Clause 5

by inserting, immediately after the definition of “capital funds” in section 2, the following definition:“ “chief executive”, in relation to a finance company, means any person, by whatever name described, who —

is in the direct employment of, or acting for or by arrangement with, the finance company; and

is principally responsible for the management and conduct of the business of the finance company;”;

by inserting, immediately after the definition of “director” in section 2, the following definition:“ “executive officer”, in relation to a finance company, means any person, by whatever name described, who —

is in the direct employment of, or acting for or by arrangement with, the finance company; and

is concerned with or takes part in the management of the finance company on a day-to-day basis;”;

by inserting, immediately after the definition of “Government securities” in section 2, the following definition:“ “licence” means a licence granted under section 6;”;

by deleting sub-paragraph (ii) of section 15(1)(c) and substituting the following sub-paragraph:“(ii)if, upon the Authority exercising any power under section 35(2) or the Minister exercising any power under Division 2, 3 or 4 of Part IVB of the Monetary Authority of Singapore Act (Cap. 186) in relation to the finance company, the Authority considers that it is in the public interest to revoke the licence.”;

by deleting the words “directors, chief and deputy chief executive officers” in section 30(2)(d) and substituting the words “the directors, chief executive and deputy chief executive”;

by inserting, immediately after subsection (3) of section 30, the following subsection:“(4) It shall not be necessary to publish any notice in writing issued under this Act in the Gazette.”;

by repealing section 34 and substituting the following sections:“Information of insolvency, etc.34.—

Any finance company which is or is likely to become insolvent, which is or is likely to become unable to meet its obligations, or which has suspended or is about to suspend payments, shall immediately inform the Authority of that fact.(2) Any finance company which contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000 and, in the case of a continuing offence, to a further fine not exceeding $2,000 for every day or part thereof during which the offence continues after conviction.Interpretation of sections 34A to 3934A. In this section and sections 35 to 39, unless the context otherwise requires —“business” includes affairs and property;“office holder”, in relation to a finance company, means any person acting as the liquidator, the provisional liquidator, the receiver or the receiver and manager of the finance company, or acting in an equivalent capacity in relation to the finance company;“relevant business” means any business of a finance company —

which the Authority has assumed control of under section 35; or

in relation to which a statutory adviser or a statutory manager has been appointed under section 35;“statutory adviser” means a statutory adviser appointed under section 35;“statutory manager” means a statutory manager appointed under section 35.”;

by repealing sections 35 to 39 and substituting the following sections:“Action by Authority if finance company unable to meet obligations, etc.35.—

The Authority may exercise any one or more of the powers specified in subsection (2) as appears to it to be necessary, where —

a finance company informs the Authority that it is or is likely to become insolvent, or that it is or is likely to become unable to meet its obligations, or that it has suspended or is about to suspend payments;

a finance company becomes unable to meet its obligations, or is insolvent, or suspends payments;

the Authority is of the opinion that a finance company —

is carrying on its business in a manner likely to be detrimental to the interests of its depositors or creditors;

is or is likely to become insolvent, or is or is likely to become unable to meet its obligations, or is about to suspend payments;

has contravened any of the provisions of this Act; or

has failed to comply with any condition attached to its licence; or

the Authority considers it in the public interest to do so.(2) Subject to subsection (1), the Authority may —

require the finance company immediately to take any action or to do or not to do any act or thing whatsoever in relation to its business as the Authority may consider necessary;

appoint one or more persons as statutory adviser, on such terms and conditions as the Authority may specify, to advise the finance company on the proper management of such of the business of the finance company as the Authority may determine; or

assume control of and manage such of the business of the finance company as the Authority may determine, or appoint one or more persons as statutory manager to do so on such terms and conditions as the Authority may specify.(3) Where the Authority appoints 2 or more persons as the statutory manager of a finance company, the Authority shall specify, in the terms and conditions of the appointment, which of the duties, functions and powers of the statutory manager —

may be discharged or exercised by such persons jointly and severally;

