Income Tax (Concessionary Rate of Tax for Financial Sector Incentive Companies) (Amendment No. 2) Regulations 2010

No. S 835

Income Tax Act

(Chapter 134)

Income Tax (Concessionary Rate of Tax for Financial Sector Incentive Companies) (Amendment No. 2) Regulations 2010

In exercise of the powers conferred by section 43Q of the Income Tax Act, the Minister for Finance hereby makes the following Regulations:

Citation and commencement

1.—(1) These Regulations may be cited as the Income Tax (Concessionary Rate of Tax for Financial Sector Incentive Companies) (Amendment No. 2) Regulations 2010.

(2) Regulation 9(b) and (c) shall be deemed to have come into operation on 1st January 2004.

(3) Regulations 2(e) (in relation to the definition of “approved start-up fund manager”), 4(b) and 6(a) shall be deemed to have come into operation on 1st September 2007.

(4) Regulations 2(q) and 7(c) and (d) shall be deemed to have come into operation on 1st April 2008.

(5) Regulation 9(a) shall be deemed to have come into operation on 1st January 2009.

(6) Regulations 3(b), 5(b) to (e) and 12 shall be deemed to have come into operation on 22nd January 2009.

(7) Regulations 2(a), (b), (c) (in relation to the definition of “approved petrochemical manufacturing company”), (d), (e) (in relation to the definition of “commodity derivatives”), (f) to (i), (o) and (p), 3(a), (c) and (d), 7(a), (b) (except in relation to regulation 8(1)(o)) and (e) (in relation to regulation 8(5)), 8 and 10 shall be deemed to have come into operation on 27th February 2009.

(8) Regulations 2(c) (in relation to the definition of “approved person”), 4(a) and (c), 6(b) and 9(d) shall be deemed to have come into operation on 1st April 2009.

(9) Regulations 2(j) to (n), 7(b) (in relation to regulation 8(1)(o)) and (e) (in relation to regulation 8(4) and (6)) and 11 shall be deemed to have come into operation on 1st May 2009.

Amendment of regulation 2

2. Regulation 2(1) of the Income Tax (Concessionary Rate of Tax for Financial Sector Incentive Companies) Regulations 2005 (G.N. No. S 735/2005) (referred to in these Regulations as the principal Regulations) is amended —

(a)

by inserting, immediately after the definition of “Approved Derivatives Trader”, the following definition:

“ “approved enhanced commodity derivatives trading company” means a commodity derivatives trading company approved as such under section 43S of the Act;”;

(b)

by inserting, immediately after the definition of “Approved Fund Manager”, the following definition:

“ “approved global trading company” means a global trading company approved under section 43P of the Act;”;

(c)

by inserting, immediately after the definition of “Approved Headquarters Company”, the following definitions:

“ “approved person” has the same meaning as in section 13X of the Act;

“approved petrochemical manufacturing company” means a petrochemical manufacturing company in Singapore which is approved under paragraph (g) of the definition of “physical trading” in regulation 2 of the Income Tax (Concessionary Rate of Tax for Approved Global Trading Companies) Regulations 2003 (G.N. No. S 204/2003);”;

(d)

by inserting, immediately after the definition of “Approved Securities Company”, the following definition:

“ “approved standard commodity derivatives trading company” means a commodity derivatives trading company approved as such under section 43S of the Act;”;

(e)

by deleting the definition of “approved start-up fund manager” and substituting the following definitions:

“ “approved start-up fund manager” has the same meaning as in —

(a)	the Income Tax (Income from Funds Managed for Foreign Investors) Regulations 2003 (G.N. No. S 640/2003);
(b)	the Income Tax (Exemption of Income of Trustee of Trust Fund Arising from Funds Managed by Fund Manager in Singapore) Regulations 2010 (G.N. No. S 7/2010); or
(c)	the Income Tax (Exemption of Income of Non-residents Arising from Funds Managed by Fund Manager in Singapore) Regulations 2010 (G.N. No. S 6/2010),

as the case may be;

“commodity derivatives” means derivatives the payoffs of which are wholly linked to the payoffs or performance of the underlying commodity;”;

(f)

by inserting, immediately after the definition of “designated securities”, the following definition:

