Section 1
Short title
This Act may be cited as the Deposit Insurance Act.
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Deposit Insurance Act is Singapore Act, cited as Act DIA 2005, currently marked in force and first recorded in 2005.
Part I
Short title
This Act may be cited as the Deposit Insurance Act.
Interpretation
“account with the electronic service”, in relation to any person, means a computer account within the electronic service which is assigned by the Authority to that person for the storage and retrieval of electronic records relating to that person;
“Agency” or “deposit insurance agency” means the company designated by the Minister under section 12 to be the deposit insurance agency;
“authentication code”, in relation to any person, means an identification or identifying code, a password or any other authentication method or procedure which is assigned to that person for the purposes of identifying and authenticating the access to and use of the electronic service by that person;
“Authority” means the Monetary Authority of Singapore established under section 3 of the Monetary Authority of Singapore Act (Cap. 186);
“bank in Singapore” has the same meaning as in section 2(1) of the Banking Act;
“book” includes any record, register, document or other record of information, and any account or accounting record, however compiled, recorded or stored, whether in written or printed form or on microfilm or in electronic form or otherwise;
“Chief Executive” means the Chief Executive of the Agency appointed under section 18 and includes any person acting in that capacity;
“client account”, in relation to a depositor, means an account maintained by the depositor with a Scheme member for the purpose of holding moneys held by the depositor for a client of the depositor, whether or not other moneys may be held in the account;
“company” has the same meaning as in section 4(1) of the Companies Act (Cap. 50);
“CPFIS” means the Central Provident Fund Investment Scheme introduced by the Central Provident Fund Board under the Central Provident Fund (Investment Schemes) Regulations (Cap. 36, Rg 9);
“deposit” means a sum of money paid on terms —
under which it will be repaid, with or without interest or a premium, or with any consideration in money or money’s worth, either on demand or at a time or in circumstances agreed by or on behalf of the person making the payment and the person receiving it; and
which are not referable to the provision of property or services or to the giving of security;
“deposit-taking business” has the same meaning as in section 4B of the Banking Act (Cap. 19);
“depositor” means any person who is entitled to repayment of a deposit, whether or not the deposit is made by him;
“electronic record” has the same meaning as in section 2 of the Electronic Transactions Act (Cap. 88);
“electronic service” means the electronic service provided by the Authority under section 59;
“exempt member” means a full bank or finance company which has been exempted by the Authority under section 6 from the requirement to be a Scheme member;
“failed Scheme member” means a Scheme member in respect of which the Authority has determined that compensation will be paid out of the Fund to insured depositors;
“finance company” has the same meaning as in section 2 of the Finance Companies Act (Cap. 108);
“full bank” means any bank holding a licence granted by the Authority under the Banking Act which permits the bank to carry on the full range of banking business;
“insured depositor” means any of the following depositors: (a)an individual, except an individual who places a deposit in an account with a Scheme member in the name of a partnership or sole proprietorship;
a charity as defined in section 2(1) of the Charities Act (Cap. 37), which is —
registered under section 5 of that Act;
specified in the Schedule to that Act; or
excepted by regulations made under that Act;
such other person or class of persons as may be prescribed,and includes —
in the case of a deposit held by a trustee under a trust, a beneficiary of the trust who is a person specified in paragraph (a), (b) or (c) or the estate of a deceased person; and
in the case of a deposit held by a depositor in a client account, the depositor’s client who is a person specified in paragraph (a), (b) or (c) and whose moneys are held in the client account;
“liquidator” has the same meaning as in section 4(1) of the Companies Act (Cap. 50);
“officer” has the same meaning as in section 2(1) of the Banking Act (Cap. 19);
“premium year”, in relation to the determination and payment of premium contributions, means such period as may be prescribed by the Authority as a premium year under section 21(4);
“quantification date” means —
the date on which a Scheme member is wound up; or
where a Scheme member is not wound up, the date on which the notice of payment of compensation is published in the Gazette under section 30(4);
“securities” has the same meaning as in section 2(1) of the Securities and Futures Act (Cap. 289);
“Supplementary Retirement Scheme” has the same meaning as in section 2(1) of the Income Tax Act (Cap. 134).
