Clause 42

by deleting the definitions of “auditor” and “borrowing corporation” in subsection (1) and substituting the following definitions:“ “borrowing entity” means an entity that is or will be under a liability (whether or not such liability is present or future) to repay any money received by it in response to an invitation to subscribe for or purchase debentures of the entity;“chief executive officer”, in relation to a corporation, means any person, by whatever name called, who is in the direct employment of, or acting for or by arrangement with, the corporation, and who is principally responsible for the management and conduct of the business of the corporation;“control”, in relation to an entity, means the capacity of a person to determine the outcome of decisions on the financial and operating policies of the entity, having regard to —

the influence which the person can, in practice, exert on the entity (as opposed to the rights which the person can exercise in the entity); and

any practice or pattern of behaviour of the person affecting the financial or operating policies of the entity (even if such practice or pattern of behaviour involves a breach of an agreement or a breach of trust),but does not include any capacity of a person to influence decisions on the financial and operating policies of the entity if such influence is required by law or under any contract or order of court to be exercised for the benefit of other persons;”;

by inserting, immediately after the definition of “debenture” in subsection (1), the following definition:“ “debenture issuance programme” means any scheme or arrangement by an entity for the issue of debentures or units of debentures where only part of the maximum amount or aggregate number of debentures or units of debentures under the programme is offered initially and a further tranche or tranches may be offered subsequently;”;

by deleting the definitions of “guarantor corporation” and “minimum subscription” in subsection (1) and substituting the following definitions:“ “guarantor entity”, in relation to a borrowing entity, means an entity that has guaranteed or has agreed to guarantee the repayment of any money received or to be received by the borrowing entity in response to an invitation to subscribe for or purchase debentures of the borrowing entity;“immediate family”, in relation to an individual, means the individual’s spouse, son, adopted son, step-son, daughter, adopted daughter, step-daughter, father, step-father, mother, step-mother, brother, step-brother, sister or step-sister;“issuer”, in relation to an offer of securities, means the entity that issued or will be issuing the securities being offered;“minimum subscription”, in relation to any securities offered for subscription, means the amount stated in the prospectus relating to the offer as the minimum amount which must be raised by the issue of the securities so offered, failing which no securities will be allotted or issued;”;

by deleting the words “shares in or debentures of, or units of shares in or debentures of, a corporation” in the definition of “preliminary document” in subsection (1) and substituting the word “securities”;

by deleting the words “a corporation, means a promoter of the corporation” in the definition of “promoter” in subsection (1) and substituting the words “an entity, means a promoter of the entity”;

by deleting the words “other document inviting applications or offers from the public to subscribe for or purchase or offering to the public for subscription or purchase any shares in or debentures of, or any units of shares in or debentures of, a corporation or proposed corporation” in the 2nd to 7th lines of the definition of “prospectus” in subsection (1) and substituting the words “other document used to make an offer of securities”;

by inserting, immediately after the definition of “prospectus” in subsection (1), the following definitions:“ “recognised securities exchange” means a corporation which has been declared by the Authority, by order published in the Gazette, to be a recognised securities exchange for the purposes of this Division;“related party” means —

in relation to an entity —

a director or an equivalent person of the entity;

the chief executive officer or equivalent person of the entity;

a person who controls the entity;

a related corporation;

any other entity controlled by it;

any other entity controlled by the person referred to in sub-paragraph (iii); and

a related party of any individual referred to in sub-paragraph (i), (ii) or (iii); and

in relation to an individual —

his immediate family;

a trustee of any trust of which the individual or any member of the individual’s immediate family is —

a beneficiary; or

where the trust is a discretionary trust, a discretionary object,when the trustee acts in that capacity; and

any corporation in which he and his immediate family (whether directly or indirectly) have interests in voting shares of an aggregate of not less than 30% of the total votes attached to all voting shares;”;

by inserting, immediately after the definition of “replacement document” in subsection (1), the following definition:“ “securities” means debentures or units of debentures of an entity, or shares or units of shares of a corporation;”;

by inserting, immediately after the definition of “supplementary document” in subsection (1), the following definition:“ “underlying entity”, in relation to an offer of units of shares or debentures, means the entity the shares or debentures of which are the subject of the offer;”;

by deleting subsections (3) to (7) and substituting the following subsections:“(3) For the purposes of this Division —

any invitation to a person to deposit money with or to lend money to an entity shall be deemed to be an offer of debentures of the entity; and

any document that is issued or intended or required to be issued by an entity acknowledging or evidencing or constituting an acknowledgment of the indebtedness of the entity in respect of any money that is or may be deposited with or lent to the entity in response to such an invitation shall be deemed to be a debenture.(3A) Notwithstanding subsection (3) —

any invitation to a person by a prescribed entity to make a deposit with the prescribed entity is not an offer of debentures; and

the following documents issued or intended or required to be issued by a prescribed entity are not debentures:

any certificate of deposit;

any other document acknowledging or evidencing or constituting an acknowledgment of the indebtedness of the prescribed entity in respect of any deposit that is or may be made with the prescribed entity.(4) In subsections (3A) and (5) —“deposit” has the same meaning as in section 4B(4) of the Banking Act (Cap. 19);“prescribed entity” means —

any bank licensed under the Banking Act; or

any entity or any entity of a class which has been declared by the Authority, by order published in the Gazette, to be a prescribed entity for the purposes of this subsection.(5) The Authority may, by notice in writing —

impose such conditions or restrictions on a prescribed entity as it thinks fit; and

at any time vary or revoke any condition or restriction so imposed,and the prescribed entity shall comply with every such condition or restriction imposed on it by the Authority that has not been revoked by the Authority.(5A) Any person who contravenes any condition or restriction imposed under subsection (5) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000 and, in the case of a continuing offence, to a further fine not exceeding $5,000 for every day or part thereof during which the offence continues after conviction.(6) For the purposes of this Division, a person makes an offer of any securities if, and only if, as principal —

he makes (either personally or by an agent) an offer to any person in Singapore which upon acceptance would give rise to a contract for the issue or sale of those securities by him or another person with whom he has made arrangements for that issue or sale; or

he invites (either personally or by an agent) any person in Singapore to make an offer which upon acceptance would give rise to a contract for the issue or sale of those securities by him or another person with whom he has made arrangements for that issue or sale.(7) In subsection (6), “sale” includes any disposal for valuable consideration.”; and

by deleting the words “offers or invitations to the public to subscribe for or purchase shares, debentures, or units of shares or debentures,” in subsection (8) and substituting the words “offers of securities”.