Singapore legislation

Schedule 5

of Banking Act 1970

Schedule 5

Definitions in sections 27, 28, 29, 29A, 38 and 39A

FIFTH SCHEDULESections 27(4), 28(8), 29(7), 38(9) and 77ADefinitions in sections 27, 28, 29, 29A, 38 and 39A1. For the purposes of sections 27, 28 and 29 and this Schedule —“affiliate” means —

(a)

in relation to a substantial shareholder of a bank incorporated in Singapore, any corporation which is an associate of the substantial shareholder, other than —

(i)

the bank and any entity in which the bank acquires or holds, directly or indirectly, a major stake;

(ii)

the parent bank of the bank and any entity in which the parent bank acquires or holds, directly or indirectly, a major stake; or

(iii)

where the bank is the subsidiary of a financial holding company, the financial holding company and any entity in which the financial holding company acquires or holds, directly or indirectly, a major stake;

(b)

in relation to a substantial shareholder of a financial holding company, any corporation which is an associate of the substantial shareholder, other than —

(i)

the financial holding company and any entity in which the financial holding company acquires or holds, directly or indirectly, a major stake; or

(ii)

where the financial holding company is the subsidiary of another financial holding company, the second‑mentioned financial holding company and any entity in which the second-mentioned holding company acquires or holds, directly or indirectly, a major stake; and

(c)

in relation to a substantial shareholder of a parent bank, any corporation which is an associate of the substantial shareholder, other than the parent bank and any entity in which the parent bank acquires or holds, directly or indirectly, a major stake;“associate”, in relation to a substantial shareholder, means —

(a)

any corporation in which the substantial shareholder controls the composition of the board of directors;

(b)

any corporation in which the substantial shareholder controls more than half of the voting power;

(c)

any corporation in which the substantial shareholder holds more than half of the total number of issued shares;

(d)

any corporation which is a subsidiary of any other corporation which is an associate by virtue of paragraph (a), (b) or (c);

(e)

any corporation in which the substantial shareholder or any other corporation which is an associate by virtue of paragraph (a), (b), (c) or (d) has, or the substantial shareholder and such other corporation together have, an interest in shares entitling the beneficial owners thereof the right to cast, whether by proxy or in person, not less than 20% but not more than 50% of the total votes able to be cast at a general meeting of the firstmentioned corporation; or

(f)

any corporation (not being a corporation which is an associate by virtue of paragraph (a), (b), (c), (d) or (e)) the policies of which the substantial shareholder or any other corporation which is an associate by virtue of paragraph (a), (b), (c), (d) or (e) is, or the substantial shareholder together with such other corporation are, able to control or influence materially;“bank group”, in relation to a bank in Singapore, means a group comprising —

(a)

in the case of a bank incorporated in Singapore —

(i)

every subsidiary of the bank;

(ii)

every branch of the bank located outside Singapore; and

(iii)

every other entity that is treated as part of the bank’s group of entities for accounting purposes according to Accounting Standards; or

(b)

in the case of branches and offices located within Singapore of a bank incorporated outside Singapore —

(i)

every subsidiary of the bank that is reflected as an investment in the balance sheet of a branch of the bank located within Singapore; and

(ii)

every other entity that —

(A)

is treated as part of the bank’s group of entities for accounting purposes according to Accounting Standards; and

(B)

is reflected as an investment in the balance sheet of a branch of the bank located within Singapore;“child” includes a stepchild and a child who has been de facto adopted by the person in question, whether or not such adoption has been registered in accordance with the provisions of any written law;“counterparty”, in relation to a bank, means a person —

(a)

who has an obligation to the bank as a result of the bank’s contractual or other arrangements; or

(b)

in relation to whom the bank is at risk as a result of the bank’s contractual or other arrangements or investments;“director”, in relation to a bank in Singapore, includes the spouse, parent and child of a director of the bank;“director group”, in relation to a bank in Singapore, means a group of persons comprising —

(a)

any director of the bank;

(b)

every firm or limited liability partnership in which the director is a partner, a manager, an agent, a guarantor or a surety;

(c)

every individual of whom, and every company of which, the director is a guarantor or surety; and

(d)

every company in which the director —

(i)

is an executive officer;

(ii)

owns more than half of the total number of issued shares, whether legally or beneficially;

(iii)

controls more than half of the voting power; or

(iv)

controls the composition of the board of directors;“exposure” means the maximum loss that a bank may incur as a result of the failure of a counterparty to meet any of its obligations;“family member”, in relation to an individual, means the individual’s spouse, parent or child;“key credit approver”, in relation to a bank in Singapore, means —

(a)

in the case of a bank incorporated in Singapore, any person who, whether alone or jointly with any other person or persons, has the highest level of authority to approve credit facilities that will be reflected in the balance sheet or profit and loss accounts of the bank incorporated in Singapore or any branch or entity in its bank group; and

(b)

in the case of branches and offices located within Singapore of a bank incorporated outside Singapore, any person who —

(i)

whether alone or jointly with any other person or persons, has the highest level of authority to approve credit facilities that will be reflected in the balance sheet or profit and loss accounts of any branch of the bank located within Singapore or any branch or entity in the bank group of the branches and offices located within Singapore of the bank incorporated outside Singapore; and

(ii)

takes part in the operations of the branches located within Singapore of the bank on a day to day basis;“key credit approver group”, in relation to a bank in Singapore, means a group comprising —

