this section —
(a)a person holds a share if —
(i)he is deemed to have an interest in that share under section 7(6) to (10) of the Companies Act (Cap. 50); or
(ii)he 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;
(b)a reference to the control of a percentage of the votes in an approved holding company shall 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 holding company; 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 corporation 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, or where B is a corporation, of the directors of B;
(iii)B is a corporation 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 A, or where A is a corporation, of the directors of A;
(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)B 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 A;
(vi)A is a related corporation of B;
(vii)A is a corporation in which B, alone or together with other associates of B as described in paragraphs (ii) to (vi), is in a position to control not less than 20% of the votes in A;
(viii)B is a corporation in which A, alone or together with other associates of A as described in paragraphs (ii) to (vi), is in a position to control not less than 20% of the votes in B; or
(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 holding company.
(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.
(6)  Without prejudice to subsection (11), the Authority may, for the purposes of securing compliance with subsection (1) or (2) or any condition or restriction imposed under subsection (5), by notice in writing, direct the transfer or disposal of all or any of the shares of an approved holding company in which a substantial shareholder, 12% controller or 20% controller of the approved holding company has an interest.
(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 notwithstanding any thing to the contrary in the Companies Act (Cap. 50) or the memorandum or articles of association or other constituent document or documents of the approved holding company —
(a)no voting rights shall be exercisable in respect of the shares which are the subject of the direction;
(b)the approved holding company shall 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 holding company, the approved holding company shall 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.
(8)  Any issue of shares by an approved holding company in contravention of subsection (7)(b) shall be deemed to be null and void, and a person to whom a direction has been issued under subsection (6) shall immediately return those shares to the approved holding company, upon which the approved holding company shall return to the person any payment received from him in respect of those shares.
(9)  Any payment made by an approved holding company in contravention of subsection (7)(c) shall be deemed to be null and void, and a person to whom a direction has been issued under subsection (6) shall immediately return the payment he has received to the approved holding company.
(10)  The Authority may exempt —
(a)any person or class or persons; or
(b)any class or description of shares or interests in shares,
from the requirement under subsection (1) or (2), subject to such conditions or restrictions as may be imposed by the Authority.
(11)  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 thereof during which the offence continues after conviction.
(12)  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 thereof during which the offence continues after conviction.
Approval of chairman, chief executive officer, director and key persons
81ZF.—(1)  An approved holding company shall ensure that it appoints or employs fit and proper persons as its chairman, chief executive officer, directors and key management officers.
(2)  No approved holding company shall appoint a person as its chairman, chief executive officer or director unless the approved holding company has obtained the approval of the Authority.
(3)  The Authority may, by notice in writing, require an approved holding company to obtain the approval of the Authority for the appointment of any person to any key management position or committee of the approved holding company and the approved holding company shall comply with the notice.
(4)  An application for approval under subsection (2) or (3) shall be made in such form and manner as the Authority may prescribe.
(5)  Without prejudice to the generality of section 81ZK and to any other matter that the Authority may consider relevant, the Authority may, in determining whether to grant its approval under subsection (2) or (3), have regard to such criteria as the Authority may prescribe or specify in directions issued by notice in writing.
(6)  Subject to subsection (7), the Authority shall not refuse an application for approval under this section without giving the approved holding company an opportunity to be heard.
(7)  The Authority may refuse an application for approval on any of the following grounds without giving the approved holding company 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 —
(i)involving fraud or dishonesty or the conviction for which involved a finding that he had acted fraudulently or dishonestly; and
(ii)punishable with imprisonment for a term of 3 months or more.
(8)  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.
(9)  An approved holding company shall, as soon as practicable, give written notice to the Authority of the resignation or removal of its chairman, chief executive officer, director or person referred to in the notice issued by the Authority under subsection (3).
(10)  Without prejudice to the generality of section 81ZK, the Authority may make regulations relating to the composition and duties of the board of directors or any committee of an approved holding company.
(11)  In this section, “committee” includes any committee of directors, disciplinary committee, appeals committee or any body responsible for disciplinary action against a member of an approved exchange or a designated clearing house of which an approved holding company is the holding company.
(12)  The Authority may exempt an approved holding company or a class of approved holding companies from the requirement under subsection (1), (2) or (9), subject to such conditions or restrictions as may be imposed by the Authority.
(13)  Any approved holding company which contravenes subsection (1), (2), (3) or (9) 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 thereof during which the offence continues after conviction.
Listing of approved holding companies on securities market
81ZG.—(1)  The securities of an approved holding company shall not be listed for quotation on a securities market that is operated by any of its related corporations unless the approved holding company and the operator of the securities 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 trading of the securities of the approved holding company.
(2)  Where the securities of an approved holding company are listed for quotation on a securities market operated by any of its related corporations, the listing rules of the securities market shall be deemed to allow the Authority to act in place of the operator of the securities market in making decisions and taking action, or to require the operator of the securities market to make decisions and to take action on behalf of the Authority, on —
(a)the admission to, or removal of, the approved holding company from the official list of the securities market; and
(b)granting, stopping or suspending the securities of the approved holding company from being listed for quotation or quoted on the securities market.
(3)  The Authority may, by notice in writing to the operator of the securities market —
(a)modify the listing rules of the securities market for the purpose of their application to the listing for quotation or trading of the securities of the approved holding company; or
(b)waive the application of any listing rule of the securities market to the approved holding company.
(4)  Any approved holding company 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 thereof during which the offence continues after conviction.
Additional powers of Authority in respect of auditors
81ZH.—(1)  If an auditor of an approved holding company, in the course of the performance of his duties, becomes aware of —
(a)any matter which, in his opinion, adversely affects or may adversely affect the financial position of the approved holding company to a material extent;
(b)any matter which, in his opinion, constitutes or may constitute a breach of any provision of this Act or an offence involving fraud or dishonesty; or
(c)any irregularity that has or may have a material effect upon the accounts of the approved holding company, including any irregularity that affects or jeopardises, or may affect or jeopardise, the funds or property of investors,
the auditor shall immediately send to the Authority a written report of the matter or the irregularity.
(2)  An auditor shall not, in the absence of malice on his part, be liable to any action for defamation at the suit of any person in respect of any statement made in his report under subsection (1).
(3)  Subsection (2) shall not restrict or affect any right, privilege or immunity that the auditor has, apart from this section, as a defendant in an action for defamation.
(4)  The Authority may impose all or any of the following duties on an auditor of an approved holding company:
(a)a duty to submit such additional information and reports in relation to his audit as the Authority considers necessary;
(b)a duty to enlarge, extend or alter the scope of his audit of the business and affairs of the approved holding company;
(c)a duty to carry out any other examination or establish any procedure in any particular case;
(d)a duty to submit a report on any matter arising out of his audit, examination or establishment of procedure referred to in paragraph (b) or (c),
and the auditor shall carry out such duties.
(5)  The approved holding company shall remunerate the auditor in respect of the discharge by him of all or any of the duties referred to in subsection (4).
Power of Authority to exempt approved holding companies from provisions of this Part
81ZI.  The Authority may exempt an approved holding company or a class of approved holding companies from any of the provisions of this Part, if it is satisfied that the non-compliance by such approved holding company or class of approved holding companies with such provision would not detract from the objectives specified in section 81T, subject to such conditions or restrictions as may be imposed by the Authority.
Power of Authority to remove officers
81ZJ.—(1)  Where the Authority is satisfied that an officer of an approved holding company —
(a)has wilfully contravened or wilfully caused that approved holding company to contravene this Act;
(b)has, without reasonable excuse, failed to ensure compliance with this Act by that approved holding company;
(c)has failed to discharge the duties or functions of his office or employment;
(d)is an undischarged bankrupt, whether in Singapore or elsewhere;
(e)has had execution against him in respect of a judgment debt returned unsatisfied in whole or in part;
(f)has, whether in Singapore or elsewhere, made a compromise or scheme of arrangement with his creditors, being a compromise or scheme of arrangement that is still in operation; or
(g)has been convicted, whether in Singapore or elsewhere, of an offence involving fraud or dishonesty or the conviction for which involved a finding that he acted fraudulently or dishonestly,
the Authority may, if it thinks it necessary in the interests of the public or a section of the public or for the protection of investors, by notice in writing direct that approved holding company to remove the officer from his office or employment and that approved holding company shall comply with such notice, notwithstanding the provisions of section 152 of the Companies Act (Cap. 50).
(2)  Without prejudice to any other matter that the Authority may consider relevant, the Authority may, in determining whether an officer of an approved holding company has failed to discharge the duties or functions of his office or employment for the purposes of subsection (1)(c), have regard to such criteria as the Authority may prescribe or specify in directions issued by notice in writing.
(3)  Subject to subsection (4), the Authority shall not direct an approved holding company to remove an officer from his office or employment without giving the approved holding company an opportunity to be heard.
(4)  The Authority may direct an approved holding company to remove an officer from his office or employment under subsection (1) on any of the following grounds without giving the approved holding company an opportunity to be heard:
(a)the officer is an undischarged bankrupt, whether in Singapore or elsewhere;
(b)the officer has been convicted, whether in Singapore or elsewhere, of an offence —
(i)involving fraud or dishonesty or the conviction for which involved a finding that he had acted fraudulently or dishonestly; and
(ii)punishable with imprisonment for a term of 3 months or more.
(5)  Where the Authority directs an approved holding company to remove an officer from his office or employment under subsection (1), the Authority need not give that officer an opportunity to be heard.
(6)  Any approved holding company that is aggrieved by a direction of the Authority made in relation to the approved holding company under subsection (1) may, within 30 days after the approved holding company is notified of the direction, appeal to the Minister whose decision shall be final.
(7)  Notwithstanding the lodging of an appeal under subsection (6), any action taken by the Authority under this section shall continue to have effect pending the decision of the Minister.
(8)  The Minister may, when deciding an appeal under subsection (6), make such modification as he considers necessary to any action taken by the Authority under this section, and such modified action shall have effect from the date of the Minister’s decision.
(9)  Subject to subsection (10), no criminal or civil liability shall be incurred by an approved holding company in respect of any thing 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.
(10)  Any approved holding company which, without reasonable excuse, contravenes a written notice 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 thereof during which the offence continues after conviction.
Power of Authority to make regulations
81ZK.—(1)  Without prejudice to section 341, the Authority may make regulations relating to the approval of, and the requirements applicable to, persons who establish, operate, or assist in establishing or operating approved holding companies.
(2)  Regulations made under this section may provide —
(a)that a contravention of any specified provision thereof shall be an offence; and
(b)for penalties 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, a further penalty not exceeding a fine of 10% of the maximum fine prescribed for that offence for every day or part thereof during which the offence continues after conviction.
Power of Authority to issue directions
81ZL.—(1)  The Authority may, if it thinks it necessary or expedient —
(a)for ensuring fair, orderly and transparent markets;
(b)for ensuring safe and efficient clearing facilities;
(c)for ensuring the integrity and stability of the capital markets or the financial system;
(d)in the interests of the public or a section of the public or for the protection of investors;
(e)for the effective administration of this Act; or
(f)for ensuring compliance with any condition or restriction as may be imposed by the Authority under section 81W(1) or (2), 81ZA (2), 81ZE (5) or (10), 81ZF(12) or 81ZI, or such other obligations or requirements under this Act or as may be prescribed by the Authority,
issue directions by notice in writing either of a general or specific nature to an approved holding company, and the approved holding company shall comply with such directions.
(2)  Any approved holding company which, without reasonable excuse, contravenes 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 thereof during which the offence continues after conviction.
(3)  For the avoidance of doubt, a direction issued under subsection (1) shall be deemed not to be subsidiary legislation.”.
Amendment of section 83
5.  Section 83 of the principal Act is amended by deleting subsections (1) and (2) and substituting the following subsections:
(1)  Subject to subsection (2), no person shall act as a representative in respect of any regulated activity or hold himself out as doing so, unless —
(a)he is the holder of a representative’s licence for that regulated activity; and
(b)when so acting or holding himself out, he is doing so for the holder of a capital markets services licence which supported his application for, or for renewal of, the representative’s licence, as the case may be, subject to regulations made under this Act.
(2)  Subsection (1) shall not apply —
(a)to any person who acts as a representative of an exempt person, in so far as —
(i)the type and scope of regulated activity carried out by the first-mentioned person are within the type and scope of, or are the same as, those carried out by the exempt person (in his capacity as an exempt person); and
(ii)the manner in which the first-mentioned person carries out the regulated activity referred to in subsection (1) is the same as the manner in which the exempt person (in his capacity as an exempt person) carries out the regulated activity; and
(b)to any person or class of persons whom the Authority may exempt from holding a representative’s licence in respect of any regulated activity.”.
Amendment of section 84
6.  Section 84 of the principal Act is amended by deleting subsection (2) and substituting the following subsection:
(2)  The Authority may require an applicant to furnish it with such information or documents as the Authority considers necessary in relation to the application.”.
Amendment of section 85
7.  Section 85 (2) of the principal Act is amended by deleting paragraph (c) and substituting the following paragraph:
(c)the licensed person —
(i)being the holder of a capital markets services licence, ceases to carry on business in that regulated activity; or
(ii)being a representative, ceases to act as a representative in respect of that regulated activity,
during the period to which the licence fee relates; or”.
Amendment of section 86
8.  Section 86 of the principal Act is amended —
(a)by inserting, immediately after the words “such information” in subsection (4)(a), the words “or documents”;
(b)by inserting, immediately after paragraph (a) of subsection (4), the following paragraph:
(aa)any information or document that is furnished by the applicant to the Authority is false or misleading;”;
(c)by inserting, immediately after the words “any of its officers” in subsection (4)(m), the words “or employees”; and
(d)by deleting the words “a right” in subsection (5) and substituting the words “an opportunity”.
Amendment of section 87
9.  Section 87 of the principal Act is amended —
(a)by deleting the words “to carry on business in” in subsection (1) and substituting the words “in respect of”;
(b)by inserting, immediately after the words “such information” in subsection (3)(a), the words “or documents”; and
(c)by inserting, immediately after paragraph (a) of subsection (3), the following paragraph:
(aa)any information or document that is furnished by the applicant to the Authority is false or misleading;”.
Amendment of section 87A
10.  Section 87A of the principal Act is amended —
(a)by deleting the words “to carry on business in” in subsection (1) and substituting the words “in respect of”; and
(b)by deleting subsection (2) and substituting the following subsection:
(2)  The Authority may require an applicant to furnish it with such information or documents as the Authority considers necessary in relation to the application.”.
Amendment of section 88
11.  Section 88 of the principal Act is amended by deleting subsection (4).
Amendment of section 92
12.  Section 92 of the principal Act is amended —
(a)by deleting the word “wilfully” in paragraphs (a) and (b) and substituting in each case the words “without reasonable excuse,”;
(b)by deleting the words “, knowing it to be false or misleading” in paragraph (a); and
(c)by deleting the words “or to imprisonment for a term not exceeding 12 months or to both” in the 8th and 9th lines.
Amendment of section 95
13.  Section 95 (2) of the principal Act is amended —
(a)by deleting the word “or” at the end of paragraph (a)(iii);
(b)by deleting the word “and” at the end of paragraph (a)(iv);
(c)by inserting, immediately after sub-paragraph (iv) of paragraph (a), the following sub-paragraphs:
(v)the Authority has reason to believe that the holder of the capital markets services licence is carrying on business in any regulated activity for which it was licensed in a manner that is contrary to the interests of the public; or
(vi)any information or document that is furnished by the holder of the capital markets services licence to the Authority is false or misleading; and”;
(d)by deleting the words “in carrying on business in” in paragraph (b)(ii) and substituting the words “in respect of”;
(e)by deleting the word “or” at the end of paragraph (b)(iv);
(f)by inserting, immediately after sub-paragraph (iv) of paragraph (b), the following sub-paragraph:
(iva)the Authority has reason to believe that the representative is performing his functions in a manner that is contrary to the interests of the public;”; and
(g)by deleting the full-stop at the end of sub-paragraph (v) of paragraph (b) and substituting the word “; or”, and by inserting immediately thereafter the following sub-paragraph:
(vi)any information or document that is furnished by the representative to the Authority is false or misleading.”.
Amendment of section 96
14.  Section 96 of the principal Act is amended by deleting subsection (6).
Amendment of section 97
15.  Section 97 of the principal Act is amended —
(a)by deleting the words “justification or” in subsection (1)(b); and
(b)by deleting the words “a right” in subsection (3) and substituting the words “an opportunity”.
Amendment of section 99
16.  Section 99 of the principal Act is amended —
(a)by deleting paragraph (e) of subsection (1);
(b)by deleting paragraph (f) of subsection (1) and substituting the following paragraph:
(f) any securities exchange, futures exchange, recognised market operator or approved holding company in respect of any regulated activity that is solely incidental to its operation of a securities market or futures market or to its performance as an approved holding company, as the case may be;”;
(c)by deleting subsections (2) and (3); and
(d)by deleting the words “any provision of this Act which is applicable to it or” in subsection (5).
New section 99A
17.  The principal Act is amended by inserting, immediately after section 99, the following section:
Annual fees payable by exempt person and its representative
99A.—(1)  Every exempt person and every representative of an exempt person shall pay to the Authority such annual fee in respect of each regulated activity as may be prescribed and in such manner as may be specified by the Authority.
(2)  Any annual fee paid by an exempt person or a representative of an exempt person to the Authority in respect of any regulated activity shall not be refunded or remitted if —
(a)in the case of the exempt person —
(i)its exemption is withdrawn; or
(ii)it fails or ceases to carry on business in that regulated activity,
during the period to which the annual fee relates; and
(b)in the case of a representative of the exempt person —
(i)his exemption is withdrawn; or
(ii)he fails or ceases to act as a representative in respect of that regulated activity,
during the period to which the annual fee relates.
(3)  Subject to subsection (2), the Authority may, where it considers appropriate, refund or remit the whole or part of any annual fee paid or payable to it.”.
Amendment of section 103
18.  Section 103 of the principal Act is amended by deleting the words “justification or”.
Amendment of section 105
19.  Section 105 of the principal Act is amended by deleting the words “justification or”.
Repeal of section 119
20.  Section 119 of the principal Act is repealed.
Repeal and re-enactment of section 120
21.  Section 120 of the principal Act is repealed and the following section substituted therefor:
Disclosure of certain interests in respect of underwriting agreement
120.—(1)  Where —
(a)securities have been offered for subscription or purchase; and
(b)the holder of a capital markets services licence has subscribed for or purchased, or is or will or may be required to subscribe for or purchase, any of those securities under an underwriting or sub-underwriting agreement by reason that some or all of the securities have not been subscribed for or purchased,
the holder shall not, during the period of 90 days after the close of the offer referred to in paragraph (a) —
(i)make an offer to sell those securities otherwise than in the ordinary course of trading on a securities exchange or recognised market operator; or
(ii)make a recommendation, whether orally or in writing and whether expressly or by implication, with respect to those securities,
unless the offer or recommendation contains or is accompanied by a statement to the effect that the offer or recommendation relates to securities that the holder has acquired, or is or will or may be required to acquire, under an underwriting or sub-underwriting agreement by reason that some or all of the securities have not been subscribed for or purchased.
(2)  For the purpose of subsection (1), any reference to an offer shall be construed as including a reference to a statement, however expressed, that expressly or impliedly invites a person to whom it is made to offer to acquire securities.
(3)  Where the holder of a capital markets services licence sends to any person a written offer, written recommendation or written statement to which subsection (1) applies, the holder shall retain a copy of the written offer, recommendation or statement for a period of 6 years after the day the written offer, recommendation or statement is made.
(4)  The Authority may, if it is in the public interest, exempt any person or class of persons, or any securities or class of securities, from the application of this section.
(5)  The holder of a capital markets services licence which contravenes this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $25,000.”.
Repeal of section 121
22.  Section 121 of the principal Act is repealed.
Amendment of section 122
23.  Section 122 of the principal Act is amended by deleting subsection (2) and substituting the following subsection:
(2)  Subsection (1) shall not apply to the holder of a capital markets services licence or a representative of such a holder —
(a)if his customer required the purchase or sale of securities or futures contracts on behalf of the customer to be effected only on specified conditions and he has been unable to purchase or sell the securities or futures contracts by reason of those conditions; or
(b)when carrying out the act referred to in subsection (1) under such other circumstances as may be prescribed by the Authority.”.
Amendment of section 123
24.  Section 123 of the principal Act is amended by inserting, immediately after paragraph (a) of subsection (2), the following paragraph:
(aa)specify requirements and restrictions relating to the granting of unsecured advance, unsecured loan or unsecured credit facility by the holder of a capital markets services licence;”.
Amendment of section 124
25.  Section 124 of the principal Act is amended —
(a)by deleting the words “justification or”; and
(b)by deleting the words “(except section 121)”.
Amendment of section 137
26.  Section 137 (1) of the principal Act is amended by deleting the words “the official list of”.
New Division 3 of Part VII
27.  The principal Act is amended by inserting, immediately after Division 2 of Part VII, the following Division:
Division 3 — Disclosure by Substantial Unitholders
Duty of substantial unitholders to notify securities exchange
137A.—(1)  In the case of a collective investment scheme that invests only in real estate and real estate-related assets specified by the Authority in the Code on Collective Investment Schemes all or any of which units are listed for quotation on a securities exchange, Division 4 of Part IV of the Companies Act (Cap. 50) (other than sections 79, 81, 86, 87, 88, 89 and 92) shall apply, with such modifications and qualifications as may be necessary, to a person who is a substantial unitholder as though —
(a)references to the company to which notification should be given were references to the securities exchange;
(b)references to shares in the company were references to units in the scheme;
(c)references to substantial shareholding were references to substantial unitholding; and
(d)references to a substantial shareholder were references to a substantial unitholder,
and such person shall comply with those provisions accordingly.
(2)  Any person who fails to comply with subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $25,000 and, in the case of a continuing offence, to a further fine of $2,500 for every day or part thereof during which the offence continues after conviction.
Duty of substantial unitholders to notify trustee of collective investment scheme
137B.—(1)  In the case of a collective investment scheme that invests only in real estate and real estate-related assets specified by the Authority in the Code on Collective Investment Schemes all or any of which units are listed for quotation on a securities exchange, Division 4 of Part IV of the Companies Act (Cap. 50) (other than sections 79 and 81) shall apply, with such modifications and qualifications as may be necessary, to a person who is a substantial unitholder as though —
(a)references to the company to which notification should be given were references to the trustee of the scheme;
(b)references to shares in the company were references to units in the scheme;
(c)references to substantial shareholding were references to substantial unitholding;
(d)references to a substantial shareholder were references to a substantial unitholder; and
(e)references to the Registrar were references to the Authority,
and such person shall comply with those provisions accordingly.
(2)  If a person to whom subsection (1) applies fails to comply with any of the provisions of Division 4 of Part IV of the Companies Act (other than sections 79 and 81), he shall be guilty of an offence and shall be liable on conviction to the same penalties as are prescribed under that Act for a failure to comply with such provision.”.
Amendment of section 162
28.  Section 162 of the principal Act is amended by deleting the words “justification or” in subsections (1) and (5).
Amendment of section 168
29.  Section 168 of the principal Act is amended by deleting the words “justification or” in subsections (1) and (5).
Amendment of section 196
30.  Section 196 of the principal Act is amended —
(a)by deleting the word “or” at the end of paragraph (a)(i);
(b)by inserting, immediately after sub-paragraph (i) of paragraph (a), the following sub-paragraph:
(ia)securities of any business trust; or”;
(c)by deleting the word “or” at the end of paragraph (b)(i); and
(d)by inserting, immediately after sub-paragraph (i) of paragraph (b), the following sub-paragraph:
(ia)securities of a business trust, the trustee of which is formed in Singapore or carries on business on behalf of the business trust in Singapore; or”.
New section 196A
31.  The principal Act is amended by inserting, immediately after section 196, the following section:
Interpretation of this Division
196A.  In this Division —
“debenture” has the same meaning as in section 2 and, in relation to a business trust, means any debenture issued by the trustee of the business trust in its capacity as trustee of the business trust;
“securities”  —
(a)in relation to a corporation, for the purposes of sections 196(a) (i) and (b)(i), 198, 202 and 203, means —
(i)debentures, stocks or shares issued or proposed to be issued by a corporation;
(ii)any right, option or derivative in respect of any such debentures, stocks or shares; or
(iii)any right under a contract for differences or under any other contract the purpose or pretended purpose of which is to secure a profit or avoid a loss by reference to fluctuations in —
(A)the value or price of any such debentures, stocks or shares;
(B)the value or price of any group of any such debentures, stocks or shares; or
(C)an index of any such debentures, stocks or shares,
but does not include —
(AA)futures contracts;
(BB)bills of exchange;
(CC)promissory notes; or
(DD)certificates of deposit issued by a bank or finance company;
(b)in relation to a business trust, for the purposes of sections 196(a) (ia) and (b)(ia), 198, 202 and 203, means —
(i)units in a business trust;
(ii)derivatives of units in a business trust;
(iii)debentures of a business trust; or
(iv)any right, option or derivative in respect of any such debentures,
but does not include —
(A)futures contracts;
(B)bills of exchange; or
(C)promissory notes; and
(c)in any other case, has the same meaning as in section 2.”.
Amendment of section 198
32.  Section 198 of the principal Act is amended —
(a)by inserting, immediately after subsection (1), the following subsection:
(1A)  No person shall effect, take part in, be concerned in or carry out, directly or indirectly, 2 or more transactions in securities of a business trust, being transactions that have, or are likely to have, the effect of raising, lowering, maintaining or stabilising the price of securities of the business trust on a securities market, with intent to induce other persons to subscribe for, purchase or sell securities of the business trust.”; and
(b)by deleting subsection (2) and substituting the following subsection:
(2)  A reference in subsection (1) or (1A) to transactions in securities of a corporation or securities of a business trust, as the case may be, includes —
(a)a reference to the making of an offer to purchase or sell such securities of the corporation or such securities of the business trust, as the case may be; and
(b)a reference to the making of an invitation, however expressed, that directly or indirectly invites a person to offer to purchase or sell such securities of the corporation or such securities of the business trust, as the case may be.”.
