Companies (Central Depository System) Regulations

Companies Act

(CHAPTER 50, Section 130P)

Rg 2

G.N. No. S 446/1993

REVISED EDITION 1994

(30th March 1994)

[12th November 1993]

Citation

1. These Regulations may be cited as the Companies (Central Depository System) Regulations.

Definitions

2. In these Regulations, unless the context otherwise requires —

“Depository Agent Agreement” means an agreement entered into by the Depository with each depository agent;

“issuer” means a corporation whose securities are listed on the Stock Exchange.

Control of depository agents by Depository

3.—(1) No person may be approved as a depository agent by the Depository unless the Depository is satisfied that —

(a)	he has the competence, physical capacity and financial resources to discharge his duties under the Depository Agent Agreement and he is able to meet any obligation he might reasonably be expected to incur thereunder; and
(b)	he is a fit and proper person to perform those duties and obligations.

(2) The Depository may terminate the Depository Agent Agreement —

(a)	where the depository agent ceases to comply with the requirements in paragraph (1); or
(b)	on the occurrence of any of the events that may be specified in the Depository Agent Agreement.

Duties of Depository

4.—(1) The Depository shall establish and maintain a system of procedures to enable and facilitate the evidencing and transfer of title to book-entry securities.

(2) In particular, and without prejudice to the generality of paragraph (1), the Depository shall establish or cause to be established all such procedures as may be necessary —

(a)	to facilitate the deposit and withdrawal of documents evidencing title in relation to book-entry securities;
(b)	to ensure orderly dealings in, and registration of, book-entry securities;
(c)	to ensure the safe custody of documents evidencing title deposited with the Depository; and
(d)	to ensure as far as is reasonably practicable that the risk of error and fraud is reduced and in particular the regulation of access to the computerised Central Depository System.

Duties of depository agents

5. The duties of a depository agent shall be —

(a)	to open and maintain separate accounts of sub-account holders as authorised under its Depository Agent Agreement, for its own account and on account of each of its clients;
(b)	to gather and maintain a record of such information relating to sub-account holders as the Depository may from time to time specify;
(c)	to furnish to the Depository upon request information relating to services provided by the Depository under the Depository Agent Agreement and the discharge of the depository agent’s obligations thereunder but not including information concerning its sub-account holders unless disclosure of such information is permitted under the Depository Agent Agreement for a particular purpose or for purposes of investor protection or is required by any court or under the provisions of any written law; and
(d)	to furnish to the Registrar or the Monetary Authority of Singapore, as the case may be, such information or documents relating to a sub-account holder’s account as is necessary for the proper administration of Division 7A of the Act or for the protection of investors.

Power of Minister to give directions

6.—(1) The Minister may, where he considers it necessary in the public interest or for the protection of investors, give directions to the Depository or the depository agent with regard to the discharge of its duties or functions. The Depository and the depository agent shall comply with any such direction.

(2) Before giving directions under this regulation, the Minister may consult the Depository or the depository agent and afford it an opportunity to make representations.

Inspections by Monetary Authority of Singapore

7.—(1) The Monetary Authority of Singapore may, after consultation with the Registrar, from time to time, inspect under conditions of secrecy, the books, accounts, documents and transactions of the Depository.

(2) The Monetary Authority of Singapore may appoint any person to exercise the power of the Authority under paragraph (1).

(3) For the purposes of an inspection under this regulation, the Depository shall afford the Monetary Authority of Singapore access to, and shall produce, its books, accounts and documents and shall give such information and facilities as may be required to conduct the inspection.

(4) Any person appointed by the Monetary Authority of Singapore shall, at all times, have the power to copy or take possession of the books, accounts and other documents of the Depository.

(5) If the Depository fails, without reasonable excuse, to produce any book, account or document or furnish any information or facilities in accordance with paragraph (3), the Depository shall be guilty of an offence.

