Singapore legislation

Clause 28

of Financial Holding Companies Bill

Clause 28

Exposures

(1)

A designated financial holding company shall not grant any credit facility except to —

(a)

any company within its FHC group; or

(b)

any company within the FHC group of the ultimate financial holding company of the designated financial holding company.

(2)

The Authority may, by notice in writing to any designated financial holding company, or any class of designated financial holding companies, impose such requirements as may be necessary or expedient for the purposes of limiting the exposure of the designated financial holding company, or a designated financial holding company within the class of designated financial holding companies, to any one or more of the following:

(a)

a substantial shareholder group of the designated financial holding company;

(b)

the financial group of the designated financial holding company;

(c)

a director group of the designated financial holding company;

(d)

a third party single counterparty group of the designated financial holding company;

(e)

any other person or class of persons as may be prescribed.

(3)

Without prejudice to the generality of subsection (2), the Authority may in a notice issued under that subsection —

(a)

specify the limit on any exposure;

(b)

exclude any exposure from any limit;

(c)

specify the method of measuring any exposure;

(d)

exclude any designated financial holding company or class of designated financial holding companies from any requirement imposed under subsection (2); and

(e)

vary any limit in a particular case.

(4)

A designated financial holding company shall not grant any credit facility against the security of its own shares or those of any of its subsidiaries.

(5)

Any designated financial holding company which fails to comply with subsection (1) or (4) or any requirement imposed under subsection (2) or (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.

(6)

In this section —

(a)

the words “director group”, “exposure”, “financial group”, “substantial shareholder group” and “third party single counterparty group” have the meanings given to them in the Schedule; and

(b)

a financial holding company is the “ultimate financial holding company” of another corporation if —

(i)

the other corporation is a subsidiary of the financial holding company; and

(ii)

the financial holding company is not itself a subsidiary of any other financial holding company.

Read in full context — Financial Holding Companies Bill →