Amendment of section 202
33.  Section 202 of the principal Act is amended —
(a)by inserting, immediately after the words “any securities of a corporation” in the 3rd and 4th lines, the words “or any securities of a business trust”; and
(b)by inserting, immediately after the words “related to that corporation” in the 7th line, the words “, or securities of that business trust, as the case may be”.
Amendment of section 203
34.  Section 203 of the principal Act is amended —
(a)by deleting subsections (1) and (2) and substituting the following subsections:
(1)  This section shall apply to —
(a)an entity the securities of which are listed for quotation on a securities exchange;
(b)a trustee of a business trust, where the securities of the business trust are listed for quotation on a securities exchange; or
(c)a responsible person of a collective investment scheme, where the units of the collective investment scheme are listed for quotation on a securities exchange,
if the entity, trustee or responsible person is required by the securities exchange under the listing rules or any other requirement of the securities exchange to notify the securities exchange of information on specified events or matters as they occur or arise for the purpose of the securities exchange making that information available to a securities market operated by the securities exchange.
(2)  The persons specified in subsection (1)(a), (b) or (c) shall not intentionally, recklessly or negligently fail to notify the securities exchange of such information as is required to be disclosed by the securities exchange under the listing rules or any other requirement of the securities exchange.”; and
(b)by deleting subsection (4).
Amendment of section 213
35.  Section 213 of the principal Act is amended —
(a)by deleting sub-paragraph (i) of paragraph (a) and substituting the following sub-paragraphs:
(i)securities of any corporation, whether formed or carrying on business in Singapore or elsewhere;
(ia)securities of any business trust;”; and
(b)by inserting, immediately after sub-paragraph (i) of paragraph (b), the following sub-paragraph:
(ia)securities of a business trust, the trustee of which is formed in Singapore or carries on business on behalf of the business trust in Singapore;”.
Amendment of section 214
36.  Section 214 of the principal Act is amended —
(a)by inserting, immediately before the definition of “information”, the following definitions:
“ “debenture” has the same meaning as in section 2 and, in relation to a business trust, means a debenture issued by the trustee of the business trust in its capacity as trustee of the business trust;
“financial performance”, in relation to a business trust, means the performance of the business relating to the trust property of the business trust which is managed and operated by the trustee of the business trust;”;
(b)by deleting paragraphs (c) and (d) of the definition of “information” and substituting the following paragraphs:
(c)matters relating to negotiations or proposals with respect to —
(i)commercial dealings;
(ii)dealing in securities; or
(iii)trading in futures contract;
(d)information relating to the financial performance of a corporation or business trust, or otherwise;”;
(c)by deleting the definition of “securities” and substituting the following definition:
“ “securities” means —
(a)in relation to a corporation, for the purposes of sections 213(a) (i) and (b)(i) and 218 —
(i)debentures, stocks or shares issued or proposed to be issued by a corporation;
(ii)any right, option or derivative in respect of any such debentures, stocks or shares;
(iii)any right under a contract for differences or under any other contract the purpose or pretended purpose of which is to secure a profit or avoid a loss by reference to fluctuations in —
(A)the value or price of any such debentures, stocks or shares;
(B)the value or price of any group of any such debentures, stocks or shares; or
(C)an index of any such debentures, stocks or shares; or
(iv)a futures contract only if the commodity which is the subject of the futures contract is a share or stock of a corporation;
(b)in relation to a business trust, for the purposes of sections 213(a) (ia) and (b)(ia) and 218 (1A) and (4A) —
(i)units in a business trust;
(ii)derivatives of units in a business trust;
(iii)debentures of a business trust; or
(iv)any right, option or derivative in respect of any such debentures; and
(c)in any other case —
(i)debentures or stocks issued or proposed to be issued by a government;
(ii)debentures, stocks or shares issued or proposed to be issued by a corporation or body unincorporate;
(iii)any right, option or derivative in respect of any such debentures, stocks or shares;
(iv)any unit in a collective investment scheme;
(v)any unit, or derivative of a unit, in a business trust;
(vi)any right under a contract for differences or under any other contract the purpose or pretended purpose of which is to secure a profit or avoid a loss by reference to fluctuations in —
(A)the value or price of any such debentures, stocks, shares, units in a collective investment scheme or units in a business trust;
(B)the value or price of any group of any such debentures, stocks, shares, units in a collective investment scheme or units in a business trust; or
(C)an index of any such debentures, stocks, shares, units in a collective investment scheme or units in a business trust; or
(vii)a futures contract only if the commodity which is the subject of the futures contract is a share or share index, or stock or stock index,
but does not include —
(AA)bills of exchange;
(BB)promissory notes; or
(CC)certificates of deposit issued by a bank or finance company;”; and
(d)by deleting the full-stop at the end of the definition of “sell” and substituting a semi-colon, and by inserting immediately thereafter the following definition:
“ “trust property” has the same meaning as in section 2 of the Business Trusts Act (Act 30 of 2004).”.
Amendment of section 218
37.  Section 218 of the principal Act is amended —
(a)by deleting the words “(referred to in this section as the connected person)” in subsection (1)(a);
(b)by inserting, immediately after the words “value of those securities” in subsection (1)(b)(ii), the words “of that corporation”;
(c)by deleting the words “subsections (2) to (6) shall apply” in the last line of subsection (1) and substituting the words “subsections (2), (3), (4), (5) and (6) shall apply”;
(d)by inserting, immediately after subsection (1), the following subsection:
(1A)  Subject to this Division, where —
(a)a person who is connected to any corporation, where such corporation —
(i)in relation to a business trust, acts as its trustee or manages or operates the business trust; or
(ii)in relation to a collective investment scheme that invests only in real estate and real estate-related assets specified by the Authority in the Code on Collective Investment Schemes and all or any units of which are listed on a securities exchange, is the trustee or manager of the scheme,
possesses information concerning that corporation, business trust or scheme, as the case may be, that is not generally available but, if the information were generally available, a reasonable person would expect it to have a material effect on the price or value of securities of that corporation, of securities of that business trust or of units in that scheme, as the case may be; and
(b)the connected person knows or ought reasonably to know that —
(i)the information is not generally available; and
(ii)if it were generally available, it might have a material effect on the price or value of those securities of that corporation, of those securities of that business trust or of those units in that scheme, as the case may be,
subsections (2), (3), (4A), (5) and (6) shall apply.”;
(e)by inserting, immediately after the words “any such securities” in subsection (2)(a) and (b), the words “referred to in subsection (1) or (1A), as the case may be”;
(f)by inserting, immediately after the words “referred to in subsection (1)” in the 1st line of subsection (3), the words “or (1A)”;
(g)by deleting the words “In any proceedings against a connected person for a contravention of subsection (2) or (3),” in subsection (4) and substituting the words “In any proceedings for a contravention of subsection (2) or (3) against a person connected to a corporation referred to in subsection (1),”;
(h)by inserting, immediately after subsection (4), the following subsection:
(4A)  In any proceedings for a contravention of subsection (2) or (3) against a person connected to a corporation which —
(a)in relation to a business trust, acts as its trustee or manages or operates the business trust; or
(b)in relation to a collective investment scheme, is the trustee or manager of the scheme,
as the case may be, referred to in subsection (1A), where the prosecution or plaintiff proves that the connected person was at the material time —
(i)in possession of information concerning the corporation, business trust or scheme, as the case may be; and
(ii)the information was not generally available,
it shall be presumed, until the contrary is proved, that the connected person knew at the material time that —
(A)the information was not generally available; and
(B)if the information were generally available, it might have a material effect on the price or value of securities of that corporation, of securities of that business trust or of units in the scheme, as the case may be.”; and
(i)by deleting subsection (5) and substituting the following subsection:
(5)  In this Division —
(a)“connected person” means a person referred to in subsection (1) or (1A) who is connected to a corporation; and
(b)a person is connected to a corporation if —
(i)he is an officer of that corporation or of a related corporation;
(ii)he is a substantial shareholder within the meaning of Division 4 of Part IV of the Companies Act (Cap. 50) in that corporation or in a related corporation; or
(iii)he occupies a position that may reasonably be expected to give him access to information of a kind to which this section applies by virtue of —
(A)any professional or business relationship existing between himself (or his employer or a corporation of which he is an officer) and that corporation or a related corporation; or
(B)being an officer of a substantial shareholder within the meaning of Division 4 of Part IV of the Companies Act in that corporation or in a related corporation.”.
Amendment of section 220
38.  Section 220 (1) of the principal Act is amended by inserting, immediately after the words “referred to in section 218 (1) (a)”, the words “or (1A) (a)”.
Amendment of section 222
39.  Section 222 of the principal Act is amended by deleting the section heading and substituting the following section heading:
Exception for redemption of units in collective investment scheme”.
Amendment of section 223
40.  Section 223 of the principal Act is amended —
(a)by deleting the words “subscribing for securities” in subsection (1)(a) and substituting the words “subscribing for, or purchasing, securities”;
(b)by deleting the words “subscribed for under” in subsection (1)(c) and substituting the words “subscribed for, or purchased, under”; and
(c)by deleting the words “subscribe for” wherever they appear in subsection (2)(b) and substituting in each case the words “subscribe for, or purchase,”.
Amendment of section 232
41.  Section 232 (7) of the principal Act is amended by deleting the words “sue for and”.
Amendment of section 239
42.  Section 239 of the principal Act is amended —
(a)by deleting the definitions of “auditor” and “borrowing corporation” in subsection (1) and substituting the following definitions:
“ “borrowing entity” means an entity that is or will be under a liability (whether or not such liability is present or future) to repay any money received by it in response to an invitation to subscribe for or purchase debentures of the entity;
“chief executive officer”, in relation to a corporation, means any person, by whatever name called, who is in the direct employment of, or acting for or by arrangement with, the corporation, and who is principally responsible for the management and conduct of the business of the corporation;
“control”, in relation to an entity, means the capacity of a person to determine the outcome of decisions on the financial and operating policies of the entity, having regard to —
(a)the influence which the person can, in practice, exert on the entity (as opposed to the rights which the person can exercise in the entity); and
(b)any practice or pattern of behaviour of the person affecting the financial or operating policies of the entity (even if such practice or pattern of behaviour involves a breach of an agreement or a breach of trust),
but does not include any capacity of a person to influence decisions on the financial and operating policies of the entity if such influence is required by law or under any contract or order of court to be exercised for the benefit of other persons;”;
(b)by inserting, immediately after the definition of “debenture” in subsection (1), the following definition:
“ “debenture issuance programme” means any scheme or arrangement by an entity for the issue of debentures or units of debentures where only part of the maximum amount or aggregate number of debentures or units of debentures under the programme is offered initially and a further tranche or tranches may be offered subsequently;”;
(c)by deleting the definitions of “guarantor corporation” and “minimum subscription” in subsection (1) and substituting the following definitions:
“ “guarantor entity”, in relation to a borrowing entity, means an entity that has guaranteed or has agreed to guarantee the repayment of any money received or to be received by the borrowing entity in response to an invitation to subscribe for or purchase debentures of the borrowing entity;
“immediate family”, in relation to an individual, means the individual’s spouse, son, adopted son, step-son, daughter, adopted daughter, step-daughter, father, step-father, mother, step-mother, brother, step-brother, sister or step-sister;
“issuer”, in relation to an offer of securities, means the entity that issued or will be issuing the securities being offered;
“minimum subscription”, in relation to any securities offered for subscription, means the amount stated in the prospectus relating to the offer as the minimum amount which must be raised by the issue of the securities so offered, failing which no securities will be allotted or issued;”;
(d)by deleting the words “shares in or debentures of, or units of shares in or debentures of, a corporation” in the definition of “preliminary document” in subsection (1) and substituting the word “securities”;
(e)by deleting the words “a corporation, means a promoter of the corporation” in the definition of “promoter” in subsection (1) and substituting the words “an entity, means a promoter of the entity”;
(f)by deleting the words “other document inviting applications or offers from the public to subscribe for or purchase or offering to the public for subscription or purchase any shares in or debentures of, or any units of shares in or debentures of, a corporation or proposed corporation” in the 2nd to 7th lines of the definition of “prospectus” in subsection (1) and substituting the words “other document used to make an offer of securities”;
(g)by inserting, immediately after the definition of “prospectus” in subsection (1), the following definitions:
“ “recognised securities exchange” means a corporation which has been declared by the Authority, by order published in the Gazette, to be a recognised securities exchange for the purposes of this Division;
“related party” means —
(a)in relation to an entity —
(i)a director or an equivalent person of the entity;
(ii)the chief executive officer or equivalent person of the entity;
(iii)a person who controls the entity;
(iv)a related corporation;
(v)any other entity controlled by it;
(vi)any other entity controlled by the person referred to in sub-paragraph (iii); and
(vii)a related party of any individual referred to in sub-paragraph (i), (ii) or (iii); and
(b)in relation to an individual —
(i)his immediate family;
(ii)a trustee of any trust of which the individual or any member of the individual’s immediate family is —
(A)a beneficiary; or
(B)where the trust is a discretionary trust, a discretionary object,
when the trustee acts in that capacity; and
(iii)any corporation in which he and his immediate family (whether directly or indirectly) have interests in voting shares of an aggregate of not less than 30% of the total votes attached to all voting shares;”;
(h)by inserting, immediately after the definition of “replacement document” in subsection (1), the following definition:
“ “securities” means debentures or units of debentures of an entity, or shares or units of shares of a corporation;”;
(i)by inserting, immediately after the definition of “supplementary document” in subsection (1), the following definition:
“ “underlying entity”, in relation to an offer of units of shares or debentures, means the entity the shares or debentures of which are the subject of the offer;”;
(j)by deleting subsections (3) to (7) and substituting the following subsections:
(3)  For the purposes of this Division —
(a)any invitation to a person to deposit money with or to lend money to an entity shall be deemed to be an offer of debentures of the entity; and
(b)any document that is issued or intended or required to be issued by an entity acknowledging or evidencing or constituting an acknowledgment of the indebtedness of the entity in respect of any money that is or may be deposited with or lent to the entity in response to such an invitation shall be deemed to be a debenture.
(3A)  Notwithstanding subsection (3) —
(a)any invitation to a person by a prescribed entity to make a deposit with the prescribed entity is not an offer of debentures; and
(b)the following documents issued or intended or required to be issued by a prescribed entity are not debentures:
(i)any certificate of deposit;
(ii)any other document acknowledging or evidencing or constituting an acknowledgment of the indebtedness of the prescribed entity in respect of any deposit that is or may be made with the prescribed entity.
(4)  In subsections (3A) and (5) —
“deposit” has the same meaning as in section 4B(4) of the Banking Act (Cap. 19);
“prescribed entity” means —
(a)any bank licensed under the Banking Act; or
(b)any entity or any entity of a class which has been declared by the Authority, by order published in the Gazette, to be a prescribed entity for the purposes of this subsection.
(5)  The Authority may, by notice in writing —
(a)impose such conditions or restrictions on a prescribed entity as it thinks fit; and
(b)at any time vary or revoke any condition or restriction so imposed,
and the prescribed entity shall comply with every such condition or restriction imposed on it by the Authority that has not been revoked by the Authority.
(5A)  Any person who contravenes any condition or restriction imposed under subsection (5) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000 and, in the case of a continuing offence, to a further fine not exceeding $5,000 for every day or part thereof during which the offence continues after conviction.
(6)  For the purposes of this Division, a person makes an offer of any securities if, and only if, as principal —
(a)he makes (either personally or by an agent) an offer to any person in Singapore which upon acceptance would give rise to a contract for the issue or sale of those securities by him or another person with whom he has made arrangements for that issue or sale; or
(b)he invites (either personally or by an agent) any person in Singapore to make an offer which upon acceptance would give rise to a contract for the issue or sale of those securities by him or another person with whom he has made arrangements for that issue or sale.
(7)  In subsection (6), “sale” includes any disposal for valuable consideration.”; and
(k)by deleting the words “offers or invitations to the public to subscribe for or purchase shares, debentures, or units of shares or debentures,” in subsection (8) and substituting the words “offers of securities”.
Repeal and re-enactment of section 239A
43.  Section 239A of the principal Act is repealed and the following section substituted therefor:
Authority may disapply this Division to certain offers
239A.  Notwithstanding any provision to the contrary in this Division, where —
(a)an offer of securities is one to which (but for this section) both this Division and Division 2 apply; and
(b)the Authority has by order published in the Gazette declared that this Division shall not apply to that offer or a class of offers to which that offer belongs,
then this Division shall not apply to that offer.”.
Amendment of section 240
44.  Section 240 of the principal Act is amended —
(a)by deleting the words “an offer to the public of shares in or debentures of, or units of shares in or debentures of, a corporation for subscription or purchase, or an invitation to the public to subscribe for or purchase shares in or debentures of, or units of shares in or debentures of, a corporation unless such offer or invitation” in the 1st to 5th lines of subsection (1) and substituting the words “an offer of securities unless the offer”;
(b)by deleting the words “or invitation” in subsection (1)(a);
(c)by deleting sub-paragraph (ii) of subsection (1)(a) and substituting the following sub-paragraph:
(ii)a copy of which, being one that has been signed in accordance with subsection (4A), is lodged with the Authority; and”;
(d)by deleting the words “offer to the public of shares in or debentures of, or units of shares in or debentures of, a corporation for subscription or purchase, or an invitation to the public to subscribe for or purchase shares in or debentures of, or units of shares in or debentures of, a corporation,” in the 1st to 5th lines of subsection (4) and substituting the words “offer of securities”;
(e)by deleting the words “or invitation” in subsection (4)(a);
(f)by deleting paragraph (b) of subsection (4) and substituting the following paragraph:
(b)a copy of the prospectus and a copy of the profile statement, each of which has been signed in accordance with subsection (4A), are lodged with the Authority, and the prospectus is lodged no later than the profile statement;”;
(g)by deleting the words “or invitation” in subsection (4)(e);
(h)by inserting, immediately after subsection (4), the following subsections:
(4A)  The copy of a prospectus or profile statement lodged with the Authority shall be signed —
(a)where the person making the offer is the issuer —
(i)in a case where the issuer is not the government of a State, by every director or equivalent person of the issuer and every person who is named therein as a proposed director or an equivalent person of the issuer; or
(ii)in a case where the issuer is the government of a State, by an official of that government who is authorised to sign the prospectus on its behalf;
(b)where the person making the offer is an individual and is not the issuer —
(i)in a case where the issuer is not the government of a State —
(A)by that person; and
(B)if the issuer is controlled by that person, one or more of his related parties, or that person and one or more of his related parties, by every director or equivalent person of the issuer and every person who is named therein as a proposed director or an equivalent person of the issuer; or
(ii)in a case where the issuer is the government of a State, by that person;
(c)where the person making the offer is an entity (not being the government of a State) and is not the issuer —
(i)in a case where the issuer is not the government of a State —
(A)by every director or equivalent person of that entity; and
(B)if the issuer is controlled by that entity, one or more of its related parties, or that entity and one or more of its related parties, by every director or equivalent person of the issuer, and every person who is named therein as a proposed director or an equivalent person of the issuer; or
(ii)in a case where the issuer is the government of a State, by every director or equivalent person of that entity; and
(d)where the person making the offer is the government of a State and is not the issuer —
(i)in a case where the issuer is not the government of another State —
(A)by an official of the government of the State who is authorised to sign the prospectus on its behalf; and
(B)if the issuer is controlled by that government, one or more of its related parties, or that government and one or more of its related parties, by every director or every equivalent person of the issuer, and every person who is named therein as a proposed director or an equivalent person of the issuer; or
(ii)in a case where the issuer is the government of another State, by an official of the government of the first-mentioned State who is authorised to sign the prospectus on its behalf.
(4B)  A requirement under subsection (4A) for the copy of a prospectus or profile statement to be signed by a director or an equivalent person is satisfied if the copy is signed —
(a)by that director or equivalent person; or
(b)by a person who is authorised in writing by that director or equivalent person to sign on his behalf.
(4C)  A requirement under subsection (4A) for the copy of a prospectus or profile statement to be signed by a person named therein as a proposed director or an equivalent person is satisfied if the copy is signed —
(a)by that proposed director or equivalent person; or
(b)by a person who is authorised in writing by that proposed director or equivalent person to sign on his behalf.”;
(i)by deleting subsection (5) and substituting the following subsection:
(5)  No person shall make any offer of securities of an entity that has not been formed or does not exist.”;
(j)by deleting subsection (6);
(k)by deleting subsection (8) and substituting the following subsections:
(8)  The Authority may register a prospectus or a profile statement on any day between the 14th and 21st days (both days inclusive) from the date of lodgment thereof with the Authority, unless —
(a)the Authority gives to the person making the offer a notice of an opportunity to be heard under subsection (15);
(b)the Authority gives to the person making the offer a notice of an extension, in which case the Authority may, not later than 28 days from the date of lodgment of the prospectus or profile statement —
(i)register the prospectus or profile statement; or
(ii)give the person making the offer a notice of an opportunity to be heard under subsection (15);
(c)the person making the offer applies in writing to extend the period during which the prospectus or profile statement may be registered, and the Authority grants an extension as it thinks fit, in which case the Authority may, at any time up to and including the date on which the extended period ends —
(i)register the prospectus or profile statement; or
(ii)give the person making the offer a notice of an opportunity to be heard under subsection (15); or
(d)the person making the offer gives a notice in writing to the Authority to withdraw the lodgment of the prospectus or profile statement, in which case the Authority shall not register the prospectus or profile statement.
(8A)  Where, after a notice of an opportunity to be heard has been given under subsection (8)(a), (b)(ii) or (c)(ii), the Authority decides not to refuse registration of the prospectus or profile statement, the Authority may proceed with the registration on such date as it considers appropriate, except that that date shall not be earlier than the 14th day from the date of lodgment of the prospectus or profile statement with the Authority.”;
(l)by deleting subsection (9) and substituting the following subsections:
(9)  Where a prospectus lodged with the Authority is a preliminary document, the Authority shall not register the prospectus unless a copy of the prospectus which has been signed in accordance with subsection (4A) and which contains the information required to be stipulated in the prospectus under section 243, including such information which could be omitted from the preliminary document by virtue of subsection (3), has been lodged with the Authority.
(9A)  A person making an offer of securities may lodge any amendment to a prospectus or profile statement in respect of that offer at any time before, but not after, the registration of the prospectus or profile statement by the Authority.”;
(m)by deleting the words “prior to the registration of such prospectus” in subsection (10)(a);
(n)by deleting the words “prior to the registration of such profile statement” in subsection (10)(b);
(o)by deleting subsection (11) and substituting the following subsection:
(11)  Where an amendment to a prospectus or profile statement is lodged with the consent of the Authority, the prospectus or profile statement as amended shall be deemed, for the purposes of subsection (8), to have been lodged when the original prospectus or profile statement was lodged with the Authority.”;
(p)by deleting the words “the person who lodges the prospectus or profile statement and, where applicable, the translation” in the 7th to 9th lines of subsection (12) and substituting the words “the person making the offer”;
(q)by deleting the words “a copy of any prospectus” in subsection (13) and substituting the words “a prospectus”;
(r)by deleting the words “or matter” in subsection (13)(a);
(s)by deleting paragraph (c) of subsection (13) and substituting the following paragraph:
(c)the copy of the prospectus that is lodged with the Authority is not signed in accordance with subsection (4A);”;
(t)by deleting paragraph (e) of subsection (13) and substituting the following paragraphs:
(e)any written consent of an expert to the issue of the prospectus required under section 249, or a copy thereof which is verified as prescribed, is not lodged with the Authority;
(ea)any written consent of an issue manager to the issue of the prospectus required under section 249A(1), or a copy thereof which is verified as prescribed, is not lodged with the Authority;
(eb)any written consent of an underwriter to the issue of the prospectus required under section 249A(2), or a copy thereof which is verified as prescribed, is not lodged with the Authority; or”;
(u)by deleting the words “a copy of any profile statement” in subsection (14) and substituting the words “a profile statement”;
(v)by deleting the words “or matter” in subsection (14)(a);
(w)by deleting paragraph (c) of subsection (14) and substituting the following paragraphs:
(c)the copy of the profile statement that is lodged with the Authority is not signed in accordance with subsection (4A);
(ca)any written consent of an expert to the issue of the profile statement required under section 249, or a copy thereof which is verified as prescribed, is not lodged with the Authority;
(cb)any written consent of an issue manager to the issue of the profile statement required under section 249A(1), or a copy thereof which is verified as prescribed, is not lodged with the Authority;
(cc)any written consent of an underwriter to the issue of the profile statement required under section 249A(2), or a copy thereof which is verified as prescribed, is not lodged with the Authority;”; and
(x)by deleting subsections (15) to (19) and substituting the following subsections:
(15)  The Authority shall not refuse to register a prospectus under subsection (13) or a profile statement under subsection (14) without giving the person making the offer an opportunity to be heard, except that an opportunity to be heard need not be given if the refusal is on the ground that it is not in the public interest to register the prospectus or profile statement on the basis of any of the following circumstances:
(a)the person making the offer (being an entity), the issuer or, where applicable, the underlying entity is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere;
(b)the person making the offer (being an individual) is an undischarged bankrupt, whether in Singapore or elsewhere;
(c)a receiver, a receiver and 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 making the offer (being an entity), the issuer or, where applicable, the underlying entity.
(16)  Any person making an offer may, within 30 days after he is notified that the Authority has refused to register a prospectus or profile statement to which his offer relates under subsection (13) or (14), appeal to the Minister, whose decision shall be final.
(17)  If —
(a)a prospectus or profile statement is issued, circulated or distributed before it has been registered by the Authority; or
(b)an application to subscribe for or purchase securities is accepted, or securities are allotted, issued or sold, before a prospectus and, where applicable, profile statement in respect of the securities has been registered by the Authority,
the person making the offer and every person who is knowingly a party to —
(i)the issue, circulation or distribution of the prospectus or profile statement;
(ii)the acceptance of the application to subscribe for or purchase the securities; or
(iii)the allotment, issue or sale of the securities,
as the case may be, 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 2 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 thereof during which the offence continues after conviction.
(18)  This section is subject to section 240A.