For the purposes of the definition of “deposit”, money is paid on terms which are referable to the provision of property or services or to the giving of security if, and only if —
it is paid by way of advance or part payment under a contract for the sale, hire or other provision of property or services, and is repayable only in the event that the property or services is or are not in fact sold, hired or otherwise provided;
it is paid by way of security for the performance of a contract or by way of security in respect of loss which may result from the non-performance of a contract; or
without prejudice to paragraph (b), it is paid by way of security for the delivery up or return of any property, whether in a particular state of repair or otherwise.
Meaning of “insured deposit base” and “relevant insured deposits”
In this Act, unless the context otherwise requires, “insured deposit base”, in relation to a Scheme member, means the aggregate of the amount of the relevant insured deposits of all the insured depositors of the Scheme member.
For the purposes of subsection (1), “relevant insured deposits”, in relation to an insured depositor of a Scheme member, means the aggregate of the amount of —
any insured deposit placed with the Scheme member and —
held by that insured depositor in his own right or in his own right jointly with one or more persons in a joint account;
held by a depositor as a trustee under a trust and the books of the Scheme member disclose that the insured depositor is a beneficiary of that trust and the share of the insured depositor in the insured deposit under that trust;
held by a depositor as a trustee under a trust and the books of the Scheme member disclose that the insured depositor is a beneficiary of that trust and the total number of beneficiaries of that trust;
held by a depositor as a trustee under 2 or more trusts and the books of the Scheme member disclose that the insured depositor is a beneficiary of any of the trusts and the share of the insured depositor in the insured deposit under that trust;
held by a depositor as a trustee under 2 or more trusts and the books of the Scheme member disclose that the insured depositor is a beneficiary of any of the trusts, the part of the insured deposit under that trust and the total number of beneficiaries of that trust;
held by a depositor in a client account for the insured depositor and the books of the Scheme member disclose that the insured depositor is a client of the depositor and the share of the client in the insured deposit; and
held by a depositor in a client account for the insured depositor and the books of the Scheme member disclose that the insured depositor is a client of the depositor and the total number of clients in the client account,up to a maximum of $20,000; and
any moneys, denominated in Singapore dollars, placed by that insured depositor with the Scheme member under the CPFIS, up to a maximum of $20,000.
For the purposes of subsection (2) —
a reference to an insured deposit includes a reference to part of the insured deposit;
where an insured depositor holds an insured deposit in his own right jointly with one or more depositors in a joint account, each of the depositors, whether or not he is an insured depositor, shall be deemed to have an equal share in the insured deposit unless there is an express provision to the contrary in the books of the Scheme member;
where an insured deposit is held by a depositor as a trustee under a trust for 2 or more beneficiaries, each of the beneficiaries, whether or not he is an insured depositor, shall be deemed to have an equal share in the insured deposit, unless there is an express provision to the contrary in the books of the Scheme member; and
where an insured deposit is held by a depositor in a client account for 2 or more clients, each of the clients, whether or not he is an insured depositor, shall be deemed to have an equal share in the insured deposit, unless there is an express provision to the contrary in the books of the Scheme member.
Part V
Premium contributions payable by Scheme members
Every Scheme member shall, from the effective date appointed under section 30(5), pay a premium contribution for any premium year or part thereof in respect of the insured deposits placed with the Scheme member.
Subject to the provisions of this Act, the premium contribution shall be of an amount computed by the Authority under section 22.
Determination of premium rates and premium contributions
The Authority shall assess and determine the premium rates for the purposes of computing the premium contributions payable by Scheme members.
The Authority shall, on the basis of the premium rates determined under subsection (1) and the insured deposit base of a Scheme member, compute the amount of premium contribution payable by the Scheme member for any premium year or part thereof.
For the purposes of assessing and determining the premium rates and computing the amounts of premium contributions payable, the Authority may make regulations for or in respect of all or any of the following matters:
the establishment of a system of classifying Scheme members into different categories;
the criteria and procedure for determining the category in which a Scheme member is to be classified;
the prescribing of the premium rate applicable to each category of Scheme members;
the manner in which the premium rate for each category of Scheme members is to be determined;
the prescribing of a minimum premium contribution payable by Scheme members;
the manner in which the amount of premium contribution for each category of Scheme members is to be determined;
the computation of premium contribution on a pro rata basis where a full bank or finance company becomes a Scheme member, or is no longer exempted from the requirement to be a Scheme member, at any time during a premium year;
the size of the Fund;
such other matters as the Authority considers necessary.
