PART I | 1. These Regulations may be cited as the Business Trusts Regulations. |
2. In these Regulations, unless the context otherwise requires —| “associated company” and “chief executive officer” have the same meanings as in section 86(10) of the Act; |
| “executive director” means a director who is concurrently an executive officer, and “non-executive director” shall be construed accordingly; |
“executive officer”, in relation to a corporation, means any person, by whatever name described, who is —| (a) | in the direct employment of, or acting for or by arrangement with, the corporation; and | | (b) | concerned with, or takes part in, the management of the corporation on a day-to-day basis; |
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| “immediate family” and “interested person transaction” have the same meanings as in section 86(10) of the Act; |
| “subsidiary” has the same meaning as in section 5 of the Companies Act (Cap. 50). |
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| When directors considered to be independent from management and business relationships with trustee-manager |
3.—(1) A director of the trustee-manager of a registered business trust is considered to be independent from management and business relationships with the trustee-manager (whether or not the trustee-manager is acting for or on behalf of the registered business trust) if —| (a) | the director has no management relationships with the trustee-manager or with any of its subsidiaries; and | | (b) | the director has no business relationships with the trustee-manager or with any of its related corporations, or with any officer of the trustee-manager or any of its related corporations, |
| that could interfere with the exercise of the director’s independent judgment with regard to the interests of all the unitholders of the registered business trust as a whole. |
(2) Without prejudice to the generality of paragraph (1)(a), a director shall not be considered to be independent from management relationships with the trustee-manager of a registered business trust or with any of its subsidiaries if —| (a) | he is employed by the trustee-manager or by any of its subsidiaries, or has been so employed, at any time during the current financial year or any of the preceding 3 financial years of the trustee-manager; | | (b) | any member of his immediate family —| (i) | is being employed by the trustee-manager or by any of its subsidiaries as an executive officer whose compensation is determined by the board of directors of the trustee-manager or the subsidiary, as the case may be; or | | (ii) | has been so employed at any time during the current financial year or any of the preceding 3 financial years of the trustee-manager; or |
| | (c) | he is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the management of the trustee-manager or any of its subsidiaries. |
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(3) Without prejudice to the generality of paragraph (1)(b), a director shall not be considered to be independent from business relationships with the trustee-manager or with any of its related corporations, or with any officer of the trustee-manager or any of its related corporations, if —| (a) | he is a substantial shareholder, a director or an executive officer of any corporation, or a sole proprietor or partner of any firm, where such corporation, sole proprietorship or firm carries on business for purposes of profit to which the trustee-manager or any of its related corporations has made, or from which the trustee-manager or any of its related corporations has received, payments (whether or not the trustee-manager is acting for or on behalf of the registered business trust) at any time during the current or immediately preceding financial year of the trustee-manager; or | | (b) | he is receiving or has received compensation from the trustee-manager or any of its related corporations, other than remuneration received for his service as a director or as an employee of the trustee-manager or any of its related corporations, at any time during the current or immediately preceding financial year of the trustee-manager. |
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| When directors considered to be independent from substantial shareholder |
4.—(1) A director of a trustee-manager of a registered business trust is considered to be independent from a substantial shareholder of the trustee-manager if he is not that substantial shareholder of the trustee-manager or is not connected to that substantial shareholder of the trustee-manager.(2) For the purposes of paragraph (1), a person is connected to a substantial shareholder if —| (a) | in the case where the substantial shareholder is an individual, the person is —| (i) | a member of the immediate family of the substantial shareholder; | | (ii) | a partner of a firm of which the substantial shareholder is also a partner; or | | (iii) | accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the substantial shareholder; or |
| | (b) | in the case where the substantial shareholder is a corporation, the person is —| (i) | employed by the substantial shareholder; | | (ii) | employed by a subsidiary or an associated company of the substantial shareholder; | | (iii) | a director of the substantial shareholder; | | (iv) | an executive director of a subsidiary or an associated company of the substantial shareholder; | | (v) | a non-executive director of a subsidiary or an associated company of the substantial shareholder, where the subsidiary or associated company is not the trustee-manager; | | (vi) | a partner of a firm of which the substantial shareholder is also a partner; or | | (vii) | accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the substantial shareholder. |
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