(19)  For the purposes of subsections (13)(a) and (14)(a), any reference to a statement shall include a reference to any information presented, regardless of whether such information is in text or otherwise.”.
New section 240A
45.  The principal Act is amended by inserting, immediately after section 240, the following section:
Debenture issuance programme
240A.—(1)  A prospectus for every offer of debentures or units of debentures that is part of a debenture issuance programme shall comprise —
(a)a base prospectus applicable to every offer under the debenture issuance programme; and
(b)a pricing statement applicable to that particular offer.
(2)  A profile statement for every offer of debentures or units of debentures that is part of a debenture issuance programme shall comprise —
(a)an extract from, or an abridged version of, a base prospectus referred to in subsection (1)(a) (referred to in this section as a base profile statement); and
(b)a pricing statement applicable to that particular offer.
(3)  In respect of an offer referred to in subsection (1), the requirements of section 240(1)(a) (ii) and (iii) are satisfied if a copy of the base prospectus and a copy of the pricing statement, each of which is signed in accordance with section 240(4A), have been lodged with and registered by the Authority, either separately, whether on the same date or on different dates, or as a single document.
(4)  In respect of an offer referred to in subsection (2), the requirements of section 240(4)(b) and (c) are satisfied if a copy of the base profile statement and a copy of the pricing statement, each of which is signed in accordance with section 240(4A), have been lodged with and registered by the Authority, either separately, whether on the same date or on different dates, or as a single document.
(5)  For the avoidance of doubt, where the base prospectus or base profile statement in relation to a debenture issuance programme has been lodged with and registered by the Authority, it shall be treated as having been lodged with and registered by the Authority in respect of every offer under that programme.
(6)  For the purposes of the application of the provisions of this Subdivision to an offer referred to in subsection (1), a reference to a prospectus shall, unless the context otherwise requires or the Authority has prescribed otherwise, be read as a reference to both the base prospectus and the pricing statement.
(7)  For the purposes of the application of the provisions of this Subdivision to an offer referred to in subsection (2), a reference to a profile statement shall, unless the context otherwise requires or the Authority has prescribed otherwise, be read as a reference to both the base profile statement and the pricing statement.
(8)  The Authority may, by regulations, prescribe how the provisions of this Subdivision shall apply to an offer referred to in subsection (1) or (2).
(9)  For the avoidance of doubt, a pricing statement may be registered by the Authority at any time after its lodgment with the Authority.”.
Amendment of section 241
46.  Section 241 of the principal Act is amended —
(a)by deleting the words “close of the offer or invitation, the person making the offer or invitation to the public to subscribe for or purchase shares, debentures, or units of shares or debentures” in the 2nd to 4th lines of subsection (1) and substituting the words “close of the offer of securities, the person making that offer”;
(b)by deleting the words “or matter” in subsection (1)(a);
(c)by inserting, immediately after subsection (1), the following subsections:
(1A)  If, after a base prospectus or a base profile statement referred to in section 240A is registered but before the expiration of 24 months from the registration of the base prospectus by the Authority, the person making that offer intends to update any information or include any new information in the base prospectus or base profile statement, the person may lodge a supplementary or replacement document with the Authority, provided that no offer to which the base prospectus or base profile statement relates is subsisting at the time of the lodgment.
(1B)  Subsections (7) to (16) shall not apply to a supplementary or replacement document which is lodged under subsection (1A).
(1C)  For the purposes of subsection (1A), an offer shall not be treated as subsisting if —
(a)a pricing statement in respect of the offer of debentures or units of debentures has not been registered by the Authority under section 240A; or
(b)a pricing statement in respect of the offer of debentures or units of debentures has been registered by the Authority under section 240A, and —
(i)the offer has closed with no application to subscribe for or purchase the debentures or units of debentures having been received or accepted; or
(ii)one or more applications to subscribe for or purchase the debentures or units of debentures have been received or accepted, and —
(A)in a case where the debentures or units of debentures are or will be listed for quotation on a securities exchange, trading in them has commenced; or
(B)in any other case, all of those debentures or units of debentures have been issued or sold.”;
(d)by deleting the words “or invitation” in subsection (2)(c);
(e)by inserting, immediately after the words “previous supplementary document” in subsection (2)(d), the words “in relation to the offer”;
(f)by deleting subsection (5) and substituting the following subsection:
(5)  The person making the offer shall take reasonable steps —
(a)to inform potential investors of the lodgment of any supplementary or replacement document under subsection (1) or (1A); and
(b)to make available to them the supplementary document or replacement document.”;
(g)by deleting paragraphs (a) and (b) of subsection (6) and substituting the following paragraphs:
(a)where the supplementary document is a supplementary prospectus, the prospectus in relation to the offer shall be taken to be the original prospectus together with the supplementary prospectus and any previous supplementary prospectus in relation to the offer; and
(b)where the supplementary document is a supplementary profile statement, the profile statement in relation to the offer shall be taken to be the original profile statement together with the supplementary profile statement and any previous supplementary profile statement in relation to the offer.”;
(h)by deleting subsection (6A);
(i)by inserting, immediately after the words “the prospectus” in subsection (6B)(a), the words “in relation to the offer”;
(j)by inserting, immediately after the words “the profile statement” in subsection (6B)(b), the words “in relation to the offer”;
(k)by deleting the words “or invitation” in subsection (7);
(l)by deleting subsection (8) and substituting the following subsection:
(8)  Where, prior to the lodgment of the supplementary document or replacement document, applications have been made under the original prospectus or profile statement to subscribe for securities, then —
(a)where the securities have not been issued to the applicants, the person making the offer —
(i)shall —
(A)within 2 days (excluding any Saturday, Sunday or public holiday) from the date of lodgment of the supplementary document or replacement document, give the applicants notice in writing of how to obtain, or arrange to receive, a copy of the supplementary document or replacement document, as the case may be, and provide the applicants with an option to withdraw their applications; and
(B)take all reasonable steps to make available within a reasonable period the supplementary document or replacement document, as the case may be, to the applicants who have indicated that they wish to obtain, or who have arranged to receive, a copy of the supplementary document or replacement document;
(ii)shall, within 7 days from the date of lodgment of the supplementary document or replacement document, give the applicants the supplementary document or replacement document, as the case may be, and provide the applicants with an option to withdraw their applications; or
(iii)shall —
(A)treat the applications as withdrawn and cancelled, in which case the applications shall be deemed to have been withdrawn and cancelled; and
(B)within 7 days from the date of lodgment of the supplementary document or replacement document, pay to the applicants all moneys the applicants have paid on account of their applications for the securities; or
(b)where the securities have been issued to the applicants, the person making the offer —
(i)shall —
(A)within 2 days (excluding any Saturday, Sunday or public holiday) from the date of lodgment of the supplementary document or replacement document, give the applicants notice in writing of how to obtain, or arrange to receive, a copy of the supplementary document or replacement document, as the case may be, and provide the applicants with an option to return, to the person making the offer, those securities which they do not wish to retain title in; and
(B)take all reasonable steps to make available within a reasonable period the supplementary document or replacement document, as the case may be, to the applicants who have indicated that they wish to obtain, or who have arranged to receive, a copy of the supplementary document or replacement document;
(ii)shall, within 7 days from the date of lodgment of the supplementary document or replacement document, give the applicants the supplementary document or replacement document, as the case may be, and provide the applicants with an option to return, to the person making the offer, those securities which they do not wish to retain title in; or
(iii)shall —
(A)treat the issue of the securities as void, in which case the issue shall be deemed void; and
(B)within 7 days from the date of lodgment of the supplementary document or replacement document, pay to the applicants all moneys paid by them for the securities.”;
(m)by deleting subsections (10) to (14) and substituting the following subsections:
(10)  An applicant who wishes to exercise his option under subsection (8)(a)(i) or (ii) to withdraw his application shall, within 14 days from the date of lodgment of the supplementary document or replacement document, notify the person making the offer of this, whereupon that person shall, within 7 days from the receipt of such notification, pay to the applicant all moneys paid by the applicant on account of his application for the securities.
(11)  An applicant who wishes to exercise his option under subsection (8)(b)(i) or (ii) to return securities issued to him shall, within 14 days from the date of lodgment of the supplementary document or replacement document, notify the person making the offer of this and return all documents, if any, purporting to be evidence of title to those securities to that person, whereupon that person shall, within 7 days from the receipt of such notification and documents, if any, pay to the applicant all moneys paid by the applicant for the securities, and the issue of those securities shall be deemed to be void.
(12)  Where, prior to the lodgment of the supplementary document or replacement document, applications have been made under the original prospectus or profile statement to purchase securities, then —
(a)where the securities have not been transferred to the applicants, the person making the offer —
(i)shall —
(A)within 2 days (excluding any Saturday, Sunday or public holiday) from the date of lodgment of the supplementary document or replacement document, give the applicants notice in writing of how to obtain, or arrange to receive, a copy of the supplementary document or replacement document, as the case may be, and provide the applicants with an option to withdraw their applications; and
(B)take all reasonable steps to make available within a reasonable period the supplementary document or replacement document, as the case may be, to the applicants who have indicated that they wish to obtain, or who have arranged to receive, a copy of the supplementary document or replacement document;
(ii)shall, within 7 days from the date of lodgment of the supplementary document or replacement document, give the applicants the supplementary document or replacement document, as the case may be, and provide the applicants with an option to withdraw their applications; or
(iii)shall —
(A)treat the applications as withdrawn and cancelled, in which case the applications shall be deemed to have been withdrawn and cancelled; and
(B)within 7 days from the date of lodgment of the supplementary document or replacement document, pay to the applicants all moneys the applicants have paid on account of their applications for the securities; or
(b)where the securities have been transferred to the applicants, the person making the offer —
(i)shall —
(A)within 2 days (excluding any Saturday, Sunday or public holiday) from the date of lodgment of the supplementary document or replacement document, give the applicants notice in writing of how to obtain, or arrange to receive, a copy of the supplementary document or replacement document, as the case may be, and provide the applicants with an option to return, to the person making the offer, those securities which they do not wish to retain title in; and
(B)take all reasonable steps to make available within a reasonable period the supplementary document or replacement document, as the case may be, to the applicants who have indicated that they wish to obtain, or who have arranged to receive, a copy of the supplementary document or replacement document;
(ii)shall, within 7 days from the date of lodgment of the supplementary document or replacement document, give the applicants the supplementary document or replacement document, as the case may be, and provide the applicants with an option to return, to the person making the offer, those securities which they do not wish to retain title in; or
(iii)shall treat the sale of the securities as void, in which case the sale shall be deemed void, and shall —
(A)if documents purporting to evidence title to the securities (referred to in this paragraph as the title documents) have been issued to the applicants —
(AA)within 7 days from the date of lodgment of the supplementary document or replacement document, inform the applicants to return the title documents to the person making the offer within 14 days from the date of lodgment of the supplementary document or replacement document; and
(AB)within 7 days from the date of receipt of the title documents or the date of lodgment of the supplementary document or replacement document, whichever is the later, pay to the applicants all moneys paid by them for the securities; or
(B)if no title documents have been issued to the applicants, within 7 days from the date of the lodgment of the supplementary document or replacement document, pay to the applicants all moneys paid by them for the securities.
(13)  An applicant who wishes to exercise his option under subsection (12)(a)(i) or (ii) to withdraw his application shall, within 14 days from the date of lodgment of the supplementary document or replacement document, notify the person making the offer of this, whereupon that person shall, within 7 days of the receipt of such notification, pay to the applicant all moneys paid by him on account of his application for the securities.
(14)  An applicant who wishes to exercise his option under subsection (12)(b)(i) or (ii) to return securities sold to him shall, within 14 days from the date of lodgment of the supplementary document or replacement document, notify the person making the offer of this and return all documents, if any, purporting to evidence title to those securities to the person making the offer, whereupon that person shall, within 7 days from the receipt of such notification and documents, if any, pay to the applicant all moneys paid by him for the securities and the sale of the securities shall be deemed to be void.”; and
(n)by inserting, immediately after subsection (16), the following subsection:
(17)  For the purposes of subsection (1)(a), the reference to a statement shall include a reference to any information presented, regardless of whether such information is in text or otherwise.”.
Amendment of section 242
47.  Section 242 of the principal Act is amended —
(a)by deleting the words “or matter” in subsection (1)(a);
(b)by deleting the words “person who lodged the prospectus direct that no or no further shares or debentures, or units of shares or debentures to which the prospectus relates” in the 12th to 14th lines of subsection (1) and substituting the words “person making the offer of securities to which the prospectus relates direct that no or no further securities”;
(c)by deleting the words “or matter” in subsection (2)(a);
(d)by deleting the words “person who lodged the profile statement, direct that no or no further shares or debentures, or units of shares or debentures to which the profile statement relates” in the 14th to 17th lines of subsection (2) and substituting the words “person making the offer of securities to which the profile statement relates direct that no or no further securities”;
(e)by deleting subsection (3) and substituting the following subsection:
(3)  Notwithstanding subsections (1) and (2), the Authority shall not serve a stop order if any of the securities to which the prospectus or profile statement relates has been issued or sold, and listed for quotation on a securities exchange and trading in them has commenced.”;
(f)by deleting the words “person who lodged the prospectus or profile statement” in the 2nd and 3rd lines of subsection (4) and substituting the words “person making the offer”;
(g)by deleting paragraph (a) of subsection (4) and substituting the following paragraphs:
(a)the person making the offer (being an entity), the issuer or, where applicable, the underlying entity is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere;
(aa)the person making the offer (being an individual) is an undischarged bankrupt, whether in Singapore or elsewhere;”;
(h)by deleting the words “that corporation” in subsection (4)(b) and substituting the words “the person making the offer (being an entity), the issuer or, where applicable, the underlying entity”;
(i)by deleting subsection (5) and substituting the following subsection:
(5)  Where applications to subscribe for securities to which the prospectus or profile statement relates have been made prior to the stop order, then —
(a)where the securities have not been issued to the applicants —
(i)the applications shall be deemed to have been withdrawn and cancelled; and
(ii)the person making the offer shall, within 14 days from the date of the stop order, pay to the applicants all moneys the applicants have paid on account of their applications for the securities; or
(b)where the securities have been issued to the applicants —
(i)the issue of the securities shall be deemed to be void; and
(ii)the person making the offer shall, within 14 days from the date of the stop order, pay to the applicants all moneys paid by them for the securities.”;
(j)by deleting subsection (7) and substituting the following subsection:
(7)  Where applications to purchase securities to which the prospectus or profile statement relates have been made prior to the stop order, then —
(a)where the securities have not been transferred to the applicants —
(i)the applications shall be deemed to have been withdrawn and cancelled; and
(ii)the person making the offer shall, within 14 days from the date of the stop order, pay to the applicants all moneys the applicants have paid on account of their applications for the securities; or
(b)where the securities have been transferred to the applicants, the sale shall be deemed to be void, and the person making the offer shall —
(i)if documents purporting to evidence title to the securities have been issued to the applicants —
(A)within 7 days from the date of the stop order, inform the applicants to return such documents to the person making the offer within 14 days from that date; and
(B)within 7 days from the date of the receipt of those documents or the date of the stop order, whichever is the later, pay to the applicants all moneys paid by them for the securities; or
(ii)if no such documents have been issued to the applicants, within 7 days from the date of the stop order, pay to the applicants all moneys paid by them for the securities.”;
(k)by deleting the words “the person who lodged the prospectus or profile statement directing that no or no further shares in or debentures of, or units of shares in or debentures of, a corporation” in subsection (8) and substituting the words “the person making the offer directing that no or no further securities”; and
(l)by inserting, immediately after subsection (12), the following subsection:
(13)  For the purposes of subsections (1)(a) and (2)(a), any reference to a statement shall include a reference to any information presented, regardless of whether such information is in text or otherwise.”.
Amendment of section 243
48.  Section 243 of the principal Act is amended —
(a)by deleting the words “an offer to the public of shares in or debentures of, or units of shares in or debentures of, a corporation for subscription or purchase, or for an invitation to the public to subscribe for or purchase shares in or debentures of, or units of shares in or debentures of, a corporation” in subsection (1) and substituting the words “an offer of securities”;
(b)by deleting subsection (3) and substituting the following subsection:
(3)  The matters referred to in subsection (1)(a) shall relate to —
(a)the rights and liabilities attaching to the securities;
(b)the assets and liabilities, profits and losses, financial position and performance, and prospects of the issuer;
(c)if the underlying entity is controlled by —
(i)the person making the offer;
(ii)one or more of the related parties of the person making the offer; or
(iii)the person making the offer and one or more of his related parties,
the assets and liabilities, profits and losses, financial position and performance, and prospects of that entity; and
(d)in the case of an offer of units of shares or debentures, where the person making the offer, or an entity which is controlled by —
(i)the person making the offer;
(ii)one or more of the related parties of the person making the offer; or
(iii)the person making the offer and one or more of his related parties,
is or will be required to issue or deliver the relevant securities, or to meet financial or contractual obligations to the holders of those units, the capacity of that person or entity to issue or deliver the relevant securities, or the ability of that person or entity to meet those financial or contractual obligations.”;
(c)by deleting paragraph (a) of subsection (4) and substituting the following paragraph:
(a)the nature of the securities and the nature of the entity concerned;”;
(d)by deleting the words “subsection (2)” in subsection (5) and substituting the words “subsection (2)(b)”;
(e)by deleting paragraphs (a), (b), (c) and (d) of subsection (5) and substituting the following paragraphs:
(a)the person making the offer;
(b)if the person making the offer is an entity, a director or an equivalent person of the entity;
(c)the issuer;
(d)a director or an equivalent person, or a proposed director or an equivalent person, of the issuer;
(da)a person named in the prospectus with his consent as an underwriter to the issue or sale;”; and
(f)by deleting the words “shares in or debentures of, or units of shares in or debentures of, a corporation” in subsection (6) and substituting the word “securities”.
Amendment of section 245
49.  Section 245 of the principal Act is amended —
(a)by deleting the words “A corporation or other entity shall not accept or retain subscriptions to a debenture issue in excess of the amount of the issue as disclosed in the prospectus unless the corporation or entity” in the 1st to 3rd lines of subsection (1) and substituting the words “An entity shall not accept or retain subscriptions to a debenture issue in excess of the amount of the issue as disclosed in the prospectus unless the entity”;
(b)by deleting subsection (2) and substituting the following subsection:
(2)  Subject to regulations made by the Authority for the purposes of this subsection, where an entity specifies in a prospectus relating to a debenture issue that it reserves the right to accept or retain over-subscriptions —
(a)the entity shall not make, authorise or permit any statement of or reference as to the asset-backing for the issue to be made or contained in any prospectus relating to the issue, other than a statement or reference to the total tangible assets and the total liabilities of the entity and of its guarantor entities; and
(b)the prospectus shall contain a statement or reference as to what the total assets and total liabilities of the entity would be if over-subscriptions to the limit specified in the prospectus were accepted or retained.”; and
(c)by deleting the words “corporation or other entity or other person that contravenes subsection (2)” in subsection (3) and substituting the words “entity or other person that contravenes subsection (1) or (2)”.
Amendment of section 246
50.  Section 246 of the principal Act is amended —
(a)by deleting the words “offer to the public of shares in or debentures of, or units of shares in or debentures of, a corporation for subscription or purchase, or an invitation to the public to subscribe for or purchase shares in or debentures of, or units of shares in or debentures of, a corporation” in the 1st to 5th lines of subsection (1) and substituting the words “offer of securities”;
(b)by deleting paragraph (a) of subsection (1) and substituting the following paragraph:
(a)the following particulars:
(i)identification of the person making the offer and, where the person making the offer is not the issuer, the issuer and, where applicable, the underlying entity;
(ii)identification of the persons signing the profile statement;
(iii)the nature of the securities;
(iv)the nature of the risks involved in investing in the securities;
(v)details of all amounts payable in respect of the securities (including any amount by way of fee, commission or charge);”;
(c)by deleting paragraph (c) of subsection (1) and substituting the following paragraph:
(c)a statement that the persons referred to in section 240(4A) who have signed the profile statement are satisfied that the profile statement contains a fair summary of the key information in the prospectus.”;
(d)by deleting the words “or matter” in subsection (2)(a); and
(e)by inserting, immediately after subsection (2), the following subsection:
(3)  For the purposes of subsection (2)(a), the reference to a statement shall include a reference to any information presented, regardless of whether such information is in text or otherwise.”.
Amendment of section 248
51.  Section 248 of the principal Act is amended —
(a)by deleting the word “corporations” in subsection (1) and in the section heading and substituting in each case the word “entities”;
(b)by deleting the word “corporation” wherever it appears in subsections (2), (4) and (5) and substituting in each case the word “entity”;
(c)by deleting the words “section 240(1)(a) (ii), (4)(b), (13)(c) and (14)(c)” in subsection (2) and substituting the words “section 240(1)(a) (ii), (4)(b), (4A), (13)(c) and (14)(c)”;
(d)by inserting, immediately after the word “directors” in subsection (3) and in the section heading, the words “or equivalent persons”; and
(e)by inserting, immediately after the word “director” in subsection (4), the words “or equivalent person”.
Amendment of section 249
52.  Section 249 of the principal Act is amended —
(a)by deleting subsection (1) and substituting the following subsections:
(1)  Where an offer of securities is made in or accompanied by a prospectus or profile statement which includes a statement purporting to be made by, or based on a statement made by, an expert, the prospectus or profile statement shall not be issued unless —
(a)the expert has given, and has not before the registration of the prospectus or profile statement, as the case may be, withdrawn his written consent to the issue thereof with the statement included in the form and context in which it is included; and
(b)there appears in the prospectus or profile statement, as the case may be, a statement that the expert has given and has not withdrawn his consent.
(1A)  Every person making the offer shall cause a true copy of every written consent referred to in subsection (1) to be deposited, within 7 days after the registration of the prospectus or profile statement, at the registered office of the issuer in Singapore or, if the issuer has no registered office in Singapore, at the address in Singapore specified in the prospectus for that purpose.
(1B)  Every issuer shall keep, and make available for inspection by its members and creditors and persons who have subscribed for or purchased the securities to which the prospectus or profile statement relates, without payment of any fee, a true copy of every written consent deposited in accordance with subsection (1A) for a period of at least 6 months after the registration of the prospectus or profile statement.”;
(b)by deleting the words “If any prospectus is issued in contravention of subsection (1), the corporation” in subsection (2) and substituting the words “If any prospectus or profile statement is issued in contravention of subsection (1), the person making the offer”;
(c)by deleting the words “prospectus or class or description of prospectuses” in subsection (3) and substituting the words “prospectus or profile statement or class or description of prospectuses or profile statements”; and
(d)by inserting, immediately after the word “prospectus” in the section heading, the words “or profile statement”.
New section 249A
53.  The principal Act is amended by inserting, immediately after section 249, the following section:
Consent of issue manager and underwriter to being named in prospectus or profile statement
249A.—(1)  Where an offer of securities is made in or accompanied by a prospectus or profile statement in which a person is named as the issue manager to the offer, the prospectus or profile statement shall not be issued unless —
(a)the person has given, and has not before the registration of the prospectus or profile statement, as the case may be, withdrawn his written consent to being named in the prospectus or profile statement as issue manager to that offer; and
(b)there appears in the prospectus or profile statement, as the case may be, a statement that the person has given and has not withdrawn his consent.
(2)  Where an offer of securities is made in or accompanied by a prospectus or profile statement in which a person is named as the underwriter (but not a sub-underwriter) to the offer, the prospectus or profile statement shall not be issued unless —
(a)the person has given, and has not before the registration of the prospectus or profile statement, as the case may be, withdrawn his written consent to being named in the prospectus or profile statement as underwriter to that offer; and
(b)there appears in the prospectus or profile statement, as the case may be, a statement that the person has given and has not withdrawn such consent.
(3)  If any prospectus or profile statement is issued in contravention of subsection (1) or (2), the person making the offer and every person who is knowingly a party to the issue thereof 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 12 months or to both and, in the case of a continuing offence, to a further fine not exceeding $5,000 for every day or part thereof during which the offence continues after conviction.
(4)  Every person making the offer shall cause a true copy of every written consent referred to in subsections (1) and (2) to be deposited, within 7 days after the registration of the prospectus or profile statement, at the registered office of the issuer in Singapore or, if it has no registered office in Singapore, at the address in Singapore specified in the prospectus for that purpose.
(5)  Every issuer shall keep, and make available for inspection by its members and creditors and persons who have subscribed for or purchased the securities to which the prospectus or profile statement relates, without payment of any fee, a true copy of every written consent deposited in accordance with subsection (4) for a period of at least 6 months after the registration of the prospectus or profile statement.”.
Repeal and re-enactment of section 250
54.  Section 250 of the principal Act is repealed and the following section substituted therefor:
Duration of validity of prospectus and profile statement
250.—(1)  No person shall make an offer of securities, or allot, issue or sell any securities, on the basis of a prospectus or profile statement after the expiration of the period referred to in subsection (3).
(2)  In a case where an entity makes an offer of securities or where the securities being offered are those issued by an entity or a proposed entity, no officer or equivalent person or promoter of the entity or proposed entity shall authorise or permit —
(a)the offer of those securities; or
(b)the allotment, issue or sale of those securities,
on the basis of a prospectus or profile statement after the expiration of the period referred to in subsection (3).
(3)  The period under subsection (1) or (2) is —
(a)in a case where the securities are debentures or units of debentures issued under a debenture issuance programme under section 240A, 24 months from the date of registration by the Authority of the base prospectus in relation to such offer, allotment, issue or sale; or
(b)in any other case, 6 months from the date of registration by the Authority of the prospectus in relation to such offer, allotment, issue or sale.
(4)  If default is made in complying with subsection (1) or (2), the person and, in the case of an entity or a proposed entity, every officer or equivalent person or promoter of the entity or proposed entity 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 12 months or to both and, in the case of a continuing offence, to a further fine not exceeding $5,000 for every day or part thereof during which the offence continues after conviction.
(5)  An allotment, an issue or a sale of securities that is made in contravention of subsection (1) or (2) shall not, by reason only of that fact, be voidable or void.”.
