Singapore legislation
Regulation 21
Regulation 21
Corporate governance requirements applicable to major stake financial entity
Subregulation 1
Subject to paragraph (2) and regulation 8(4), a major stake financial entity shall have a board of directors, the majority of whom —
where the bank is a subsidiary of another bank incorporated in Singapore (referred to in this regulation as the parent bank), are independent from the substantial shareholders of the bank (other than the parent bank) and the substantial shareholders of the parent bank;
where the bank is a subsidiary of a financial holding company, are independent from the substantial shareholders of the bank (other than the financial holding company) and the substantial shareholders of the financial holding company; or
in any other case, are independent from all substantial shareholders of the bank.
Subregulation 2
Where a single substantial shareholder holds 50% or more of the share capital or the voting power in a major stake financial entity, paragraph (1) shall not apply to the major stake financial entity in respect of the independence of its directors from that substantial shareholder.
Subregulation 3
The Nominating Committee of a major stake financial entity or, where the entity does not have a Nominating Committee, the Nominating Committee of the bank which has a major stake in the entity (referred to in this regulation as the relevant Nominating Committee) shall determine —
where a person is proposed to be appointed as a director of a major stake financial entity, prior to the person’s appointment; or
in the case of an existing director of a major stake financial entity, prior to every annual general meeting of the major stake financial entity, whether the person or director is independent of a substantial shareholder of the bank, parent bank or financial holding company, as the case may be, using the criteria set out in regulation 7 and, where applicable, in accordance with regulation 8.
Subregulation 4
A major stake financial entity shall not, without the prior approval of the Authority, appoint any person as its executive officer while that person is concurrently —
employed by a substantial shareholder of a bank which holds a major stake in the entity (other than, in the case where the bank is a subsidiary of a parent bank, the parent bank or, in the case where the bank is a subsidiary of a financial holding company, the financial holding company); (b)an executive officer of an affiliate of a substantial shareholder of the bank; (c)where the bank is a subsidiary of a parent bank, employed by a substantial shareholder of the parent bank or an affiliate of the substantial shareholder of the parent bank; or
where the bank is a subsidiary of a financial holding company, employed by a substantial shareholder of the financial holding company or an affiliate of a substantial shareholder of the financial holding company.
Subregulation 5
Any major stake financial entity which contravenes paragraph (1) or (4) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $25,000 and, in the case of a continuing offence, to a further fine not exceeding $2,500 for every day or part thereof during which the offence continues after conviction.