Singapore legislation
Clause 38
Clause 38
As to invitations to the public to lend money to or to deposit money with a corporation
(1)
An invitation to the public to deposit money with or lend money to a corporation or proposed corporation shall not be issued circulated or distributed by the corporation or by any other person unless —
a prospectus in relation to the invitation has been registered by the Registrar;
the prospectus contains an undertaking by the corporation that it will within two months after the acceptance of any money as a deposit or loan from any person in response to the invitation issue to that person a document which acknowledges or evidences or constitutes an acknowledgment of the indebtedness of the corporation in respect of that deposit or loan; and
the document is described or referred to in the prospectus and in any other document whether constituting or relating to the invitation as —
an unsecured note or an unsecured deposit note;
a mortgage debenture or certificate of mortgage debenture stock; or
a debenture or certificate of debenture stock,in accordance with the provisions of this section.
(2)
Where pursuant to an invitation referred to in subsection (1) of this section a corporation has accepted from any person any money as a deposit or loan the corporation shall within two months after the acceptance of the money issue to that person a document which —
acknowledges or evidences or constitutes an acknowledgment of the indebtedness of the corporation in respect of that deposit or loan; and
complies with the other requirements of this section.
(3)
The document shall be described or referred to in the prospectus and in any other document whether constituting or relating to the invitation and in the document itself as an unsecured note or an unsecured deposit note unless pursuant to the provisions of either subsection (4) or subsection (5) of this section it is and may be otherwise described.
(4)
The document may be described or referred to in the prospectus or in such other document or in the document itself as a mortgage debenture or certificate of mortgage debenture stock if, and only if, there is include in the prospectus the statements and the valuation referred to in paragraph 32 of the Fifth Schedule.
(5)
The document may be described or referred to in the prospectus or in such other document or in the document itself as a debenture or certificate of debenture stock if, and only if —
pursuant to subsection (4) of this section it may be (but is not) described or referred to in that prospectus or document as a mortgage debenture or certificate of mortgage debenture stock; or
there is included in the prospectus the statement and the summary referred to in paragraph 33 of the Fifth Schedule.
(6)
Nothing in this section shall apply to a prescribed corporation and nothing in this Act shall require a prospectus to be issued in connexion with any invitation to the public to deposit money with a prescribed corporation.
(7)
In subsection (6) of this section, “prescribed corporation” means —
a banking corporation; or
a corporation or a corporation of a class which has been declared by the Minister by notice in the Gazette to be a prescribed corporation for the purposes of this section.
(8)
The Minister may, by notice published in the Gazette —
specify terms and conditions subject to which subsection (6) of this section shall have effect in relation to a corporation specified in paragraph (b) of subsection (7) of this section; or
vary or revoke any declaration or specification made under this section.
(9)
Every corporation or other person that contravenes or fails to comply with any of the provisions of this section and every officer of a corporation who is in default shall be guilty of an offence under this Act and shall be liable on conviction to imprisonment for a term not exceeding two years or to a fine not exceeding five thousand dollars.
(10)
The provisions of this section relating to the description of any document acknowledging or evidencing or intended to acknowledge or evidence the indebtedness of a corporation shall apply to and in relation to every such document issued after the commencement of this Act notwithstanding anything in any existing debenture or trust deed and any such document issued after the date of the coming into operation of this Act may be described in accordance with the requirements of this section notwithstanding anything in any such existing debenture or trust deed.
(11)
For the purposes of this section a document issued by a borrowing corporation certifying that a person named therein is in respect of any deposit with or loan to the corporation the registered holder of a specified number or value —
of unsecured notes or unsecured deposit notes;
of mortgage debentures or mortgage debenture stock; or
of debentures or debenture stock,issued by the corporation upon or subject to the terms and conditions contained in a trust deed referred to or identified in the certificate, shall be deemed to be a document evidencing the indebtedness of that corporation in respect of that deposit or loan.