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Securities Industry (Amendment) Bill

Bill No. 12/1974

Read the first time on 14th March 1974.

An Act to amend the Securities Industry Act, 1973 (No. 17 of 1973).

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 Industry (Amendment) Act, 1974 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 of the Securities Industry Act, 1973 (hereinafter in this Act referred to as “the principal Act”) is hereby amended —

(a)

by inserting immediately after the word “securities” appearing in the definition of “dealer” therein the words “as a corporation”;

(b)

by deleting the expression “, where the dealer is a corporation, includes any director, member or officer of the corporation who is not the holder of a dealer’s licence and” appearing in the ninth, tenth and eleventh lines of the definition of “dealer’s representative” therein and substituting therefor the words “includes any director or officer of a corporation”;

(c)

by deleting paragraph (a) of the definition of “exempt dealer” appearing therein and substituting therefor the following: —

“(a)	a person who carries on a business of dealing in securities only through the holder of a dealer’s licence for his own account;”;

(d)

by deleting sub-paragraph (iv) of paragraph (e) of the definition of “exempt dealer” appearing therein and substituting therefor the following: —

“(iv)

acquiring or disposing of securities only through the holder of a dealer’s licence;”;

(e)

by inserting immediately after the words “a dealer” appearing in the first line of paragraph (e) of the definition of “investment adviser” therein the words “or his employee or a dealer’s representative”;

(f)

by deleting the expression “, not being a dealer, stockbroker or exempt dealer,” appearing in the third and fourth lines of the definition of “investment representative” therein;

(g)

by deleting the words “where the investment adviser is a corporation includes any director, member or officer of the corporation who is not the holder of an investment adviser’s licence and” appearing in the ninth, tenth, eleventh, twelfth and thirteenth lines of the definition of “investment representative” therein and substituting therefor the words “includes any director or officer of a corporation”;

(h)

by deleting paragraph (a) of the definition of “relevant authority” and by deleting the words “firm or” appearing in the first and in the second and third lines of paragraph (b) of that definition;

(i)

by deleting the definition of “stockbroker” appearing therein and substituting therefor the following: —

“ “stockbroker” means a person who is a member of a stock exchange and a director of a member company;”; and

(j)

by deleting the definitions of “member firm” and “sole trader” appearing therein.

Amendment of section 7

3. Section 7 of the principal Act is hereby amended —

(a)

by inserting immediately after the word “Minister” appearing at the end of subsection (1) thereof the words “for approval”;

(b)

by deleting subsection (2) thereof;

(c)

by deleting subsection (3) thereof and substituting therefor the following: —

“(3) The Minister may give notice to the stock exchange concerned that he approves the amendment or that he disapproves the whole or any specified part of the amendment in question and until such notice is given the amendment shall not have force and effect.”; and

(d)

by deleting the words “be notified of” appearing in the marginal note thereto and substituting therefor the word “approve”.

Amendment of section 11

4. Subsection (2) of section 11 of the principal Act is hereby deleted.

Repeal and re-enactment of section 14

5. Section 14 of the principal Act is hereby repealed and the following substituted therefor: —

“Registrar to grant or renew dealer’s licence to a corporation or investment adviser’s licence to an individual or corporation in certain circumstances

14.—(1) A dealer’s licence shall only be granted to a corporation.

(2) The Registrar shall grant or renew a dealer’s licence if —

(a)	after consideration of the character of the directors and secretary of the corporation and of the corporation’s financial position; and
(b)	after consideration of the interests of the public,

he is of the opinion that the applicant corporation is a fit and proper person to hold the licence applied for.

(3) The Registrar shall grant or renew an investment adviser’s licence if —

(a)

after consideration —

(i)	where the applicant is an individual — of the character and financial position of the applicant;
(ii)	where the applicant is a corporation — of the character of the directors and secretary of the corporation and of the corporation’s financial position; and

(b)

after consideration of the interests of the public,

he is of the opinion that the applicant is a fit and proper person to hold the licence applied for.”.

Amendment of section 19

6. Subsection (1) of section 19 of the principal Act is hereby amended by deleting the word “stockbroker” appearing in the first and second lines thereof and substituting therefor the words “member company”.

Amendment of section 21

7. Section 21 of the principal Act is hereby amended by inserting immediately after subsection (2) thereof the following subsection: —

“(3) No holder of a representative’s licence shall work for or have an arrangement with a dealer or investment adviser who is not the dealer or investment adviser in relation to which his licence was issued unless he has lodged a notice in the prescribed form with the Registrar.”.

Amendment of section 25

8. Section 25 of the principal Act is hereby amended —

(a)

by inserting the word “or” at the end of paragraph (d) of subsection (1) thereof;

(b)

by deleting paragraph (e) of subsection (1) thereof;

(c)

by deleting subsection (3) thereof and substituting therefor the following: —

“(3) In this Part a reference to securities is a reference to securities which are quoted on a stock exchange in Singapore.”.