(a)

any key credit approver of the bank;

(b)

any family member of a key credit approver of the bank;

(c)

any firm or limited liability partnership in or for which a key credit approver of the bank, or a family member of a key credit approver of the bank, is a partner, a manager, an agent, a guarantor or a surety;

(d)

any individual for whom a key credit approver of the bank, or a family member of a key credit approver of the bank, is a guarantor or a surety;

(e)

any company for which a key credit approver of the bank, or a family member of a key credit approver of the bank, is a guarantor or a surety;

(f)

any company of which a key credit approver of the bank, or a family member of a key credit approver of the bank, is an executive officer;

(g)

any company in which a key credit approver of the bank, or a family member of a key credit approver of the bank, owns more than half of the total number of issued shares, whether legally or beneficially;

(h)

any company in which a key credit approver of the bank, or a family member of a key credit approver of the bank, controls more than half of the voting power; or

(i)

any company the composition of the board of directors of which is controlled by a key credit approver of the bank, or a family member of a key credit approver of the bank;“major stake” has the meaning given by section 32(7);“major stake entity group”, in relation to a bank in Singapore, means a group comprising —

(a)

in the case of a bank incorporated in Singapore, any entity in which the bank holds, directly or indirectly, a major stake; and

(b)

in the case of branches and offices located within Singapore of a bank incorporated outside Singapore, any entity in which the bank incorporated outside Singapore holds, directly or indirectly, a major stake that is reflected as an investment in the balance sheet in Singapore of the bank;“parent bank”, in relation to a bank, means a bank incorporated in or outside Singapore of which the firstmentioned bank is a subsidiary;“related corporation group”, in relation to a bank in Singapore, means a group comprising —

(a)

any related corporation of the bank;

(b)

any branch of the bank located outside Singapore; and

(c)

in the case of a bank incorporated outside Singapore, the head office of the bank incorporated outside Singapore;“senior management group”, in relation to a bank in Singapore, means a group comprising —

(a)

any executive officer of the bank;

(b)

any family member of an executive officer of the bank;

(c)

any firm or limited liability partnership in or for which an executive officer of the bank, or a family member of an executive officer of the bank, is a partner, a manager, an agent, a guarantor or a surety;

(d)

any individual for whom an executive officer of the bank, or a family member of an executive officer of the bank, is a guarantor or a surety;

(e)

any company for which an executive officer of the bank, or a family member of an executive officer of the bank, is a guarantor or a surety;

(f)

any company of which an executive officer of the bank, or a family member of an executive officer of the bank, is an executive officer;

(g)

any company in which an executive officer of the bank, or a family member of an executive officer of the bank, owns more than half of the total number of issued shares, whether legally or beneficially;

(h)

any company in which an executive officer of the bank, or a family member of an executive officer of the bank, controls more than half of the voting power; or

(i)

any company the composition of the board of directors of which is controlled by an executive officer of the bank, or a family member of an executive officer of the bank;“substantial shareholder group”, in relation to a bank incorporated in Singapore, means a group of persons comprising —

(a)

any substantial shareholder of the bank;

(b)

every affiliate of the substantial shareholder of the bank; and

(c)

where the bank is a subsidiary of a financial holding company or a parent bank —

(i)

any substantial shareholder of the financial holding company or the parent bank; and

(ii)

every affiliate of the substantial shareholder mentioned in sub‑paragraph (i);“transaction” means any type of transaction including (but not limited to) any contract, agreement and arrangement and any transaction forming part of a contract, agreement or arrangement, and includes a write‑off of a debt, loan or any other similar arrangement.

2. For the purposes of the definitions of “associate” and “substantial shareholder group”, a reference to a substantial shareholder, where the substantial shareholder is an individual, includes a reference to a family member of the substantial shareholder.

3. For the purposes of the definition of “associate”, a substantial shareholder is deemed to control the composition of the board of directors of a corporation if the substantial shareholder has any power, exercisable by the substantial shareholder without the consent or concurrence of any other person, to appoint or remove all or a majority of the directors of the corporation.

4. For the purposes of the definition of “director group”, a director of a bank is deemed to control the composition of the board of directors of a company if the director has any power, exercisable by the director without the consent or concurrence of any other person, to appoint or remove all or a majority of the directors of the company.

5. For the purposes of the definition of “key credit approver group”, a key credit approver (X) of a bank is deemed to control the composition of the board of directors of a company if X has any power, exercisable by X without the consent or concurrence of any other person, to appoint or remove all or a majority of the directors of the company.5A. For the purposes of the definition of “senior management group”, an executive officer of a bank is deemed to control the composition of the board of directors of a company if he or she has any power, exercisable by him or her without the consent or concurrence of any other person, to appoint or remove all or a majority of the directors of the company.

6. For the purposes of sections 38 and 39A, “liquidity stress situation” means a situation where a bank, having exhausted all reasonable sources or avenues for obtaining funds, is unable to meet its obligations, as and when they fall due, without incurring significant costs or losses.

7. In this Schedule, unless the context otherwise requires —

(a)

a reference to an entity is a reference to any body corporate or unincorporate, whether incorporated, formed or established in or outside Singapore; and

(b)

a reference to an entity in which another entity acquires or holds, directly or indirectly, a major stake is a reference to an entity in which the other entity has a major stake as defined in section 32(7).[5/2016; 1/2020]

Read in full context — Banking Act 1970 →