2.—(1) In these Regulations —| “Approved Securities Company” has the same meaning as in the Income Tax (Concessionary Rate of Tax for Derivatives Activities) Regulations 2003 (G.N. No. S 637/2003); |
| “approved start-up fund manager” means a start-up fund manager approved under paragraph (4); [S 785/2005 wef 18/02/2005] |
| “commodity derivatives” means derivatives, whether traded over-the-counter or on an exchange, the payoffs of which are linked in whole to the payoffs or performance of the underlying commodity; [S 627/2007 wef 15/02/2007] |
| “compensatory payment” has the same meaning as in section 10N(12) of the Act; [S 591/2005 wef 27/02/2004] |
“designated investments” means —| (a) | stocks and shares denominated in any foreign currency of companies which are neither incorporated in Singapore nor resident in Singapore, excluding stocks and shares of companies incorporated in Malaysia which are listed on the Singapore Exchange or on the Kuala Lumpur Stock Exchange; | | (b) | securities (other than stocks and shares) denominated in any foreign currency (including bonds, notes, certificates of deposit and treasury bills) issued by foreign governments, foreign banks outside Singapore and companies which are neither incorporated in Singapore nor resident in Singapore; | | (c) | futures contracts held in any futures exchange; | | (d) | any immovable property situated outside Singapore; | | (e) | certificates of deposit, notes and bonds issued by Asian Currency Units in Singapore; | | (f) | Asian Dollar Bonds approved under section 13(1)(v) of the Act; | | (g) | deposits in Singapore with any approved bank as defined in section 13(16) of the Act; [S 591/2005 wef 01/01/2004] | | (h) | foreign currency deposits with financial institutions outside Singapore; | | (i) | stocks, shares, bonds and other securities listed on the Singapore Exchange or on the Kuala Lumpur Stock Exchange and other stocks, shares, bonds and securities issued by companies which are incorporated in Singapore and resident in Singapore; | | (j) | Singapore Government securities; | | (k) | foreign exchange transactions; | | (l) | interest rate or currency contracts on a forward basis, interest rate or currency options, interest rate or currency swaps, and swaps, forwards and option contracts relating to any designated investment or financial index, with —| (i) | an Asian Currency Unit of a financial institution, or an Approved Securities Company, before 1st January 2004; | | (ii) | a financial sector incentive company which is —| (A) | a bank licensed under the Banking Act (Cap. 19); | | (B) | a merchant bank approved under section 28 of the Monetary Authority of Singapore Act (Cap. 186); or | | (C) | a holder of a capital markets services licence under the Securities and Futures Act (Cap. 289) to deal in securities or a company exempted under that Act from holding such a licence, |
| on or after 1st January 2004; |
| | (iii) | a person who is neither a resident of nor a permanent establishment in Singapore; or | | (iv) | a branch office outside Singapore of a company resident in Singapore; [S 591/2005 wef 01/01/2004] |
| | (m) | units in any unit trust which invests wholly in designated investments; | | (n) | qualifying debt securities that are discount securities which mature within one year from the date of issue of those securities and are issued during the period from 27th February 2004 to 31st December 2008 (both dates inclusive); [S 627/2007 wef 15/02/2007] | | (o) | securities (including bonds, notes, certificates of deposits and treasury bills, but excluding stocks and shares) issued by supranational bodies; [S 591/2005 wef 27/02/2004] | | (p) | loans that are —| (i) | granted by the foreign investor to any company incorporated outside Singapore which is neither a resident nor permanent establishment in Singapore, where no interest, commission, fee or other payment in respect of the loan is deductible against any income of that company accruing in or derived from Singapore; or | | (ii) | granted by a person other than the foreign investor but traded by the foreign investor; [S 627/2007 wef 15/02/2007] |
| | (q) | commodity derivatives; and [S 627/2007 wef 15/02/2007] | | (r) | physical commodities if —| (i) | the trading of those physical commodities by the foreign investor in the basis period for any year of assessment is done in connection with and is incidental to its trading of commodity derivatives (referred to in this paragraph as related commodity derivatives) in that basis period; and | | (ii) | the trade volume of those physical commodities traded by the foreign investor in that basis period does not exceed 15% of the total trade volume of those physical commodities and related commodity derivatives traded by the foreign investor in that basis period; [S 627/2007 wef 15/02/2007] |
