Singapore legislation
Section 55T
Section 55T
Minimum capital requirements of merchant banks
(1)
A company must not be granted a merchant bank licence unless —
where the company intends to carry on a permitted business in Singapore as a merchant bank incorporated in Singapore, its paid‑up capital and capital funds —
are in ordinary shares;
are denominated in Singapore dollars, or another currency approved by the Authority in a particular case by written notice to the company; and
are each at least $15 million or another amount determined by the Authority in a particular case by written notice to the company; or
where the company intends to carry on a permitted business in Singapore through a branch or office located in Singapore, its head office capital funds are at least the equivalent of $200 million or another amount determined by the Authority in a particular case by written notice to the company.
(2)
Subject to subsection (3), the paid‑up capital and capital funds of a merchant bank incorporated in Singapore —
must at all times be denominated in Singapore dollars or another currency approved by the Authority in a particular case by written notice to the merchant bank; and
must at all times be in ordinary shares.
(3)
Any amount of paid-up capital or capital funds of a merchant bank incorporated in Singapore that is above the amount mentioned in subsection (1)(a) may be denominated in any currency, and may be in any type of shares.
(4)
A merchant bank incorporated in Singapore must not, without the approval of the Authority —
reduce its paid-up capital; or
purchase or otherwise acquire shares issued by the merchant bank if those shares are to be held as treasury shares.
(5)
The Authority may —
give its approval under subsection (2)(a) or (4), with or without conditions; and
at any time impose conditions or additional conditions on, or vary or revoke any condition of, its approval.
(6)
A merchant bank must at all times maintain —
if it is incorporated in Singapore — paid‑up capital and capital funds of at least the amount mentioned in subsection (1)(a); or
if it is incorporated outside Singapore — head office capital funds of at least the equivalent of the amount mentioned in subsection (1)(b).
(7)
A merchant bank that fails to comply with any requirement under subsection (2) or (6) must immediately give written notice to the Authority.
(8)
Without affecting subsection (9), where a merchant bank fails to comply with any provision of this section, the Authority may by written notice to the merchant bank —
restrict or suspend the operations of the merchant bank; or
give any direction to the merchant bank that the Authority considers appropriate.
(9)
A merchant bank commits an offence if it fails to comply with —
subsection (2), (4), (6) or (7);
any condition imposed under subsection (5); or
any restriction or suspension imposed by the Authority, or any direction of the Authority, under subsection (8).
(10)
A merchant bank that commits an offence under subsection (9) shall be liable on conviction to a fine not exceeding $250,000 and, in the case of a continuing offence, to a further fine not exceeding $25,000 for every day or part of a day during which the offence continues after conviction.
(11)
In this section —
Definition
“head office capital funds”, in relation to a company or merchant bank incorporated outside Singapore, means the aggregate of —
its paid-up capital or the equivalent of such paid‑up capital recognised by the Authority as applicable to the company or merchant bank under the laws of the country or territory in which the company or merchant bank is incorporated, formed or established; and
published reserves (excluding any reserves specified by the Authority by written notice to the company or merchant bank), deduction having been made for any loss appearing in the accounts of the company or merchant bank;
Definition
“paid-up capital” does not include any amount that is represented by treasury shares.