Singapore legislation
Section 70
Section 70
Control of substantial shareholding in approved clearing house
(1)
A person must not enter into any agreement to acquire shares in an approved clearing house, being an agreement by virtue of which the person would, if the agreement had been carried out, become a substantial shareholder of the approved clearing house, without first obtaining the approval of the Authority to enter into the agreement.
(2)
A person must not become either of the following without first obtaining the approval of the Authority:
a 12% controller of an approved clearing house;
a 20% controller of an approved clearing house.
(3)
In subsection (2) —
Definition
“12% controller”, in relation to an approved clearing house, means a person, not being a 20% controller, who alone or together with the person’s associates —
holds not less than 12% of the shares in the approved clearing house; or
is in a position to control not less than 12% of the votes in the approved clearing house;
Definition
“20% controller”, in relation to an approved clearing house, means a person who, alone or together with the person’s associates —
holds not less than 20% of the shares in the approved clearing house; or
is in a position to control not less than 20% of the votes in the approved clearing house.
(4)
In this section —
a person holds a share if —
the person is deemed to have an interest in that share under section 7(6) to (10) of the Companies Act 1967; or
the person otherwise has a legal or an equitable interest in that share, except such interest as is to be disregarded under section 7(6) to (10) of the Companies Act 1967;
a reference to the control of a percentage of the votes in an approved clearing house is to be construed as a reference to the control, whether direct or indirect, of that percentage of the total number of votes that might be cast in a general meeting of the approved clearing house; and
a person, A, is an associate of another person, B, if —
A is the spouse, a parent, remoter lineal ancestor or step‑parent, a son, daughter, remoter issue, stepson or stepdaughter or a brother or sister of B;
A is a body corporate that is, or a majority of the directors of which are, accustomed or under an obligation whether formal or informal to act in accordance with the directions, instructions or wishes of B;
[Deleted by Act 35 of 2014](iv)A is a person who is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of B;
A is a subsidiary of B;
[Deleted by Act 35 of 2014](vii)A is a body corporate in which B, whether alone or together with other associates of B as described in sub‑paragraphs (ii), (iv) and (v), is in a position to control not less than 20% of the votes in A; or
[Deleted by Act 35 of 2014](ix)A is a person with whom B has an agreement or arrangement, whether oral or in writing and whether express or implied, to act together with respect to the acquisition, holding or disposal of shares or other interests in, or with respect to the exercise of their votes in relation to, the approved clearing house.
(5)
The Authority may grant its approval referred to in subsection (1) or (2) subject to such conditions or restrictions as the Authority may think fit.
(6)
Without affecting subsection (13), the Authority may, for the purposes of securing compliance with subsection (1) or (2) or any condition or restriction imposed under subsection (5), by written notice, direct the transfer or disposal of all or any of the shares of an approved clearing house in which a substantial shareholder, 12% controller or 20% controller of the approved clearing house has an interest.
(7)
Until a person to whom a direction has been issued under subsection (6) transfers or disposes of the shares which are the subject of the direction, and despite anything to the contrary in the Companies Act 1967 or the memorandum or articles of association or other constituent document or documents of the approved clearing house —
no voting rights are exercisable in respect of the shares which are the subject of the direction;
the approved clearing house must not offer or issue any shares (whether by way of rights, bonus, share dividend or otherwise) in respect of the shares which are the subject of the direction; and
except in a liquidation of the approved clearing house, the approved clearing house must not make any payment (whether by way of cash dividend, dividend in kind or otherwise) in respect of the shares which are the subject of the direction.
(8)
Any issue of shares by an approved clearing house in contravention of subsection (7)(b) is deemed to be void, and a person to whom a direction has been issued under subsection (6) must immediately return those shares to the approved clearing house, upon which the approved clearing house must return to the person any payment received from the person in respect of those shares.
(9)
Any payment made by an approved clearing house in contravention of subsection (7)(c) is deemed to be void, and a person to whom a direction has been issued under subsection (6) must immediately return the payment that the person has received to the approved clearing house.
(10)
Without affecting sections 81SB(1) and 337(1), the Authority may, by regulations made under section 81Q, exempt all or any of the following from subsection (1) or (2), subject to such conditions or restrictions as the Authority may prescribe in those regulations:
any person or class of persons;
any class or description of shares or interests in shares.
(11)
Without affecting sections 81SB(2) and 337(3) and (4), the Authority may, by written notice, exempt any person, shares or interests in shares from subsection (1) or (2), subject to such conditions or restrictions as the Authority may specify by written notice.
(12)
It is not necessary to publish any exemption granted under subsection (11) in the Gazette.
(13)
Any person who contravenes subsection (1) or (2), or any condition or restriction imposed by the Authority under subsection (5), shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $200,000 and, in the case of a continuing offence, to a further fine not exceeding $20,000 for every day or part of a day during which the offence continues after conviction.
(14)
Any person who contravenes subsection (7)(b) or (c), (8) or (9) or any direction issued by the Authority under subsection (6) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part of a day during which the offence continues after conviction.