16. Part IV of the Companies Act is amended by inserting, immediately after Division 7, the following Division:Division 7A — The Central Depository System — a book-entry or scripless system for the transfer of listed securities |
130A. In this Division, unless the contrary intention appears —“account holder” means a person who has an account directly with the Depository and not through a depository agent; |
“bare trustee” means a trustee who has no beneficial interest in the subject-matter of the trust; |
“book-entry securities”, in relation to the Depository, means listed securities —(a) | the documents evidencing title to which are deposited by a depositor with the Depository and are registered in the name of the Depository or its nominee; and | (b) | which are transferable by way of book-entry in the Depository Register and not by way of an instrument of transfer; |
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“Depository” means the Central Depository (Pte) Limited established by the Stock Exchange, or any other corporation approved by the Minister as a depository company or corporation for the purposes of this Act, which as a bare trustee operates the Central Depository System for the holding and transfer of book-entry securities; |
“Depository Register” means a register maintained by the Depository in respect of book-entry securities; |
“depositor” means an account holder or a depository agent but does not include a sub-account holder; |
“depository agent” means a member company of the Stock Exchange, a trust company (registered under the Trust Companies Act (Cap. 336)), a banking corporation or merchant bank (approved by the Monetary Authority of Singapore under the Monetary Authority of Singapore Act (Cap. 186)) or any other person or body approved by the Depository who or which —(a) | performs services as a depository agent for sub-account holders in accordance with the terms of a depository agent agreement entered into between the Depository and the depository agent; | (b) | deposits book-entry securities with the Depository on behalf of the sub-account holders; and | (c) | establishes an account in its name with the Depository; |
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“derivative instruments”, in relation to debentures, stocks and shares, includes warrants, transferable subscription rights, options to subscribe for stocks or shares, convertibles and such other instruments as the Minister may, by order, prescribe; |
“documents evidencing title” means —(a) | in the case of stocks, shares, debentures or any derivative instruments related thereto of a company or debentures or any derivative instruments related thereto of the Government — the stock certificates, share certificates, debenture certificates or certificates representing the derivative instrument, as the case may be; and | (b) | in the case of stocks, shares, debentures or any derivative instruments related thereto of a foreign company or debentures or any derivative instruments related thereto of a foreign government or of an international body — such documents or other evidence of title thereto, as the Depository may require; |
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“international body” means the Asian Development Bank, the International Bank for Reconstruction and Development, the International Monetary Fund, the European Bank for Reconstruction and Development and such other international bodies as the Minister may, by order, prescribe; |
“instrument” includes a deed or any other instrument in writing; |
“listed securities” means securities of a corporation that are listed on the Stock Exchange and have not been delisted or had its quotation removed; |
“rules” means the rules made by the Depository in relation to the operation of the Central Depository System and includes the Central Depository Rules and Procedures made by the Depository pursuant to its Articles of Association (as the same may be amended from time to time) and any rule with regard to payment of fees to the Depository; |
“securities”, in relation to the Depository, means debentures, stocks or shares, issued by a government, a body corporate or unincorporate, or international body or any right in respect of any such debentures, stocks or shares or any derivative instrument each of which is listed on the Stock Exchange and which has been designated by the Stock Exchange as eligible for deposit with the Depository and for clearance and book-entry settlement of transactions on the Stock Exchange; |
“Stock Exchange” means the Stock Exchange of Singapore Limited; |
“sub-account holder” means a holder of an account maintained with a depository agent. |
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130B. This Division shall apply only to book-entry securities. |
Establishment of Central Depository System |
130C. There is hereby established a computerised Central Depository System whereby, in accordance with the rules of the Depository —(a) | documents evidencing title in respect of listed securities (with where applicable, in the case of shares or registered debentures, proper instruments of transfer duly executed) are deposited with the Depository and are registered in the name of the Depository or its nominee; | (b) | accounts are maintained by the Depository in the names of the depositors so as to reflect the title of the depositors to the book-entry securities; and | (c) | transfers of the book-entry securities are effected electronically, and not by any other means, by the Depository making an appropriate entry in the Depository Register of the book-entry securities that have been transferred. |