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“designated person” means —| (a) | the Government of Singapore Investment Corporation Pte. Ltd.; | | (b) | any statutory board; or | | (c) | any company which is wholly owned, directly or indirectly, by the Minister (in his capacity as a corporation established under the Minister for Finance (Incorporation) Act (Cap. 183)) and which is approved by the Minister or such person as he may appoint; |
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| “financial sector incentive company” has the same meaning as in section 43Q of the Act; [S 591/2005 wef 01/01/2004] |
“foreign investor” —| (a) | in relation to an individual, means an individual who is neither a citizen of Singapore nor resident in Singapore and who is the beneficial owner of the funds managed by any fund manager in Singapore; | | (b) | in relation to a company, means a company not resident in Singapore where —| (i) | in the case where the company is incorporated before 15th February 2007, not more than 20% (excluding the total percentage owned directly by designated persons) of the total number of its issued shares are beneficially owned, directly or indirectly, by persons who are citizens of Singapore or resident in Singapore; or | | (ii) | in the case where the company is incorporated on or after 15th February 2007, not more than 20% (excluding the total percentage owned directly by designated persons) of the total value of its issued securities are beneficially owned, directly or indirectly, by persons who are citizens of Singapore or resident in Singapore; and [S 627/2007 wef 15/02/2007] |
| | (c) | in relation to a trust fund, means a trust fund where not more than 20% (excluding the total percentage held directly by designated persons) of the value of the fund is beneficially held, directly or indirectly, by persons who are not foreign investors referred to in paragraph (a) or (b); |
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“issued securities” means —| (a) | debentures, stocks or shares; | | (b) | any right, option or derivative in respect of any such debentures, stocks or shares; | | (c) | any right under a contract for differences or under any other contract the purpose or pretended purpose of which is to secure a profit or avoid a loss by reference to fluctuations in —| (i) | the value or price of any such debentures, stocks or shares; | | (ii) | the value or price of any group of any such debentures, stocks or shares; or | | (iii) | an index of any such debentures, stocks or shares, |
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| and includes derivatives of a buy-sell nature, but does not include — |
| (A) | futures contracts which are traded on a futures market; | | (B) | bills of exchange; | | (C) | promissory notes; or | | (D) | certificates of deposit issued by a bank or finance company; [S 627/2007 wef 15/02/2007] |
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| “qualifying debt securities” has the same meaning as in section 13(16) of the Act; [S 591/2005 wef 27/02/2004] |
| “securities lending or repurchase arrangement” has the same meaning as in section 10N(12) of the Act; [S 591/2005 wef 27/02/2004] |
“specified income” means —| (a) | interest and dividends derived from outside Singapore and received in Singapore in respect of any designated investments; | | (b) | interest derived from deposits with and certificates of deposit issued by any approved bank as defined in section 13(16) of the Act and from Asian Dollar Bonds approved under section 13(1)(v) of the Act; [S 591/2005 wef 01/01/2004] | | (c) | gains or profits realised from the sale of any designated investments; | | (d) | gains or profits arising from transactions in paragraphs (c), (k), (l), (p), (q) and (r) of the definition of “designated investments”; [S 627/2007 wef 15/02/2007] | | (e) | fees and compensatory payments derived on or after 27th February 2004 from securities lending or repurchase arrangements with —| (i) | a person who is neither a resident of nor a permanent establishment in Singapore; | | (ii) | the Monetary Authority of Singapore; | | (iii) | a bank licensed under the Banking Act (Cap. 19); | | (iv) | a merchant bank approved under section 28 of the Monetary Authority of Singapore Act (Cap. 186); | | (v) | a finance company licensed under the Finance Companies Act (Cap. 108); | | (vi) | a holder of a capital markets services licence licensed to carry on business in the following regulated activities under the Securities and Futures Act (Cap. 289) or a company exempted under that Act from holding such a licence:| (A) | dealing in securities (other than any person licensed under the Financial Advisers Act (Cap. 110)); | | (B) | fund management; | | (C) | securities financing; or | | (D) | providing custodial services for securities; |
