Banking Act 1970 · 2020 Revised Edition · Part 9 · Miscellaneous
62B. Priority of specified liabilities for merchant banks
Feedback & supportLast amended by an amending law of 2022. 2 amendments in all.
Where a merchant bank becomes unable to meet its obligations, becomes insolvent or suspends payment, the assets of that merchant bank in Singapore are available to meet all liabilities in Singapore of the merchant bank specified in subsection (3).
merchant bank
“merchant bank” means any company —(a)that holds a valid merchant bank licence granted under section 55S; or(b)that is treated as having been granted a merchant bank licence in accordance with section 64 of the Banking (Amendment) Act 2020;
The liabilities in Singapore of the merchant bank specified in subsection (3) have priority over all unsecured liabilities of the merchant bank other than preferential debts specified in section 328(1) of the Companies Act 1967.
Despite the provisions of any written law or rule of law relating to the winding up of companies, in the event of the winding up of a merchant bank, the following liabilities in Singapore of the merchant bank rank in the following order of priority:
firstly, any deposit liabilities incurred by the merchant bank with non‑bank customers;
secondly, any sum claimed by the trustee of a resolution fund within the meaning of section 107 of the Financial Services and Markets Act 2022 from the merchant bank under section 112, 113, 114 or 115 of that Act.
The liabilities in each paragraph specified in subsection (3) —
rank in the order specified in that subsection, but as between all liabilities that fall within the same paragraph of that subsection, such liabilities rank equally between themselves; and
must be paid in full unless the assets of the merchant bank in Singapore are insufficient to meet them in which case the liabilities abate in equal proportions between themselves.
For the purposes of this section, “deposit liabilities” has the meaning given in section 62(3) and (4) with each reference to a bank substituted with a merchant bank.
deposit
“deposit” has the meaning given by section 4B(4) read with subsections (4A), (5), (6) and (10) of that section;
To avoid doubt, any liability of a merchant bank excluded from the definition of “deposit liabilities” in section 62(3) and (4) as applied by subsection (5) ranks pari passu with all other unsecured liabilities of the merchant bank.