shall be discharged or exercised by such persons jointly; and

shall be discharged or exercised by a specified person or such persons.(4) Where the Authority has exercised any power under subsection (2), it may, at any time and without prejudice to its power under section 15(1)(c)(ii), do one or more of the following:

vary or revoke any requirement of, any appointment made by or any action taken by the Authority in the exercise of such power, on such terms and conditions as it may specify;

further exercise any of the powers under subsection (2);

add to, vary or revoke any term or condition specified by the Authority under this section.(5) No liability shall be incurred by a statutory manager or a statutory adviser for anything done (including any statement made) or omitted to be done with reasonable care and in good faith in the course of or in connection with —

the exercise or purported exercise of any power under this Act;

the performance or purported performance of any function or duty under this Act; or

the compliance or purported compliance with this Act.(6) Any finance company that fails to comply with a requirement imposed by the Authority under subsection (2)(a) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000 and, in the case of a continuing offence, to a further fine not exceeding $2,000 for every day or part thereof during which the offence continues after conviction.Effect of assumption of control under section 3536.—

Upon assuming control of the relevant business of a finance company, the Authority or statutory manager, as the case may be, shall take custody or control of the relevant business.(2) During the period when the Authority or statutory manager is in control of the relevant business of a finance company, the Authority or statutory manager —

shall manage the relevant business of the finance company in the name of and on behalf of the finance company; and

shall be deemed to be an agent of the finance company.(3) In managing the relevant business of a finance company, the Authority or statutory manager —

shall take into consideration the interests of the depositors of the finance company; and

shall have all the duties, powers and functions of the members of the board of directors of the finance company (collectively and individually) under this Act, the Companies Act (Cap. 50) and the constitution of the finance company, including powers of delegation, in relation to the relevant business of the finance company; but nothing in this paragraph shall require the Authority or statutory manager to call any meeting of the finance company under the Companies Act or the constitution of the finance company.(4) Notwithstanding any written law or rule of law, upon the assumption of control of the relevant business of a finance company by the Authority or statutory manager, any appointment of a person as the chief executive or a director of the finance company, which was in force immediately before the assumption of control, shall be deemed to be revoked, unless the Authority gives its approval, by notice in writing to the person and the finance company, for the person to remain in the appointment.(5) Notwithstanding any written law or rule of law, during the period when the Authority or statutory manager is in control of the relevant business of a finance company, except with the approval of the Authority, no person shall be appointed as the chief executive or a director of the finance company.(6) Where the Authority has given its approval under subsection (4) or (5) to a person to remain in the appointment of, or to be appointed as, the chief executive or a director of a finance company, the Authority may at any time, by notice in writing to the person and the finance company, revoke that approval, and the appointment shall be deemed to be revoked on the date specified in the notice.(7) Notwithstanding any written law or rule of law, if any person, whose appointment as the chief executive or a director of a finance company is revoked under subsection (4) or (6), acts or purports to act after the revocation as the chief executive or a director of the finance company during the period when the Authority or statutory manager is in control of the relevant business of the finance company —

the act or purported act of the person shall be invalid and of no effect; and

the person shall be guilty of an offence.(8) Notwithstanding any written law or rule of law, if any person who is appointed as the chief executive or a director of a finance company in contravention of subsection (5) acts or purports to act as the chief executive or a director of the finance company during the period when the Authority or statutory manager is in control of the relevant business of the finance company —

the act or purported act of the person shall be invalid and of no effect; and

the person shall be guilty of an offence.(9) During the period when the Authority or statutory manager is in control of the relevant business of a finance company —

if there is any conflict or inconsistency between —

a direction or decision given by the Authority or statutory manager (including a direction or decision to a person or body of persons referred to in sub-paragraph (ii)); and

a direction or decision given by any chief executive, director, member, executive officer, employee, agent or office holder, or the board of directors, of the finance company,the direction or decision referred to in sub‑paragraph (i) shall, to the extent of the conflict or inconsistency, prevail over the direction or decision referred to in sub‑paragraph (ii); and

no person shall exercise any voting or other right attached to any share in the finance company in any manner that may defeat or interfere with any duty, function or power of the Authority or statutory manager, and any such act or purported act shall be invalid and of no effect.(10) Any person who is guilty of an offence under subsection (7) or (8) shall be liable on conviction to a fine not exceeding $20,000 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 $2,000 for every day or part thereof during which the offence continues after conviction.(11) In this section, “constitution”, in relation to a finance company, means the memorandum of association and articles of association of the finance company.Duration of control37.—