| | (vii) | a collective investment scheme or closed-end fund as defined in the Securities and Futures Act (Cap. 289) that is constituted as a corporation; | | (viii) | the Central Depository (Pte) Limited; | | (ix) | an insurer registered or regulated under the Insurance Act (Cap. 142) or exempted under that Act from being registered or regulated; or | | (x) | a trust company registered under the Trust Companies Act (Cap. 336); [S 591/2005 wef 27/02/2004] |
| | (f) | rents and any other income derived from any immovable property situated outside Singapore and received in Singapore on or after 27th February 2004; [S 591/2005 wef 27/02/2004] | | (g) | discounts derived from outside Singapore and received in Singapore on or after 27th February 2004; [S 591/2005 wef 27/02/2004] | | (h) | discounts from qualifying debt securities which —| (i) | are issued during the period from 27th February 2004 to 16th February 2006 and which mature within one year from the date of issue of those securities; or | | (ii) | are issued during the period from 17th February 2006 to 31st December 2008; [S 627/2007 wef 17/02/2006] |
| | (i) | interest derived on or after 27th February 2004 from qualifying debt securities; and [S 591/2005 wef 27/02/2004] | | (j) | distributions from foreign unit trusts derived from outside Singapore and received in Singapore on or after 27th February 2004; [S 591/2005 wef 27/02/2004] |
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| “unit” means a right or interest (whether described as a unit, a sub-unit or otherwise) which may be acquired under a unit trust; |
| “unit trust” means any trust established for the purpose, or having the effect, of providing facilities for the participation by persons as beneficiaries under a trust, in profits or income arising from the acquisition, management or disposal of securities or any other property. |
(2) The requirement in paragraph (b) of the definition of “foreign investor” in paragraph (1) relating to beneficial ownership of issued shares or securities, as the case may be, of a company does not apply to a fund constituted as a company not resident in Singapore, for a period of 12 months from the date of its incorporation if —| (a) | the company is incorporated at any time between 18th February 2005 and 17th February 2010 (both dates inclusive); | | (b) | the date of its incorporation is stated in its charter, statute or memorandum and articles or other instrument constituting it or defining its constitution; | | (c) | it was incorporated by a fund manager who was an approved start-up fund manager at the time of incorporation; | | (d) | it has been managed by that fund manager since its incorporation; and | | (e) | it is not incorporated with the avoidance or reduction of tax chargeable under the Act as its main purpose or one of its main purposes. [S 785/2005 wef 18/02/2005] [S 96/2006 wef 30/01/2006] [S 627/2007 wef 15/02/2007] |
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(3) The requirement in paragraph (c) of the definition of “foreign investor” in paragraph (1) relating to beneficial holding of the value of a trust fund does not apply to a trust fund for a period of 12 months from the date of its constitution if —| (a) | the fund is constituted at any time between 18th February 2005 and 17th February 2010 (both dates inclusive); | | (b) | the date of its constitution is stated in the relevant trust instrument; | | (c) | it was constituted by a fund manager who was an approved start-up fund manager at the time of constitution; | | (d) | it has been managed by that fund manager since its constitution; and | | (e) | it is not constituted with the avoidance or reduction of tax chargeable under the Act as its main purpose or one of its main purposes. [S 785/2005 wef 18/02/2005] |
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| (4) For the purposes of paragraphs (2) and (3), the Minister or such person as he may appoint may approve a fund manager as an approved start-up fund manager, and such approval shall be for a period not exceeding 3 years. [S 785/2005 wef 18/02/2005] |
| (5) Any reference in these Regulations to the value of issued securities of a company is a reference to the value of those securities at the time of their issue by the company. [S 627/2007 wef 15/02/2007] |
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