Amendment of section 251
55.  Section 251 of the principal Act is amended —
(a)by deleting subsection (1) and substituting the following subsection:
(1)  If a prospectus is required for an offer or intended offer of securities, a person shall not —
(a)advertise the offer or intended offer; or
(b)publish a statement that —
(i)directly or indirectly refers to the offer or intended offer; or
(ii)is reasonably likely to induce persons to subscribe for or purchase the securities,
unless the advertisement or publication is authorised by this section.”;
(b)by deleting paragraphs (a) and (b) of subsection (2) and substituting the following paragraphs:
(a)indirectly refers to an offer or intended offer of securities; or
(b)is reasonably likely to induce persons to subscribe for or purchase securities,”;
(c)by deleting the words “a corporation’s” in subsection (2) (i) and substituting the words “an entity’s”;
(d)by deleting the word “corporation” in subsection (2) (ii) and substituting the word “entity”;
(e)by deleting the words “to persons specified in sections 274 and 275” in the 4th line of subsection (3) and substituting the words “to institutional investors, relevant persons as defined in section 275(2) or persons to whom an offer referred to in section 275(1A) is to be made”;
(f)by deleting sub-paragraph (i) of subsection (3)(a) and substituting the following sub-paragraph:
(i)the following statement:
This is a preliminary document and is subject to further amendments and completion in the prospectus to be registered by the Monetary Authority of Singapore.”.
(g)by deleting sub-paragraph (iii) of subsection (3)(a) and substituting the following sub-paragraph:
(iii)a statement in bold lettering that no offer or agreement shall be made on the basis of the preliminary document to purchase or subscribe for any securities to which the preliminary document relates;”;
(h)by deleting paragraph (b) of subsection (3) and substituting the following paragraph:
(b)the preliminary document does not contain or have attached to it any form of application that will facilitate the making by any person of an offer of the securities to which the preliminary document relates, or the acceptance of such an offer by any person; and”;
(i)by deleting the words “to persons specified in sections 274 and 275” in subsection (4) and substituting the words “to institutional investors, relevant persons as defined in section 275(2) or persons to whom an offer referred to in section 275(1A) is to be made”;
(j)by inserting, immediately after the words “registered by the Authority” in subsection (5), the words “under section 240”;
(k)by deleting paragraphs (a) to (d) of subsection (6) and substituting the following paragraphs:
(a)a statement that identifies the securities, the person making the offer, the issuer and, where applicable, the underlying entity;
(b)a statement that a prospectus or profile statement for the offer will be made available when the offer is made;
(c)a statement that anyone wishing to acquire the securities will need to make an application in the manner set out in the prospectus or profile statement; and
(d)a statement of how to obtain, or arrange to receive, a copy of the prospectus or profile statement.”;
(l)by deleting subsections (8) and (9) and substituting the following subsections:
(8)  After a prospectus or profile statement is registered with the Authority, an advertisement or a publication does not contravene subsection (1) if —
(a)it includes a statement that the prospectus or profile statement in respect of the offer of securities is available for collection at the times and places specified in the statement;
(b)it includes a statement that anyone wishing to acquire the securities will need to make an application in the manner set out in the prospectus or profile statement; and
(c)it does not contain any information that is not included in the prospectus or profile statement.
(9)  An advertisement or a publication does not contravene subsection (1) if it —
(a)consists solely of a disclosure, notice or report required under this Act, or any listing rules or other requirements of a securities exchange, futures exchange or recognised securities exchange made by any person;
(b)consists solely of a notice or report of a general meeting or proposed general meeting of the person making the offer, the issuer, the underlying entity or any entity, or a presentation of oral or written material on matters so contained in the notice or report at the general meeting;
(c)consists solely of a report about the issuer or the underlying entity that is published by the person making the offer, the issuer or the underlying entity, which —
(i)does not contain information that materially affects the affairs of the issuer or underlying entity other than information previously made available in a prospectus that has been registered by the Authority, an annual report or a disclosure, notice or report referred to in paragraph (a) or (b); and
(ii)does not refer (directly or indirectly) to the offer or intended offer;
(d)consists solely of a statement made by the person making the offer, the issuer or the underlying entity that a prospectus or profile statement in respect of the offer or intended offer has been lodged with the Authority;
(e)is a news report, or a genuine comment, by a person other than any person referred to in paragraph (f)(i), (ii), (iii) or (iv), in a newspaper, periodical or magazine or on radio, television or any other means of broadcasting or communication, relating to —
(i)a prospectus or profile statement that has been lodged with the Authority or information contained in such a prospectus or profile statement;
(ii)a disclosure, notice or report referred to in paragraph (a);
(iii)a notice, report, presentation, general meeting or proposed general meeting referred to in paragraph (b);
(iv)a report referred to in paragraph (c);
(f)is a report about the securities which are the subject of the offer or intended offer, published by someone who is not —
(i)the person making the offer, the issuer or the underlying entity;
(ii)a director or an equivalent person of the person making the offer, the issuer or the underlying entity;
(iii)a person who has an interest in the success of the issue or sale of the securities; or
(iv)a person acting at the instigation of, or by arrangement with, any person referred to in sub-paragraph (i), (ii) or (iii);
(g)is a report about the securities which are the subject of the offer or intended offer, published and delivered to any institutional investor not later than 14 days prior to the date of lodgment of the prospectus, provided that —
(i)the offer is also made or will also be made in one or more other countries;
(ii)the publication and delivery of such report in that other country or any one of those other countries do not infringe any law, code or other requirement of that country;
(iii)the report and the manner of its publication and delivery in Singapore comply with such other requirements as may be prescribed by the Authority; and
(iv)the person issuing the report complies with such requirements as may be prescribed by the Authority; or
(h)is a publication made by the person making the offer, the issuer or the underlying entity solely to correct or provide clarification on any erroneous or inaccurate information or comment contained in —
(i)an earlier news report or a genuine comment referred to in paragraph (e); or
(ii)an earlier publication published in the ordinary course of business of publishing a newspaper, periodical or magazine, or of broadcasting by radio, television or any other means of broadcasting or communication, referred to in subsection (10),
provided that the first-mentioned publication does not contain any material information that is not included in the prospectus.”;
(m)by deleting the words “Subsection (9)(d) and (e)” in subsection (11) and substituting the words “Subsection (9)(e) and (f)”;
(n)by deleting the words “and, in the case of a corporation, every officer or other person, who knowingly authorised or permitted the publication or dissemination,” in subsection (12) and substituting the words “or who knowingly authorised or permitted the publication or dissemination in contravention of subsection (1)”; and
(o)by inserting, immediately after subsection (15), the following subsections:
(16)  For the purposes of this section, any reference to publishing a statement shall be construed as including a reference to making a statement, whether oral or written, which is reasonably likely to be published.
(17)  For the purposes of subsections (1) and (2), any reference to a statement shall include a reference to any information present, regardless of whether such information is in text or otherwise.
(18)  For the purposes of subsection (2) (ii), the reference to affairs of the entity shall —
(a)in the case where the entity is a corporation, be construed as including a reference to the matters referred to in section 2(2); and
(b)in any other case, be construed as a reference to such matters as may be prescribed by the Authority.
(19)  For the purposes of subsection (9)(c)(i), the reference to affairs of the issuer or underlying entity shall —
(a)in the case where the issuer or underlying entity is a corporation, be construed as including a reference to the matters referred to in section 2(2); and
(b)in any other case, be construed as a reference to such matters as may be prescribed by the Authority.”.
Amendment of section 252
56.  Section 252 of the principal Act is amended —
(a)by deleting the words “offer of shares, debentures, or units of shares or debentures, for subscription or purchase, or the invitation to subscribe for or purchase shares, debentures, or units of shares or debentures, as soon as practicable, if he becomes aware at any time after the prospectus or profile statement is registered by the Authority but before the close of the offer or invitation” in subsection (1) and substituting the words “offer of securities, as soon as practicable, if he becomes aware at any time after the prospectus or profile statement is registered by the Authority but before the close of the offer”;
(b)by deleting the words “or matter” in subsection (1)(a);
(c)by inserting, immediately after subsection (2), the following subsection:
(3)  For the purposes of subsection (1)(a), any reference to a statement shall include a reference to any information presented, regardless of whether such information is in text or otherwise.”; and
(d)by deleting the words “or invitation” in the section heading.
Amendment of section 253
57.  Section 253 of the principal Act is amended —
(a)by deleting the words “offer to the public of shares in or debentures of, or units of shares in or debentures of, a corporation for subscription or purchase, or an invitation to the public to subscribe for or purchase shares in or debentures of, or units of shares in or debentures of, a corporation is made in or is accompanied by a prospectus or profile statement” in the 1st to 6th lines of subsection (1) and substituting the words “offer of securities is made in or accompanied by a prospectus or profile statement, or, in the case of an offer referred to in section 280, where a prospectus or profile statement is prepared and issued in relation to the offer,”;
(b)by deleting the words “or matter” in subsection (1)(a);
(c)by deleting the words “the shares or debentures, or units of shares or debentures” in subsection (1)(a)(ii) and substituting the words “the securities”;
(d)by deleting paragraphs (a) to (f) of subsection (4) and substituting the following paragraphs:
(a)the person making the offer;
(b)where the person making the offer is an entity —
(i)each director or equivalent person of the entity; and
(ii)if the entity is also the issuer, each person who is, and who has consented to be, named in the prospectus or profile statement as a proposed director or an equivalent person of the entity;
(c)where the issuer is controlled by the person making the offer, one or more of the related parties of the person making the offer, or the person making the offer and one or more of his related parties —
(i)the issuer;
(ii)each director or equivalent person of the issuer; and
(iii)each person who is, and who has consented to be, named in the prospectus or profile statement as a proposed director or an equivalent person of the issuer;
(d)an issue manager to the offer of the securities who is, and who has consented to be, named in the prospectus or profile statement, if —
(i)he intentionally or recklessly makes the false or misleading statement or omits to state the information or circumstance;
(ii)knowing that the statement in the prospectus or profile statement is false or misleading or that the information or circumstance has been omitted, he fails to take such remedial action as is appropriate in the circumstances without delay; or
(iii)he is reckless as to whether the statement is false or misleading or whether the information or circumstance has been included;
(e)an underwriter (but not a sub-underwriter) to the issue or sale of the securities who is, and who has consented to be, named in the prospectus or profile statement, if —
(i)he intentionally or recklessly makes the false or misleading statement or omits to state the information or circumstance;
(ii)knowing that the statement is false or misleading or that the information or circumstance has been omitted, he fails to take such remedial action as is appropriate in the circumstances without delay; or
(iii)he is reckless as to whether the statement is false or misleading or whether the information or circumstance has been included;
(f)a person named in the prospectus or the profile statement with his consent as having made —
(i)the statement that is false or misleading, if he intentionally or recklessly makes that statement; or
(ii)a statement on which the false or misleading statement is based, if he knows that the second-mentioned statement is false or misleading and fails to take immediate steps to withdraw his consent,
but only in respect of the inclusion of the false or misleading statement; and
(g)any other person who intentionally or recklessly makes the false or misleading statement, or omits to state the information or circumstance, as the case may be, but only in respect of the inclusion of the statement or the omission to state the information or circumstance, as the case may be.”; and
(e)by deleting subsection (5) and substituting the following subsections:
(5)  For the purposes of subsection (4) and this subsection —
(a)remedial action includes any of the following:
(i)preventing the statement from being included, or having the information or circumstance included, in the prospectus or profile statement, as the case may be;
(ii)procuring the lodgment of a supplementary or replacement prospectus under section 241; and
(b)a person is reckless as to the matter referred to in subsection (4)(d)(iii) or (e)(iii) if, having been put upon inquiry that the statement to be, or which has been, included in the prospectus or profile statement is likely to be false or misleading, that the information or circumstance is likely to be required to be included in that document, or that there is likely to be an omission to state the information or circumstance in that document, he fails to —
(i)make all inquiries as are reasonable in the circumstances to verify this; and
(ii)take such remedial action as is appropriate in the circumstances without delay, if such action is warranted by the outcome of the inquiries.
(6)  For the purposes of this section, any reference to a statement shall include a reference to any information presented, regardless of whether such information is in text or otherwise.”.
Amendment of section 254
58.  Section 254 of the principal Act is amended —
(a)by deleting the words “offer to the public of shares in or debentures of, or units of shares in or debentures of, a corporation for subscription or purchase, or an invitation to the public to subscribe for or purchase shares in or debentures of, or units of shares in or debentures of, a corporation is made in or accompanied by a prospectus or profile statement” in the 1st to 6th lines of subsection (1) and substituting the words “offer of securities is made in or accompanied by a prospectus or profile statement, or, in the case of an offer referred to in section 280, where a prospectus or profile statement is prepared and issued in relation to the offer,”;
(b)by deleting the words “or matter” in subsection (1)(a);
(c)by deleting the words “the shares or debentures, or units of shares or debentures” in subsection (1)(a)(ii) and substituting the words “the securities”;
(d)by deleting paragraphs (a) to (d) of subsection (3) and substituting the following paragraphs:
(a)the person making the offer;
(b)where the person making the offer is an entity —
(i)each director or equivalent person of the entity; and
(ii)if the entity is also the issuer, each person who is, and who has consented to be, named in the prospectus or profile statement as a proposed director or an equivalent person of the entity;
(c)where the issuer is controlled by the person making the offer, one or more of the related parties of the person making the offer, or the person making the offer and one or more of his related parties —
(i)the issuer;
(ii)each director or equivalent person of the issuer; and
(iii)each person who is, and who has consented to be, named in the prospectus or the profile statement as a proposed director or an equivalent person of the issuer;
(d)an issue manager to the offer of the securities who is, and who has consented to be, named in the prospectus or the profile statement;
(da)an underwriter (but not a sub-underwriter) to the issue or sale of the securities who is, and who has consented to be, named in the prospectus or the profile statement;”; and
(e)by deleting subsection (4) and substituting the following subsections:
(4)  A person who acquires securities as a result of an offer that was made in or accompanied by a profile statement is taken to have acquired the securities in reliance on both the profile statement and the prospectus for the offer.
(4A)  For the purposes of this section, any reference to a statement shall include a reference to any information presented, regardless of whether such information is in text or otherwise.”.
Amendment of section 255
59.  Section 255 of the principal Act is amended —
(a)by deleting the words “is not liable under section 253(1) or 254 (1)” in subsection (1) and substituting the words “referred to in section 253(4)(a), (b) or (c) is not liable under section 253(1), and a person referred to in section 254(3) is not liable under section 254(1),”;
(b)by deleting the words “or matter” in subsection (1);
(c)by deleting the words “is not liable under section 253(1) or 254 (1)” in subsection (2) and substituting the words “referred to in section 253(4)(a), (b) or (c) is not liable under section 253(1), and a person referred to in section 254(3) is not liable under section 254(1),”;
(d)by deleting paragraph (a) of subsection (3) and substituting the following paragraph:
(a)if the person is an entity, someone other than —
(i)a director or an equivalent person; or
(ii)an employee or agent,
of the entity; or”;
(e)by deleting subsection (4) and substituting the following subsection:
(4)  For the purposes of subsection (3), a person is not the agent of an entity or individual merely because he performs a particular professional or advisory function for the entity or individual.”;
(f)by deleting paragraph (a) of subsection (5) and substituting the following paragraph:
(a)a proposed director or an equivalent person of the issuer, or an issue manager or underwriter;”; and
(g)by inserting, immediately after subsection (6), the following subsection:
(7)  For the purposes of this section, any reference to a statement shall include a reference to any information presented, regardless of whether such information is in text or otherwise.”.
Repeal of section 256
60.  Section 256 of the principal Act is repealed.
Amendment of section 257
61.  Section 257 of the principal Act is amended —
(a)by deleting subsection (1) and substituting the following subsection:
(1)  Subsection (2) applies where —
(a)an entity allots or agrees to allot to any person any securities of the entity with a view to all or any of them being subsequently offered for sale to another person; and
(b)such offer (referred to in this section as a subsequent offer) does not qualify for an exemption under Subdivision (4) of this Division (other than section 280).”;
(b)by deleting the words “offer for sale to the public is made shall for all purposes be deemed to be a prospectus issued by the corporation” in the 1st to 3rd lines of subsection (2) and substituting the words “subsequent offer is made shall for all purposes be deemed to be a prospectus issued by the entity, and the entity shall for all purposes be deemed to be the person making the offer,”;
(c)by deleting paragraphs (a) and (b) of subsection (2) and substituting the following paragraphs:
(a)an offer of securities has been made; and
(b)persons accepting the subsequent offer in respect of any securities were subscribers therefor,”;
(d)by deleting the words “by whom the offer is made” in the 12th and 13th lines of subsection (2) and substituting the words “making the subsequent offer”;
(e)by deleting subsections (3), (4) and (5) and substituting the following subsections:
(3)  For the purposes of this Act, it shall, unless the contrary is proved, be sufficient evidence that an allotment of, or an agreement to allot, securities was made with a view to the securities being subsequently offered for sale if it is shown —
(a)that an offer of the securities or of any of them for sale was made within 6 months after the allotment or agreement to allot; or
(b)that at the date when the offer was made the whole consideration to be received by the entity in respect of the securities had not been so received.
(4)  The requirements of this Division as to prospectuses shall have effect as though the persons making the subsequent offer were persons named in the prospectus as directors or equivalent persons of the entity.
(5)  In addition to complying with the other requirements of this Division, the document making the subsequent offer shall state —
(a)the net amount of the consideration received or to be received by the entity in respect of the securities being offered; and
(b)the place and time at which a copy of the contract under which the securities have been or are to be allotted may be inspected.”;
(f)by deleting subsection (6); and
(g)by deleting the words “shares or debentures” in the section heading and substituting the word “securities”.
Repeal and re-enactment of section 258
62.  Section 258 of the principal Act is repealed and the following section substituted therefor:
Application and moneys to be held in trust in separate bank account until allotment
258.—(1)  All applications and other moneys paid prior to allotment by any applicant on account of securities offered to him shall, until the allotment of the securities, be held by the person making the offer of the securities upon trust for the applicant in a separate bank account, being a bank account that is established and kept by the person solely for the purpose of depositing the application and other moneys that are paid by applicants for those securities.
(2)  There shall be no obligation or duty on any bank with which any such moneys have been deposited to enquire into or see to the proper application of those moneys, so long as the bank acts in good faith.
(3)  Any person who contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000 or to imprisonment for a term not exceeding 2 years or to both and, in the case of a continuing offence, to a further fine not exceeding $5,000 for every day or part thereof during which the offence continues after conviction.”.
Amendment of section 259
63.  Section 259 of the principal Act is amended —
(a)by deleting the words “shares or debentures, or units of shares or debentures offered thereby to be listed for quotation on the official list of” in the 2nd to 4th lines of subsection (1) and substituting the words “securities offered thereby to be listed for quotation on”;
(b)by deleting the words “shares or debentures, or units of shares or debentures,” in subsection (1) (i) and (ii) and substituting in each case the word “securities”;
(c)by deleting subsections (2) and (3) and substituting the following subsections:
(2)  Where the permission has not been applied for, or has not been granted as mentioned under subsection (1), the person making the offer shall, subject to subsection (3), immediately repay without interest all moneys received from applicants in pursuance of the prospectus, and if any such moneys is not repaid within 14 days after the person making the offer so becomes liable to repay them, then —
(a)he shall be liable to repay those moneys with interest at the rate of 10% per annum from the expiration of such 14 days; and
(b)where the person making the offer is an entity, in addition to the liability of the entity, the directors or equivalent persons of the entity shall be jointly and severally liable to repay those moneys with interest at the rate of 10% per annum from the expiration of such 14 days.
(3)  Where in relation to any securities of an entity —
(a)permission is not applied for as specified in subsection (1)(a); or
(b)permission is not granted as specified in subsection (1)(b),
the Authority may, on the application of the entity made before any of the securities is purported to be allotted, exempt the allotment of the securities from the provisions of this section, and the Authority shall give notice of such exemption in the Gazette.”;
(d)by inserting, immediately after the words “A director” in subsection (4), the words “or an equivalent person”;
(e)by deleting the words “shares or debentures, or units of shares or debentures,” in subsection (5) and substituting the word “securities”;
(f)by deleting paragraphs (a) and (b) of subsection (6) and substituting the following paragraphs:
(a)in relation to any securities agreed to be taken by a person underwriting an offer thereof contained in a prospectus as if he had applied therefor in pursuance of the prospectus; and
(b)in relation to a prospectus offering securities for sale as if a reference to sale were substituted for a reference to allotment.”;
(g)by deleting the words “the corporation” in subsection (7) and substituting the words “the person making the offer”;
(h)by deleting subsection (8) and substituting the following subsection:
(8)  Any person who contravenes subsection (7) 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 12 months or to both and, in the case of a continuing offence, to a further fine not exceeding $5,000 for every day or part thereof during which the offence continues after conviction.”;
(i)by inserting, immediately after the word “directors” in subsection (9), the words “or equivalent persons”;
(j)by inserting, immediately after the words “each director” in subsection (10), the words “or equivalent person”;
(k)by deleting subsection (11) and substituting the following subsection:
(11)  A person shall not issue a prospectus inviting persons to subscribe for securities of an entity if it includes —
(a)a false or misleading statement that permission has been granted for those securities to be listed for quotation on, dealt in or quoted on any securities exchange; or
(b)any statement in any way referring to any such permission or to any application or intended application for any such permission, or to listing for quotation, dealing in or quoting the securities, on any securities exchange, or to any requirement of a securities exchange, unless —
(i)that statement is or is to the effect that permission has been granted, or that application has been or will be made to the securities exchange within 3 days from the date of the issue of the prospectus; or
(ii)that statement has been approved by the Authority for inclusion in the prospectus.”;
(l)by deleting subsection (13) and substituting the following subsection:
(13)  Where a prospectus contains a statement to the effect that the memorandum and articles or other constituent document or documents of the issuer comply, or have been drawn so as to comply, with the requirements of any securities exchange, the prospectus shall, unless the contrary intention appears from the prospectus, be deemed for the purposes of this section to imply that application has been, or will be, made for permission for the securities to which the prospectus relates to be listed for quotation on the securities exchange.”; and
(m)by deleting the words “shares and debentures” in the section heading and substituting the word “securities”.
Amendment of section 260
64.  Section 260 of the principal Act is amended —
(a)by deleting the words “shares or debentures, or units of shares or debentures of a company offered to the public” in the 1st and 2nd lines of subsection (1) and substituting the words “securities of a company”;
(b)by deleting the words “shares or debentures, or units of shares or debentures” in subsection (1)(b) and substituting the word “securities”;
(c)by deleting paragraph (a) of subsection (2) and substituting the following paragraph:
(a)be calculated based on the price at which each share or debenture, or each unit of share or debenture, is or will be offered; and”;
(d)by deleting subsection (3) and substituting the following subsection:
(3)  The amount payable on application on each share or debenture, or each unit of share or debenture, offered shall not be less than 5% of the price at which the share or debenture, or unit of share or debenture, is or will be offered.”; and
(e)by deleting the words “shares or debentures, or units of shares or debentures,” wherever they appear in subsections (4) and (9) and substituting in each case the word “securities”.
Amendment of section 261
65.  Section 261 of the principal Act is amended —
(a)by deleting subsections (1) to (1C) and substituting the following subsections:
(1)  Subject to subsection (1A), this Subdivision shall apply where an entity makes an offer of debentures.
(1A)  Sections 268, 269 and 270 shall not apply if the borrowing entity is a prescribed entity.
(1B)  In subsections (1A) and (1C), “prescribed entity” means —
(a)any bank licensed under the Banking Act (Cap. 19); or
(b)any entity or entity of a class which has been declared by the Authority, by order published in the Gazette, to be a prescribed entity for the purposes of this section.
(1C)  The Authority may, by notice in writing —
(a)impose such conditions or restrictions on a prescribed entity as it thinks fit; and
(b)at any time vary or revoke any condition or restriction so imposed,
and the prescribed entity shall comply with every such condition or restriction imposed on it by the Authority that has not been revoked by the Authority.
(1D)  Any person who contravenes any condition or restriction imposed under subsection (1C)(a) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000 and, in the case of a continuing offence, to a further fine not exceeding $5,000 for every day or part thereof during which the offence continues after conviction.”; and
(b)by deleting subsection (2).
New section 262
66.  The principal Act is amended by inserting, immediately after section 261, the following section:
Offer of asset-backed securities
262.—(1)  An offer of asset-backed securities shall be made only if they are issued by —
(a)a special purpose vehicle other than a trust; or
(b)the trustee of a trust that is a special purpose vehicle.
(2)  The Authority may exempt any person or class of persons from this section, subject to such conditions or restrictions as may be determined by the Authority.
(3)  In this section —
“asset-backed securities” means debentures or units of debentures issued pursuant to a securitisation transaction;
“securitisation transaction” means an arrangement that involves the sale, transfer or assignment of assets to a special purpose vehicle where —
(a)such sale, transfer or assignment is funded by the issue of debentures or units of debentures (whether by that special purpose vehicle or another special purpose vehicle); and
(b)payments in respect of such debentures or units of debentures are or will be principally derived, directly or indirectly, from the cash flows generated by the assets;
“special purpose vehicle” means an entity that is established solely in order to, or a trust that is established solely in order for its trustee to, do either or both of the following:
(a)hold (whether as a legal or equitable owner) the assets from which payments to holders of any asset-backed securities are or will be primarily derived;
(b)issue any asset-backed securities.”.
Amendment of section 265
67.  Section 265 of the principal Act is amended by deleting the words “borrowing corporation” wherever they appear in subsections (1) and (2) and substituting in each case the words “borrowing entity”.
Amendment of section 266
68.  Section 266 of the principal Act is amended —
(a)by deleting the word “corporation” wherever it appears in subsections (2) to (5), (7) and (8) and substituting in each case the word “entity”;
(b)by deleting the word “corporations” in subsections (2), (4) and (5) and substituting in each case the word “entities”;
(c)by deleting the words “the debentures” in subsection (2) and substituting the word “debentures”; and
(d)by deleting the words “offer or invitation in respect of the debentures was made to the public” in subsection (7) and substituting the words “offer of the debentures was made”.