The Authority shall cease to be in control of the relevant business of a finance company when the Authority is satisfied that —

the reasons for the Authority’s assumption of control of the relevant business have ceased to exist; or

it is no longer necessary for the protection of the depositors of the finance company.(2) A statutory manager shall be deemed to have assumed control of the relevant business of a finance company on the date of his appointment as a statutory manager.(3) The appointment of a statutory manager in relation to the relevant business of a finance company may be revoked by the Authority at any time —

if the Authority is satisfied that —

the reasons for the appointment have ceased to exist; or

it is no longer necessary for the protection of the depositors of the finance company; or

on any other ground,and upon such revocation, the statutory manager shall cease to be in control of the relevant business of the finance company.(4) The Authority shall, as soon as practicable, publish in the Gazette the date, and such other particulars as the Authority thinks fit, of —

the Authority’s assumption of control of the relevant business of a finance company;

the cessation of the Authority’s control of the relevant business of a finance company;

the appointment of a statutory manager in relation to the relevant business of a finance company; and

the revocation of a statutory manager’s appointment in relation to the relevant business of a finance company.Responsibilities of officers, member, etc., of finance company38.—

During the period when the Authority or statutory manager is in control of the relevant business of a finance company —

the High Court may, on an application by the Authority or statutory manager, direct any person who has ceased to be or who is still any chief executive, director, member, executive officer, employee, agent, banker, auditor or office holder of, or trustee for, the finance company to pay, deliver, convey, surrender or transfer to the Authority or statutory manager, within such period as the High Court may specify, any property, book, accounts, record or other documents, whether in electronic, print or other form, of the finance company which is comprised in, forms part of or relates to the relevant business of the finance company, and which is in the person’s possession or control; and

any person who has ceased to be or who is still any chief executive, director, member, executive officer, employee, agent, banker, auditor or office holder of, or trustee for, the finance company shall give to the Authority or statutory manager such information as the Authority or statutory manager may require for the discharge of the Authority’s or statutory manager’s duties or functions, or the exercise of the Authority’s or statutory manager’s powers, in relation to the finance company, within such time and in such manner as may be specified by the Authority or statutory manager.(2) Any person who —

without reasonable excuse, fails to comply with subsection (1)(b); or

in purported compliance with subsection (1)(b), knowingly or recklessly furnishes any information or document that is false or misleading in a material particular,shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000 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 $2,000 for every day or part thereof during which the offence continues after conviction.Remuneration and expenses of Authority and others in certain cases

to a statutory manager or statutory adviser appointed in relation to the finance company, whether or not the appointment has been revoked; and

where the Authority has assumed control of the relevant business of the finance company, to the Authority and any person authorised or appointed by the Authority under section 42 in relation to the Authority’s assumption of control of the relevant business, whether or not the Authority has ceased to be in control of the relevant business.”;

by inserting, immediately after section 39, the following Part:“PART VIAVOLUNTARY TRANSFER OF BUSINESSInterpretation of this Part39A. In this Part, unless the context otherwise requires —“business” includes affairs, property, right, obligation and liability;“Court” means the High Court or a Judge thereof;“debenture” has the same meaning as in section 4(1) of the Companies Act (Cap. 50);“property” includes property, right and power of every description;“Registrar of Companies” means the Registrar of Companies appointed under the Companies Act and includes any Deputy or Assistant Registrar of Companies appointed under that Act;“transferee” means a finance company, or a company which has applied or will be applying for a licence to carry on financing business in Singapore, to which the whole or any part of a transferor’s business is, is to be or is proposed to be transferred under this Part;“transferor” means a finance company the whole or any part of the business of which is, is to be, or is proposed to be transferred under this Part.Voluntary transfer of business39B.—

