Singapore legislation
Section 86
Section 86
Application of fund
(1)
Subject to this Part, a fidelity fund shall be held and applied for the purpose of compensating persons who suffer pecuniary loss from any defalcation committed by a member company or any of its directors or by any of the employees of such a member company in relation to any money or other property which, whether before or after the commencement of this Act, in the course of or in connection with the business of that company —
was entrusted to or received by a member company or any of its directors or any of the company’s employees for or on behalf of any other person; or
(the member company, being in respect of the money or other property, either the sole trustee or trustees or trustee or trustees with any other person or persons) was entrusted to or received by the member company or any of its directors or any of the company’s employees as trustee or trustees or for or on behalf of the trustees of that money or property.
(2)
Except as otherwise provided in this section, the total amount that may be paid under this Part to all persons who suffer loss through defalcations by a member company or any of its directors or through defalcations by any of the company’s employees shall not, in any event, exceed in respect of that member company the sum of $200,000, but for the purposes of this subsection any amount paid from a fidelity fund shall to the extent to which the fund is subsequently reimbursed therefor be disregarded.
(3)
If, after taking into account all ascertained or contingent liabilities of a fidelity fund, the committee considers that the assets of the fund so permit, the committee may decide to increase the total amount which may be applied from that fund pursuant to subsection (2) and shall inform the Authority accordingly who shall then cause notice of such decision to be published in the Gazette.
(b)
From the date of the publication until the notice is revoked or varied the amount specified in the notice shall be the total amount which may be applied as aforesaid.
(4)
Where the committee decides to revoke or vary the notice under subsection (3), the committee shall inform the Authority accordingly, who shall then cause notice of such revocation or variation to be published in the Gazette; and a notice which is so varied shall have effect accordingly.
(5)
If, in any particular case after taking into account all ascertained or contingent liabilities of a fidelity fund, the committee considers that the assets of the fund so permit, the committee may apply out of the fund such sum in excess of the total amount limited by or under this section as the committee in its discretion thinks fit in or towards the compensation of persons who have suffered pecuniary loss as provided in subsection (1).
(6)
Notwithstanding any provision in subsections (2), (3) and (5), the Minister may, by order, direct the committee to increase the total amount which shall be applied from a fidelity fund to a particular member company in payment to persons who suffer loss through defalcations by that particular member company or any of its directors or by any of that member company’s employees.
(7)
For the purposes of this section, “director of a member company” includes a person who has been, but at the time of any defalcation in question has ceased to be, a director of a member company if, at the time of the defalcation, the person claiming compensation has reasonable grounds for believing that person to be a director of a member company.