Amendment of section 268
69.  Section 268 of the principal Act is amended —
(a)by deleting the words “borrowing corporation” wherever they appear in subsections (1), (2), (4), (6) and (9) to (12) and the section heading and substituting in each case the words “borrowing entity”;
(b)by deleting the words “the corporation” wherever they appear in subsections (2)(a), (4)(a), (6)(a) and (b) and (13) and substituting in each case the words “the entity”;
(c)by deleting the words “to the public” in subsection (2)(e);
(d)by deleting the words “that corporation” in subsection (13) and substituting the words “that entity”;
(e)by deleting the words “guarantor corporation” wherever they appear in subsections (4)(a), (6), (9)(b), (10), (11) and (12) and substituting in each case the words “guarantor entity”;
(f)by deleting the words “guarantor corporations” wherever they appear in subsections (2)(b), (d) and (e) and (4) and substituting in each case the words “guarantor entities”;
(g)by inserting, immediately after the word “directors” wherever it appears in subsections (1), (2), (6), (9)(a) and (b), (11), (12) and (13), the words “or equivalent persons”; and
(h)by deleting subsection (14).
Amendment of section 269
70.  Section 269 of the principal Act is amended —
(a)by deleting the word “corporation” wherever it appears in subsections (1), (2) and (3) and in the section heading and substituting in each case the word “entity”;
(b)by deleting the word “corporations” in subsection (1) and substituting the word “entities”;
(c)by inserting, immediately after the word “directors” in subsection (1), the words “or equivalent persons”; and
(d)by inserting, immediately after the word “officer” in subsection (3), the words “or equivalent person”.
Amendment of section 270
71.  Section 270 of the principal Act is amended —
(a)by deleting the words “borrowing corporation” wherever they appear in subsections (1), (3), (4)(c), (5) and (6) and substituting in each case the words “borrowing entity”;
(b)by deleting the words “or invitation in respect” in subsection (1);
(c)by deleting the words “the invitation” wherever they appear in subsections (1) and (5) and substituting in each case the words “the offer”.
Repeal and re-enactment of section 272 and new sections 272A and 272B
72.  Section 272 of the principal Act is repealed and the following sections substituted therefor:
Issue or transfer of securities for no consideration
272.—(1)  Subdivisions (2) and (3) of this Division (other than section 257) shall not apply to an offer of shares or debentures of an entity if no consideration is or will be given for the issue or transfer of the shares or debentures.
(2)  Subdivisions (2) and (3) of this Division (other than section 257) shall not apply to an offer of units of shares or debentures of an entity if —
(a)no consideration is or will be given for the issue or transfer of the units of shares or debentures; and
(b)no consideration is or will be given for the underlying shares or debentures on the exercise or conversion of the units of shares or debentures.
Small offers
272A.—(1)  Subdivisions (2) and (3) of this Division (other than section 257) shall not apply to personal offers of securities of an entity by a person if —
(a)the total amount raised by the person from such offers within any period of 12 months does not exceed —
(i)$5 million (or its equivalent in a foreign currency); or
(ii)such other amount as may be prescribed by the Authority in substitution for the amount specified in sub-paragraph (i);
(b)in respect of each offer, the person making the offer gives the person to whom he makes the offer —
(i)the following statement in writing:
This offer is made in reliance on the exemption under section 272A(1) of the Securities and Futures Act. It is not made in or accompanied by a prospectus that is registered by the Monetary Authority of Singapore.
(ii)a notification in writing that the securities to which the offer (referred to in this sub-paragraph as the initial offer) relates shall not be subsequently sold to any person, unless the offer resulting in such subsequent sale is made —
(A)in compliance with Subdivisions (2) and (3) of this Division;
(B)in reliance on subsection (8)(c) or any other exemption under any provision of this Subdivision (other than this subsection); or
(C)where at least 6 months have elapsed from the date the securities were acquired under the initial offer, in reliance on the exemption under this subsection;
(c)none of the offers is accompanied by an advertisement making an offer or calling attention to the offer or intended offer; and
(d)no selling or promotional expenses are paid or incurred in connection with each offer other than those incurred for administrative or professional services, or by way of commission or fee for services rendered by —
(i)the holder of a capital markets services licence to deal in securities;
(ii)an exempt person in respect of dealing in securities; or
(iii)a person who is licensed, approved, authorised or otherwise regulated under the laws, codes or other requirements of any foreign jurisdiction in respect of dealing in securities, or who is exempted therefrom in respect of such dealing.
(2)  For the purposes of subsection (1)(b), where any notice, circular, material, publication or other document is issued in connection with the offer, the person making the offer is deemed to have given the statement and notification to the person to whom he makes the offer in accordance with that provision if such statement or notification is contained in the first page of that notice, circular, material, publication or document.
(3)  For the purposes of subsection (1), a personal offer of securities is one that —
(a)may be accepted only by the person to whom it is made; and
(b)is made to a person who is likely to be interested in that offer, having regard to —
(i)any previous contact before the date of the offer between the person making the offer and that person;
(ii)any previous professional or other connection established before that date between the person making the offer and that person; or
(iii)any previous indication (whether through statements made or actions carried out) before that date by that person that indicate to —
(A)the person making the offer;
(B)the holder of a capital markets services licence to deal in securities;
(C)an exempt person in respect of dealing in securities;
(D)a person licensed under the Financial Advisers Act (Cap.110) in respect of the provision of financial advisory services concerning investment products;
(E)an exempt financial adviser as defined in section 2(1) of the Financial Advisers Act; or
(F)a person who is licensed, approved, authorised or otherwise regulated under the laws, codes or other requirements of any foreign jurisdiction in respect of dealing in securities or the provision of financial advisory services concerning investment products, or who is exempted therefrom in respect of such dealing or the provision of such services,
that he is interested in offers of that kind.
(4)  In determining the amount raised by an offer, the following shall be included:
(a)the amount payable for the securities at the time they are allotted, issued or sold;
(b)if the securities are issued partly-paid, any amount payable at a future time if a call is made;
(c)if the securities carry a right (by whatever name called) to be converted into other securities or to acquire other securities, any amount payable on the exercise of the right to convert them into, or to acquire, other securities.
(5)  In determining whether the amount raised by a person from offers within a period of 12 months exceeds the applicable amount specified in subsection (1)(a), each amount raised —
(a)by that person from any offer of securities issued by the same entity; or
(b)by that person or another person from any offer of securities of an entity, units or derivatives of units in a business trust, or units in a collective investment scheme, which is a closely related offer,
if any, within that period in reliance on the exemption under subsection (1), section 282V(1) or section 302B(1) shall be included.
(6)  Whether an offer is a closely related offer under subsection (5) shall be determined by considering such factors as the Authority may prescribe.
(7)  For the purpose of this section, an offer of securities made by a person acting as an agent of another person shall be treated as an offer made by that other person.
(8)  Where securities acquired through an offer made in reliance on the exemption under subsection (1) (referred to in this subsection as an initial offer) are subsequently sold by the person who acquired the securities to another person, Subdivisions (2) and (3) of this Division shall apply to the offer from the first-mentioned person to the second-mentioned person which resulted in that sale, unless —
(a)such offer is made in reliance on an exemption under any provision of this Subdivision (other than this section);
(b)such offer is made in reliance on an exemption under subsection (1) and at least 6 months have elapsed from the date the securities were acquired under the initial offer; or
(c)such offer is one —
(i)that may be accepted only by the person to whom it is made;
(ii)that is made to a person who is likely to be interested in the offer having regard to —
(A)any previous contact before the date of the offer between the person making the initial offer and that person;
(B)any previous professional or other connection established before that date between the person making the initial offer and that person; or
(C)any previous indication (whether through statements made or actions carried out) before that date by that person that indicate to —
(CA)the person making the initial offer;
(CB)the holder of a capital markets services licence to deal in securities;
(CC)an exempt person in respect of dealing in securities;
(CD)a person licensed under the Financial Advisers Act (Cap. 110) in respect of the provision of financial advisory services concerning investment products;
(CE)an exempt financial adviser as defined in section 2(1) of the Financial Advisers Act; or
(CF)a person who is licensed, approved, authorised or otherwise regulated under the laws, codes or other requirements of any foreign jurisdiction in respect of dealing in securities or the provision of financial advisory services concerning investment products, or who is exempted therefrom in respect of such dealing or the provision of such services,
that he is interested in offers of that kind;
(iii)in respect of which the first-mentioned person has given the second-mentioned person —
(A)the following statement in writing:
This offer is made in reliance on the exemption under section 272A(8)(c) of the Securities and Futures Act. It is not made in or accompanied by a prospectus that is registered by the Monetary Authority of Singapore.”; and
(B)a notification in writing that the securities being offered shall not be subsequently sold to any person unless the offer resulting in such subsequent sale is made —
(BA)in compliance with Subdivisions (2) and (3) of this Division;
(BB)in reliance on this subsection or any other exemption under any provision of this Subdivision (other than subsection (1)); or
(BC)where at least 6 months have elapsed from the date the securities were acquired under the initial offer, in reliance on the exemption under subsection (1);
(iv)that is not accompanied by an advertisement making an offer or calling attention to the offer or intended offer; and
(v)in respect of which no selling or promotional expenses are paid or incurred in connection with the offer other than those incurred for administrative or professional services, or by way of commission or fee for services rendered by —
(A)the holder of a capital markets services licence to deal in securities;
(B)an exempt person in respect of dealing in securities; or
(C)a person who is licensed, approved, authorised or otherwise regulated under the laws, codes or other requirements of any foreign jurisdiction in respect of dealing in securities, or who is exempted therefrom in respect of such dealing.
(9)  Subsection (2) shall apply, with the necessary modifications, in relation to the statement and notification referred to in subsection (8)(c)(iii).
(10)  In subsection (1)(c) and (8)(c)(iv), “advertisement” means —
(a)a written or printed communication;
(b)a communication by radio, television or other medium of communication; or
(c)a communication by means of a recorded telephone message,
that is published in connection with an offer of securities, but does not include —
(i)a document —
(A)purporting to describe the securities being offered, or the business and affairs of the person making the offer, the issuer or, where applicable, the underlying entity; and
(B)purporting to have been prepared for delivery to and review by persons to whom the offer is made so as to assist them in making an investment decision in respect of the securities being offered;
(ii)a publication which consists solely of a disclosure, notice or report required under this Act, or any listing rules or other requirements of a securities exchange, futures exchange or recognised securities exchange, which is made by any person; or
(iii)a publication which consists solely of a notice or report of a general meeting or proposed general meeting of the person making the offer, the issuer, the underlying entity or any entity, or a presentation of oral or written material on matters so contained in the notice or report at the general meeting.
(11)  In subsection (10) (i) (A), the reference to the affairs of the person making the offer, the issuer or, where applicable, the underlying entity shall —
(a)in the case where the person making the offer, the issuer or the underlying entity is a corporation, be construed as including a reference to the matters referred to in section 2(2); and
(b)in any other case, be construed as referring to such matters as may be prescribed by the Authority.
Private placement
272B.—(1)  Subdivisions (2) and (3) of this Division (other than section 257) shall not apply to offers of securities of an entity that are made by a person if —
(a)the offers are made to no more than 50 persons within any period of 12 months;
(b)none of the offers is accompanied by an advertisement making an offer or calling attention to the offer or intended offer; and
(c)no selling or promotional expenses are paid or incurred in connection with each offer other than those incurred for administrative or professional services, or by way of commission or fee for services rendered by —
(i)the holder of a capital markets services licence to deal in securities;
(ii)an exempt person in respect of dealing in securities; or
(iii)a person who is licensed, approved, authorised or otherwise regulated under the laws, codes or other requirements of any foreign jurisdiction in respect of dealing in securities, or who is exempted therefrom in respect of such dealing.
(2)  The Authority may prescribe such other number of persons in substitution for the number specified in subsection (1)(a).
(3)  In determining whether offers of securities by a person are made to no more than the applicable number of persons specified in subsection (1)(a) within a period of 12 months, each person to whom —
(a)an offer of securities issued by the same entity is made by the first-mentioned person; or
(b)an offer of securities of an entity, units or derivatives of units in a business trust, or units in a collective investment scheme, is made by the first-mentioned person or another person where such offer is a closely related offer,
if any, within that period in reliance on the exemption under this section, section 282W or section 302C shall be included.
(4)  Whether an offer is a closely related offer under subsection (3) shall be determined by considering such factors as the Authority may prescribe.
(5)  For the purposes of subsection (1) —
(a)an offer of securities to an entity or to a trustee shall be treated as an offer to a single person, provided that the entity or trust is not formed primarily for the purpose of acquiring the securities which are the subject of the offer;
(b)an offer of securities to an entity or to a trustee shall be treated as an offer to the equity owners, partners or members of that entity, or to the beneficiaries of the trust, as the case may be, if the entity or trust is formed primarily for the purpose of acquiring the securities which are the subject of the offer;
(c)an offer of securities to 2 or more persons who will own the securities acquired as joint owners shall be treated as an offer to a single person;
(d)an offer of securities to a person acting on behalf of another person (whether as an agent or otherwise) shall be treated as an offer made to that other person;
(e)offers of securities made by a person as an agent of another person shall be treated as offers made by that other person;
(f)where an offer is made to a person with a view to another person acquiring an interest in those securities by virtue of section 4, only the second-mentioned person shall be counted for the purposes of determining whether offers of the securities are made to no more than the applicable number of persons specified in subsection (1)(a); and
(g)where —
(i)an offer of securities is made to a person in reliance on the exemption under subsection (1) with a view to those securities being subsequently offered for sale to another person; and
(ii)that subsequent offer —
(A)is not made in reliance on an exemption under any provision of this Subdivision; or
(B)is made in reliance on an exemption under subsection (1) or section 280,
both persons shall be counted for the purposes of determining whether offers of the securities are made to no more than the applicable number of persons specified in subsection (1)(a).
(6)  In subsection (1)(b), “advertisement” has the same meaning as in section 272A(10).”.
Amendment of section 273
73.  Section 273 of the principal Act is amended —
(a)by deleting the words “this Division shall not apply to an offer or invitation in respect of shares, debentures or units of shares or debentures,” in the 1st to 3rd lines of subsection (1) and substituting the words “this Division (other than section 257) shall not apply to an offer of securities”;
(b)by deleting paragraph (b) of subsection (1) and substituting the following paragraph:
(b)it is made in connection with an offer for the acquisition by or on behalf of a person of some or all of the shares in an unlisted corporation or some or all of the shares of a particular class in an unlisted corporation —
(i)to all members of the corporation or all members of the corporation holding shares of that class; or
(ii)where the person already holds shares in the corporation, to all other members of the corporation or all other members of the corporation holding shares of that class,
where such offer is in compliance with the laws, codes and other requirements (whether or not having the force of law) relating to take-overs of the country in which the corporation was incorporated;”;
(c)by deleting the words “a corporation” wherever they appear in sub-paragraphs (i) and (ii) of subsection (1)(c) and substituting in each case the words “an unlisted corporation”;
(d)by inserting, immediately after paragraph (c) of subsection (1), the following paragraphs:
(ca)it is made in connection with an offer for the acquisition by or on behalf of a person of some or all of the shares in a corporation or some or all of the shares of a particular class in a corporation —
(i)to all members of the corporation or all members of the corporation holding shares of that class; or
(ii)where the person already holds shares in the corporation, to all other members of the corporation or all other members of the corporation holding shares of that class,
and such offer complies with the Take-over Code as though the Take-over Code is applicable to it;
(cb)it is made in connection with a proposed compromise or arrangement between —
(i)a corporation and its creditors or a class of them; or
(ii)a corporation and its members or a class of them,
and such proposed compromise or arrangement and the execution thereof complies with the Take-over Code as though the Take-over Code is applicable to it;
(cc)it is an offer to enter into an underwriting agreement relating to securities;
(cd)it is an offer of securities of an entity —
(i)being an entity which is formed or constituted in Singapore or otherwise, whose securities are not listed for quotation on a securities exchange; or
(ii)being an entity which is not formed or constituted in Singapore, whose securities are listed for quotation on a securities exchange and such listing is not a primary listing,
that is made to existing members or debenture holders of that entity (whether or not it is renounceable in favour of persons other than existing members or debenture holders);
(ce)it is an offer of shares or debentures of an entity made to any existing member or debenture holder of the entity whose shares are listed for quotation on a securities exchange;
(cf)it is an offer of debentures of an entity made to any existing debenture holder of the entity whose debentures are listed for quotation on a securities exchange;
(cg)it is an offer of units of shares or debentures of an entity made to any existing member or debenture holder of the entity whose shares are listed for quotation on a securities exchange, where such units may only be exercised or converted by any existing member or debenture holder into shares or debentures, as the case may be, of the entity;
(ch)it is an offer of units of debentures of an entity made to any existing debenture holder of the entity whose debentures are listed on a securities exchange, where such units may only be exercised or converted by any existing debenture holder into debentures of the entity;
(ci)it is an offer of securities of a corporation made in the circumstances specified under section 306 of the Companies Act (Cap. 50);”;
(e)by deleting the words “or invitation in respect” in subsection (1)(d) and (e);
(f)by deleting paragraph (f) of subsection (1) and substituting the following paragraph:
(f)it is made (whether or not in relation to securities that have been previously issued) by an entity to a qualifying person, where the securities are to be held by or for the benefit of the qualifying person and are the securities of the entity or any of its related parties.”;
(g)by inserting, immediately after subsection (1), the following subsection:
(1A)  An offer of securities does not come within subsection (1)(d) or (e) if —
(a)the securities being offered are borrowed by the issuer from an existing shareholder, holder of a debenture, or holder of units of shares or debentures, solely for the purpose of facilitating the offer of securities by the issuer; and
(b)such borrowing is made under an agreement or arrangement between the issuer and the shareholder or holder which promises the issue or allotment of securities by the issuer to the shareholder or holder at the same time or shortly after the offer.”;
(h)by deleting subsection (2) and substituting the following subsection:
(2)  An offer of securities comes within subsection (1)(f) only if no selling or promotional expenses are paid or incurred in connection with the offer other than those incurred for administrative or professional services, or by way of commission or fee for services rendered by —
(a)the holder of a capital markets services licence to deal in securities;
(b)an exempt person in respect of dealing in securities; or
(c)a person who is licensed, approved, authorised or otherwise regulated under the laws, codes or other requirements of any foreign jurisdiction in respect of dealing in securities, or who is exempted therefrom in respect of such dealing.”;
(i)by deleting subsection (3);
(j)by deleting subsection (4) and substituting the following subsection:
(4)  For the purposes of subsection (1)(f), a person is a qualifying person in relation to an entity if he is a bona fide director or equivalent person, former director or equivalent person, consultant, adviser, employee or former employee of the entity or a related corporation of that entity (being a corporation), or if he is the spouse, widow, widower or a child, adopted child or step-child below the age of 18, of such director or equivalent person, former director or equivalent person, employee or former employee”;
(k)by deleting subsection (5) and substituting the following subsection:
(5)  Where, on the application of any person interested, the Authority declares that circumstances exist whereby —
(a)the cost of providing a prospectus for an offer of securities outweighs the resulting protection to investors; or
(b)it would not be prejudicial to the public interest if a prospectus were dispensed with for an offer of securities,
then Subdivisions (2) and (3) of this Division (other than section 257) shall not apply to such an offer for a period of 6 months from the date of the declaration.”;
(l)by deleting the words “or invitation” in subsection (6) and in the section heading; and
(m)by deleting subsection (9) and substituting the following subsections:
(9)  In subsection (1)(b) and (c), “unlisted corporation” means a corporation —
(a)that is not a company; and
(b)the securities of which are not listed for quotation on any securities exchange.
(10)  In subsection (1)(ca) and (cb), “corporation” means a corporation that is not a company.”.
Repeal and re-enactment of section 274
74.  Section 274 of the principal Act is repealed and the following section substituted therefor:
Offer made to institutional investors
274.  Subdivisions (2) and (3) of this Division (other than section 257) shall not apply to an offer of securities, whether or not they have been previously issued, made to an institutional investor.”.
Amendment of section 275
75.  Section 275 of the principal Act is amended —
(a)by deleting subsection (1) and substituting the following subsections:
(1)  Subdivisions (2) and (3) of this Division (other than section 257) shall not apply to an offer of securities, whether or not they have been previously issued, where the offer is made to a relevant person, if —
(a)the offer is not accompanied by an advertisement making an offer or calling attention to the offer or intended offer; and
(b)no selling or promotional expenses are paid or incurred in connection with the offer other than those incurred for administrative or professional services, or by way of commission or fee for services rendered by —
(i)the holder of a capital markets services licence to deal in securities;
(ii)an exempt person in respect of dealing in securities; or
(iii)a person who is licensed, approved, authorised or otherwise regulated under the laws, codes or other requirements of any foreign jurisdiction in respect of dealing in securities, or who is exempted therefrom in respect of such dealing.
(1A)  Subdivisions (2) and (3) of this Division (other than section 257) shall not apply to an offer of securities to a person who acquires the securities as principal, whether or not the securities have been previously issued, if —
(a)the offer is on terms that the securities may only be acquired at a consideration of not less than $200,000 (or its equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange of securities or other assets;
(b)the offer is not accompanied by an advertisement making an offer or calling attention to the offer or intended offer; and
(c)no selling or promotional expenses are paid or incurred in connection with the offer other than those incurred for administrative or professional services, or by way of commission or fee for services rendered by —
(i)the holder of a capital markets services licence to deal in securities;
(ii)an exempt person in respect of dealing in securities; or
(iii)a person who is licensed, approved, authorised or otherwise regulated under the laws, codes or other requirements of any foreign jurisdiction in respect of dealing in securities, or who is exempted therefrom in respect of such dealing.”;
(b)by deleting subsection (2) and substituting the following subsections:
(2)  In this section —
“advertisement” means —
(a)a written or printed communication;
(b)a communication by radio, television or other medium of communication; or
(c)a communication by means of a recorded telephone message,
that is published in connection with an offer in respect of securities, but does not include —
(i)an information memorandum;
(ii)a publication which consists solely of a disclosure, notice or report required under this Act, or any listing rules or other requirements of a securities exchange, futures exchange or recognised securities exchange, which is made by any person; or
(iii)a publication which consists solely of a notice or report of a general meeting or proposed general meeting of the person making the offer, the issuer, the underlying entity or any entity, or a presentation of oral or written material on matters so contained in the notice or report at the general meeting;
“information memorandum” means a document —
(a)purporting to describe the securities being offered, or the business and affairs of the person making the offer, the issuer or, where applicable, the underlying entity; and
(b)purporting to have been prepared for delivery to and review by relevant persons and persons to whom an offer referred to in subsection (1A) is to be made so as to assist them in making an investment decision in respect of the securities being offered;
“relevant person” means —
(a)an accredited investor;
(b)a corporation the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor;
(c)a trustee of a trust the sole purpose of which is to hold investments and each beneficiary of which is an individual who is an accredited investor;
(d)an officer or equivalent person of the person making the offer (such person being an entity) or a spouse, parent, brother, sister, son or daughter of that officer or equivalent person; or
(e)a spouse, parent, brother, sister, son or daughter of the person making the offer (such person being an individual).
(2A)  In the definition of “information memorandum” in subsection (2), the reference to the affairs of the person making the offer, the issuer or, where applicable, the underlying entity shall —
(a)in the case where the person making the offer, the issuer or the underlying entity is a corporation, be construed as including a reference to the matters referred to in section 2(2); and
(b)in any other case, be construed as referring to such matters as may be prescribed by the Authority.”;
(c)by deleting the words “shares in or debentures of, or units of shares in or debentures of, a corporation” in subsection (3) and substituting the word “securities”;
(d)by deleting the words “paragraph (a) or (b) in the definition of “sophisticated investor” in subsection (2)” in subsection (4) and substituting the words “subsection (1A)(a)”; and
(e)by deleting the section heading and substituting the following section heading:
Offer made to accredited investors and certain other persons”.
Repeal and re-enactment of section 276
76.  Section 276 of the principal Act is repealed and the following section substituted therefor:
Offer of securities acquired pursuant to section 274 or 275
276.—(1)  Notwithstanding sections 272A, 272B, 273 (1)(d), (e) and (f), 277, 278 and 279, where securities initially acquired pursuant to an offer made in reliance on an exemption under section 274 or 275 are sold within the period of 6 months from the date of the initial acquisition to any person other than —
(a)an institutional investor;
(b)a relevant person as defined in section 275(2); or
(c)any person pursuant to an offer referred to in section 275(1A),
then Subdivisions (2) and (3) of this Division shall apply to the offer resulting in that sale.
(2)  Where securities initially acquired pursuant to an offer made in reliance on an exemption under section 274 or 275 are sold to —
(a)an institutional investor;
(b)a relevant person as defined in section 275(2); or
(c)any person pursuant to an offer referred to in section 275(1A),
Subdivisions (2) and (3) of this Division shall not apply to the offer resulting in that sale.
(3)  Securities of a corporation (other than a corporation that is an accredited investor) —
(a)the sole business of which is to hold investments; and
(b)the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor,
shall not be transferred within 6 months after the corporation has acquired any securities pursuant to an offer made in reliance on an exemption under section 275 unless —
(i)that transfer —
(A)is made only to institutional investors or relevant persons as defined in section 275(2); or
(B)arises from an offer referred to in section 275(1A);
(ii)no consideration is or will be given for the transfer; or
(iii)the transfer is by operation of law.
(4)  Where —
(a)the sole purpose of a trust (other than a trust the trustee of which is an accredited investor) is to hold investments; and
(b)each beneficiary of the trust is an individual who is an accredited investor,
the beneficiaries’ rights and interest (howsoever described) in the trust shall not be transferred within 6 months after securities are acquired for the trust pursuant to an offer made in reliance on an exemption under section 275 unless —
(i)that transfer —
(A)is made only to institutional investors or relevant persons as defined in section 275(2); or
(B)arises from an offer that is made on terms that such rights or interest are acquired at a consideration of not less than $200,000 (or its equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange of securities or other assets;
(ii)no consideration is or will be given for the transfer; or
(iii)the transfer is by operation of law.
(5)  For the avoidance of doubt, the reference to beneficiaries in subsection (4) shall include a reference to unitholders of a business trust and participants of a collective investment scheme.
