Banking (Amendment No. 2) Regulations 2010

Status:

Published in Subsidiary Legislation Supplement
on 05 Jul 2010

No. S 370

Banking Act

(Chapter 19)

Banking (Amendment No. 2) Regulations 2010

In exercise of the powers conferred by sections 30(1)(d), 31(3)(a), 32(5), 33(3) and 78(1) of the Banking Act, the Monetary Authority of Singapore hereby makes the following Regulations:

Citation and commencement

1. These Regulations may be cited as the Banking (Amendment No. 2) Regulations 2010 and shall come into operation on 5th July 2010.

Amendment of regulation 7

2. Regulation 7 of the Banking Regulations (Rg 5) is amended by deleting paragraph (1) and substituting the following paragraph:

“(1) The Authority hereby excludes, from the operation of section 32 of the Act —

(a)	any company which carries on a business prescribed in regulation 23F(1) (whether as its principal business or otherwise); or
(b)	any other company whose principal business is that of investing in any company referred to in sub-paragraph (a).”.

New regulation 23F

3. The Banking Regulations are amended by inserting, immediately after regulation 23E, the following regulation:

“Prescribed private equity or venture capital business

23F.—(1) For the purposes of section 30(1)(d) of the Act and subject to paragraphs (3) and (4), a business (not being a business referred to in section 30(1)( a), (b) or (c) of the Act) which —

(a)	is carried on by a company or the trustee of a trust; and
(b)	satisfies the requirement in paragraph (2),

is prescribed as a business that any bank in Singapore may carry on, or with whom a bank in Singapore may enter into any partnership, joint venture or any other arrangement to carry on, whether in Singapore or elsewhere.

(2) The business referred to in paragraph (1) is one which the bank in Singapore has determined to have potential for high growth or value creation.

(3) The reference to a company or trustee of a trust in paragraph (1) excludes a company or trustee which —

(a)	is not carrying on any substantial business or not in operation;
(b)	is carrying on the business of engaging in property-related activities; or
(c)	is carrying on the business of factoring, leasing equipment or otherwise purchasing debt obligations from others.

(4) Subject to paragraph (5), the bank in Singapore shall, when carrying on a business prescribed in paragraph (1), limit its total net book value of all such businesses —

(a)

where the bank is incorporated in Singapore, to —

(i)	10% of its capital funds or such other percentage as the Authority may approve in any particular case; and
(ii)	10% of the capital funds of its banking group or such other percentage as the Authority may approve in any particular case (where applicable); and

(b)

where the bank is incorporated outside Singapore, to 10% of its capital funds or such other percentage as the Authority may approve in any particular case.

(5) The limits prescribed in paragraph (4)(b) shall not apply to any business prescribed in paragraph (1) and carried on in the operation of an Asian Currency Unit by a bank incorporated outside Singapore.

(6) In this regulation, unless the context otherwise requires —

“Asian Currency Unit” has the same meaning as in section 77(5) of the Act;

“banking group”, in relation to a bank incorporated in Singapore, means the bank incorporated in Singapore, its subsidiaries, and all other entities treated as part of the bank’s group of companies for accounting purposes according to Accounting Standards;

“capital funds” —

(a)	in relation to a bank incorporated in Singapore, means the capital of the bank that is used for the purposes of calculating the bank’s capital adequacy ratio under section 10 of the Act;
(b)	in relation to the banking group of a bank incorporated in Singapore, means the capital of the banking group that is used for the purposes of calculating the banking group’s capital adequacy ratio under section 10 of the Act; or
(c)	in relation to a bank incorporated outside Singapore, means such net head office funds and such other liabilities as the Authority may, by notice in writing, specify.”.

New regulations 24A and 24B

4. Part X of the Banking Regulations is amended by inserting, immediately after regulation 24, the following regulations:

“Valuation of equity investments

24A. For the purposes of section 31 of the Act in relation to a bank incorporated in Singapore, the valuation of any equity investment in a single company shall be —

(a)	in the case where revaluation gains with respect to the equity investment are permitted by the Authority to be included in the computation of the bank’s capital funds, the sum of the cost of the equity investment and 45% of revaluation gains with respect to the equity investment; and
(b)	in any other case, the cost of the equity investment less revaluation losses and diminution in value with respect to the equity investment, if any.

Valuation of immovable property

24B. For the purposes of section 33 of the Act in relation to a bank incorporated in Singapore, the valuation of immovable property shall be —

(a)	in the case where revaluation gains with respect to immovable property are permitted by the Authority to be included in the computation of the bank’s capital funds, the sum of the cost of the immovable property and 45% of revaluation gains with respect to the immovable property; and
(b)	in any other case, the cost of the immovable property less revaluation losses and diminution in value with respect to the immovable property, if any.”.

[G.N. Nos. S 622/2005; S 170/2006; S 325/2006; S 238/2007; S 401/2008; S 18/2009; S 203/2009; S 360/2009; S 214/2010]

Made this 25th day of June 2010.

TEO SWEE LIAN

Acting Managing Director,
Monetary Authority of Singapore.

[FSG SPD 036/2000; FSG SPD 034/2000; AG/LLRD/SL/19/2010/2 Vol. 1]

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