(6) Nothing in this regulation shall be construed as in any way limiting or restricting the powers of inspection and investigation conferred upon the Registrar by the Act.

Rights and obligations of a depositor in his book-entry security are the same as in his deposited security

8. All the rights that are attached to the documents evidencing title representing the securities that are deposited with the Depository and all obligations to which those documents evidencing title are subject shall subsist and be attached to the book-entry securities registered in the name of the depositor in the Depository Register.

No law requiring proper instrument of transfer and documents evidencing title to validate transfer of securities applies to transfer of book-entry securities

9. Where in any written law or rule of law it is provided that, in a contract to transfer title to a security, the transferor shall execute and deliver a proper instrument of transfer together with the documents evidencing title relating to the security, such written law or rule of law shall not apply to the transfer of a book-entry security.

Record of entry in depositor’s account prima facie evidence

10. A record of an entry in an account holder’s account or in a sub-account holder’s account kept and maintained by the Depository or the depository agent respectively shall be prima facie evidence of the truth of the matters recorded therein.

Jumbo certificates and marketable lots

11. The Depository may require an issuer to issue, in the name of the Depository or its nominee, share certificates in jumbo lots and in marketable lots.

Procedure for transmission of title on death or bankruptcy

12.—(1) This regulation shall apply where title to a book-entry security has devolved on a person (referred to in this regulation as the successor) as a result of death or bankruptcy of a person (or in the case of a body corporate its dissolution).

(2) This regulation shall also apply where as a result of the death (or in the case of a body corporate its dissolution) of a joint holder title is vested in a surviving holder or holders and the terms “devolved” and “successor” shall be construed accordingly.

(3) The successor shall, in accordance with paragraph (4), notify the Depository or the depository agent, as the case may be, that title to the book-entry security has devolved on him.

(4) A notice under paragraph (3) shall be in the Form A, B, C, D or E as set out in the Schedule and shall be accompanied by —

(a)

where title has devolved as a result of death, any document which by law is sufficient evidence of probate of the will or grant of letters of administration of the estate of a deceased depositor having been granted to the successor or a copy of the declaration of the Public Trustee under section 6(2) of the Public Trustee Act [Cap. 260] or of the official assignee under section 62(1) of the Probate and Administration Act [Cap. 251], as the case may be;

[S 47/94 wef 12/11/1993]

(b)

where title has devolved as a result of the bankruptcy of a depository, such evidence of the right of a person concerned to the book-entry security as the Depository may require; and

(c)

where title has devolved as a result of the dissolution of a corporation —

(i)

any document which by law is sufficient evidence of the dissolution of the corporation; or

(ii)

in the event that the corporation is wound up pursuant to the provisions of Division 3 of Part X of the Act, a copy of the Court order or a certified copy of the prescribed returns lodged with the Registrar and the Official Receiver, which lodgment shall have been made not less than 3 months before the notification by the successor to the Depository or the depository agent, as the case may be.

[Subst. by S 47/94 wef 12/11/1993]

(5) The notice shall specify either —

(a)	that the successor wishes to be registered in the Depository Register as holder of the book-entry security; or
(b)	that the successor wishes the book-entry security to be transferred to another person, giving the name and securities account number of that person,

and the Depository or the depository agent, as the case may be, shall give effect to his wishes upon payment of the transfer fees laid down by the Depository or the depository agent.

(6) For the purposes of this regulation and regulation 13, “successor” shall be deemed to include the Official Receiver, a receiver or liquidator, a provisional liquidator and a judicial manager.

Procedure on transmission of title by Court order

13.—(1) Where by virtue of any provision in the Act, the Securities Industry Act [Cap. 289] or any written law the title to a book-entry security is by Court order transferred to or vested in another person (referred to in this regulation as the successor) the procedures in this regulation shall be followed.

(2) The successor shall notify the Depository or the depository agent, as the case may be, that title to the book-entry security has been transferred to or vested in him.