“ “emission derivatives” means derivatives the payoffs of which are wholly linked to the payoffs or performance of underlying emission allowances;”;

(g)

by inserting, immediately after the definition of “financial sector incentive (derivatives market) company”, the following definitions:

“ “financial sector incentive (derivatives market) (exchange-traded commodity derivatives) company” means a company approved as such under section 43Q of the Act;

“financial sector incentive (derivatives market) (financial) company” means a company approved as such under section 43Q of the Act;

“financial sector incentive (derivatives market) (financial, over-the-counter and exchange-traded commodity derivatives) company” means a company approved as such under section 43Q of the Act;

“financial sector incentive (derivatives market) (over-the-counter commodity derivatives) company” means a company approved as such under section 43Q of the Act;

“financial sector incentive (derivatives market) (over-the-counter and exchange-traded commodity derivatives) company” means a company approved as such under section 43Q of the Act;”;

(h)

by inserting, immediately after the definition of “foreign trust”, the following definition:

“ “freight derivatives” means derivatives the payoffs of which are wholly linked to the payoffs or performance of the underlying freight rates;”;

(i)

by inserting, immediately after the definition of “futures member of the Singapore Exchange”, the following definition:

“ “incidental physical trading” means —

(a)

trading by a financial sector incentive (derivatives market) (over-the-counter commodity derivatives) company —

(i)	in any commodity with any specified person on a spot or forward basis; and
(ii)	in connection with and incidental to the trading by that company in any commodity derivatives transacted over-the-counter with that or any other specified person;

(b)

trading by a financial sector incentive (derivatives market) (exchange-traded commodity derivatives) company —

(i)	in any commodity with any specified person on a spot or forward basis; and
(ii)	in connection with and incidental to the trading by that company in any commodity derivatives transacted on an exchange with that or any other specified person;

(c)

trading by a financial sector incentive (derivatives market) (over-the-counter and exchange-traded commodity derivatives) company —

(i)	in any commodity with any specified person on a spot or forward basis; and
(ii)	in connection with and incidental to the trading by that company in any commodity derivatives, whether transacted over-the-counter or on an exchange, with that or any other specified person; or

(d)

trading by a financial sector incentive (derivatives market) (financial, over-the-counter and exchange-traded commodity derivatives) company —

(i)	in any commodity with any specified person on a spot or forward basis; and
(ii)	in connection with and incidental to the trading by that company in any commodity derivatives, whether transacted over-the-counter or on an exchange, with that or any other specified person,

where the intention of the parties at the time of the transaction in relation to the commodity is that actual delivery of the commodity is required (whether or not the delivery is actually made), but does not include any transaction in which —

(A)	the commodity is purchased for the purpose of consumption in Singapore;
(B)	the commodity, being fuel, is purchased for the supply of the same to an aircraft or a vessel within Singapore; or
(C)	the commodity, being petroleum or a petroleum product, is both purchased from and sold to an approved petrochemical manufacturing company;”;

(j)

by deleting the words “paragraph (a)” in paragraph (a)(i) of the definition of “offshore credit facility” and substituting the words “paragraph (b)(i)”;

(k)

by deleting sub-paragraph (ii) of paragraphs (a) and (b) of the definition of “offshore credit facility” and substituting in each case the following sub-paragraph:

“(ii)

the loans, advances or funds made available are to be used —

(A)	wholly outside Singapore; or
(B)	partly inside Singapore and partly outside Singapore if —
(BA)	the agreement for the facility is made on or after 1st May 2009;
(BB)	the part used in Singapore is for the sole purpose of discharging any professional fees incurred in respect of the facility or for the first payment of any interest incurred in respect of the facility; and
(BC)	the part used in Singapore does not exceed 10% of the value of the facility;”;

(l)

by deleting the words “paragraph (b)” in paragraph (b)(i) of the definition of “offshore credit facility” and substituting the words “paragraph (b)(ii)”;

(m)

by deleting the words “paragraph (a)” in paragraph (d)(i) of the definition of “offshore credit facility” and substituting the words “paragraph (b)(i)”;

(n)

by deleting the words “paragraph (b)” in paragraph (e)(i) of the definition of “offshore credit facility” and substituting the words “paragraph (b)(ii)”;

(o)

by inserting, immediately after the definition of “qualifying derivatives”, the following definition:

“ “qualifying exchange” means a corporation which is an approved exchange, a recognised market operator or an exempt market operator under the Securities and Futures Act (Cap. 289);”;

(p)

by deleting the definition of “specified person” and substituting the following definitions:

“ “shipping enterprise” has the same meaning as in section 13A(16) of the Act;

“specified person” —

(a)

in relation to any —

(i)	financial sector incentive (derivatives market) (exchange-traded commodity derivatives) company;
(ii)	financial sector incentive (derivatives market) (financial, over-the-counter and exchange-traded commodity derivatives) company;
(iii)	financial sector incentive (derivatives market) (over-the-counter commodity derivatives) company; or
(iv)	financial sector incentive (derivatives market) (over-the-counter and exchange-traded commodity derivatives) company,

means any of the following:

(A)	a financial sector incentive company which is —
(AA)	a bank licensed under the Banking Act (Cap. 19); or
(AB)	a merchant bank approved under section 28 of the Monetary Authority of Singapore Act (Cap. 186);
(B)	an approved global trading company;
(C)	a person who is neither a resident of nor a permanent establishment in Singapore;
(D)	a branch office outside Singapore of a company resident in Singapore;
(E)	a member of the Singapore Commodity Exchange;
(F)	a person who carries on the business of refining petroleum in Singapore;
(G)	an approved petrochemical manufacturing company;
(H)	a or another financial sector incentive (derivatives market) (exchange-traded commodity derivatives) company;
(I)	a or another financial sector incentive (derivatives market) (financial, over-the-counter and exchange-traded commodity derivatives) company;
(J)	a or another financial sector incentive (derivatives market) (over-the-counter commodity derivatives) company;
(K)	a or another financial sector incentive (derivatives market) (over-the-counter and exchange-traded commodity derivatives) company; and

(b)

in relation to any offshore credit facility, means —

(i)	a non-resident person (other than his permanent establishment in Singapore) or a permanent establishment outside Singapore of a person resident in Singapore in respect of any business carried on outside Singapore through that permanent establishment; or
(ii)	a person resident in Singapore (other than in respect of any business carried on outside Singapore by him through a permanent establishment outside Singapore) or a permanent establishment in Singapore of a non-resident person;”; and

(q)

by deleting the words “regulation 3(5)(a)” in the definition of “subsequent incentive period” and substituting the words “regulation 3(5)”.

Amendment of regulation 3

3. Regulation 3 of the principal Regulations is amended —

(a)

by deleting the full-stop at the end of sub-paragraph (j) of paragraph (1) and substituting a semi-colon, and by inserting immediately thereafter the following sub-paragraphs:

“(k)	a financial sector incentive (derivatives market) (exchange-traded commodity derivatives) company;
(l)	a financial sector incentive (derivatives market) (financial) company;
(m)	a financial sector incentive (derivatives market) (financial, over-the-counter and exchange-traded commodity derivatives) company;
(n)	a financial sector incentive (derivatives market) (over-the-counter commodity derivatives) company;
(o)	a financial sector incentive (derivatives market) (over-the-counter and exchange-traded commodity derivatives) company.”;

(b)

by inserting, immediately after paragraph (2), the following paragraph:

“(2A) Notwithstanding paragraph (2) but subject to paragraph (6), a company may, on or after 22nd January 2009, be approved as a financial sector incentive (headquarter services) company for the purposes of these Regulations if —

(a)

the company provides treasury, investment or financial services in Singapore for any of its offices or its associated companies; and

(b)

the company —

(i)	directly or indirectly wholly owns, or is directly or indirectly wholly-owned by, another company in Singapore that is licensed or approved by the Monetary Authority of Singapore under any written law administered by the Monetary Authority of Singapore; or
(ii)	directly or indirectly wholly owns, or is directly or indirectly wholly-owned by, another company outside Singapore that is licensed or approved under any written law administered by the financial supervisory authority of the other company.”;

(c)

by deleting sub-paragraph (a) of paragraph (6) and substituting the following sub-paragraph:

“(a)

any of the following on or after 1st January 2014:

(i)	a financial sector incentive (bond market) company;
(ii)	a financial sector incentive (credit facilities syndication) company;
(iii)	a financial sector incentive (debt capital market) company;
(iv)	a financial sector incentive (derivatives market) (exchange-traded commodity derivatives) company;
(v)	a financial sector incentive (derivatives market) (financial) company;
(vi)	a financial sector incentive (derivatives market) (financial, over-the-counter and exchange-traded commodity derivatives) company;
(vii)	a financial sector incentive (derivatives market) (over-the-counter commodity derivatives) company;
(viii)	a financial sector incentive (derivatives market) (over-the-counter and exchange-traded commodity derivatives) company;
(ix)	a financial sector incentive (equity market) company;
(x)	a financial sector incentive (fund management) company;
(xi)	a financial sector incentive (headquarters services) company;
(xii)	a financial sector incentive (standard tier) company;”; and

(d)

by deleting the full-stop at the end of sub-paragraph (c) of paragraph (6) and substituting the word “; or”, and by inserting immediately thereafter the following sub-paragraph:

“(d)	a financial sector incentive (derivatives market) company on or after 27th February 2009.”.

Amendment of regulation 4

4. Regulation 4 of the principal Regulations is amended —

(a)

by deleting the words “and (2F)” wherever they appear in paragraphs (2) and (4) (definition of “ “specified income” or “specified loss” ”) and substituting in each case the words “, (2F) and (2G)”;

(b)

by inserting, immediately after the words “designated investments” in paragraph (2F)(c) and (f), the words “, where the payments for those services are not borne, directly or indirectly, by a person resident in Singapore or by a permanent establishment in Singapore (other than a fund manager of, or a trustee in its capacity as the trustee of the prescribed trust fund)”; and

(c)

by inserting, immediately after paragraph (2F), the following paragraph:

“(2G) Subject to this regulation, tax shall be payable at the rate of 10% on the income of a financial sector incentive (standard tier) company derived on or after 1st April 2009 from any of the following activities:

(a)	managing the funds of an approved person for the purpose of any designated investments;
(b)	providing investment advisory services to an approved person in respect of any designated investments.”.

Amendment of regulation 5

5. Regulation 5 of the principal Regulations is amended —

(a)

by deleting the words “derived from the provision of any of the following services, which is approved by the Minister or approving authority in relation to that financial sector incentive (headquarter services) company” in paragraph (1) and substituting the words “derived during the period from 1st January 2004 to 30th December 2010 (both dates inclusive) from the provision of such of the following services as may be approved by the Minister or approving authority in relation to that financial sector incentive (headquarter services) company, or derived on or after 31st December 2010 from the provision of any of the following services”;

(b)

by deleting sub-paragraph (n) of paragraph (1) and substituting the following sub-paragraph:

“(n)

managing the funds of the approved office for the purpose of any designated investments, provided that, if the approved office is an associated company not resident in Singapore, unless otherwise allowed by the Minister or approving authority —

(i)

not less than 80% of the total number of the issued shares of the approved office are beneficially owned, directly or indirectly, by persons who are neither citizens of Singapore nor resident in Singapore;

(ii)

the approved office has no permanent establishment in Singapore other than the financial services incentive (headquarter services) company;

(iii)

the approved office does not carry on business in Singapore;

(iv)

the approved office does not beneficially own more than 20% of the total number of the issued shares of any company incorporated in Singapore; and

(v)

the approved office has less than 20% of the total number of its issued shares beneficially owned, directly or indirectly, by a company which —

(A)	has a permanent establishment in Singapore other than the financial sector incentive (headquarter services) company;
(B)	carries on business in Singapore; or
(C)	beneficially owns more than 20% of the total number of the issued shares of any company incorporated in Singapore.”;

(c)

by inserting, immediately after paragraph (1), the following paragraph:

“(1A) Tax shall be payable at the rate of 10% on the income of a financial sector incentive (headquarter services) company derived on or after 22nd January 2009 from the provision of any prescribed processing services to any financial institution or another financial sector incentive (headquarter services) company.”;

(d)

by deleting the definitions of “approved office” and “approved person” in paragraph (2) and substituting the following definition:

“ “approved office”, in relation to a financial sector incentive (headquarter services) company, means an office or associated company of the financial sector incentive (headquarter services) company which —