(6)  For the avoidance of doubt, where any securities are acquired pursuant to an offer made in reliance on an exemption under section 274 or 275, an offer to sell those securities may be made in reliance on an exemption under section 273(1)(d) or (e) after 6 months have elapsed from the date of the first-mentioned offer.”.
Amendment of section 277
77.  Section 277 of the principal Act is amended —
(a)by deleting subsection (1) and substituting the following subsections:
(1)  Subject to subsection (1A), Subdivisions (2) and (3) of this Division (other than section 257) shall not apply to an offer of securities (not being such securities as may be prescribed by the Authority) issued by an entity whose shares are listed for quotation on a securities exchange, whether by means of a rights issue or otherwise, if —
(a)in the case where the securities offered are units of shares or debentures, the shares or debentures are those of the entity that issued the units;
(b)an offer information statement relating to the offer which complies with such form and content requirements as may be prescribed by the Authority is lodged with the Authority; and
(c)the offer is made in or accompanied by the offer information statement referred to in paragraph (b).
(1A)  Subsection (1) shall apply to an offer of securities referred to therein only for a period of 6 months from the date of lodgment of the offer information statement relating to that offer.”;
(b)by deleting subsection (3) and substituting the following subsection:
(3)  Sections 249, 249A, 253, 254 and 255 shall apply in relation to an offer information statement referred to in subsection (1) as they apply in relation to a prospectus.”;
(c)by deleting the words “subsection (3)(b)” in subsection (4) and substituting the words “subsection (3)”;
(d)by deleting paragraph (a) of subsection (4) and substituting the following paragraph:
(a)a reference in section 249 or 249A to the registration of the prospectus shall be read as a reference to the lodgment of the offer information statement; and”;
(e)by deleting the words “to the issue of an offer information statement is required to be given under section 249 (as applied in relation to that statement under subsection (3)(b))” in subsection (5) and substituting the words “is required to be given under section 249 (as applied in relation to an offer information statement under subsection (3))”;
(f)by inserting, immediately after subsection (5), the following subsection:
(6)  Where the written consent of an issue manager or underwriter is required to be given under section 249A (as applied in relation to an offer information statement under subsection (3)), that written consent shall be lodged with the Authority at the same time as the lodgment of the statement.”; and
(g)by deleting the section heading and substituting the following section heading:
Offer made using offer information statement”.
Amendment of section 278
78.  Section 278 of the principal Act is amended —
(a)by deleting the words “shall not apply to an offer or invitation in respect” in subsection (1) and substituting the words “(other than section 257) shall not apply to an offer”; and
(b)by deleting the words “or invitation” in subsections (1) and (2)(b) and in the section heading.
Amendment of section 279
79.  Section 279 of the principal Act is amended —
(a)by deleting the words “or invitation to the public in respect”; and
(b)by deleting the words “or invitation in respect” in the section heading.
New section 280
80.  The principal Act is amended by inserting, immediately after section 279, the following section:
Making offer using automated teller machine or electronic means
280.—(1)  Subject to subsection (3) and such requirements as may be prescribed by the Authority, a person making an offer of securities using —
(a)any automated teller machine; or
(b)such other electronic means as may be prescribed by the Authority,
is exempted from the requirement under section 240(1)(a) that the offer be made in or accompanied by a prospectus in respect of the offer or, where applicable, the requirement under section 240(4) that the offer be made in or accompanied by a profile statement in respect of the offer.
(2)  For the avoidance of doubt, a prospectus which complies with all other requirements of section 240(1)(a) or, where applicable, a profile statement which complies with all other requirements of section 240(4) must still be prepared and issued in respect of any offer referred to in subsection (1).
(3)  Subsection (1) shall not apply unless the automated teller machine or prescribed electronic means indicates to a prospective subscriber or buyer —
(a)how he can obtain, or arrange to receive, a copy of the prospectus or, where applicable, profile statement in respect of the offer; and
(b)that he should read the prospectus or, where applicable, profile statement before submitting his application,
before enabling him to submit any application to subscribe for or purchase securities.”.
Amendment of section 282
81.  Section 282 of the principal Act is amended —
(a)by deleting the words “or invitation”; and
(b)by deleting the words “or invitations” in the section heading.
Repeal and re-enactment of Division 1A of Part XIII
82.  Division 1A of Part XIII of the principal Act is repealed and the following Division substituted therefor:
Subdivision (1) — Interpretation
Preliminary provisions
282A.—(1)  In this Division, unless the context otherwise requires —
“chief executive officer”, in relation to a corporation, means any person, by whatever name called, who is in the direct employment of, or acting for or by arrangement with, the corporation, and who is principally responsible for the management and conduct of the business of the corporation;
“control”, in relation to an entity, means the capacity of a person to determine the outcome of decisions on the financial and operating policies of the entity, having regard to —
(a)the influence which the person can, in practice, exert on the entity (as opposed to the rights which the person can exercise in the entity); and
(b)any practice or pattern of behaviour of that person affecting the financial or operating policies of the entity (even if such practice or pattern of behaviour involves a breach of an agreement or a breach of trust),
but does not include any capacity of a person to influence decisions on the financial and operating policies of the entity if such influence is required by law or under any contract or order of court to be exercised for the benefit of other persons;
“expert” has the same meaning as in section 4(1) of the Companies Act (Cap. 50);
“immediate family”, in relation to an individual, means the individual’s spouse, son, adopted son, step-son, daughter, adopted daughter, step-daughter, father, step-father, mother, step-mother, brother, step-brother, sister or step-sister;
“issuer”, in relation to an offer of units or derivatives of units in a business trust, means —
(a)in the case of units being offered, the trustee of the business trust in its capacity as the trustee that issued or will be issuing such units; or
(b)in the case of derivatives of units being offered, the trustee of the business trust in its capacity as the trustee, or any other entity, that issued or will be issuing such derivatives of units;
“minimum subscription”, in relation to any units or derivatives of units in a business trust offered for subscription, means the amount stated in the prospectus relating to the offer, as the minimum amount which must be raised by the issue of the units or derivatives of units so offered failing which no units or derivatives of units will be allotted or issued;
“preliminary document” means a document which has been lodged with the Authority and is issued for the purpose of determining the appropriate issue or sale price of, and the number of, units or derivatives of units in a business trust or proposed business trust to be issued or sold and which contains the information required to be included in a prospectus under section 282F, except for such information as may be prescribed by the Authority;
“profile statement” means a profile statement referred to in section 282C(4);
“promoter”, in relation to a prospectus issued in connection with a business trust, means a promoter of the business trust who was a party to the preparation of the prospectus or of any relevant portion thereof, but does not include any person by reason only of his acting in a professional capacity;
“prospectus” means any prospectus, notice, circular, material, advertisement, publication or other document used to make an offer of units or derivatives of units in a business trust or proposed business trust and includes any document deemed to be a prospectus under section 282Q, but does not include —
(a)a profile statement; or
(b)any material, advertisement or publication which is authorised by section 282L (other than subsection (5) thereof);
“recognised securities exchange” means a corporation which has been declared by the Authority, by order published in the Gazette, to be a recognised securities exchange for the purposes of this Division;
“related party” means —
(a)in relation to an entity —
(i)a director or equivalent person of the entity;
(ii)the chief executive officer or equivalent person of the entity;
(iii)a person who controls the entity;
(iv)a related corporation;
(v)any other entity controlled by it;
(vi)any other entity controlled by the person referred to in sub-paragraph (iii); and
(vii)a related party of any individual referred to in sub-paragraph (i), (ii) or (iii); and
(b)in relation to an individual —
(i)his immediate family;
(ii)a trustee of any trust of which the individual or any member of the individual’s immediate family is —
(A)a beneficiary; or
(B)where the trust is a discretionary trust, a discretionary object,
when the trustee acts in that capacity; and
(iii)any corporation in which he and his immediate family (whether directly or indirectly) have interests in voting shares of an aggregate of not less than 30% of the votes attached to all voting shares;
“replacement document” means a replacement prospectus or a replacement profile statement referred to in section 282D(1), as the case may be;
“supplementary document” means a supplementary prospectus or a supplementary profile statement referred to in section 282D(1), as the case may be;
“trustee-manager”  —
(a)in relation to a registered business trust, has the same meaning as in section 2 of the Business Trusts Act 2004 (Act 30 of 2004); and
(b)in relation to a business trust for which an application for registration has been made under section 4(1) of the Business Trusts Act 2004, means the person proposed to be named as the trustee-manager in the application made under that section;
“trust deed” has the same meaning as “deed” in section 2 of the Business Trusts Act 2004;
“trust property” has the same meaning as in section 2 of the Business Trusts Act 2004.
(2)  For the purposes of this Division, a statement shall be deemed to be included in a prospectus or profile statement if it is contained in any report or memorandum appearing on the face thereof or by reference incorporated therein or issued therewith.
(3)  For the purposes of this Division, a person makes an offer of any units or derivatives of units in a business trust if, and only if, as principal —
(a)he makes (either personally or by an agent) an offer to any person in Singapore which upon acceptance would give rise to a contract for the issue or sale of those units or derivatives of units by him or another person with whom he has made arrangements for that issue or sale; or
(b)he invites (either personally or by an agent) any person in Singapore to make an offer which upon acceptance would give rise to a contract for the issue or sale of those units or derivatives of units by him or another person with whom he has made arrangements for that issue or sale.
(4)  In subsection (3), “sale” includes any disposal for valuable consideration.
Division not to apply to certain business trusts which are collective investment schemes
282B.  This Division does not apply to an offer of units or derivatives of units in a business trust, where —
(a)the business trust is also a collective investment scheme that has been authorised under section 286 or recognised under section 287; or
(b)the business trust is also a collective investment scheme and the offer is made in reliance on an exemption under Subdivision (4) of Division 2.
Subdivision (2) — Prospectus Requirements
Requirement for prospectus and profile statement, where relevant
282C.—(1)  No person shall make an offer of units or derivatives of units in a business trust unless —
(a)the business trust is a registered business trust; and
(b)the offer —
(i)is made in or accompanied by a prospectus in respect of the offer —
(A)that is prepared in accordance with section 282F;
(B)a copy of which, being one that has been signed in accordance with subsection (5), is lodged with the Authority; and
(C)that is registered by the Authority; and
(ii)complies with such requirements as may be prescribed by the Authority.
(2)  A person who lodges a preliminary document with the Authority shall be deemed to have lodged a prospectus with the Authority.
(3)  A preliminary document referred to in subsection (2) shall contain all information to be included in a prospectus other than such information as may be prescribed by the Authority.
(4)  Notwithstanding subsection (1), an offer of units or derivatives of units in a business trust may be made in or accompanied by an extract from, or an abridged version of, a prospectus (referred to in this section as a profile statement), instead of a prospectus, if —
(a)a prospectus in respect of such offer is prepared in accordance with section 282F, and the profile statement is prepared in accordance with section 282G;
(b)a copy of the prospectus and a copy of the profile statement, each of which has been signed in accordance with subsection (5), are lodged with the Authority, and the prospectus is lodged no later than the profile statement;
(c)the prospectus and profile statement are registered by the Authority;
(d)sufficient copies of the prospectus are made available for collection at the times and places specified in the profile statement; and
(e)the offer complies with such requirements as may be prescribed by the Authority.
(5)  The copy of a prospectus or profile statement lodged with the Authority shall be signed —
(a)where the person making the offer is the issuer, by every director or equivalent person of the issuer and every person who is named therein as a proposed director or an equivalent person of the issuer;
(b)where the person making the offer is an individual and is not the issuer —
(i)by that person; and
(ii)if the issuer is controlled by that person, one or more of his related parties, or that person and one or more of his related parties, by every director or equivalent person of the issuer and every person who is named therein as a proposed director or an equivalent person of the issuer; and
(c)where the person making the offer is an entity and is not the issuer —
(i)by every director or equivalent person of that entity; and
(ii)if the issuer is controlled by that entity, one or more of its related parties, or that entity and one or more of its related parties, by every director or equivalent person of the issuer, and every person who is named therein as a proposed director or an equivalent person of the issuer.
(6)  A requirement under subsection (5) for the copy of a prospectus or profile statement to be signed by a director or an equivalent person is satisfied if the copy is signed —
(a)by that director or equivalent person; or
(b)by a person who is authorised in writing by that director, or equivalent person to sign on his behalf.
(7)  A requirement under subsection (5) for the copy of a prospectus or profile statement to be signed by a person named therein as a proposed director or an equivalent person is satisfied if the copy is signed —
(a)by that proposed director or equivalent person; or
(b)by a person who is authorised in writing by that proposed director or equivalent person to sign on his behalf.
(8)  No person shall make any offer of units or derivatives of units in a business trust that has not been formed or does not exist.
(9)  Any person who contravenes subsection (1) or (8) 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 2 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 thereof during which the offence continues after conviction.
(10)  The Authority may register a prospectus or profile statement on any day between the 14th and 21st days (both days inclusive) from the date of lodgment thereof with the Authority, unless —
(a)the Authority gives to the person making the offer a notice of an opportunity to be heard under subsection (20);
(b)the Authority gives to the person making the offer notice of an extension, in which case the Authority may, not later than 28 days from the date of lodgment of the prospectus or profile statement —
(i)register the prospectus or profile statement; or
(ii)give the person making the offer a notice of an opportunity to be heard under subsection (20);
(c)the person making the offer applies in writing to extend the period during which the prospectus or profile statement may be registered, and the Authority grants an extension as it thinks fit, in which case the Authority may, at any time up to and including the date on which the extended period ends —
(i)register the prospectus or profile statement; or
(ii)give the person making the offer a notice of an opportunity to be heard under subsection (20); or
(d)the person making the offer gives a notice in writing to the Authority to withdraw the lodgment of the prospectus or profile statement, in which case the Authority shall not register the prospectus or profile statement.
(11)  Where, after a notice of an opportunity to be heard has been given under subsection (10)(a), (b)(ii) or (c)(ii), the Authority decides not to refuse registration of the prospectus or profile statement, the Authority may proceed with the registration on such date as it considers appropriate, except that that date shall not be earlier than the 14th day from the date of lodgment of the prospectus or profile statement with the Authority.
(12)  Where a prospectus lodged with the Authority is a preliminary document, the Authority shall not register the prospectus unless a copy of the prospectus which has been signed in accordance with subsection (5) and which contains the information required to be stipulated in the prospectus under section 282F, including such information which could be omitted from the preliminary document by virtue of subsection (3), has been lodged with the Authority.
(13)  A person making an offer of units or derivatives of units in a business trust may lodge any amendment to a prospectus or profile statement in respect of that offer at any time before but not after the registration of the prospectus or profile statement by the Authority.
(14)  Subject to subsection (15) —
(a)where any amendment to a prospectus is lodged, the prospectus and any profile statement which is lodged shall be deemed, for the purposes of subsection (10), to have been lodged when such amendment was lodged; and
(b)where any amendment to a profile statement is lodged, the profile statement shall be deemed, for the purposes of subsection (10), to have been lodged when such amendment was lodged.
(15)  Where an amendment to a prospectus or profile statement is lodged with the consent of the Authority, the prospectus or profile statement as amended shall be deemed, for the purposes of subsection (10), to have been lodged when the original prospectus or profile statement was lodged with the Authority.
(16)  An amendment to a prospectus or profile statement that is lodged shall be treated as part of the original prospectus or profile statement.
(17)  The Authority may, for public information, publish —
(a)a prospectus or profile statement lodged with the Authority under this section; and
(b)where applicable, the translation thereof in the English language lodged with the Authority under section 318A(1),
and, for the purposes of this subsection, the person making the offer shall provide the Authority with a copy of the prospectus or profile statement and, where applicable, the translation, in such form or medium for publication as the Authority may require.
(18)  The Authority shall refuse to register a prospectus if —
(a)the Authority is of the opinion that the prospectus contains a false or misleading statement;
(b)there is an omission from the prospectus of any information that is required to be included in it under section 282F;
(c)the copy of the prospectus that is lodged with the Authority is not signed in accordance with subsection (5);
(d)the Authority is of the opinion that the prospectus does not comply with the requirements of this Act;
(e)any written consent of an expert to the issue of the prospectus required under section 282I, or a copy thereof which is verified as prescribed, is not lodged with the Authority;
(f)any written consent of an issue manager to the issue of the prospectus required under section 282J(1), or a copy thereof which is verified as prescribed, is not lodged with the Authority;
(g)any written consent of an underwriter to the issue of the prospectus required under section 282J(2), or a copy thereof which is verified as prescribed, is not lodged with the Authority; or
(h)the Authority is of the opinion that it is not in the public interest to do so.
(19)  The Authority shall refuse to register a profile statement if —
(a)the Authority is of the opinion that the profile statement contains a false or misleading statement;
(b)there is an omission from the profile statement of information required under section 282G to be included in it or an inclusion in the profile statement of information prohibited by that section from being included in it;
(c)the copy of the profile statement that is lodged with the Authority is not signed in accordance with subsection (5);
(d)any written consent of an expert to the issue of the profile statement required under section 282I, or a copy thereof which is verified as prescribed, is not lodged with the Authority;
(e)the Authority is of the opinion that the profile statement does not comply with the requirements of this Act;
(f)the prospectus has not been registered by the Authority;
(g)any written consent of an issue manager to the issue of the profile statement required under section 282J(1), or a copy thereof which is verified as prescribed, is not lodged with the Authority;
(h)any written consent of an underwriter to the issue of the profile statement required under section 282J(2), or a copy thereof which is verified as prescribed, is not lodged with the Authority; or
(i)the Authority is of the opinion that it is not in the public interest to do so.
(20)  The Authority shall not refuse to register a prospectus under subsection (18) or a profile statement under subsection (19) without giving the person making the offer an opportunity to be heard, except that an opportunity to be heard need not be given if the refusal is on the ground that it is not in the public interest to register the prospectus or profile statement on the basis of any of the following circumstances:
(a)the person making the offer (being an entity), the issuer, the trustee-manager of the business trust or the business trust itself is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere;
(b)the person making the offer (being an individual) is an undischarged bankrupt, whether in Singapore or elsewhere; or
(c)a receiver, a receiver and 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 making the offer (being an entity), the issuer or the trustee-manager of the business trust, or in relation to or in respect of the trust property of the business trust.
(21)  Any person making an offer may, within 30 days after he is notified that the Authority has refused to register a prospectus or profile statement to which his offer relates under subsection (18) or (19), appeal to the Minister whose decision shall be final.
(22)  If —
(a)a prospectus or profile statement is issued, circulated or distributed before it has been registered by the Authority; or
(b)an application to subscribe for or purchase units or derivatives of units in a business trust is accepted, or units or derivatives of units in a business trust are allotted, issued or sold, before a prospectus and, where applicable, profile statement, where applicable, in respect of the units or derivatives of units has been registered by the Authority,
the person making the offer and every person who is knowingly a party to —
(i)the issue, circulation or distribution of the prospectus or profile statement;
(ii)the acceptance of the application to subscribe for or purchase the units or derivatives of units; or
(iii)the allotment, issue or sale of the units or derivatives of units,
as the case may be, 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 2 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 thereof during which the offence continues after conviction.
(23)  Regulations made under this section may provide that a contravention of specified provisions thereof shall be an offence and may provide for penalties not exceeding a fine of $50,000.
(24)  For the purposes of subsections (18)(a) and (19)(a), any reference to a statement shall include a reference to any information presented, regardless of whether such information is in text or otherwise.
Lodging supplementary document or replacement document
282D.—(1)  If, after a prospectus or profile statement is registered but before the close of the offer of units or derivatives of units in a business trust, the person making that offer becomes aware of —
(a)a false or misleading statement in the prospectus or profile statement;
(b)an omission from the prospectus of any information that should have been included in it under section 282F, or an omission from the profile statement of any information that should have been included in it under section 282G, as the case may be; or
(c)a new circumstance that —
(i)has arisen since the prospectus or profile statement was lodged with the Authority; and
(ii)would have been required by —
(A)section 282F to be included in the prospectus; or
(B)section 282G to be included in the profile statement,
if it had arisen before the prospectus or the profile statement, as the case may be, was lodged,
and that is materially adverse from the point of view of an investor, the person may lodge a supplementary or replacement prospectus, or a supplementary or replacement profile statement (referred to in this section as a supplementary or replacement document, as the case may be), with the Authority.
(2)  At the beginning of a supplementary document, there shall be —
(a)a statement that it is a supplementary prospectus or a supplementary profile statement, as the case may be;
(b)an identification of the prospectus or profile statement it supplements;
(c)an identification of any previous supplementary document lodged with the Authority in relation to the offer; and
(d)a statement that it is to be read together with the prospectus or profile statement it supplements and any previous supplementary document in relation to the offer.
(3)  At the beginning of a replacement document, there shall be —
(a)a statement that it is a replacement prospectus or a replacement profile statement, as the case may be; and
(b)an identification of the prospectus or profile statement it replaces.
(4)  The supplementary document and the replacement document must be dated with the date on which they are lodged with the Authority.
(5)  The person making the offer shall take reasonable steps —
(a)to inform potential investors of the lodgment of any supplementary or replacement document under subsection (1); and
(b)to make available to them the supplementary document or replacement document.
(6)  For the purposes of the application of this Division to events that occur after the lodgment of the supplementary document —
(a)where the supplementary document is a supplementary prospectus, the prospectus in relation to the offer shall be taken to be the original prospectus together with the supplementary prospectus and any previous supplementary prospectus in relation to the offer; and
(b)where the supplementary document is a supplementary profile statement, the profile statement in relation to the offer shall be taken to be the original profile statement together with the supplementary profile statement and any previous supplementary profile statement in relation to the offer.
(7)  For the purposes of the application of this Division to events that occur after the lodgment of the replacement document —
(a)where the replacement document is a replacement prospectus, the prospectus in relation to the offer shall be taken to be the replacement prospectus; and
(b)where the replacement document is a replacement profile statement, the profile statement in relation to the offer shall be taken to be the replacement profile statement.
(8)  If a supplementary document or replacement document is lodged with the Authority, the offer shall be kept open for at least 14 days after the lodgment of the supplementary document or replacement document.
(9)  Where, prior to the lodgment of the supplementary document or replacement document, applications have been made under the original prospectus or profile statement to subscribe for units or derivatives of units in a business trust, then —
(a)where the units or derivatives of units have not been issued to the applicants, the person making the offer —
(i)shall —
(A)within 2 days (excluding any Saturday, Sunday or public holiday) from the date of lodgment of the supplementary document or replacement document, give the applicants notice in writing of how to obtain, or arrange to receive, a copy of the supplementary document or replacement document, as the case may be, and provide the applicants with an option to withdraw their applications; and
(B)take all reasonable steps to make available within a reasonable period the supplementary document or replacement document, as the case may be, to the applicants who have indicated that they wish to obtain, or who have arranged to receive, a copy of the supplementary document or replacement document;
(ii)shall, within 7 days from the date of lodgment of the supplementary document or replacement document, give the applicants the supplementary document or replacement document, as the case may be, and provide the applicants with an option to withdraw their applications; or
(iii)shall —
(A)treat the applications as withdrawn and cancelled, in which case the applications shall be deemed to have been withdrawn and cancelled; and
(B)within 7 days from the date of lodgment of the supplementary document or replacement document, pay to the applicants all moneys the applicants have paid on account of their applications for the units or derivatives of units in the business trust; or
(b)where the units or derivatives of units have been issued to the applicants, the person making the offer —
(i)shall —
(A)within 2 days (excluding any Saturday, Sunday or public holiday) from the date of lodgment of the supplementary document or replacement document, give the applicants notice in writing of how to obtain, or arrange to receive, a copy of the supplementary document or replacement document, as the case may be, and provide the applicants with an option to return, to the person making the offer, those units or derivatives of units in the business trust which they do not wish to retain title in; and
(B)take all reasonable steps to make available within a reasonable period the supplementary document or replacement document, as the case may be, to the applicants who have indicated that they wish to obtain, or who have arranged to receive, a copy of the supplementary document or replacement document;
(ii)shall, within 7 days from the date of lodgment of the supplementary document or replacement document, give the applicants the supplementary document or replacement document, as the case may be, and provide the applicants with an option to return, to the person making the offer, those units or derivatives of units in the business trust which they do not wish to retain title in; or
(iii)shall —
(A)treat the issue of the units or derivatives of units in the business trust as void, in which case the issue shall be deemed void; and
(B)within 7 days from the date of lodgment of the supplementary document or replacement document, pay to the applicants all moneys paid by them for the units or derivatives of units.
(10)  An applicant who wishes to exercise his option under subsection (9)(a)(i) or (ii) to withdraw his application shall, within 14 days from the date of lodgment of the supplementary document or replacement document, notify the person making the offer of this, whereupon that person shall, within 7 days from the receipt of such notification, pay to the applicant all moneys paid by him on account of his application for the units or derivatives of units in the business trust.
(11)  An applicant who wishes to exercise his option under subsection (9)(b)(i) or (ii) to return units or derivatives of units in the business trust issued to him shall, within 14 days from the date of lodgment of the supplementary document or replacement document, notify the person making the offer of this and return all documents, if any, purporting to be evidence of title to those units or derivatives of units to that person, whereupon that person shall, within 7 days from the receipt of such notification and documents, if any, pay to the applicant all moneys paid by the applicant for the units or derivatives of units in the business trust, and the issue of those units or derivatives of units shall be deemed to be void.