Amendment of section 26

9. Subsection (2) of section 26 of the principal Act is hereby deleted.

Amendment of section 33

10. Section 33 of the principal Act is hereby amended by deleting the words “him a dealer or investment adviser” appearing in the second line thereof and substituting therefor the words “any person”.

Amendment of section 34

11. Subsection (2) of section 34 of the principal Act is hereby deleted and the following substituted therefor: —

“(2) For the purposes of subsection (1) dealings as principal include dealings on behalf of a corporation in which the dealer or its directors have a controlling interest.”.

Amendment of section 37

12. Section 37 of the principal Act is hereby amended by deleting the word “stockbroker” wherever it appears in subsection (1) thereof and substituting therefor in each case the word “dealer”.

Amendment of section 38

13. Section 38 of the principal Act is hereby amended —

(a)	by inserting the word “or” at the end of paragraph (a) thereof; and
(b)	by deleting paragraph (b) thereof.

Amendment of section 42

14. Subsection (3) of section 42 of the principal Act is hereby deleted and the following substituted therefor: —

“(3) For the purposes of subsection (1) “financial year” has the meaning assigned to that expression in the Companies Act (Cap. 185).”.

Amendment of section 45

15. Subsection (2) of section 45 of the principal Act is hereby amended by inserting immediately after the word “section” appearing in the third line thereof the expression “and section 46”.

Amendment of section 48

16. Paragraph (a) of section 48 of the principal Act is hereby deleted and the following substituted therefor: —

“(a)	examine on oath any director, manager or secretary of that dealer and any of the dealer’s servants and agents and any other auditor appointed under this Act in relation to those books, accounts, records and securities;”.

Amendment of section 50

17. Section 50 of the principal Act is hereby amended —

(a)

by deleting paragraph (a) of subsection (1) thereof and substituting therefor the following: —

“(a)	a director, manager or secretary of a dealer and the dealer’s servants and agents shall produce any books, accounts, records and securities held by the dealer relating to his business; and”; and

(b)

by deleting the expression “dealer and, where the dealer carries on business in partnership, the other members of the partnership and where the dealer is a company, any director, manager or secretary of that company” appearing in the first, second, third and fourth lines of subsection (2) thereof and substituting therefor the expression “director, manager or secretary of a dealer”.

Amendment of section 52

18. Section 52 of the principal Act is hereby amended —

(a)	by deleting the words “the members of that stock exchange” appearing in the second and third lines thereof and substituting therefor the words “member companies”; and
(b)	by deleting the word “members” appearing in the marginal note thereto and substituting therefor the words “member companies”.

Repeal of Part VIII

19. Part VIII of the principal Act is hereby repealed.

Amendment of section 62

20. Section 62 of the principal Act is hereby amended —

(a)	by deleting the word “stockbrokers” appearing in the first and second lines of paragraph (a) thereof and substituting therefor the words “member companies”; and
(b)	by deleting paragraph (b) thereof.

Amendment of section 65

21. Subsection (3) of section 65 of the principal Act is hereby amended by deleting the word “one” appearing in the fourth line thereof and substituting therefor the word “three”.

Amendment of section 66

22. Subsection (2) of section 66 of the principal Act is hereby amended by deleting the expression “and section 74” appearing at the end thereof.

Repeal and re-enactment of sections 67 and 68

23. Sections 67 and 68 of the principal Act are hereby repealed and the following substituted therefor: —

“Fidelity fund to consist of an amount of two million dollars

67.—(1) The fidelity fund of a stock exchange shall consist of an amount of not less than two million dollars, or such other sum as may by order be determined by the Minister from time to time, to be paid to the credit of the fund on the establishment of a stock exchange under this Act.

(2) The fidelity fund shall be increased by an annual payment into the fund of a sum that is equal to ten per cent or more of the net income of a stock exchange for any one financial year.

Provisions if fund is reduced below two million dollars

68. If the fidelity fund is reduced below the sum of two million dollars or such other sum as the Minister may, by order, determine, the committee shall take steps to make up the deficiency —

(a)	by transferring an amount that is equal to the deficiency from other funds of a stock exchange to the fidelity fund; or
(b)	in the event that there are insufficient funds to transfer under paragraph (a), by determining the amount which each member company shall contribute to the fund.”.

Amendment of section 69

24. Section 69 of the principal Act is hereby amended —

(a)

by deleting the expression “stockbroker liable to contribute to that fund a levy of such amount as it thinks fit, not exceeding one thousand dollars, for payment into the fund” appearing in the fourth, fifth and sixth lines of subsection (1) thereof and substituting therefor the words “member company a levy of such amount as it thinks fit”;

(b)

by deleting subsection (3) thereof and substituting therefor the following: —

“(3) No member company shall be required to pay by way of levy under this section more than one hundred thousand dollars in the aggregate.”; and

(c)

by deleting the marginal note thereto and substituting therefor the following: —

“Levy to meet liabilities.”.