(a)	is outside Singapore and is approved by the Minister or approving authority; or
(b)	is in Singapore and is approved on or after 22nd January 2009 by the Minister or approving authority;”; and

(e)

by deleting the full-stop at the end of the definition of “associated company” in paragraph (2) and substituting a semi-colon, and by inserting immediately thereafter the following definitions:

“ “financial institution” means —

(a)	any institution in Singapore that is licensed or approved by the Monetary Authority of Singapore, or exempted from such licensing or approval, under any written law administered by the Monetary Authority of Singapore; or
(b)	any institution outside Singapore that is licensed or approved, or exempted from such licensing or approval, by its financial supervisory authority for the carrying on of financial activities;

“prescribed processing services” means any of the services specified in the Third Schedule provided in Singapore by a financial sector incentive (headquarter services) company.”.

Amendment of regulation 6

6. Regulation 6 of the principal Regulations is amended —

(a)

by inserting, immediately after the words “designated investments” in paragraph (4)(c) and (f), the words “, where the payments for those services are not borne, directly or indirectly, by a person resident in Singapore or by a permanent establishment in Singapore (other than a fund manager of, or a trustee in its capacity as the trustee of the prescribed trust fund)”; and

(b)

by inserting, immediately after paragraph (4), the following paragraph:

“(4A) Subject to this regulation, tax shall be payable at the rate of 10% on the income of a financial sector incentive (fund management) company derived on or after 1st April 2009 from any of the following activities:

(a)	managing the funds of an approved person for the purpose of any designated investments;
(b)	providing investment advisory services to an approved person in respect of any designated investments.”.

Amendment of regulation 8

7. Regulation 8 of the principal Regulations is amended —

(a)

by deleting the word “and” at the end of paragraph (1)(h)(ii);

(b)

by deleting the full-stop at the end of sub-paragraph (i) of paragraph (1) and substituting a semi-colon, and by inserting immediately thereafter the following sub-paragraphs:

“(j)

on or after 27th February 2009, by a financial sector incentive (derivatives market) (financial) company from —

(i)	trading in financial derivatives; or
(ii)	providing services as an intermediary in connection with transactions relating to financial derivatives;

(k)

on or after 27th February 2009, by a financial sector incentive (derivatives market) (over-the-counter commodity derivatives) company from —

(i)

trading in commodity derivatives or emission derivatives transacted over-the-counter with any specified person;

(ii)

providing services as an intermediary in connection with transactions relating to commodity derivatives or emission derivatives transacted over-the-counter between specified persons;

(iii)

trading in freight derivatives transacted over-the-counter with —

(A)	a specified person; or
(B)	a shipping enterprise;

(iv)

providing services as an intermediary in connection with transactions relating to freight derivatives transacted over-the-counter between —

(A)	specified persons;
(B)	shipping enterprises; or
(C)	a specified person and a shipping enterprise;

(v)

from incidental physical trading; except that where, in a relevant year of assessment, the volume of the incidental physical trading exceeds 15% of the total volume of incidental physical trading and trading in commodity derivatives transacted over-the-counter with specified persons in that year of assessment, the concessionary rate shall only apply to a portion of the income derived from the incidental physical trading calculated in accordance with the formula

where

is 15% of the total volume of incidental physical trading and trading in commodity derivatives transacted over-the-counter with specified persons in that year of assessment;

is the total volume of all incidental physical trading with specified persons in that year of assessment; and

is the total income derived from all incidental physical trading with specified persons in that year of assessment; or

(vi)

trading with any person in commodity derivatives or freight derivatives transacted over-the-counter, where such trade is cleared through the SGX AsiaClear Facility by the Singapore Exchange Derivatives Clearing Limited;

(l)

on or after 27th February 2009, by a financial sector incentive (derivatives market) (exchange-traded commodity derivatives) company from —

(i)

trading in commodity derivatives or emission derivatives transacted on an exchange where —

(A)	the financial sector incentive (derivatives market) (exchange-traded commodity derivatives) company is a member of a qualifying exchange; or
(B)	such trade is executed through a specified person who is a member of any exchange, and on behalf of the financial sector incentive (derivatives market) (exchange-traded commodity derivatives) company;

(ii)

providing services as an intermediary in connection with transactions relating to commodity derivatives or emission derivatives transacted on an exchange between —