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Depository not a member of a company and depositors deemed to be members |
130D.—(1) Notwithstanding anything in this Act or the memorandum or articles of association of a company, where the Depository is named in the register of members of the company —(a) | the Depository shall be deemed not to be a member of the company; and | (b) | the persons named as the depositors in a Depository Register shall, for such period as the book-entry securities are entered against their names in the Depository Register, be deemed to be —(i) | members of the company in respect of the amount of book-entry securities (relating to the stocks or shares issued by the company) entered against their respective names in the Depository Register; or | (ii) | holders of the amount of the company’s book-entry securities (relating to the debentures or any derivative instruments) entered against their names in the Depository Register. |
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(2) Nothing in this Division shall be construed as affecting —(a) | the obligation of a company to keep —(i) | a register of its members under section 190 and allow inspection of the register under section 192; and | (ii) | a register of holders of debentures issued by the company under section 93 and allow inspection of the register under that section, |
except that the company shall not be obliged to enter in such registers the names and particulars of persons who are deemed members or holders of debentures under subsection (1)(b); |
| (b) | the right of a depositor to withdraw his documents evidencing title in respect of listed securities from the Depository at any time in accordance with the rules of the Depository and to register them in his or any other name; or | (c) | the enjoyment of any right, power or privilege conferred by, or the imposition of any liability, duty or obligation under this Act, any rule of law or under any instrument or under the memorandum or articles of association of a company upon a depositor, as a member of a company or as a holder of debentures or any derivative instruments except to the extent provided for in this Division or prescribed by regulations made thereunder. |
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(3) Notwithstanding any provision in this Act, a depositor shall not be regarded as a member of a company entitled to attend any general meeting of the company and to speak and vote thereat unless his name appears on the Depository Register 48 hours before the general meeting. |
(4) The payment by a company to the Depository of any dividend payable to a depositor shall, to the extent of the payment made, discharge the company from any liability in respect of that payment. |
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Depository to certify names of depositors to company upon request |
130E. The Depository shall certify the names of persons on the Depository Register to a company in accordance with the rules of the Depository upon a written request being made to it by the company. |
130F. The Depository shall maintain accounts of book-entry securities on behalf of depositors in accordance with the rules of the Depository. |
Transfers effected by Depository under book-entry clearing system |
130G.—(1) Subject to this Division, a transfer of book-entry securities between depositors shall be effected, notwithstanding anything in this Act or any other written law or rule of law or in any instrument or in a corporation’s memorandum or articles of association to the contrary, by the Depository making an appropriate entry in its Depository Register.(2) A transfer of securities by the Depository by way of book-entry to a depositor under this Division shall be valid and shall not be challenged in any Court on the ground that the transfer is not accompanied by a proper instrument of transfer or that otherwise the transfer is not made in writing. |
(3) This section shall apply to a transfer of book-entry securities whether effected before or after the commencement of the Companies (Amendment) Act 1993. |
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Depository to be discharged from liability if acting on instructions |
130H.—(1) Subject to the regulations, the Depository, if acting in good faith and without negligence, shall not be liable for conversion or for any breach of trust or duty where the Depository has, in respect of book-entries in accounts maintained by it, made entries regarding the book-entry securities, or transferred or delivered the securities, according to the instructions of a depositor notwithstanding that the depositor had no right to dispose of or take any other action in respect of the securities.(2) The Depository or a depository agent, if acting in good faith and without negligence, shall be fully discharged of its obligations to the account holder or sub-account holder by the transfer or delivery of book-entry securities upon the instructions of the account holder or sub-account holder, as the case may be. |
(3) The Depository, if acting in good faith and without negligence, shall be fully discharged of its obligations to a depository agent by the transfer or delivery of book-entry securities upon the instructions of the depository agent. |