A transferor may transfer the whole or any part of its business (including any business that is not financing business) to a transferee, if —

the Authority has consented to the transfer;

the transfer involves the whole or any part of the financing business of the transferor; and

the Court has approved the transfer.(2) Subsection (1) is without prejudice to the right of a finance company to transfer the whole or any part of its business under any law.(3) The Authority may consent to a transfer under subsection (1)(a) if the Authority is satisfied that —

the transferee is a fit and proper person; and

the transferee will conduct the business of the transferor prudently and comply with the provisions of this Act.(4) The Authority may at any time appoint one or more persons to perform an independent assessment of, and furnish a report on, the proposed transfer of a transferor’s business (or any part thereof) under this Part.(5) The remuneration and expenses of any person appointed under subsection (4) shall be paid by the transferor and the transferee jointly and severally.(6) The Authority shall serve a copy of any report furnished under subsection (4) on the transferor and the transferee.(7) The Authority may require a person to furnish, within the period and in the manner specified by the Authority, any information or document that the Authority may reasonably require for the discharge of its duties or functions, or the exercise of its powers, under this Part.(8) Any person who —

without reasonable excuse, fails to comply with any requirement under subsection (7); or

in purported compliance with any requirement under subsection (7), knowingly or recklessly furnishes any information or document that is false or misleading in a material particular,shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000 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 $2,000 for every day or part thereof during which the offence continues after conviction.(9) Where a person claims, before furnishing the Authority with any information or document that he is required to furnish under subsection (7), that the information or document might tend to incriminate him, the information or document shall not be admissible in evidence against him in criminal proceedings other than proceedings under subsection (8).Approval of transfer39C.—

A transferor shall apply to the Court for its approval of the transfer of the whole or any part of the business of the transferor to the transferee under this Part.(2) Before making an application under subsection (1) —

the transferor shall lodge with the Authority a report setting out such details of the transfer and furnish such supporting documents as the Authority may specify;

the transferor shall obtain the consent of the Authority under section 39B(1)(a);

the transferor and the transferee shall, if they intend to serve on their respective customers a summary of the transfer, obtain the Authority’s approval of the summary;

the transferor shall, at least 15 days before the application is made but not earlier than one month after the report referred to in paragraph (a) is lodged with the Authority, publish in the Gazette and in such newspaper or newspapers as the Authority may determine a notice of the transferor’s intention to make the application and containing such other particulars as may be prescribed;

the transferor and the transferee shall keep at their respective offices in Singapore, for inspection by any person who may be affected by the transfer, a copy of the report referred to in paragraph (a) for a period of 15 days after the publication of the notice referred to in paragraph (d) in the Gazette; and

unless the Court directs otherwise, the transferor and the transferee shall serve on their respective customers affected by the transfer, at least 15 days before the application is made, a copy of the report referred to in paragraph (a) or a summary of the transfer approved by the Authority under paragraph (c).(3) The Authority and any person who, in the opinion of the Court, is likely to be affected by the transfer —

shall have the right to appear before and be heard by the Court in any proceedings relating to the transfer; and

may make any application to the Court in relation to the transfer.(4) The Court shall not approve the transfer if the Authority has not consented under section 39B(1)(a) to the transfer.(5) The Court may, after taking into consideration the views, if any, of the Authority on the transfer —

approve the transfer without modification or subject to any modification agreed to by the transferor and the transferee; or

refuse to approve the transfer.(6) If the transferee is not granted a licence by the Authority, the Court may approve the transfer on terms that the transfer shall take effect only in the event of the transferee being granted a licence by the Authority.(7) The Court may by the order approving the transfer or by any subsequent order provide for all or any of the following matters:

the transfer to the transferee of the whole or any part of the business of the transferor;

the allotment or appropriation by the transferee of any share, debenture, policy or other interest in the transferee which under the transfer is to be allotted or appropriated by the transferee to or for any person;

the continuation by (or against) the transferee of any legal proceedings pending by (or against) the transferor;

the dissolution, without winding up, of the transferor;

the provisions to be made for persons who are affected by the transfer;

such incidental, consequential and supplementary matters as are, in the opinion of the Court, necessary to secure that the transfer is fully effective.(8) Any order under subsection (7) may —

provide for the transfer of any business, whether or not the transferor otherwise has the capacity to effect the transfer in question;

make provision in relation to any property which is held by the transferor as trustee; and

make provision as to any future or contingent right or liability of the transferor, including provision as to the construction of any instrument under which any such right or liability may arise.(9) Subject to subsection (10), where an order made under subsection (7) provides for the transfer to the transferee of the whole or any part of the transferor’s business, then by virtue of the order the business (or part thereof) of the transferor specified in the order shall be transferred to and vest in the transferee, free in the case of any particular property (if the order so directs) from any charge which by virtue of the transfer is to cease to have effect.(10) No order under subsection (7) shall have any effect or operation in transferring or otherwise vesting land in Singapore until the appropriate entries are made with respect to the transfer or vesting of that land by the appropriate authority.(11) If any business specified in an order under subsection (7) is governed by the law of any foreign country or territory, the Court may order the transferor to take all necessary steps for securing that the transfer of the business to the transferee is fully effective under the law of that country or territory.(12) Where an order is made under this section, the transferor and the transferee shall each lodge within 7 days after the order is made —

a copy of the order with the Registrar of Companies and with the Authority; and

where the order relates to land in Singapore, an office copy of the order with the appropriate authority concerned with the registration or recording of dealings in that land.(13) A transferor or transferee which contravenes subsection (12), and every officer of the transferor or transferee (as the case may be) who fails to take all reasonable steps to secure compliance by the transferor or transferee (as the case may be) with that subsection, shall each be guilty of an offence and shall each be liable on conviction to a fine not exceeding $2,000 and, in the case of a continuing offence, to a further fine not exceeding $200 for every day or part thereof during which the offence continues after conviction.”;

by repealing section 45;

by repealing section 47 and substituting the following section:“Disqualification or removal of director or executive officer47.—

Notwithstanding the provisions of any other written law, a finance company shall not, without the prior written consent of the Authority, permit a person to act as its director or executive officer, if the person —

has been convicted, whether in Singapore or elsewhere, of an offence committed before, on or after the date of commencement of section 5(k) of the Financial Institutions (Miscellaneous Amendments) Act 2013, being an offence —

involving fraud or dishonesty;

the conviction for which involved a finding that he had acted fraudulently or dishonestly; or

that is specified in the Third Schedule to the Registration of Criminals Act (Cap. 268);

is an undischarged bankrupt, whether in Singapore or elsewhere;

has had execution against him in respect of a judgment debt returned unsatisfied in whole or in part;

has, whether in Singapore or elsewhere, entered into a compromise or scheme of arrangement with his creditors, being a compromise or scheme of arrangement that is still in operation;

has had a prohibition order under section 59 of the Financial Advisers Act (Cap. 110), section 35V of the Insurance Act (Cap. 142) or section 101A of the Securities and Futures Act (Cap. 289) made against him that remains in force; or

has been a director of, or directly concerned in the management of, a regulated financial institution, whether in Singapore or elsewhere —

which is being or has been wound up by a court; or

the approval, authorisation, designation, recognition, registration or licence of which has been withdrawn, cancelled or revoked by the Authority or, in the case of a regulated financial institution in a foreign country or territory, by the regulatory authority in that foreign country or territory.(2) Notwithstanding the provisions of any other written law, where the Authority is satisfied that a director or an executive officer of a finance company —

has wilfully contravened or wilfully caused the finance company to contravene any provision of this Act;

