Singapore legislation
Clause 50
Clause 50
Establishment of clearing house
(1)
Subject to subsections (2) and (3), no person shall establish or operate or assist in establishing or operating or hold himself out as operating a clearing facility unless that person has been approved by the Authority as a clearing house under section 51.
(2)
Subsection (1) shall not apply to a holder of a capital markets services licence or an exempt person whose carrying on of the activities referred to in subsection (1) is incidental to its clearing or settlement of transactions as a member of a securities exchange, futures exchange or recognised trading system provider.
(3)
The Authority may declare any clearing facility or class of clearing facilities to be exempt from the prohibition under subsection (1), subject to such conditions or restrictions as it may think fit to impose.
(4)
The Authority may revoke any exemption granted under subsection (3) if —
the person ceases to operate its clearing facility;
the person is being wound up or otherwise dissolved;
the person is contravening or is likely to contravene or has contravened any condition or restriction of its approval or that is applicable to it under this Act;
the person is contravening or is likely to contravene or has contravened any direction issued to it by the Authority;
the person is operating in a manner that is, in the opinion of the Authority, contrary to the public interest.
(5)
For the purposes of subsection (4)(a), a person shall be deemed to have ceased to operate its clearing facility if it has ceased to operate such facility for more than 30 days, unless it has obtained the prior approval of the Authority to do so.
(6)
Subject to subsection (7), the Authority shall not revoke any exemption granted to a person under subsection (3) without giving the person an opportunity to be heard.
(7)
Where the Authority revokes an exemption granted to a person under subsection (3) on any ground referred to in subsection (4) on the basis of any of the following circumstances:
the person or its substantial shareholder is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere;
execution against the person or its substantial shareholder in respect of a judgment debt has been returned unsatisfied in whole or in part;
a receiver, receiver and manager, judicial manager or equivalent person has been appointed, whether in Singapore or elsewhere, in relation to or in respect of any property of the person or its substantial shareholder;
the person or its substantial shareholder has, whether in Singapore or elsewhere, entered into a compromise or scheme of arrangement with its creditors, being a compromise or scheme of arrangement that is still in operation; or
the person or its substantial shareholder, or any officer of the corporation has been convicted, whether in Singapore or elsewhere, of an offence involving fraud or dishonesty or the conviction for which involved a finding that it or he acted fraudulently or dishonestly,the Authority need not give the person an opportunity to be heard.
(8)
A person that is aggrieved by the decision of the Authority made under subsection (4) may, within 30 days after it is notified of the decision, appeal to the Minister whose decision shall be final.
(9)
Notwithstanding the lodging of an appeal under subsection (8), any action taken by the Authority under this section shall continue to have effect pending the determination or withdrawal of the appeal.
(10)
The Minister may make such modification to any action taken by the Authority that is the subject of an appeal and such modified action shall have effect.
(11)
Any revocation of exemption granted to a person under subsection (4) shall not operate so as to —
avoid or affect any agreement, transaction or arrangement entered into in connection with the use of a clearing facility operated by the person, whether the agreement, transaction or arrangement was entered into before or after the revocation of the exemption; or
affect any right, obligation or liability arising under such agreement, transaction or arrangement.
(12)
Any person who contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 or to imprisonment for a term not exceeding 3 years or to both and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.
(13)
Any person who contravenes any of the conditions or restrictions imposed under subsection (3) 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.