(4) For the purposes of this section, the Depository or a depository agent is not to be treated as having been negligent by reason only of its failure to concern itself with whether or not the depositor or sub-account holder, as the case may be, has a right to dispose of or take any other action in respect of the securities or to issue the instructions. |
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Confirmation of transaction |
130I. The Depository shall, in accordance with the rules made by the Depository, issue to each account holder and to each sub-account holder through his depository agent, following upon any transaction affecting book-entry securities maintained for such account holder by the Depository and maintained for such sub-account holder by his depository agent under this Division, a confirmation note which shall specify the amount and description of the book-entry securities and any other relevant transaction information. |
No rectification of Depository Register |
130J.—(1) Notwithstanding anything in this Act or any written law or rule of law, no order shall be made by the Court for rectification of the Depository Register; subject to that where the Court is satisfied that —(a) | a depositor did not consent to a transfer of the book-entry securities; or | (b) | a depositor should not have been registered in the Depository Register as having title to the book-entry securities, |
it may award damages to the first-mentioned depositor or to any person who would have been entitled to have been registered in the Depository Register as having title to the book-entry securities, as the case may be, on such terms as the Court thinks to be equitable or make such other order as the Court thinks fit including an order for the transfer of book-entry securities to such depositor or person. |
(2) Where provisions exist in the memorandum or articles of association of a corporation that entitle a corporation to refuse registration of a transfer of book-entry securities, it may in relation to any transfer to which it objects, notify the Depository in writing of its refusal before the transfer takes place and furnish the Depository with the facts upon which such refusal is considered to be justified. |
(3) Where the Depository has had prior notice of the corporation’s refusal under subsection (2) (but not otherwise), it shall refuse to effect the transfer and to enter the name of the transferee in the Depository Register and thereupon convey the facts upon which such refusal is considered to be justified to the transferee. |
(4) Section 128 shall not apply to any refusal to register a transfer under subsections (2) and (3). |
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Trustee, executor or administrator of deceased depositor named as depositor |
130K.—(1) Any trustee, executor or administrator of the estate of a deceased depositor whose name was entered in the Depository Register as owner or as having an interest in book-entry securities may open an account with the Depository and have his name entered in the Depository Register so as to reflect the interest of the trustee, executor or administrator in the book-entry securities.(2) Subject to this section, no notice of any trust expressed, implied or constructive shall be entered on the Depository Register and no liabilities shall be affected by anything done in pursuance of subsection (1) or pursuant to the law of any other place which corresponds to this section and the Depository and the issuer of the book-entry securities shall not be affected with notice of any trust by anything so done. |
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Non-application of certain provisions in bankruptcy and company liquidation law |
130L. Where by virtue of the provisions of any written law in relation to bankruptcy or company liquidation it is provided that —(a) | any disposition of the property of a company after commencement of a winding up shall be void, unless the Court orders otherwise; or | (b) | any disposition of the property of a person who is adjudged bankrupt after presentation of the petition for a bankruptcy order and before vesting of the bankrupt’s estate in a trustee shall be void unless done with the consent or ratification of the Court, |
those provisions shall not apply to any disposition of book-entry securities; but where a Court is satisfied that a party to the disposition, being a party other than the Depository, had notice that a petition had been presented for the winding up or bankruptcy of the other party to the disposition, it may award damages against that party on such terms as it thinks equitable or make such other order as the Court thinks fit, including an order for the transfer of book-entry securities by that party but not an order for the rectification of the Depository Register. |
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Non-application of certain provisions in sections 21, 76A and 106E |
130M. Sections 21, 76A and 106E, insofar as these sections provide that a transfer or contract of sale of shares or debentures in contravention of either section shall be void, shall not apply to any disposition of book-entry securities; but a Court, on being satisfied that a disposition of book-entry securities would in the absence of this section be void, may, on the application of the Registrar or any other person, make the following order:(a) | in the case of a contravention of section 21 or 76A, order the transfer of the shares acquired in contravention of those sections; or | (b) | in the case of a contravention of section 106E, order the purchaser referred to in that section to transfer the shares or debentures, as the case may be, to the seller and may award damages to the purchaser. |