Regulations made pursuant to or dealing with the matters referred to in subsection (3)(c) or (d) may provide for different premium rates for different categories of Scheme members.
If the Authority wishes to amend or vary any regulations made under subsection (3), the Authority shall first conduct a joint review with the Agency and such regulations shall not be amended or varied without the concurrence of the Agency.
Notice of payment of premium contribution
Where the Authority has computed the amount of premium contribution payable by a Scheme member for any premium year or part thereof under section 22(2), the Authority shall notify the Agency accordingly.
Upon receipt of the notification referred to in subsection (1), the Agency shall, within such time as may be specified in the Rules, give the Scheme member notice in writing of the amount of premium contribution that the Scheme member is required to pay under the Scheme for that premium year or part thereof.
Additional premium contributions where Fund insufficient to pay compensation
Where the Fund is insufficient to pay any compensation due to insured depositors under this Act, the Authority may, with the concurrence of the Agency, determine —
that Scheme members shall be required to pay additional premium contributions for any premium year or part thereof; and
the premium rate or rates for the purposes of computing the additional premium contributions.
Where a determination is made under subsection (1) —
the Authority shall, as soon as practicable —
publish a notice in the Gazette of the requirement to pay additional premium contributions and the premium rate or rates for the purposes of computing the additional premium contributions referred to in subsection (1); and
compute the additional premium contributions payable by Scheme members for that premium year or part thereof and notify the Agency accordingly; and
the Agency shall, upon receipt of the notification referred to in paragraph (a)(ii), give notice in writing to every Scheme member of the additional premium contribution that the Scheme member is required to pay for that premium year or part thereof and the date by which the additional premium contribution shall be paid.
Any Scheme member shall not, without the prior approval of the Minister, be required to pay additional premium contribution for any premium year exceeding 0.3% of the insured deposit base of that Scheme member.
For the purposes of subsection (3), the insured deposit base of a Scheme member shall be determined on the date prescribed by the Authority for computing the amounts of premium contribution payable by Scheme members.
Payment of premium contributions and late payment fees
Where a Scheme member is given notice in writing to pay a premium contribution under section 23(2) or an additional premium contribution under section 24(2) for any premium year or part thereof, the Scheme member shall pay to the Agency —
in the case of the premium contribution, on or before the date of payment specified in the Rules; and
in the case of the additional premium contribution, on or before the date of payment specified in the notice,the amount of premium contribution or additional premium contribution, as the case may be, that the Scheme member is required to pay for that premium year or part thereof.
Subject to subsection (3), if a Scheme member fails to pay the premium contribution or additional premium contribution or any part thereof in contravention of subsection (1) —
the Agency may, by notice in writing, impose on the Scheme member such late payment fee as the Agency may by Rules determine; and
the Scheme member shall pay to the Agency the late payment fee together with the unpaid premium contribution or additional premium contribution, as the case may be, on or before the date of payment specified in the notice.
The late payment fee referred to in subsection (2) shall not exceed the amount of premium contribution or additional premium contribution, as the case may be, owing by the Scheme member.
The amount of premium contribution or additional premium contribution owing by the Scheme member and the late payment fee shall be paid in such manner as may be specified in the Rules.
Without prejudice to any other remedy, any premium contribution, additional premium contribution or late payment fee payable under this Act shall be recoverable as a debt due to the Agency by the Scheme member.
Where the Agency has commenced any legal proceedings in a court to recover a premium contribution, an additional premium contribution or a late payment fee from a Scheme member, the Agency shall be entitled to claim costs on a full indemnity basis from that Scheme member.
Power to refund or remit premium contributions
The Agency may, with the approval of the Minister, refund or remit in whole or in part any premium contribution paid or payable by any Scheme member under this Act.
Refund of premium contributions paid in excess
Where it appears to the Authority that a Scheme member has paid premium contribution in excess of the amount payable under this Act, the Authority shall notify the Agency accordingly.
Upon receipt of the notification referred to in subsection (1), the Agency shall refund to the Scheme member the amount of premium contribution paid in excess.
Re-computation of premium contributions
Where it appears to the Authority that the premium contribution for any premium year or part thereof —
computed by the Authority under section 22(2) and notified to the Agency under section 23(1); or
in respect of which a Scheme member has been required to pay under section 23(2) or has paid,is of an amount less than that which ought to have been computed, imposed or paid, as the case may be, the Authority may within the same premium year re-compute such amount of premium contribution which ought to have been computed, imposed or paid, as the case may be, under this Act.