(3) A notice under paragraph (2) shall be in the Form F or G as set out in the Schedule and shall be accompanied by a copy of the Court order and the provision in the written law under which the order transferring or vesting title is made and shall state the name and address of the successor and give such other information as the Depository or the depository agent may require.

(4) The notice shall specify —

(a)	that the successor wishes to have his name registered in the Depository Register as holder of the book-entry securities; or
(b)	that the successor wishes the book-entry securities to be transferred to another person, giving the name and securities account number of that person,

and the Depository or the depository agent, as the case may be, shall give effect to his wishes upon payment of the transfer fees laid down by the Depository or the depository agent.

Orders restraining transfer or dealing in book-entry securities

14.—(1) Where in any judicial proceedings an injunction or other Court order is made or where a Ministerial order is issued which has the effect of restraining the transfer of a book-entry security or restraining any dealing in a book-entry security, the order may be served upon the Depository where it relates to an account holder and upon a depository agent where the order relates to a sub-account.

(2) Where the order is served upon a depository agent, the depository agent shall thereupon deliver the order to the Depository which shall, subject to paragraph (3), be under a duty not to transfer or deal in that book-entry security so long as the injunction or order is in force notwithstanding any instruction by a depositor to transfer or deal in the book-entry security.

(3) Where the injunction or other Court or Ministerial order has the effect of restraining the transfer of a book-entry security in a sub-account or restraining any dealing in that book-entry security the order shall specify the sub-account number, failing which the Depository or depository agent, as the case may be, shall not be in breach of duty or be liable in contempt proceedings for the failure to restrain the transfer of the book-entry security or to restrain the dealing in that book-entry security, as the case may be.

(4) For the purposes of this regulation, “dealing” in book-entry security includes withdrawal from the Depository of documents evidencing title in respect of listed securities.

Period in which records to be kept by Depository and depository agents

15. The Depository and every depository agent shall keep a copy of all records and communications received or given by it which relate to an account holder’s account or sub-account holder’s account, as the case may be, for a period of 6 years.

Certificate of authorised officer to be evidence

16. In any legal proceedings, a copy of any instrument kept by the Depository or an entry in the record kept and maintained by the Depository duly certified under the hand of such officer of the Depository as is authorised by the Depository shall be prima facie evidence of the entry having been made and of the truth of the contents thereof.

Six-monthly statements of accounts to be sent by Depository

17.—(1) The Depository shall issue to all depositors —

(a)	at the end of a period not exceeding 6 months (referred to in this regulation as the statement period) a statement showing the number of book-entry securities held to the account of the depositors at the date of the statement, except that, if there are no security balances in his account no statement will be sent; and
(b)	a monthly statement showing the transactions effected in their accounts during the preceding month (if any), except that, if there is no transaction no statement will be sent.

(2) The depositor shall examine all entries in the statement of account balances and notify the Depository of any errors or discrepancies in such statement within 14 days of the date of the statement.

(3) If no notification is received by the Depository within 14 days of the date of the statement, the depositor shall be deemed to have agreed to release the Depository from liability and the Depository shall not be liable for any loss suffered by the depositor by reason of the Depository having debited or credited or omitting to debit or credit any amount of book-entry securities in or to the depositor’s securities account.

(4) For the purpose of paragraph (1)(a), the first statement period shall be the period commencing from the date of commencement of these Regulations.

Duty of Depository to keep certain records

18.—(1) The Depository shall keep or cause to be kept such records and accounts, in sufficient detail, so as to show particulars of —

(a)	all moneys received or paid by the Depository, including dividends received in respect of any book-entry securities and the disbursement of such dividends to depositors;
(b)	all income received from commissions, fees, charges and other sources, and all expenses, commissions and other payments made or paid by the Depository;
(c)	all assets and liabilities (including contingent liabilities) of the Depository;
(d)	all book-entry securities and particulars showing withdrawals of such securities; and
(e)	all purchases and sales of book-entry securities and particulars of other dealings made in respect thereof and the charges and credits arising therefrom.