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130N.—(1) Except as provided in this section or any other written law or any regulations made under section 130P, no security interest may be created in book-entry securities.(2) A security interest in book-entry securities to secure the payment of a debt or liability may be created in favour of any depositor in the following manner:(a) | by way of assignment, by an instrument of assignment in the prescribed form executed by the assignor; or | (b) | by way of charge, by an instrument of charge in the prescribed form executed by the chargor: |
Provided that no security interest in any book-entry securities subsequent to any assignment or charge thereof may be created by the assignor or the chargor, as the case may be, in favour of any other person and any such assignment or charge shall be void. |
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(3) Upon receipt of the instrument of assignment, the Depository shall forthwith, by way of an off-market transaction, transfer the book-entry securities to the assignee and thereafter notify the assignor and the assignee of the transfer in the prescribed manner. |
(4) Upon receipt of the instrument of charge, the Depository shall forthwith register the instrument in a register of charges maintained by the Depository and thereafter notify the chargor and the chargee in the prescribed manner. |
(5) The register of charges shall not be open to inspection to any person other than the chargor or the chargee or their authorised representatives and except for the purpose of the performance of its duties or the exercise of its functions or when required to do by any court or under the provisions of any written law, the Depository shall not disclose to any unauthorised person any information contained in the register of charges. |
(6) An assignment or a charge made in accordance with the provisions of this section, but not otherwise, shall have effect upon the Depository transferring the book-entry securities or endorsing the charge in the register of charges except that the instrument of assignment or charge shall not have any effect if on the date of receipt of such instrument, the number of book-entry securities in the account of the assignor or chargor is less than the number of book-entry securities specified in such instrument. |
(7) The provisions of section 130D(1)(b) and (2) shall apply to an assignment of book-entry securities made under this section. |
(8) An assignee or a registered chargee of book-entry securities shall have the following powers:(a) | a power, when the loan or liability has become due and payable, to sell the book-entry securities or any part thereof and in the case of a chargee he shall have the power to sell the book-entry securities or any part thereof in the name of and for and on behalf of the chargor; and | (b) | any other power which may be granted to him in writing by the assignor or chargor in relation to the book-entry securities provided that the Depository shall not be concerned with or affected by the exercise of any such power. |
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(9) Nothing in subsection (8) shall be construed as imposing on the Depository a duty to ascertain whether the power of sale has become exercisable or has been lawfully exercised by the assignee or chargee. |
(10) No book-entry securities assigned by way of security or charged in accordance with the provisions of this section may be —(a) | transferred by way of an off-market transaction to the assignor save upon the production of a duly executed re-assignment in the prescribed form; or | (b) | transferred by the chargor, by way of sale or otherwise, save upon the production of a duly executed discharge of charge in the prescribed form. |
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(11) Upon the sale by the assignee or the chargee in exercise of his power of sale of any book-entry securities assigned or charged in accordance with the provisions of this section, the assignee or the chargee shall forthwith notify the Depository of the sale and the particulars of the book-entry securities sold by him, and the Depository shall —(a) | in the case of the sale by the assignee, notify the assignor of the sale; and | (b) | in the case of the sale by the chargee, effect a transfer of the book-entry securities to the buyer in accordance with section 130G and notify the chargor of the transfer. |
The provisions of sections 130I, 130J, 130L and 130M shall apply, mutatis mutandis, to a transfer effected pursuant to this section. |
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(12) Upon fulfilling his obligations under an assignment by way of security or a charge, the assignor or the chargor shall be entitled to obtain from the assignee or chargee a re-assignment or a discharge of charge, as the case may be, of the whole or part of the book-entry securities. |
(13) A re-assignment or discharge of charge shall be effected by the Depository by transferring the book-entry securities to the assignor or cancelling the endorsement of charge in the register of charges and in the account of the chargor, as the case may be. |
(14) Book-entry securities may be assigned by way of security by an assignee or charged in the prescribed form by a chargee to secure the payment of any debt or liability of the assignee or the chargee, as the case may be, in accordance with the provisions of this section provided that no book-entry security may be charged by a chargee subsequent to any sub-charge. |