has, without reasonable excuse, failed to secure the compliance of the finance company with this Act, the Monetary Authority of Singapore Act (Cap. 186) or any of the written laws set out in the Schedule to that Act; or

has failed to discharge any of the duties of his office,the Authority may, if it thinks it necessary in the public interest or for the protection of the depositors or creditors of the finance company, by notice in writing to the finance company, direct the finance company to remove the director or executive officer, as the case may be, from his office or employment within such period as may be specified by the Authority in the notice, and the finance company shall comply with the notice.(3) Without prejudice to any other matter that the Authority may consider relevant, the Authority shall, when determining whether a director or an executive officer of a finance company has failed to discharge the duties of his office for the purposes of subsection (2)(c), have regard to such criteria as may be prescribed.(4) Before directing a finance company to remove a person from his office or employment under subsection (2), the Authority shall —

give the finance company and the person notice in writing of its intention to do so; and

in the notice referred to in paragraph (a), call upon the finance company and the person to show cause, within such time as may be specified in the notice, why the person should not be removed.(5) If the finance company and the person referred to in subsection (4) —

fail to show cause within the time specified under subsection (4)(b) or within such extended period of time as the Authority may allow; or

fail to show sufficient cause,the Authority may direct the finance company to remove the person under subsection (2).(6) Any finance company which, or any director or executive officer of a finance company who, is aggrieved by a direction of the Authority under subsection (2) may, within 30 days after receiving the direction, appeal in writing to the Minister, whose decision shall be final.(7) Any finance company which contravenes subsection (1) or fails to comply with a notice issued under subsection (2) 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.(8) No criminal or civil liability shall be incurred by a finance company, or any person acting on behalf of the finance company, in respect of anything done (including any statement made) or omitted to be done with reasonable care and in good faith in the discharge or purported discharge of the obligations of the finance company under this section.(9) In this section, unless the context otherwise requires —“regulated financial institution” means a person who carries on a business, the conduct of which is regulated or authorised by the Authority or, if it is carried on in Singapore, would be regulated or authorised by the Authority;“regulatory authority”, in relation to a foreign country or territory, means an authority of the foreign country or territory exercising any function that corresponds to a regulatory function of the Authority under this Act, the Monetary Authority of Singapore Act or any of the written laws set out in the Schedule to that Act.”;

by deleting subsection (2) of section 48;

by inserting, immediately after section 48, the following sections:“Composition of offences48A.—

The Authority may, in its discretion, compound any offence under this Act which is prescribed as a compoundable offence by collecting from a person reasonably suspected of having committed the offence a sum of money not exceeding one half of the amount of the maximum fine prescribed for that offence.(2) The Authority may, in its discretion, compound any offence under this Act (including an offence under a provision which has been repealed) which —

was compoundable under this section at the time the offence was committed; but(b)has ceased to be so compoundable,by collecting from a person reasonably suspected of having committed the offence a sum of money not exceeding one half of the amount of the maximum fine prescribed for that offence at the time it was committed.(3) On payment of the sum of money referred to in subsection (1) or (2), no further proceedings shall be taken against that person in respect of the offence.(4) The Authority may make regulations to prescribe the offences which may be compounded.(5) All sums collected by the Authority under subsection (1) or (2) shall be paid into the Consolidated Fund.Recovery of fees, expenses, etc.48B. There shall be recoverable as a civil debt due to the Authority from the finance company concerned —

the amount of any fees payable under section 6(7); and

any remuneration and expenses payable by the finance company to —

a statutory adviser appointed under section 35(2);

a statutory manager appointed under section 35(2);

the Authority or any person authorised or appointed by the Authority under section 42 in relation to the Authority’s assumption of control of any business of the finance company under section 35; and

any person appointed to perform any independent assessment under Part VIA.”; and

by inserting, immediately after the words “the Companies Act (Cap. 50)” in section 54(1), the words “and Part IVB of the Monetary Authority of Singapore Act (Cap. 186)”.