Amendment of section 72

25. Section 72 of the principal Act is hereby amended —

(a)

by deleting subsections (1) and (2) thereof and substituting therefor the following: —

“(1) Subject to this Part, a fidelity fund shall be held and applied for the purpose of compensating persons who suffer pecuniary loss from any defalcation committed by a member company or any of its directors or by any of the clerks or servants of such a member company in relation to any money or other property which, whether before or after the date of the coming into operation of this Act, in the course of or in connection with the business of that company —

(a)	was entrusted to or received by a member company or any of its directors or any of the company’s clerks or servants for or on behalf of any other person; or
(b)	(the member company being in respect of the money or other property either the sole trustee or trustees or trustee or trustees with any other person or persons) was entrusted to or received by the member company or any of its directors or any of the company’s clerks or servants as trustee or trustees or for or on behalf of the trustees of that money or property.

(2) Save as otherwise provided in this section, the total amount that may be paid under this Part to all persons who suffer loss through defalcations by a member company or any of its directors or through defalcations by any of the company’s clerks or servants shall not, in any event, exceed in respect of that member company the sum of one hundred thousand dollars, but for the purposes of this subsection any amount paid from a fidelity fund shall to the extent to which the fund is subsequently reimbursed therefor be disregarded.”; and

(b)

by deleting subsection (6) thereof and substituting therefor the following: —

“(6) For the purposes of this section “director of a member company” includes a person who has been, but at the time of any defalcation in question has ceased to be a director of a member company if, at the time of the defalcation, the person claiming compensation has reasonable grounds for believing that person to be a director of a member company.”.

Amendment of section 73

26. Paragraph (b) of subsection (2) of section 73 of the principal Act is hereby amended by deleting the expression “sole trader concerned or in the case of a member firm, of the partner or partners concerned, or in the case of a member company, of the director or directors concerned” appearing at the end thereof and substituting therefor the words “director or directors of the member company concerned”.

Repeal of section 74

27. Section 74 of the principal Act is hereby repealed.

Amendment of section 76

28. Section 76 of the principal Act is hereby amended —

(a)	by deleting the words “the sole trader or the partners in the member firm or the directors of” appearing in the fifth and sixth lines of paragraph (b) of subsection (2) thereof; and
(b)	by deleting the word “stockbroker” wherever it appears in subsection (6) thereof and substituting therefor in each case the words “member company”.

Amendment of section 78

29. Section 78 of the principal Act is hereby amended by deleting the words “a sole trader or the partners in a member firm or” appearing in the fifth and sixth lines thereof.

Amendment of section 81

30. Subsection (2) of section 81 of the principal Act is hereby amended —

(a)	by deleting the words “sole trader or member firm or” wherever they appear therein; and
(b)	by inserting immediately after the word “apportionment” appearing in the eleventh line thereof the word “of”.

Amendment of section 82

31. Section 82 of the principal Act is hereby amended —

(a)

by deleting subsection (2) thereof and substituting therefor the following: —

“(2) Any such contract may be entered into in relation to member companies generally, or in relation to any particular member company or member companies named therein, or in relation to member companies generally with the exclusion of any particular member company or member companies named therein.”;

(b)

by deleting the word “stockbroker” appearing in the fourth line of subsection (3) thereof and substituting therefor the words “member company”; and

(c)

by deleting the word “him” appearing at the end of subsection (3) thereof and substituting therefor the word “it”.

Amendment of section 90

32. Section 90 of the principal Act is hereby amended —

(a)	by deleting the word “dealer” appearing in paragraph (b) of subsection (1) thereof and substituting therefor the word “person”;
(b)	by deleting the words “the holder of a dealer’s licence” appearing in the second and third lines of subsection (2) thereof and substituting therefor the words “any person”;
(c)	by deleting the word “dealer” appearing in the sixth line of subsection (2) thereof and substituting therefor the word “person”; and
(d)	by deleting the expression “subsection (1), (2) or (5)” appearing in the second and third lines of subsection (4) thereof and substituting therefor the words “this section”.

Amendment of section 95

33. Section 95 of the principal Act is hereby amended —

(a)

by inserting immediately after the expression “95.” appearing in the first line thereof the expression “—(1)”; and

(b)

by inserting immediately after subsection (1) thereof the following subsection: —

“(2) The Registrar may, without instituting proceedings against any person for an offence under this Act or the regulations made thereunder which is punishable only by a fine, demand and receive the amount of such fine or such reduced amount as he thinks fit from such person, whereupon —

(a)	if such person pays such amount to the Registrar within fourteen days after the demand no proceedings shall be taken against him in relation to the offence;
(b)	if such person does not pay the amount so demanded, the Registrar may cause proceedings to be instituted in relation to the offence.”.