(15) All acts, powers and rights which might previously have been done or exercised by the chargee thereunder in relation to the book-entry securities may thereafter be done or exercised by the sub-chargee, and, except with the consent of the sub-chargee, shall not be done or exercised by the chargee thereunder during the currency of the sub-charge. |
(16) Upon the sale by the sub-chargee in exercise of his power of sale of any book-entry securities in accordance with the provisions of this section, the provisions of subsection (11), in respect of a sale by a chargee, shall apply mutatis mutandis to the sale by the sub-chargee |
(17) Nothing in subsection (14) shall affect the rights or liabilities of the original assignor or chargor of the book-entry securities under subsections (12) and (13) and he shall be entitled to a re-assignment or discharge of charge from the assignee or chargee free from all subsequent security interests created without his consent upon satisfying his indebtedness or liability to the assignee or the chargee. |
(18) The provisions of section 130H shall apply to relieve the Depository and its servants or agents of any liability in respect of any act done or omission made under this section as if references to “depositor” include references to “assignee”, “chargee” or “sub-chargee”, as the case may be. |
(19) Nothing in this section shall affect the validity and operation of floating charges on book-entry securities created under the common law before or after the date of commencement of the Companies (Amendment) Act 1993, but that the Depository shall not be required to recognise, even when having notice thereof, any equitable interest in any book-entry securities under a floating charge except the power of the chargee, upon the crystallisation of the floating charge, to sell the book-entry securities in the name of the chargor in accordance with the provisions of this section. |
(20) Nothing in subsection (19) shall be construed as imposing on the Depository a duty to ascertain whether the power of sale pursuant to a floating charge has become exercisable or has been lawfully exercised. |
(21) A stockbroker shall have a lien over unpaid book-entry securities purchased for the account of a customer which shall be enforceable by sale in accordance with and subject to the provisions of this section as if the same had been charged to him under this section except that the stockbroker shall not be obliged to notify the Depository of the sale or the particulars of the book-entry securities sold by him. |
(22) Any security interest on book-entry securities created before the date of commencement of the Companies (Amendment) Act 1993 and subsisting or in force on that date shall continue to have effect as if that Act had not been enacted. |
(23) In this section,“off-market transaction” means a transaction effected outside the Stock Exchange. |
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Depository rules to be regarded as rules of a securities exchange that are subject to Securities Industry Act |
130O.—(1) Rules made by the Depository in relation to the operation of the Central Depository System, including any amendments made thereto from time to time, shall be regarded as having the same force and effect as if made by a securities exchange and shall likewise be subject to the provisions of the Securities Industry Act (Cap. 289).(2) Without prejudice to the generality of subsection (1), section 18 (authority to approve amendments to rules) and section 20(1) (power of Court to enforce rules) of the Securities Industry Act shall apply to rules made by the Depository under subsection (1) as they apply to rules made by a securities exchange. |
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130P. The Minister may make regulations for all matters or things which by this Division are required or permitted to be prescribed or which are necessary or expedient to give effect to this Division and, in particular, regulations may be made for or with respect to —(a) | rights and obligations of persons in relation to securities dealt with under the Central Depository System; | (b) | procedures for the deposit and custody of securities and the transfer of title to book-entry securities and the regulation of persons concerned in that operation; | (c) | matters relating to security interest in book-entry securities; | (d) | keeping of depositors’ accounts by the Depository and sub-accounts by the depository agents; | (e) | keeping of the Depository Register and of records generally; | (f) | safeguards for depositors including the maintenance of insurance and the establishment and maintenance of compensation funds by the Depository for the purpose of settling claims by depositors; | (g) | matters relating to link-ups between the Depository and other securities depositories (by whatever name called) established and maintained outside Singapore; | (h) | the modification or exclusion of any provision of any written law, rule of law, any instrument or articles of association; | (i) | the application, with such modifications as may be required, of the provisions of any written law, instrument or articles of association; and | (j) | such supplementary, incidental, saving or transitional provisions as may be necessary or expedient.”. |
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