Sections 23 and 25 shall apply, with the necessary modifications, to any amount of premium contribution re-computed under subsection (1) and to the recovery of any shortfall in premium contribution upon a re-computation under that subsection —
as if the reference to premium contribution were a reference to the difference between the amount of premium contribution as re-computed and the amount of premium contribution that was originally computed, imposed or paid, as the case may be, under this Act; and
the reference in section 25(1)(a) to the “date of payment specified in the Rules” shall be read as a reference to the date of payment specified in the notice.
Disclosure of information relating to premium contributions
Subject to subsections (2) and (3), no Scheme member or officer of any Scheme member shall disclose to any person —
the premium rate applicable to the Scheme member;
the category in which the Scheme member is classified pursuant to section 22;
where the system of classifying a Scheme member incorporates a rating of the Scheme member based on the assessment by the Authority of the risks arising from the activities of the Scheme member, the rating of the Scheme member; and
any information which if disclosed, would enable any of the information referred to in paragraph (a), (b) or (c) to be identified or deduced.
Notwithstanding subsection (1), a Scheme member or an officer of a Scheme member may disclose to —
any director or officer of the Scheme member;
in the case where the Scheme member is a full bank, the head office, parent bank or parent supervisory authority of the Scheme member; or
such other person or class of persons as the Authority may approve,any of the matters referred to in subsection (1) where such disclosure is necessary for the performance of the duties of the person referred to in paragraph (a), (b) or (c), as the case may be.
No person to whom the Scheme member or officer of the Scheme member has disclosed information pursuant to subsection (2) shall disclose that information to any other person except as approved by the Authority.
Any person who contravenes subsection (1) or (3) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $125,000 or to imprisonment for a term not exceeding 3 years or to both.
Establishment of Deposit Insurance Scheme
There shall be established a scheme to be called the Deposit Insurance Scheme for the benefit of insured depositors in respect of their insured deposits placed with Scheme members.
Membership of Scheme
Every full bank or finance company which is not exempted under section 6 shall be a Scheme member so long as it holds a valid licence under the Banking Act (Cap. 19) or Finance Companies Act (Cap. 108), as the case may be.
A full bank or finance company, which holds a valid licence under the Banking Act or Finance Companies Act, as the case may be, immediately before 18th October 2005, shall be deemed to be a Scheme member from 18th October 2005.
A full bank or finance company, which is granted a licence under the Banking Act or Finance Companies Act, as the case may be, on or after 18th October 2005, shall be a Scheme member from the date on which its licence is granted.
Exemption from membership
A full bank or finance company may apply in writing to the Authority to be exempted from the requirement under section 5(1) to be a Scheme member.
The Authority may, by notification published in the Gazette, exempt a full bank or finance company referred to in subsection (1) from the requirement under section 5(1).
The Authority may require an applicant to furnish it with such information or documents as the Authority considers necessary in relation to the application.
Without prejudice to the generality of subsection (2), the Authority shall, in determining whether to grant an exemption under subsection (2), have regard to —
the scope of deposit-taking business conducted by the full bank or finance company, as the case may be, in Singapore; and
in the case of a full bank which is incorporated in a jurisdiction other than Singapore —
whether the deposits accepted by its branches and offices located within Singapore are insured by a deposit insurance scheme, or any other scheme of a similar nature, established and maintained in the jurisdiction in which the full bank is incorporated (referred to in this section as the foreign scheme); and
whether the scope and level of protection available to those deposits under the foreign scheme are not less than the scope and level of protection that would be available to the deposits under the Scheme if those deposits were insured by the Scheme.
The Authority may, by notice in writing, impose on an exempt member such conditions or restrictions relating to the exemption as the Authority may think fit.
The Authority may at any time —
by notice in writing to an exempt member, add to, vary or revoke any existing condition or restriction imposed by the Authority under subsection (5); or
by notice in writing impose such conditions or restrictions as the Authority may think fit on a class of exempt members.
An exempt member shall comply with all conditions or restrictions imposed on it under subsection (5) or (6), as the case may be.