(12)  Where, prior to the lodgment of the supplementary document or replacement document, applications have been made under the original prospectus or profile statement to purchase units or derivatives of units in a business trust, then —
(a)where the units or derivatives of units have not been transferred to the applicants, the person making the offer —
(i)shall —
(A)within 2 days (excluding any Saturday, Sunday or public holiday) from the date of lodgment of the supplementary document or replacement document, give the applicants notice in writing of how to obtain, or arrange to receive, a copy of the supplementary document or replacement document, as the case may be, and provide the applicants with an option to withdraw their applications; and
(B)take all reasonable steps to make available within a reasonable period the supplementary document or replacement document, as the case may be, to the applicants who have indicated that they wish to obtain, or who have arranged to receive, a copy of the supplementary document or replacement document;
(ii)shall, within 7 days from the date of lodgment of the supplementary document or replacement document, give the applicants the supplementary document or replacement document, as the case may be, and provide the applicants with an option to withdraw their applications; or
(iii)shall —
(A)treat the applications as withdrawn and cancelled, in which case the applications shall be deemed to have been withdrawn and cancelled; and
(B)within 7 days from the date of lodgment of the supplementary document or replacement document, pay to the applicants all moneys the applicants have paid on account of their applications for the units or derivatives of units in the business trust; or
(b)where the units or derivatives of units have been transferred to the applicants, the person making the offer —
(i)shall —
(A)within 2 days (excluding any Saturday, Sunday or public holiday) from the date of lodgment of the supplementary document or replacement document, give the applicants notice in writing of how to obtain, or arrange to receive, a copy of the supplementary document or replacement document, as the case may be, and provide the applicants with an option to return, to the person making the offer, those units or derivatives of units in the business trust which they do not wish to retain title in; and
(B)take all reasonable steps to make available within a reasonable period the supplementary document or replacement document, as the case may be, to the applicants who have indicated that they wish to obtain, or who have arranged to receive, a copy of the supplementary document or replacement document;
(ii)shall, within 7 days from the date of lodgment of the supplementary document or replacement document, give the applicants the supplementary document or replacement document, as the case may be, and provide the applicants with an option to return, to the person making the offer, those units or derivatives of units in the business trust which they do not wish to retain title in; or
(iii)shall treat the sale of the units or derivatives of units in the business trust as void, in which case the sale shall be deemed void, and shall —
(A)if documents purporting to evidence title to the units or derivatives of units (referred to in this paragraph as the title documents) have been issued to the applicants —
(AA)within 7 days from the date of lodgment of the supplementary document or replacement document, inform the applicants to return the title documents to the person making the offer within 14 days from the date of lodgement of the supplementary document or replacement document; and
(AB)within 7 days from the date of the receipt of the title documents or the date of lodgment of the supplementary document or replacement document, whichever is the later, pay to the applicants all moneys paid by them for the units or derivatives of units; or
(B)if no title documents have been issued to the applicants, within 7 days from the date of the lodgment of the supplementary document or replacement document, pay to the applicants all moneys paid by them for the units or derivatives of units.
(13)  An applicant who wishes to exercise his option under subsection (12)(a)(i) or (ii) to withdraw his application shall, within 14 days from the date of lodgment of the supplementary document or replacement document, notify the person making the offer of this, whereupon that person shall, within 7 days of the receipt of such notification, pay to him all moneys paid by him on account of his application for the units or derivatives of units in the business trust.
(14)  An applicant who wishes to exercise his option under subsection (12)(b)(i) or (ii) to return units or derivatives of units in the business trust sold to him shall, within 14 days from the date of lodgment of the supplementary document or replacement document, notify the person making the offer of this and return all documents, if any, purporting to evidence title to those units or derivatives of units to the person making the offer, whereupon that person shall, within 7 days from the receipt of such notification and documents, if any, pay to the applicant all moneys paid by him for the units or derivatives of units and the sale of those units or derivatives of units shall be deemed to be void.
(15)  Any person who contravenes subsection (9) or (12) 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 thereof during which the offence continues after conviction.
(16)  Any person who contravenes any other provision of this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000 and, in the case of a continuing offence, to a further fine not exceeding $5,000 for every day or part thereof during which the offence continues after conviction.
(17)  For the purposes of subsection (1)(a), the reference to a statement shall include a reference to any information presented, regardless of whether such information is in text or otherwise.
Stop order for prospectus and profile statement
282E.—(1)  If a prospectus has been registered and —
(a)the Authority is of the opinion that the prospectus contains a false or misleading statement;
(b)there is an omission from the prospectus of any information that is required to be included in it under section 282F;
(c)the Authority is of the opinion that the prospectus does not comply with the requirements of this Act; or
(d)the Authority is of the opinion that it is in the public interest to do so,
the Authority may, by an order in writing (referred to in this section as a stop order) served on the person making the offer of units or derivatives of units in a business trust to which the prospectus relates, direct that no or no further units or derivatives of units in the business trust be allotted, issued or sold.
(2)  If a profile statement has been registered and —
(a)the Authority is of the opinion that the profile statement contains a false or misleading statement;
(b)there is an omission from the profile statement of any information that is required to be included in it under section 282G;
(c)the Authority is of the opinion that the profile statement does not comply with the requirements of this Act; or
(d)the Authority is of the opinion that it is in the public interest to do so,
the Authority may, by an order in writing (referred to in this section as a stop order) served on the person making the offer of the units or derivatives of units in a business trust to which the profile statement relates, direct that no or no further units or derivatives of units in the business trust allotted, issued or sold.
(3)  Notwithstanding subsections (1) and (2), the Authority shall not serve a stop order if any of the units or derivatives of units in a business trust to which the prospectus or profile statement relates has been issued or sold, and listed for quotation on a securities exchange and trading in them has commenced.
(4)  The Authority shall not serve a stop order under subsection (1) or (2) without giving the person making the offer an opportunity to be heard, except that an opportunity to be heard need not be given if the stop order is served on the ground that it is in the public interest to do so on the basis of any of the following circumstances:
(a)the person making the offer (being an entity), the issuer, the trustee-manager of the business trust or the business trust itself is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere;
(b)the person making the offer (being an individual) is an undischarged bankrupt, whether in Singapore or elsewhere;
(c)a receiver, a receiver and 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 making the offer (being an entity), the issuer, the trustee-manager of the business trust or, in relation to or in respect of the trust property of the business trust.
(5)  Where applications to subscribe for units or derivatives of units in a business trust to which the prospectus or profile statement relates have been made prior to the stop order, then —
(a)where the units or derivatives of units have not been issued to the applicants —
(i)the applications shall be deemed to have been withdrawn and cancelled; and
(ii)the person making the offer shall, within 14 days from the date of the stop order, pay to the applicants all moneys the applicants have paid on account of their applications for the units or derivatives of units; or
(b)where the units or derivatives of units have been issued to the applicants —
(i)the issue of the units or derivatives of units shall be deemed to be void; and
(ii)the person making the offer shall, within 14 days from the date of the stop order, pay to the applicants all moneys paid by them for the units or derivatives of units.
(6)  Where applications to purchase units or derivatives of units in a business trust to which the prospectus or profile statement relates have been made prior to the stop order, then —
(a)where the units or derivatives of units have not been transferred to the applicants —
(i)the applications shall be deemed to have been withdrawn and cancelled; and
(ii)the person making the offer shall, within 14 days from the date of the stop order, pay to the applicants all moneys the applicants have paid on account of their applications for the units or derivatives of units; or
(b)where the units or derivatives of units have been transferred to the applicants, the sale shall be deemed to be void, and the person making the offer shall —
(i)if documents purporting to evidence title to the units or derivatives of units have been issued to the applicants —
(A)within 7 days from the date of the stop order, inform the applicants to return such documents to the person making the offer within 14 days from that date; and
(B)within 7 days from the date of the receipt of those documents or the date of the stop order, whichever is the later, pay to the applicants all moneys paid by them for the units or derivatives of units; or
(ii)if no such documents have been issued to the applicants, within 7 days from the date of the stop order, pay to the applicants all moneys paid by them for the units or derivatives of units.
(7)  If the Authority is of the opinion that any delay in serving a stop order pending the holding of a hearing required under subsection (4) is not in the interests of the public, the Authority may, without giving an opportunity to be heard, serve an interim stop order on the person making the offer directing that no or no further units or derivatives of units in a business trust to which the prospectus or profile statement relates be allotted, issued or sold.
(8)  An interim stop order shall, unless revoked by the Authority, be in force —
(a)in a case where —
(i)it is served during a hearing under subsection (4); or
(ii)a hearing under subsection (4) is commenced while it is in force,
until the Authority makes an order under subsection (1) or (2); and
(b)in any other case, for a period of 14 days from the day on which the interim stop order is served.
(9)  Subsections (5) and (6) shall not apply where only an interim stop order has been served.
(10)  Any person who fails to comply with a stop order served under subsection (1) or (2) or an interim stop order served under subsection (7) 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 2 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 thereof during which the offence continues after conviction.
(11)  Any person who contravenes subsection (5) or (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 thereof during which the offence continues after conviction.
(12)  For the purposes of subsections (1)(a) and (2)(a), any reference to a statement shall include a reference to any information presented, regardless of whether such information is in text or otherwise.
Contents of prospectus
282F.—(1)  A prospectus for an offer of units or derivatives of units in a business trust shall contain —
(a)all the information that investors and their professional advisers would reasonably require to make an informed assessment of the matters specified in subsection (3); and
(b)the matters prescribed by the Authority.
(2)  The prospectus shall, with respect to subsection (1)(a), contain such information —
(a)only to the extent to which it is reasonable for investors and their professional advisers to expect to find in the prospectus; and
(b)only to the extent that a person whose knowledge is relevant —
(i)actually knows the information; or
(ii)in the circumstances ought reasonably to have obtained the information by making enquiries.
(3)  The matters referred to in subsection (1)(a) shall relate to —
(a)the rights and liabilities attaching to the units or derivatives of units in the business trust;
(b)where the person making the offer of units or derivatives of units in the business trust is the trustee-manager of the business trust or the trustee-manager of the business trust is controlled by —
(i)the person making the offer;
(ii)one or more of the related parties of the person making the offer; or
(iii)the person making the offer and one or more of his related parties —
the assets and liabilities, profits and losses and financial position and performance of the business trust and of the trustee manager, and the prospects of the business trust;
(c)where derivatives of units in the business trust are issued by an entity other than the trustee-manager of the business trust and the person making the offer is that entity or that entity is controlled by —
(i)the person making the offer;
(ii)one or more of the related parties of the person making the offer; or
(iii)the person making the offer and one or more of his related parties,
the assets and liabilities, profits and losses, financial position and performance, and prospects of that entity; and
(d)in the case of an offer of derivatives of units in the business trust, where the person making the offer, or an entity which is controlled by —
(i)the person making the offer;
(ii)one or more of the related parties of the person making the offer; or
(iii)the person making the offer and one or more of his related parties,
is or will be required to issue or deliver the relevant units or derivatives of units, or meet financial or contractual obligations to the holders of those derivatives of units, the capacity of that person or entity to issue or deliver the relevant units or derivatives of units in that business trust, or the ability of that person or entity to meet those financial or contractual obligations.
(4)  In deciding what information shall be included under subsection (1)(a), regard shall be had to —
(a)the nature of the units or derivatives of units in the business trust and the nature of the business trust concerned;
(b)the matters that likely investors may reasonably be expected to know; and
(c)the fact that certain matters may reasonably be expected to be known to the professional advisers of such investors.
(5)  For the purposes of subsection (2)(b), a person’s knowledge is relevant only if he is one of the following persons:
(a)the person making the offer;
(b)if the person making the offer is an entity, a director or equivalent person of the entity;
(c)the issuer;
(d)a director or equivalent person, or a proposed director or equivalent person, of the issuer;
(e)a person named in the prospectus with his consent as an underwriter to the issue or sale;
(f)a person named in the prospectus as a stockbroker to the issue or sale if he participates in any way in the preparation of the prospectus;
(g)a person named in the prospectus with his consent as having made a statement —
(i)that is included in the prospectus; or
(ii)on which a statement made in the prospectus is based;
(h)a person named in the prospectus with his consent as having performed a particular professional or advisory function.
(6)  A condition requiring or binding an applicant for units or derivatives of units in a business trust to waive compliance with any requirement of this section, or purporting to affect him with notice of any contract, document or matter not specifically referred to in the prospectus, shall be void.
(7)  This section does not affect any liability that a person has under any other law.
(8)  In subsection (3)(b), “assets and liabilities, profits and losses, financial position and performance, and prospects”, in relation to a business trust, means —
(a)the assets and liabilities, profits and losses, financial position and performance of that business trust derived from the accounting records and other records kept by the trustee-manager of that business trust; and
(b)the business and financial prospects anticipated with respect to the operations of the trustee-manager of the business trust in its capacity as trustee-manager of the business trust.
Contents of profile statement
282G.—(1)  A profile statement for an offer of units or derivatives of units in a business trust shall contain —
(a)the following particulars:
(i)identification of the business trust, the trustee-manager of the business trust, the person making the offer and the issuer;
(ii)identification of the persons signing the profile statement;
(iii)the nature of the units or derivatives of units;
(iv)the nature of the risks involved in investing in the units or derivatives of units; and
(v)details of all amounts payable in respect of the units or derivatives of units (including any amount by way of fee, commission or charge);
(b)a statement that copies of the prospectus are available for collection at the times and places specified in the profile statement; and
(c)a statement that the persons referred to in section 282C(5) who have signed the profile statement are satisfied that the profile statement contains a fair summary of the key information in the prospectus.
(2)  A profile statement shall not contain —
(a)any statement that is false or misleading in the form and context in which it is included;
(b)any material information that is not contained in the prospectus; and
(c)any material information that differs in any material particular from that set out in the prospectus.
(3)  For the purposes of subsection (2)(a), the reference to a statement shall include a reference to any information presented, regardless of whether such information is in text or otherwise.
Exemption from requirements as to form or content of prospectus or profile statement
282H.—(1)  The Authority may exempt any person or any prospectus or profile statement from any requirement of this Act relating to the form or content of a prospectus or profile statement, subject to such conditions or restrictions as may be determined by the Authority.
(2)  The Authority shall not grant an exemption under subsection (1) unless it is of the opinion that —
(a)the cost of complying with the requirement in respect of which exemption has been applied for outweighs the resulting protection to investors; or
(b)it would not be prejudicial to the public interest if the requirement in respect of which the exemption has been applied for were dispensed with.
(3)  The Authority may exempt any class of persons or any class or description of prospectuses or profile statements, from any requirement of this Act relating to the form or content of a prospectus or profile statement, subject to such conditions or restrictions as may be determined by the Authority.
(4)  Any person who contravenes any of the conditions or restrictions imposed under subsection (1) or (3) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000 and, in the case of a continuing offence, to a further fine not exceeding $5,000 for every day or part thereof during which the offence continues after conviction.
Expert’s consent to issue of prospectus or profile statement containing statement by him
282I.—(1)  Where an offer of units or derivatives of units in a business trust is made in or accompanied by a prospectus or profile statement which includes a statement purporting to be made by, or based on a statement made by, an expert, the prospectus or profile statement shall not be issued unless —
(a)the expert has given, and has not before the registration of the prospectus or profile statement, as the case may be, withdrawn his written consent to the issue thereof with the statement included in the form and context in which it is included; and
(b)there appears in the prospectus or profile statement, as the case may be, a statement that the expert has given and has not withdrawn his consent.
(2)  Every person making the offer shall cause a true copy of every written consent referred to in subsection (1) to be deposited, within 7 days after the registration of the prospectus or profile statement, at the registered office of the issuer in Singapore or, if the issuer has no registered office in Singapore, at the address in Singapore specified in the prospectus for that purpose.
(3)  Every issuer shall keep, and make available for inspection by its members and creditors and persons who have subscribed for or purchased the units or derivatives of units in the business trust to which the prospectus or profile statement relates, without payment of any fee, a true copy of every written consent deposited in accordance with subsection (2) for a period of at least 6 months after the registration of the prospectus or profile statement.
(4)  If any prospectus or profile statement is issued in contravention of subsection (1), the person making the offer and every person who is knowingly a party to the issue thereof 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 12 months or to both and, in the case of a continuing offence, to a further fine not exceeding $5,000 for every day or part thereof during which the offence continues after conviction.
(5)  The Authority may exempt any person or class of persons, or any prospectus or profile statement or class or description of prospectuses or profile statements, from this section, subject to such conditions or restrictions as may be determined by the Authority.
(6)  Any person who contravenes any of the conditions or restrictions imposed under subsection (5) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000 and, in the case of a continuing offence, to a further fine not exceeding $5,000 for every day or part thereof during which the offence continues after conviction.
Consent of issue manager and underwriter to being named in the prospectus or profile statement
282J.—(1)  Where an offer of units or derivatives of units in a business trust is made in or accompanied by a prospectus or profile statement in which a person is named as the issue manager to the offer, the prospectus or profile statement shall not be issued unless —
(a)the person has given, and has not before the registration of the prospectus or profile statement, as the case may be, withdrawn his written consent to being named in the prospectus or profile statement as issue manager to that offer; and
(b)there appears in the prospectus or profile statement, as the case may be, a statement that the person has given and has not withdrawn his consent.
(2)  Where an offer of units or derivatives of units in a business trust is made in or accompanied by a prospectus or profile statement in which a person is named as the underwriter (but not a sub-underwriter) to the offer, the prospectus or profile statement shall not be issued unless —
(a)the person has given, and has not before the registration of the prospectus or profile statement, as the case may be, withdrawn his written consent to being named in the prospectus or profile statement as underwriter to that offer; and
(b)there appears in the prospectus or profile statement, as the case may be, a statement that the person has given and has not withdrawn such consent.
(3)  If any prospectus or profile statement is issued in contravention of subsection (1) or (2), the person making the offer and every person who is knowingly a party to the issue thereof 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 12 months or to both and, in the case of a continuing offence, to a further fine not exceeding $5,000 for every day or part thereof during which the offence continues after conviction.
(4)  Every person making the offer shall cause a true copy of every written consent referred to in subsection (1) and (2) to be deposited, within 7 days after the registration of the prospectus or profile statement, at the registered office of the issuer in Singapore or, if it has no registered office in Singapore, at the address in Singapore specified in the prospectus for that purpose.
(5)  Every issuer shall keep, and make available for inspection by its members and creditors and persons who have subscribed for or purchased the units or derivatives of units in the business trust to which the prospectus or profile statement relates, without payment of any fee, a true copy of every written consent deposited in accordance with subsection (4) for a period of at least 6 months after the registration of the prospectus or profile statement.
Duration of validity of prospectus and profile statement
282K.—(1)  No person shall make an offer of units or derivatives of units in a business trust, or allot, issue or sell any units or derivatives of units in a business trust, on the basis of a prospectus or profile statement after the expiration of a period of 6 months from the date of registration by the Authority of the prospectus in relation to such offer, allotment, issue or sale.
(2)  In a case where an entity makes an offer of units or derivatives of units in a business trust or where the units or derivatives of units in a business trust being offered are those issued by an entity or a proposed entity, no officer or equivalent person or promoter of the entity or proposed entity shall authorise or permit —
(a)the offer of those units or derivatives of units; or
(b)the allotment, issue or sale of those units or derivatives of units,
on the basis of a prospectus or profile statement after the expiration of a period of 6 months from the date of registration by the Authority of the prospectus in relation to such offer, allotment, issue or sale.
(3)  If default is made in complying with subsection (1) or (2), the person and, in the case of an entity or proposed entity, every officer or equivalent person or promoter of the entity or proposed entity 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 12 months or to both and, in the case of a continuing offence, to a further fine not exceeding $5,000 for every day or part thereof during which the offence continues after conviction.
(4)  An allotment, an issue or a sale of units or derivatives of units in a business trust that is made in contravention of subsection (1) or (2) shall not, by reason only of that fact, be voidable or void.
Restrictions on advertisements, etc.
282L.—(1)  If a prospectus is required for an offer or intended offer of units or derivatives of units in a business trust, a person shall not —
(a)advertise the offer or intended offer; or
(b)publish a statement that —
(i)directly or indirectly refers to the offer or intended offer; or
(ii)is reasonably likely to induce persons to subscribe for or purchase the units or derivatives of units,
unless the advertisement or publication is authorised by this section.
(2)  In determining whether a statement —
(a)indirectly refers to an offer or intended offer of units or derivatives of units in a business trust; or
(b)is reasonably likely to induce persons to subscribe for or purchase units or derivatives of units in a business trust,
regard shall be had to whether the statement —
(i)forms part of —
(A)the normal advertising by a trustee-manager of a business trust on behalf of the business trust in respect of the products or services offered by the trustee-manager on behalf of the business trust, and is genuinely directed at maintaining existing customers, or attracting new customers, for those products or services; or
(B)the normal advertising of an entity’s products or services, and is genuinely directed at maintaining its existing customers, or attracting new customers, for those products or services;
(ii)communicates information that materially deals with the affairs of the business trust or the entity; and
(iii)is likely to encourage investment decisions being made on the basis of the statement rather than on the basis of information contained in a prospectus or profile statement.
(3)  Notwithstanding subsection (6), a person may, before a prospectus or profile statement is registered by the Authority, disseminate a preliminary document which has been lodged with the Authority to institutional investors, relevant persons as defined in section 282Z(3) or persons to whom an offer referred to in section 282Z(2) is to be made without contravening subsection (1), if —
(a)the front page of the preliminary document contains —
(i)the following statement:
This is a preliminary document and is subject to further amendments and completion in the prospectus to be registered by the Monetary Authority of Singapore.”;
(ii)a statement that a person to whom a copy of the preliminary document has been issued shall not circulate it to any other person; and
(iii)a statement in bold lettering that no offer or agreement shall be made on the basis of the preliminary document to purchase or subscribe for any units or derivatives of units in the business trust to which the preliminary document relates;
(b)the preliminary document does not contain or have attached to it any form of application that will facilitate the making by any person of an offer of the units or derivatives of units in the business trust to which the preliminary document relates, or the acceptance of such an offer by any person; and
(c)when the prospectus is registered by the Authority, the person takes reasonable steps to notify the persons to whom the preliminary document was issued that the registered prospectus is available for collection.
(4)  Notwithstanding subsection (6), a person does not contravene subsection (1) by presenting oral or written material, on matters contained in a preliminary document which has been lodged with the Authority, to institutional investors, relevant persons as defined in section 282Z(3) or persons to whom an offer referred to in section 282Z(2) is to be made before a prospectus or profile statement is registered by the Authority.
(5)  For the avoidance of doubt, a person may disseminate a prospectus or profile statement that has been registered by the Authority under section 282C without contravening subsection (1).
(6)  Before a prospectus or profile statement is registered, an advertisement or a publication does not contravene subsection (1) if it contains only the following:
(a)a statement that identifies the units or derivatives of units in the business trust, the person making the offer, the issuer, the business trust and the trustee-manager of the business trust;
(b)a statement that a prospectus or profile statement for the offer will be made available when the offer is made;
(c)a statement that anyone wishing to acquire the units or derivatives of units in the business trust will need to make an application in the manner set out in the prospectus or profile statement; and
(d)a statement of how to obtain, or arrange to receive, a copy of the prospectus or profile statement.
(7)  To satisfy subsection (6), the advertisement or publication shall include all of the statements referred to in paragraphs (a), (b) and (c) of that subsection, and may include the statement referred to in paragraph (d).
(8)  After a prospectus or profile statement is registered with the Authority, an advertisement or a publication does not contravene subsection (1) if —
(a)it includes a statement that the prospectus or profile statement in respect of the offer of units or derivatives of units in the business trust is available for collection at the times and places specified in the statement;
(b)it includes a statement that anyone wishing to acquire the units or derivatives of units in the business trust will need to make an application in the manner set out in the prospectus or profile statement; and
(c)it does not contain any information that is not included in the prospectus or profile statement.
(9)  An advertisement or a publication does not contravene subsection (1) if it —
(a)consists solely of a disclosure, notice or report required under this Act, or any listing rules or other requirements of a securities exchange, futures exchange or recognised securities exchange made by any person;
(b)consists solely of a notice or report of a general meeting or proposed general meeting of the person making the offer, the issuer, the trustee-manager of the business trust or any entity, a notice or report of a general meeting or proposed general meeting of the unitholders of the business trust, or a presentation of oral or written material on matters so contained in the notice or report at the general meeting;
(c)consists solely of a report about the issuer or the business trust whose units or derivatives of units are the subject of the offer or intended offer that is published by the person making the offer, the issuer or the trustee-manager of the business trust, which —
(i)does not contain information that materially affects the affairs of the issuer or the business trust other than information previously made available in a prospectus that has been registered by the Authority, an annual report or a disclosure, notice or report referred to in paragraph (a) or (b); and
(ii)does not refer (directly or indirectly) to the offer or intended offer;
(d)consists solely of a statement made by the person making the offer, the issuer or the trustee-manager of the business trust that a prospectus or profile statement in respect of the offer or intended offer has been lodged with the Authority;
(e)is a news report, or a genuine comment, by a person other than any person referred to in paragraph (f)(i), (ii), (iii) or (iv), in a newspaper, periodical or magazine or on radio, television or any other means of broadcasting or communication, relating to —
(i)a prospectus or profile statement that has been lodged with the Authority or information contained in such a prospectus or profile statement;
(ii)a disclosure, notice or report referred to in paragraph (a);
(iii)a notice, report, presentation, general meeting or proposed general meeting referred to in paragraph (b);
(iv)a report referred to in paragraph (c);
(f)is a report about the units or derivatives of units in a business trust which are the subject of the offer or intended offer, published by someone who is not —
(i)the person making the offer, the issuer or the trustee-manager of the business trust;
(ii)a director or equivalent person of the person making the offer, the issuer or the trustee-manager of the business trust;
(iii)a person who has an interest in the success of the issue or sale of the units or derivatives of units in the business trust; or
(iv)a person acting at the instigation of, or by arrangement with, any person referred to in sub-paragraph (i), (ii) or (iii);
(g)is a report about the units or derivatives of units in a business trust which are the subject of the offer or intended offer, published and delivered to any institutional investor not later than 14 days prior to the date of lodgment of the prospectus, provided that —
(i)the offer is also made or will also be made in one or more other countries;
(ii)the publication and delivery of such report in that other country or any one of those other countries do not infringe any law, code or other requirement of that country;
(iii)the report and the manner of its publication and delivery in Singapore comply with such other requirements as may be prescribed by the Authority; and
(iv)the person issuing the report complies with such requirements as may be prescribed by the Authority; or
(h)is a publication made by the person making the offer, the issuer or the trustee-manager of the business trust solely to correct or provide clarification on any erroneous or inaccurate information or comment contained in —
(i)an earlier news report or a genuine comment referred to in paragraph (e); or
(ii)an earlier publication published in the ordinary course of business of publishing a newspaper, periodical or magazine, or of broadcasting by radio, television or any other means of broadcasting or communication, referred to in subsection (10),
provided that the first-mentioned publication does not contain any material information that is not included in the prospectus.