(A)	specified persons; or
(B)	a specified person and a qualifying exchange;

(iii)

trading in freight derivatives transacted on an exchange where —

(A)	the financial sector incentive (derivatives market) (exchange-traded commodity derivatives) company is a member of a qualifying exchange; or
(B)	such trade is executed through a specified person who is a member of any exchange, and on behalf of the financial sector incentive (derivatives market) (exchange-traded commodity derivatives) company;

(iv)

providing services as an intermediary in connection with transactions relating to freight derivatives transacted on an exchange between —

(A)	specified persons;
(B)	shipping enterprises;
(C)	qualifying exchanges;
(D)	a specified person and a shipping enterprise;
(E)	a specified person and a qualifying exchange; or
(F)	a shipping enterprise and a qualifying exchange; or

(v)

from incidental physical trading; except that where, in a relevant year of assessment, the volume of the incidental physical trading exceeds 15% of the total volume of incidental physical trading and trading in commodity derivatives transacted on an exchange with specified persons in that year of assessment, the concessionary rate shall only apply to a portion of the income derived from the incidental physical trading calculated in accordance with the formula

where

is 15% of the total volume of incidental physical trading and trading in commodity derivatives transacted on an exchange with specified persons in that year of assessment;

is the total volume of all incidental physical trading with specified persons in that year of assessment; and

is the total income derived from all incidental physical trading with specified persons in that year of assessment;

(m)

on or after 27th February 2009, by a financial sector incentive (derivatives market) (over-the-counter and exchange-traded commodity derivatives) company from —

(i)

activities referred to in sub-paragraph (k)(i), (ii), (iii), (iv) or (vi) or (l)(i), (ii), (iii) or (iv); or

(ii)

from incidental physical trading; except that where, in a relevant year of assessment, the volume of the incidental physical trading exceeds 15% of the total volume of incidental physical trading and trading in commodity derivatives, whether transacted over-the-counter or on an exchange, with specified persons in that year of assessment, the concessionary rate shall only apply to a portion of the income derived from the incidental physical trading calculated in accordance with the formula

where

is 15% of the total volume of incidental physical trading and trading in commodity derivatives (whether transacted over-the-counter or on an exchange) with specified persons in that year of assessment;

is the total volume of all incidental physical trading with specified persons in that year of assessment; and

is the total income derived from all incidental physical trading with specified persons in that year of assessment;

(n)

on or after 27th February 2009, by a financial sector incentive (derivatives market) (financial, over-the-counter and exchange-traded commodity derivatives) company from activities referred to in sub-paragraph (j), (k)(i), (ii), (iii), (iv) or (vi), (l)(i), (ii), (iii) or (iv) or (m)(ii); and

(o)

on or after 1st May 2009, by a financial sector incentive (credit facilities syndication) company from arranging, underwriting or granting a loan after it has become a syndicated facility, under any facility falling within paragraph (a) or (b) of the definition of “offshore credit facility” in regulation 2(1) if —

(i)	at the time of signing of the initial loan agreement, there exists a clear intention by the arranger, underwriter or agent bank of the loan to syndicate the loan as a syndicated facility within 6 months from the date of the signing of that agreement;
(ii)	the loan agreement becomes an agreement for a syndicated facility on or after 1st May 2009; and
(iii)	the conditions specified in the Second Schedule are satisfied.”;

(c)

by deleting the words “paragraph (1)(b)” in paragraph (3) and substituting the words “paragraph (1)(b), (g) and (o)”;

(d)

by inserting, immediately after the words “financial sector incentive (credit facilities syndication) company” in paragraph (3), the words “or financial sector incentive (debt capital market) company, as the case may be,”; and

(e)

by inserting, immediately after paragraph (3), the following paragraphs:

“(4) Notwithstanding paragraph (1)(b) or (o), where not more than 10% of the funds raised from any syndicated offshore facility arranged, underwritten or granted by a financial sector incentive (credit facilities syndication) company on or after 1st May 2009 is used in Singapore for the sole purpose of discharging any professional fees incurred in respect of the facility, the income of the company in relation to that syndicated offshore facility shall, for the purpose of paragraph (1), be determined by multiplying the income from the syndicated offshore facility by the formula

–

where

is the amount of the funds raised from the syndicated offshore facility so used in Singapore; and

is the total amount of the syndicated offshore facility.