(2) An entry in the records or accounts shall specify the date and time of making such entry and, in the case of an entry made by a person, the identity of such person.

(3) Any entry in the records or accounts of the Depository shall, unless the contrary is proved, be deemed to have been made by, or with the authority of, the Depository.

Physical stock count of documents evidencing title and other documents

19.—(1) For the purposes of verifying the accuracy of Depository Register and any record of account relating to depositors kept by the Depository, it shall, before or at the end of every quarter during a financial year, conduct a stock count of all documents evidencing title and any other documents related thereto held in custody by, or in the name of, the Depository or its nominee company.

(2) The Depository shall, within 21 days after the end of each quarter of a financial year, submit to the Stock Exchange, the issuers (in respect of book-entry securities issued by each issuer), the Registrar and the Monetary Authority of Singapore a report on the outcome of such stock count, and such report shall, if applicable, state what action the Depository proposes to take with regard to any deficiency in the number of documents evidencing title representing the book-entry securities or any other documents in relation therewith or with regard to any other inaccuracies in its records of accounts.

(3) Notwithstanding paragraph (1), the Registrar may, if he is not satisfied with such report or where he considers it appropriate, at any time conduct, or appoint an approved company auditor to conduct, a stock count of all documents evidencing title representing the book-entry securities and any other documents in relation therewith.

(4) Where the Registrar is not satisfied with the report submitted to him by the Depository under paragraph (2), and conducts, or appoints an approved company auditor to conduct, a stock count of documents evidencing title pursuant to paragraph (3), the costs and expenses incurred by the Registrar in respect thereof shall be borne by the Depository.

(5) The Registrar may —

(a)	upon receipt of a report from the Depository;
(b)	upon receipt of a report from an auditor appointed by the Registrar under paragraph (3); or
(c)	after conducting a stock count pursuant to paragraph (3),

give to the Depository such directions as he considers appropriate.

(6) A Depository which fails, without lawful excuse, to comply with any direction given by the Registrar under paragraph (5) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000.

Procedure for withdrawal of securities

20.—(1) A depositor may, on application in writing to the Depository, withdraw any documents evidencing title relating to his book-entry securities that are standing to the credit of his account with the Depository.

(2) Where an application is made under paragraph (1) for withdrawal of a book-entry security, the Depository shall lodge with the issuer —

(a)	the documents evidencing title representing the equivalent amount of the book-entry securities requested to be withdrawn; and
(b)	the instruments of transfer duly executed by the Depository for the purpose of effecting the transfer of those securities to the depositor or to any person nominated by him.

(3) A depositor shall, on demand made by the Depository, pay to the Depository the appropriate amount of stamp duty payable on the instrument of transfer to be lodged with an issuer under paragraph (2), together with the appropriate transfer fee (if any) and the withdrawal fees laid down by the Depository.

(4) Notwithstanding section 130 of the Act, an issuer shall, within two weeks after the documents evidencing title and the instruments of transfer in respect thereof are lodged with it —

(a)	complete and have ready for delivery to the depositor the appropriate certificate registered in the name of the depositor or in the name of any person nominated by him, and any other document in connection with the securities, if any; and
(b)	unless otherwise instructed by the depositor, send or deliver the completed certificates and such other documents, if any, to the depositor or to any person nominated by him.

(5) The Depository shall cease to act as a depository of securities where the securities cease to be quoted on the Stock Exchange. Such securities shall thereafter be deemed to be withdrawn and the Depository shall, except for such securities which had expired, deliver the documents evidencing title to such securities together with the instruments of transfer thereof in the name of the depositors to the issuer who shall thereupon comply with paragraph (4).

[S 47/94 wef 12/11/1993]

(6) The documents evidencing title representing the securities shall not be capable of being traded on a stock market unless they are again deposited with the Depository.