(10)  A person does not contravene subsection (1) if —
(a)he publishes any advertisement or publication in the ordinary course of a business of —
(i)publishing a newspaper, periodical or magazine; or
(ii)broadcasting by radio, television or any other means of broadcasting or communication; and
(b)he did not know and had no reason to suspect that its publication would constitute a contravention of subsection (1).
(11)  Subsection (9)(e) and (f) shall not apply to an advertisement or a statement if any person gives consideration or any other benefit for the publication of the advertisement or statement.
(12)  Any person who contravenes subsection (1) or who knowingly authorised or permitted the publication or dissemination in contravention of subsection (1) 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 12 months or to both and, in the case of a continuing offence, to a further fine not exceeding $5,000 for every day or part thereof during which the offence continues after conviction.
(13)  This section does not affect any liability that a person has under any other law.
(14)  The Authority may exempt any person or class of persons from this section, subject to such conditions or restrictions as may be determined by the Authority.
(15)  Any person who contravenes any of the conditions or restrictions imposed under subsection (14) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000 and, in the case of a continuing offence, to a further fine not exceeding $5,000 for every day or part thereof during which the offence continues after conviction.
(16)  For the purposes of this section, any reference to publishing a statement shall be construed as including a reference to making a statement, whether oral or written, which is reasonably likely to be published.
(17)  For the purposes of subsections (1) and (2), any reference to a statement shall include a reference to any information presented, regardless of whether such information is in text or otherwise.
(18)  For the purposes of subsection (2) (ii), the reference to affairs of the business trust or the entity shall —
(a)in the case of the business trust, be construed to refer to such matters as may be prescribed by the Authority;
(b)in the case where the entity is a corporation, be construed as including a reference to the matters referred to in section 2(2); and
(c)in the case where the entity is not a corporation, be construed to refer to such matters as may be prescribed by the Authority.
(19)  For the purposes of subsection (9)(c)(i), the reference to affairs of the issuer or the business trust shall —
(a)in the case where the issuer is a corporation, be construed as including a reference to the matters referred to in section 2(2);
(b)in the case where the issuer is not a corporation, be construed to refer to such matters as may be prescribed by the Authority; and
(c)in the case of the business trust, be construed to refer to such matters as may be prescribed by the Authority.
Persons liable on prospectus or profile statement to inform person making offer about certain deficiencies
282M.—(1)  A person referred to in section 282O(3) (other than paragraph (a)) shall notify in writing the person making the offer of units or derivatives of units in a business trust, as soon as practicable, if he becomes aware at any time after the prospectus or profile statement is registered by the Authority but before the close of the offer that —
(a)a statement in the prospectus or the profile statement is false or misleading;
(b)there is an omission to state any information required to be included in the prospectus under section 282F or there is an omission to state any information required to be included in the profile statement under section 282G, as the case may be; or
(c)a new circumstance —
(i)has arisen since the prospectus or the profile statement was lodged with the Authority; and
(ii)would have been required to be included in the prospectus under section 282F, or required to be included in the profile statement under section 282G, as the case may be, if it had arisen before the prospectus or the profile statement was lodged with the Authority,
and the failure to so notify would have been materially adverse from the point of view of an investor.
(2)  Any person who contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000.
(3)  For the purposes of subsection (1)(a), any reference to a statement shall include a reference to any information presented, regardless of whether such information is in text or otherwise.
Criminal liability for false or misleading statements
282N.—(1)  Where an offer of units or derivatives of units in a business trust is made in or accompanied by a prospectus or profile statement, or, in the case of an offer referred to in section 282ZC, where a prospectus or profile statement is prepared and issued in relation to the offer, and —
(a)a false or misleading statement is contained in —
(i)the prospectus or the profile statement; or
(ii)any application form for the units or derivatives of units;
(b)there is an omission to state any information required to be included in the prospectus under section 282F or there is an omission to state any information required to be included in the profile statement under section 282G, as the case may be; or
(c)there is an omission to state a new circumstance that —
(i)has arisen since the prospectus or the profile statement was lodged with the Authority; and
(ii)would have been required to be included in the prospectus under section 282F, or required to be included in the profile statement under section 282G, as the case may be, if it had arisen before the prospectus or the profile statement was lodged with the Authority,
the persons referred to in subsection (4) shall be guilty of an offence even if such persons, unless otherwise specified, were not involved in the making of the false or misleading statement or the omission, and shall be liable on conviction to a fine not exceeding $150,000 or to imprisonment for a term not exceeding 2 years or to both and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.
(2)  For the purposes of subsection (1), a false or misleading statement about a future matter (including the doing of, or the refusal to do, an act) is taken to have been made if a person made the statement without having reasonable grounds for making the statement.
(3)  A person shall not be taken to have contravened subsection (1) if the false or misleading statement, or the omission to state any information or new circumstance, is not materially adverse from the point of view of the investor.
(4)  The persons guilty of the offence are —
(a)the person making the offer;
(b)where the person making the offer is an entity —
(i)each director or equivalent person of the entity; and
(ii)if the entity is also the issuer, each person who is, and who has consented to be, named in the prospectus or profile statement as a proposed director or equivalent person of the entity;
(c)where the issuer is controlled by the person making the offer, one or more of the related parties of the person making the offer, or the person making the offer and one or more of his related parties —
(i)the issuer;
(ii)each director or equivalent person of the issuer; and
(iii)each person who is, and who has consented to be, named in the prospectus or profile statement as a proposed director or equivalent person of the issuer;
(d)an issue manager to the offer of the units or derivatives of units in the business trust who is, and who has consented to be, named in the prospectus or profile statement, if —
(i)he intentionally or recklessly makes the false or misleading statement or omits to state the information or circumstance;
(ii)knowing that the statement in the prospectus or profile statement is false or misleading or that the information or circumstance has been omitted, he fails to take such remedial action as is appropriate in the circumstances without delay; or
(iii)he is reckless as to whether the statement is false or misleading or whether the information or circumstance has been included;
(e)an underwriter (but not a sub-underwriter) to the issue or sale of the units or derivatives of units in the business trust who is, and who has consented to be, named in the prospectus or profile statement, if —
(i)he intentionally or recklessly makes the false or misleading statement or omits to state the information or circumstance;
(ii)knowing that the statement is false or misleading or that the information or circumstance has been omitted, he fails to take such remedial action as is appropriate in the circumstances without delay; or
(iii)he is reckless as to whether the statement is false or misleading or whether the information or circumstance has been included;
(f)a person named in the prospectus or the profile statement with his consent as having made —
(i)the statement that is false or misleading, if he intentionally or recklessly makes that statement; or
(ii)a statement on which the false or misleading statement is based, if he knows that the second-mentioned statement is false or misleading and fails to take immediate steps to withdraw his consent,
but only in respect of the inclusion of the false or misleading statement; and
(g)any other person who intentionally or recklessly makes the false or misleading statement, or omits to state the information or circumstance, as the case may be, but only in respect of the inclusion of the statement or the omission to state the information or circumstance, as the case may be.
(5)  For the purposes of subsection (4) and this subsection —
(a)remedial action includes any of the following:
(i)preventing the statement from being included, or having the information or circumstance included, in the prospectus or profile statement, as the case may be;
(ii)procuring the lodgment of a supplementary or replacement prospectus under section 282D; and
(b)a person is reckless as to the matter referred to in subsection (4)(d)(iii) or (e)(iii) if, having been put upon inquiry that the statement to be, or which has been, included in the prospectus or profile statement is likely to be false or misleading, that the information or circumstance is likely to be required to be included in that document, or that there is likely to be an omission to state the information or circumstance in that document, he fails to —
(i)make all inquiries as are reasonable in the circumstances to verify this; and
(ii)take such remedial action as is appropriate in the circumstances without delay, if such action is warranted by the outcome of the inquiries.
(6)  For the purposes of this section, any reference to a statement shall include a reference to any information presented, regardless of whether such information is in text or otherwise.
Civil liability for false or misleading statements
282O.—(1)  Where an offer of units or derivatives of units in a business trust is made in or accompanied by a prospectus or profile statement, or, in the case of an offer referred to in section 282ZC, where a prospectus or profile statement is prepared and issued in relation to the offer, and —
(a)a false or misleading statement is contained in —
(i)the prospectus or the profile statement; or
(ii)any application form for the units or derivatives of units;
(b)there is an omission to state any information required to be included in the prospectus under section 282F or there is an omission to state any information required to be included in the profile statement under section 282G, as the case may be; or
(c)there is an omission to state a new circumstance that —
(i)has arisen since the prospectus or the profile statement was lodged with the Authority; and
(ii)would have been required by section 282F to be included in the prospectus, or required by section 282G to be included in the profile statement, as the case may be, if it had arisen before the prospectus or the profile statement was lodged with the Authority,
the persons referred to in subsection (3) shall be liable to compensate any person who suffers loss or damage as a result of the false or misleading statement in or omission from the prospectus or the profile statement, even if such persons, unless otherwise specified, were not involved in the making of the false or misleading statement or the omission.
(2)  For the purposes of subsection (1), a false or misleading statement about a future matter (including the doing of, or the refusal to do, an act) is taken to have been made if a person makes the statement without having reasonable grounds for making the statement.
(3)  The persons liable are —
(a)the person making the offer;
(b)where the person making the offer is an entity —
(i)each director or equivalent person of the entity; and
(ii)if the entity is also the issuer, each person who is, and who has consented to be, named in the prospectus or profile statement as a proposed director or equivalent person of the entity;
(c)where the issuer is controlled by the person making the offer, one or more of the related parties of the person making the offer, or the person making the offer and one or more of his related parties —
(i)the issuer;
(ii)each director or equivalent person of the issuer; and
(iii)each person who is, and who has consented to be, named in the prospectus or the profile statement as a proposed director or equivalent person of the issuer;
(d)an issue manager to the offer of the units or derivatives of units in the business trust who is, and who has consented to be, named in the prospectus or the profile statement;
(e)an underwriter (but not a sub-underwriter) to the issue or sale of the units or derivatives of units in the business trust who is, and who has consented to be, named in the prospectus or the profile statement;
(f)a person named in the prospectus or the profile statement with his consent as having made a statement —
(i)that is included in the prospectus or the profile statement; or
(ii)on which a statement made in the prospectus or the profile statement is based,
but only in respect of the inclusion of that statement; and
(g)any other person who made the false or misleading statement or omitted to state the information or circumstance, as the case may be, but only in respect of the inclusion of the statement or the omission to state the information or circumstance.
(4)  A person who acquires units or derivatives of units in a business trust as a result of an offer that was made in or accompanied by a profile statement is taken to have acquired the units or derivatives of units in reliance on both the profile statement and the prospectus for the offer.
(5)  For the purposes of this section, any reference to a statement shall include a reference to any information presented, regardless of whether such information is in text or otherwise.
(6)  No action under subsection (1) shall be commenced after the expiration of 6 years from the date on which the cause of action arose.
(7)  This section shall not affect any liability that a person has under any other law.
Defences
282P.—(1)  A person referred to in section 282N(4)(a), (b) or (c) is not liable under section 282N(1), and a person referred to in section 282O(3) is not liable under section 282O(1), only because of a false or misleading statement in a prospectus or a profile statement if the person proves that he —
(a)made all inquiries (if any) that were reasonable in the circumstances; and
(b)after doing so, believed on reasonable grounds that the statement was not false or misleading.
(2)  A person referred to in section 282N(4)(a), (b) or (c) is not liable under section 282N(1), and a person referred to in section or 282O (3) is not liable under section 282O(1), only because of an omission from a prospectus or a profile statement in relation to a particular matter if the person proves that he —
(a)made all inquiries (if any) that were reasonable in the circumstances; and
(b)after doing so, believed on reasonable grounds that there was no omission from the prospectus or profile statement in relation to that matter.
(3)  A person is not liable under section 282N(1) or 282O (1) only because of a false or misleading statement in, or an omission from, a prospectus or a profile statement if the person proves that he placed reasonable reliance on information given to him by —
(a)if the person is an entity, someone other than —
(i)a director or equivalent person; or
(ii)an employee or agent,
of the entity; or
(b)if the person is an individual, someone other than an employee or agent of the individual.
(4)  For the purposes of subsection (3), a person is not the agent of an entity or individual merely because he performs a particular professional or advisory function for the entity or individual.
(5)  A person who is named in a prospectus or a profile statement as —
(a)a proposed director or equivalent person of the issuer, or an issue manager or underwriter;
(b)having made a statement included in the prospectus or the profile statement; or
(c)having made a statement on the basis of which a statement is included in the prospectus or the profile statement,
is not liable under section 282N(1) or 282O (1) only because of a false or misleading statement in, or an omission from, the prospectus or the profile statement if the person proves that he publicly withdrew his consent to being named in the prospectus or the profile statement in that way.
(6)  A person is not liable under section 282N(1) or 282O (1) only because of a new circumstance that has arisen since the prospectus or the profile statement was lodged with the Authority if the person proves that he was not aware of the matter.
(7)  For the purposes of this section, any reference to a statement shall include a reference to any information presented, regardless of whether such information is in text or otherwise.
Document containing offer of units or derivatives of units for sale deemed prospectus
282Q.—(1)  Subsection (2) applies where —
(a)an entity allots or agrees to allot to any person any units or derivatives of units in a business trust with a view to all or any of them being subsequently offered for sale to another person; and
(b)such offer (referred to in this section as a subsequent offer) does not qualify for an exemption under Subdivision (3) of this Division (other than section 282ZC).
(2)  Any document by which the subsequent offer is made shall for all purposes be deemed to be a prospectus issued by the entity, and the entity shall for all purposes be deemed to be the person making the offer, and all written laws and rules of law as to the contents of prospectuses and to liability in respect of statements and non-disclosure in prospectuses, or otherwise relating to prospectuses, shall apply and have effect accordingly as if —
(a)an offer of units or derivatives of units in the business trust has been made; and
(b)persons accepting the subsequent offer in respect of any units or derivatives of units in the business trust were subscribers therefor,
but without prejudice to the liability, if any, of the persons making the subsequent offer, in respect of statements or non-disclosures in the document or otherwise.
(3)  For the purposes of this Act, it shall, unless the contrary is proved, be sufficient evidence that an allotment of, or an agreement to allot, units or derivatives of units in a business trust was made with a view to the units or derivatives of units being subsequently offered for sale if it is shown —
(a)that an offer of the units or derivatives of units or of any of them for sale was made within 6 months after the allotment or agreement to allot; or
(b)that at the date when the offer was made the whole consideration to be received by the entity in respect of the units or derivatives of units had not been so received.
(4)  The requirements of this Division as to prospectuses shall have effect as though the persons making the subsequent offer were persons named in the prospectus as directors or equivalent persons of the entity.
(5)  In addition to complying with the other requirements of this Division, the document making the subsequent offer shall state —
(a)the net amount of the consideration received or to be received by the entity in respect of the units or derivatives of units in the business trust being offered; and
(b)the place and time at which a copy of the contract under which the units or derivatives of units in the business trust have been or are to be allotted may be inspected.
Application and moneys to be held in trust in separate bank account until allotment
282R.—(1)  All application and other moneys paid prior to allotment by any applicant on account of units or derivatives of units in a business trust offered to him shall, until the allotment of the units or derivatives of units in the business trust, be held by the person making the offer of the units or derivatives of units upon trust for the applicant in a separate bank account, being a bank account that is established and kept by the person solely for the purpose of depositing the application and other moneys that are paid by applicants for those units or derivatives of units.
(2)  There shall be no obligation or duty on any bank with which any such moneys have been deposited to enquire into or see to the proper application of those moneys, so long as the bank acts in good faith.
(3)  Any person who contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000 or to imprisonment for a term not exceeding 2 years or to both and, in the case of a continuing offence, to a further fine not exceeding $5,000 for every day or part thereof during which the offence continues after conviction.
Allotment of units or derivatives of units where prospectus indicates application to list on securities exchange
282S.—(1)  Where a prospectus states or implies that application has been or will be made for permission for the units or derivatives of units in a business trust offered thereby to be listed for quotation on any securities exchange, and —
(a)the permission is not applied for in the form required by the securities exchange within 3 days from the date of the issue of the prospectus; or
(b)the permission is not granted before the expiration of 6 weeks from the date of the issue of the prospectus or such longer period not exceeding 12 weeks from the date of the issue as is, within those 6 weeks, notified to the applicant by or on behalf of the securities exchange,
then —
(i)any allotment whenever made of units or derivatives of units made on an application in pursuance of the prospectus shall, subject to subsection (3), be void; and
(ii)any person who continues to allot such units or derivatives of units after the period specified in paragraph (a) or (b), 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 2 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 thereof during which the offence continues after conviction.
(2)  Where, the permission has not been applied for, or has not been granted as mentioned under subsection (1), the person making the offer shall, subject to subsection (3), immediately repay without interest all moneys received from applicants in pursuance of the prospectus, and if any such moneys is not repaid within 14 days after the person making the offer so becomes liable to repay them, then —
(a)he shall be liable to repay those moneys with interest at the rate of 10% per annum from the expiration of such 14 days; and
(b)where the person making the offer is an entity, in addition to the liability of the entity, the directors or equivalent persons of the entity shall be jointly and severally liable to repay those moneys with interest at the rate of 10% per annum from the expiration of such 14 days.
(3)  Where in relation to any units or derivatives of units in a business trust —
(a)permission is not applied for as specified in subsection (1)(a); or
(b)permission is not granted as specified in subsection (1)(b),
the Authority may, on the application of the issuer made before any of the units or derivatives of units is purported to be allotted, exempt the allotment of the units or derivatives of units from the provisions of this section, and the Authority shall give notice of such exemption in the Gazette.
(4)  A director or equivalent person shall not be liable under subsection (2) if he proves that the default in the repayment of the money was not due to any misconduct or negligence on his part.
(5)  Any condition requiring or binding any applicant for units or derivatives of units in a business trust to waive compliance with any requirement of this section or purporting to do so shall be void.
(6)  Without limiting the application of any of its provisions, this section shall have effect —
(a)in relation to any units or derivatives of units in a business trust agreed to be taken by a person underwriting an offer thereof contained in a prospectus as if he had applied therefor in pursuance of the prospectus; and
(b)in relation to a prospectus offering units or derivatives of units in a business trust for sale as if a reference to sale were substituted for a reference to allotment.
(7)  All moneys received from applicants in pursuance of the prospectus shall be kept in a separate bank account so long as the person making the offer may become liable to repay it under subsection (2).
(8)  Any person who contravenes subsection (7) 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 12 months or to both and, in the case of a continuing offence, to a further fine not exceeding $5,000 for every day or part thereof during which the offence continues after conviction.
(9)  Where the securities exchange has within the time specified in subsection (1)(b) granted permission subject to compliance with any requirements specified by the securities exchange, permission shall be deemed to have been granted by the securities exchange if the directors or equivalent persons of the issuer have given to the securities exchange an undertaking in writing to comply with the requirements of the securities exchange.
(10)  If any such undertaking referred to in subsection (9) is not complied with, each director or equivalent person who is in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000 and, in the case of a continuing offence, to a further fine not exceeding $5,000 for every day or part thereof during which the offence continues after conviction.
(11)  A person shall not issue a prospectus inviting persons to subscribe for units or derivatives of units in a business trust if it includes —
(a)a false or misleading statement that permission has been granted for those units or derivatives of units to be listed for quotation on, dealt in or quoted on any securities exchange; or
(b)any statement in any way referring to any such permission or to any application or intended application for any such permission, or to listing for quotation, dealing in or quoting the units or derivatives of units, on any securities exchange, or to any requirement of a securities exchange, unless —
(i)that statement is or is to the effect that permission has been granted, or that application has been or will be made to the securities exchange within 3 days from the date of the issue of the prospectus; or
(ii)that statement has been approved by the Authority for inclusion in the prospectus.
(12)  Any person who contravenes subsection (11) 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 12 months or to both and, in the case of a continuing offence, to a further fine not exceeding $5,000 for every day or part thereof during which the offence continues after conviction.
(13)  Where a prospectus contains a statement to the effect that the trust deed of a business trust or the memorandum and articles or other constituent document or documents of the issuer comply, or have been drawn so as to comply, with the requirements of any securities exchange, the prospectus shall, unless the contrary intention appears from the prospectus, be deemed for the purposes of this section to imply that application has been, or will be, made for permission for the units or derivatives of units in the business trust to which the prospectus relates to be listed for quotation on the securities exchange.
Prohibition of allotment unless minimum subscription received
282T.—(1)  No allotment shall be made of any units or derivatives of units in a business trust unless —
(a)the minimum subscription has been subscribed; and
(b)the sum payable on application for the units or derivatives of units so subscribed has been received by the trustee-manager of the business trust,
but if a cheque for the sum payable has been received by the trustee-manager, the sum shall be deemed not to have been received by the trustee-manager until the cheque is paid by the bank on which it is drawn.
(2)  The minimum subscription shall —
(a)be calculated based on the price at which each unit or derivative of a unit is offered or will be offered; and
(b)be reckoned exclusively of any amount payable otherwise than in cash.
(3)  The amount payable on application for each unit or derivative of a unit offered shall not be less than 5% of the price at which the unit or derivative of a unit is or will be offered.
(4)  If the conditions referred to in subsection (1)(a) and (b) have not been satisfied on the expiration of 4 months after the first issue of the prospectus, all moneys received from applicants for units or derivatives of units in the business trust shall be immediately repaid to them without interest.
(5)  If any money referred to in subsection (4) is not repaid within 5 months after the issue of the prospectus, the directors of the trustee-manager of the business trust shall be jointly and severally liable to repay that money with interest at the rate of 10% per annum from the expiration of the period of 5 months; but a director shall not be so liable if he proves that the default in the repayment of the money was not due to any misconduct or negligence on his part.
(6)  An allotment made by the trustee-manager of a business trust of any units or derivatives of units in the business trust to an applicant in contravention of this section shall be voidable at the option of the applicant, whose option may be exercised by written notice served on the trustee-manager of the business trust within one month after the date of the allotment and not later, and the allotment shall be so voidable notwithstanding that the business trust is in the course of being wound up.
(7)  The trustee-manager of a business trust which contravenes any of the provisions of this section, and every director of a trustee-manager who knowingly contravenes or permits or authorises the contravention of any of the provisions of this section, shall be guilty of an offence and shall be liable in addition to the penalty or punishment for the offence to pay into the trust property of the business trust and compensate the allottee respectively for any loss, damages or costs which the business trust (represented by any diminishment in value to the trust property of the business trust) or the allottee has sustained or incurred thereby.
(8)  No proceedings for the recovery of any compensation under subsection (7) shall be commenced after the expiration of 2 years from the date of the allotment.
(9)  Any condition requiring or binding any applicant for units or derivatives of units in a business trust to waive compliance with any requirement of this section shall be void.
Subdivision (3) — Exemptions
Issue or transfer of units or derivatives of units for no consideration
282U.—(1)  Subdivision (2) of this Division (other than section 282Q) shall not apply to an offer of units in a business trust if no consideration is or will be given for the issue or transfer of the units.
(2)  Subdivision (2) of this Division (other than section 282Q) shall not apply to an offer of derivatives of units in a business trust if —
(a)no consideration is or will be given for the issue or transfer of the derivatives of units; and
(b)no consideration is or will be given for the units in the business trust on the exercise or conversion of the derivatives of units.
Small offers
282V.—(1)  Subdivision (2) of this Division (other than section 282Q) shall not apply to personal offers of units or derivatives of units in a business trust by a person if —
(a)the total amount raised by the person from such offers within any period of 12 months does not exceed —
(i)$5 million (or its equivalent in a foreign currency); or
(ii)such other amount as may be prescribed by the Authority in substitution for the amount specified in sub-paragraph (i);
(b)in respect of each offer, the person making the offer —
(i)gives the person to whom he makes the offer —
(A)in the case where the business trust is not registered under the Business Trusts Act 2004 (Act 30 of 2004), the following statement in writing:
This offer is made in reliance on the exemption under section 282V(1) of the Securities and Futures Act. It is not made in or accompanied by a prospectus that is registered by the Monetary Authority of Singapore and the business trust is not registered under the Business Trusts Act 2004.
(B)in the case where the business trust is registered under the Business Trusts Act 2004, the following statement in writing:
This offer is made in reliance on the exemption under section 282V(1) of the Securities and Futures Act. It is not made in or accompanied by a prospectus that is registered by the Monetary Authority of Singapore.
(ii)gives the person to whom he makes the offer a notification in writing that the units or derivatives of units to which the offer (referred to in this sub-paragraph as the initial offer) relates being offered shall not be subsequently sold to any person, unless the offer resulting in such subsequent sale is made —
(A)in compliance with Subdivision (2) of this Division;
(B)in reliance on subsection (8)(c) or any other exemption under any provision of this Subdivision (other than this subsection); or
(C)where at least 6 months have elapsed from the date the units or derivatives of units were acquired under the initial offer, in reliance on the exemption under this subsection;
(c)none of the offers is accompanied by an advertisement making an offer or calling attention to the offer or intended offer; and
(d)no selling or promotional expenses are paid or incurred in connection with each offer other than those incurred for administrative or professional services, or by way of commission or fee for services rendered by —
(i)the holder of a capital markets services licence to deal in securities;
(ii)an exempt person in respect of dealing in securities; or
(iii)a person who is licensed, approved, authorised or otherwise regulated under the laws, codes or other requirements of any foreign jurisdiction in respect of dealing in securities, or who is exempted therefrom in respect of such dealing.
(2)  For the purposes of subsection (1)(b), where any notice, circular, material, publication or other document is issued in connection with the offer, the person making the offer is deemed to have given the statement and notification to the person to whom he makes the offer in accordance with that provision if such statement or notification is contained in the first page of that notice, circular, material, publication or document.
(3)  For the purposes of subsection (1), a personal offer of units or derivatives of units in a business trust is one that —
(a)may be accepted only by the person to whom it is made; and
(b)is made to a person who is likely to be interested in that offer, having regard to