(5) Paragraph (1)(k)(v), (l)(v) and (m)(ii) shall not apply to any income attributable to activities carried out in Singapore which —

(a)	add value to the commodities by any physical alteration, addition or improvement (including refining, blending or processing) of the commodities; or
(b)	relate to the storage or bulk-breaking of the commodities.

(6) The rate of 5% under paragraph (1)(o) shall not apply if the financial sector incentive (credit facilities syndication) company fails to syndicate the facility as a syndicated facility within 6 months from the date of the signing of the initial loan agreement.”.

Amendment of regulation 9

8. Regulation 9 of the principal Regulations is amended —

(a)

by deleting the word “and” at the end of paragraph (a); and

(b)

by deleting the full-stop at the end of paragraph (b) and substituting the word “; and”, and by inserting immediately thereafter the following paragraph:

“(c)	the manner and extent to which any income should be excluded under regulation 8(5).”.

Amendment of regulation 10

9. Regulation 10 of the principal Regulations is amended —

(a)

by inserting, immediately after the words “specified income” in paragraph (5A)(a) and (b), the words “or specified loss, as the case may be,”;

(b)

by deleting the word “or” at the end of paragraph (8)(a);

(c)

by deleting the full-stop at the end of sub-paragraph (b) of paragraph (8) and substituting the word “; or”, and by inserting immediately thereafter the following sub-paragraph:

“(c)

the financial sector incentive (standard tier) company is a company which —

(i)	was incorporated or registered on or after 1st January 2004;
(ii)	has not taken over any activity referred to in regulation 4 from any person in Singapore; and
(iii)	was approved as a financial sector incentive (standard tier) company within 2 years from the date of commencement in Singapore of any activity referred to in regulation 4 by the company.”; and

(d)

by deleting the words “and (2F)” in paragraph (b)(ii) of the definition of “specified previous income” in paragraph (9) and substituting the words “, (2F) and (2G)”.

Amendment of regulation 12

10. Regulation 12 of the principal Regulations is amended by inserting, immediately after paragraph (8), the following paragraphs:

“(9) A company which before 27th February 2009 was a financial sector incentive (derivatives market) company shall be deemed to be approved as a financial sector incentive (derivatives market) (financial) company for the purposes of these Regulations from and including 27th February 2009 until the end of the period for which the Minister or approving authority had approved the company as a financial sector incentive (derivatives market) company for the purposes of these Regulations.

(10) A company which before 27th February 2009 was an approved standard commodity derivatives trading company for the purposes of the Income Tax (Concessionary Rate of Tax for Approved Commodity Derivatives Trading Companies) Regulations 2005 (G.N. No. S 672/2005) shall be deemed to be approved as a financial sector incentive (derivatives market) (over-the-counter commodity derivatives) company for the purposes of these Regulations from and including 27th February 2009 until the end of the period for which the Minister or approving authority had approved the company as an approved standard commodity derivatives trading company for the purposes of those Regulations.

(11) A company which before 27th February 2009 was an approved enhanced commodity derivatives trading company for the purposes of the Income Tax (Concessionary Rate of Tax for Approved Commodity Derivatives Trading Companies) Regulations 2005 shall be deemed to be approved as a financial sector incentive (derivatives market) (over-the-counter and exchange-traded commodity derivatives) company for the purposes of these Regulations from and including 27th February 2009 until the end of the period for which the Minister or approving authority had approved the company as an approved enhanced commodity derivatives trading company for the purposes of those Regulations.”.