Non-application of section 86

21. For the avoidance of doubt, it is hereby declared that section 86 of the Act shall not apply to the Depository as the registered holder of a company’s shares.

Application of section 125

22.—(1) For the purposes of section 125 of the Act in relation to a book-entry security, a reference to an owner therein shall be construed as a reference to the Depository.

(2) Section 125(2) of the Act shall not apply to documents evidencing title in relation to listed securities which have been deposited with the Depository and registered in its name or its nominee’s name.

Securities interest — Forms

23.—(1) An instrument of —

(a)	assignment;
(b)	charge;
(c)	sub-charge;
(d)	re-assignment;
(e)	discharge of charge;
(f)	discharge of sub-charge,

referred to in section 130N of the Act shall be in the Forms H, I, J, K, L and M, respectively, as set out in the Schedule.

(2) All instruments lodged with the Depository shall be accompanied by the fees payable to the Depository.

Creation of certain security interests by sub-account holders and depository agents under common law not precluded

23A.—(1) Nothing in section 130N of the Act or these Regulations shall be construed as precluding —

(a)

a sub-account holder from creating under any rule of law any security interest in book-entry securities in favour of —

(i)	any other sub-account holder who maintains a sub-account for such book-entry securities with the same depository agent as the sub-account holder; or
(ii)	the depository agent with whom the sub-account holder maintains the sub-account for such book-entry securities; or

(b)

a depository agent from creating under any rule of law any security interest in book-entry securities in favour of the depository agent itself,

except that the Depository shall not be required to recognise, even when having notice thereof, any security interest so created in such book-entry securities.

(2) Security interests created in book-entry securities pursuant to instruments of assignment or charge in the prescribed form shall have priority over such security interests created under any rule of law.

[S 47/94 wef 12/11/1993]

Subsistence of security interests created before securities converted into book-entry securities

23B. Where any security interest in securities is created under any rule of law and subsists or remains in force immediately before such securities are brought under the provisions of Division 7A of the Act as book-entry securities, such security interest shall continue to have effect until such time as such security interest is discharged or released by the holder thereof.

[S 47/94 wef 12/11/1993]

Security interests created by assignment under section 130N to include all securities

23C. Where any assignment of book-entry securities is made in accordance with section 130N of the Act, the security interest created thereunder shall, upon such assignment taking effect, include all book-entry securities arising from or accruing or attaching to the book-entry securities so assigned.

[S 47/94 wef 12/11/1993]

Book-entry security treated as an interest in a share for purposes of Division 4 and sections 163 to 165 and sections 92 and 244

24. For the purposes of Division 4 of Part IV and sections 163 to 165 inclusive as well as sections 92 and 244 of the Act, a book-entry security shall be treated as if it were an interest in a share.

Audit

25.—(1) Notwithstanding anything in the Act, the Depository —

(a)	shall appoint an approved company auditor to carry out in respect of the year in which he is appointed an audit of the accounts of the Depository; and
(b)	shall, within 3 months after the end of a financial year, lodge with the Registrar and the Monetary Authority of Singapore the auditor’s report.

(2) The Registrar may at any time appoint an approved company auditor to conduct a surprise audit on the Depository and the Registrar may fix the remuneration to be paid by the Depository to that auditor.

Duty to comply with rules of Depository

26. Any person who is an account holder, a sub-account holder, a depository agent, an issuer or a user of the Central Depository System shall comply with, enforce or give effect to the rules of the Depository to the extent to which those rules are applicable to such person.

Depository not liable for failure of electronic system of Depository

27. Apart from any wilful act, omission, neglect or default on the part of the Depository or its employees affecting the electronic system of the Depository, the Depository shall not be liable for any loss or damage suffered or incurred by a depository agent or a depositor that is attributable to the failure of that system.

Penalty

28. Any person guilty of an offence under these Regulations for which no penalty is expressly provided shall be liable on conviction to a fine not exceeding $5,000.

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