Clause 22

No bank in Singapore shall carry on, or enter into any partnership, joint venture or other arrangement with any person to carry on, whether in Singapore or elsewhere, any business except for the following:

banking business;

any business the conduct of which is regulated or authorised by the Authority under any other written law;

any business which is incidental to the business which the bank may carry on under paragraph (a) or (b);

any business or class of business as the Authority may prescribe, subject to such conditions as may be prescribed; or

any other business as the Authority may approve for the purposes of this section, subject to such conditions as the Authority may impose.(2) Nothing in this section shall —

prevent a bank from holding any equity investment in a company in accordance with section 31; or

be construed as exempting a bank from any requirement which, apart from this section, the bank is required to comply with under any written law for the conduct of any business.(3) Any bank which contravenes this section or fails to comply with any condition imposed or prescribed under this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $250,000 and, in the case of a continuing offence, to a further fine not exceeding $25,000 for every day or part thereof during which the offence continues after conviction.Limit on equity investments31.—

No bank in Singapore shall acquire or hold any equity investment in a single company, the value of which exceeds in the aggregate 2% of the capital funds of the bank or such other percentage as the Authority may prescribe.(2) This section shall not apply to —

any interest held by way of security for the purposes of a transaction entered into in the ordinary course of the business of the bank in Singapore;

any shareholding or interest acquired or held by a bank in Singapore in the course of satisfaction of debts due to it which is disposed of at the earliest suitable opportunity; or

any major stake approved under section 32.(3) The Authority may, by regulations —

exempt any bank from subsection (1) in respect of any investment;

provide for the manner of valuation of investments for the purposes of compliance with this section; and

exclude the operation of this section in respect of any investment or class of investments which may be held by any bank, subject to such conditions as may be prescribed.(4) Any bank which contravenes this section or fails to comply with any condition imposed or prescribed under this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 and, in the case of a continuing offence, to a further fine not exceeding $10,000 for every day or part thereof during which the offence continues after conviction.(5) In this section, “equity investment” means any beneficial interest in the share capital of a company.(6) The Authority may, by order published in the Gazette, modify the definition of “equity investment” in subsection (5).Investments in companies undertaking non-financial businesses32.—

No bank in Singapore shall acquire or hold a major stake in any company without the prior approval of the Authority.(2) The Authority shall not ordinarily grant its approval under subsection (1) if the company carries on, whether as its principal business or otherwise, any prohibited business.(3) Notwithstanding subsection (2), the Authority may, in the circumstances of a particular case, grant its approval for a bank in Singapore to acquire or hold a major stake in a company which carries on any prohibited business, subject to such conditions as it may impose.(4) This section shall not apply to —

any interest held by way of security for the purposes of a transaction entered into in the ordinary course of the business of the bank in Singapore; and

any shareholding or interest acquired or held by a bank in Singapore in the course of satisfaction of debts due to it which is disposed of at the earliest suitable opportunity.(5) The Authority may, by regulations —

exclude the operation of this section in respect of any company or class of companies, subject to such conditions as may be prescribed; and

provide for the manner of computation of major stakes.(6) Any bank which contravenes this section or fails to comply with any condition imposed or prescribed under this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $250,000 and, in the case of a continuing offence, to a further fine not exceeding $25,000 for every day or part thereof during which the offence continues after conviction.(7) In this section —“major stake” means —

any beneficial interest exceeding 10% in the share capital of a company;

control over more than 10% of the voting power in a company; or

any interest in a company, where the directors of the company are accustomed or under an obligation, whether formal or informal, to act in accordance with the bank’s directions, instructions or wishes, or where the bank is in a position to determine the policy of the company;“prohibited business” means any business other than the businesses referred to in section 30(1)(a) to (d).(8) This section shall not affect any acquisition or holding of a major stake which was approved by the Authority prior to the appointed day.Immovable property33.—

No bank in Singapore shall hold or acquire interests in or rights over immovable property, wherever situated, the value of which exceeds in the aggregate 20% of the capital funds of the bank or such other percentage as the Authority may prescribe.(2) For the purposes of determining the aggregate value of the interest in or right over immovable property referred to in subsection (1), there shall be excluded such portion of the value as may be attributable to the following:

any interest in or right over immovable property or any part thereof used for the purpose of conducting the business of the bank in Singapore or housing or providing amenities for its officers;

any interest in or right over immovable property held by way of security for the purposes of a transaction entered into in the ordinary course of the business of the bank in Singapore;

any interest in or right over immovable property held by way of enforcement of such security referred to in paragraph (b), provided that it is disposed of at the earliest suitable opportunity; and

such other interest in or right over immovable property as the Authority may prescribe.(3) The Authority may make regulations to provide for the manner of valuation or apportionment of immovable property for the purposes of this section.(4) Any bank which contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 and, in the case of a continuing offence, to a further fine of $10,000 for every day or part thereof during which the offence continues after conviction.Grace period for sections 30 to 3334.—

Notwithstanding sections 30 to 33, where any business was carried on, or any property or investment was held, by a bank in Singapore immediately before the appointed day with the approval of the Authority (where required) or which did not require the approval of the Authority, the bank may continue to carry on such business or hold such property or investment, as the case may be, for a period of 3 years from the appointed day.(2) The Authority may, on application by a bank in Singapore, extend the period referred to in subsection (1) for such further period as the Authority considers appropriate.(3) The Authority may, in granting an application for extension under subsection (2) —

levy a charge of an amount not exceeding $10,000 for every day of the period of extension; or

impose such conditions as it considers appropriate.(4) The Authority may, on application by a bank in Singapore, waive any requirement in section 30, 31, 32 or 33, on such conditions as the Authority may impose, where in the opinion of the Authority, the waiver is reasonably necessary for the bank to divest the business, property or investment referred to in subsection (1) by the end of the period referred to in that subsection or the further period referred to in subsection (2).Exposure to immovable property sector35.—

The Authority may make such regulations as may be necessary or expedient for the purposes of limiting, in relation to a bank in Singapore, exposure to risks associated, directly or indirectly, with such immovable property as may be prescribed.(2) Without prejudice to the generality of subsection (1), the regulations may —

prescribe a limit (referred to in this section as the property sector exposure limit) —

on the credit facilities that may be granted or issued by a bank in Singapore to such person or class of persons as may be prescribed; or

on the notes, bonds, debentures, derivatives or other financial instruments that may be held by a bank in Singapore;

provide for the manner of computation for the purpose of determining whether the property sector exposure limit has been complied with;

provide for the Authority to vary the property sector exposure limit in the circumstances of any particular case;

provide for such transitional and consequential provisions as may be necessary or expedient; and

provide that a contravention of the regulations shall be an offence punishable, on conviction, with a fine not exceeding $100,000 and, in the case of a continuing offence, with a further fine of $10,000 for every day or part thereof during which the offence continues after conviction.”.