Amendment of Second Schedule

11. The Second Schedule to the principal Regulations is amended —

(a)

by inserting, immediately after paragraph 1, the following paragraph:

“1A. The conditions for the purpose of regulation 8(1)(o) are as follows:

(a)

at the time of the signing of the initial agreement for the facility, the arranger, underwriter or agent bank of the facility intends to syndicate the loan facility as a syndicated facility within the meaning of paragraph 2 of this Schedule within 6 months from the date of the signing of that agreement;

(b)

all the lenders in the syndicated facility are reflected as lenders of records in the records of the arrangers or agent bank;

(c)

the syndication work in respect of the facility will be and is carried out substantially in Singapore, as determined in accordance with paragraph 3 of this Schedule; and

(d)

the agent bank of the facility submits to the Comptroller within such time and in such form as may be specified by the Comptroller —

(i)	a return on the facility and a declaration from the arrangers of the facility that the facility is a syndicated offshore facility;
(ii)	a declaration from the specified person to whom the facility is provided and who has any related party in Singapore, that the funds from the facility have not been, and are not intended to be, transferred to that related party in Singapore; and
(iii)	such other information or particulars as may be required by the Comptroller.”; and

(b)

by deleting the words “paragraph 1” in paragraph 3 and substituting the words “paragraphs 1 and 1A”.

New Third Schedule

12. The principal Regulations are amended by inserting, immediately after the Second Schedule, the following Schedule:

“THIRD SCHEDULE

Regulation 5(2)

Prescribed Processing Services

1. The following are prescribed processing services when provided to a financial institution or a financial sector incentive (headquarter services) company in connection with its financial activities relating to treasury and securities:

(a)	account opening documentation services;
(b)	agreement maintenance and support services;
(c)	cash management services;
(d)	corporate action processing services;
(e)	monitoring of counterparty limits services;
(f)	funds and net asset value accounting services;
(g)	portfolio valuation services;
(h)	pre-settlement confirmation and matching services;
(i)	securities borrowing and lending processing services;
(j)	settlement and reconciliation services.

2. The following are prescribed processing services when provided to a financial institution or a financial sector incentive (headquarter services) company in connection with its financial activities relating to asset management:

(a)	benchmark tracking and monitoring services;
(b)	central dealing services;
(c)	credit administration services;
(d)	funds and net asset value accounting services;
(e)	monitoring of counterparty limits services;
(f)	monitoring of investment restrictions services;
(g)	portfolio performance monitoring and measurement services;
(h)	portfolio valuation services;
(i)	registrar, listing agent, and paying agent services;
(j)	settlement and reconciliation services;
(k)	transfer agency services.

3. The following are prescribed processing services when provided to a financial institution or a financial sector incentive (headquarter services) company in connection with its financial activities relating to private banking:

(a)	administration and monitoring of credit facilities services;
(b)	foreign exchange settlement services;
(c)	funds and net asset value accounting services;
(d)	monitoring of investment limits and restrictions services;
(e)	personal and corporate trust servicing services;
(f)	settlement and reconciliation services.

4. The following are prescribed processing services when provided to a financial institution or a financial sector incentive (headquarter services) company in connection with its financial activities relating to wholesale banking:

(a)	cash management services;
(b)	collateral management services;
(c)	loan administration and monitoring of credit facilities services;
(d)	product control services;
(e)	securities borrowing and lending processing services;
(f)	trade finance and clearing operation services;
(g)	trade settlement and reconciliation services;
(h)	trade support services.

5. The following are prescribed processing services when provided to a financial institution or a financial sector incentive (headquarter services) company in connection with its financial activities relating to retail banking:

(a)	credit control services;
(b)	evaluation services of applications for financial products including credit cards, loans and bancassurance;
(c)	fraud control services;
(d)	monitoring services of investment and insurance activities;
(e)	settlement and reconciliation services.

6. The following are prescribed processing services when provided to a financial institution or a financial sector incentive (headquarter services) company in connection with its financial activities relating to insurance:

(a)	claims management and processing services;
(b)	loss adjusting services;
(c)	policy issuance, processing, administration, renewal and collection services;
(d)	risk modeling and related services;
(e)	run-off management and related services.

7. The following are prescribed processing services when provided to a financial institution or a financial sector incentive (headquarter services) company in connection with and incidental to its provision of any of the services referred to in paragraphs 1 to 6:

(a)	compliance and legal support services;
(b)	financial control and accounting services;
(c)	information technology development, application and data support services;
(d)	management information and reporting services;
(e)	risk management services.”.

[G.N. Nos. S 260/2006; S 586/2008; S 54/2010]

Made this 30th day of December 2010.

CHAN LAI FUNG

Permanent Secretary,
Ministry of Finance,
Singapore.

[MF(R) 032.018.2183 V13; AG/LLRD/SL/134/2010/8 Vol. 1]

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