Any exempt member which contravenes subsection (7) 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.[HK DPS Ord 2004, s. 13; SFA 2002 Ed., s. 14]
Withdrawal of exemption
The Authority may withdraw an exemption granted to an exempt member under section 6(2) if —
the exempt member fails to comply with a condition or restriction imposed in respect of the exemption; or
the Authority considers it necessary in the public interest.
Before withdrawing any exemption granted to an exempt member under section 6(2), the Authority shall —
give the exempt member notice in writing of its intention to do so; and
in the notice referred to in paragraph (a), call upon the exempt member to show cause within such time as may be specified in the notice why the exemption should not be withdrawn.
If the exempt member referred to in subsection (2) —
fails to show cause within the time specified in the notice or within such extended period of time as the Authority may allow; or
fails to show sufficient cause,the Authority shall give notice in writing to the exempt member of the date on which the withdrawal of the exemption is to take effect.
Where a withdrawal of exemption becomes effective, the Authority shall publish a notice of the withdrawal in the Gazette.[FAA 2002 Ed., s. 23 (10); Insurance 2002 Ed., s. 35ZN (5); SFA 2002 Ed., s. 99 (6)]
Maintenance of assets in Singapore
The Authority may by regulations require a Scheme member, or a class of Scheme members, to maintain, in relation to its insured deposit base, such minimum amount of assets in Singapore as may be specified in the regulations for meeting its liabilities in respect of insured deposits placed with the Scheme member.
The Authority may make regulations which are necessary or expedient for carrying out the purposes of this section, including regulations for or with respect to —
the circumstances under which, and the manner in which, the Authority may impose an asset maintenance requirement;
the types of assets that are to be treated as assets maintained in Singapore and the minimum amount of assets for the purpose of an asset maintenance requirement; and
the method for the valuation of assets maintained in Singapore.
If the Authority is satisfied that a Scheme member has failed to comply with any asset maintenance requirement under subsection (1), the Authority may by notice in writing to the Scheme member, impose a financial penalty.
The financial penalty shall be of an amount not exceeding the interest calculated per day on the deficiency in the amount of assets necessary to comply with the asset maintenance requirement, for every day or part thereof during which there is a deficiency.
For the purposes of subsection (4), the interest shall be calculated at the rate of 10% above SIBOR.
Before imposing a financial penalty on a Scheme member, the Authority shall —
give the Scheme member notice in writing of its intention to do so, including the basis for its decision to impose the financial penalty; and
in the notice referred to in paragraph (a), call upon the Scheme member to show cause within such time as may be specified in the notice why the financial penalty should not be imposed.
If the Scheme member referred to in subsection (6) —
fails to show cause within the time specified in the notice or within such extended period of time as the Authority may allow; or
fails to show sufficient cause,the Authority shall give notice in writing to the Scheme member of the date by which the payment of the financial penalty is to be made.
Where a Scheme member is given a notice under subsection (7), the Scheme member shall pay the financial penalty to the Authority by the date of payment specified in the notice.
Any financial penalty payable under this Act shall be recoverable as a debt due to the Authority by the Scheme member.
Notwithstanding any provision in the Limitation Act (Cap. 163), an action to recover any financial penalty recoverable by virtue of this section shall not be brought after the expiration of 3 years from the date on which the cause of action accrued.
Any financial penalty paid to or recovered by the Authority shall be paid into the Fund.
Where the Authority has commenced any proceedings in a court to recover a financial penalty from a Scheme member, the Authority shall be entitled to claim costs on a full indemnity basis from that Scheme member.
Any Scheme member who is aggrieved by a decision of the Authority to impose a financial penalty under subsection (3) may, within 30 days of the decision of the Authority, appeal in writing to the Minister whose decision shall be final and shall be given effect to by the Authority.
In this section, “SIBOR” means the Singapore Interbank Offer Rate for such tenor and determined in such manner as may be prescribed by the Authority.[HK DPS Ord 2004, s. 53 (2) (a) to (d); Banking 2003 Ed., s. 38]
Establishment of Deposit Insurance Fund
There shall be established a fund to be called the Deposit Insurance Fund which shall, subject to the directions of the Minister, be controlled and administered by the Agency designated by the Minister under section 12.
The Fund shall consist of —
all premium contributions and late payment fees paid by Scheme members;
all moneys borrowed by the Agency for the purpose of performing its functions under this Act;
all moneys recovered by the Agency from, or out of the assets of, failed Scheme members;
any interest, dividend and other income derived from the investment of the moneys in the Fund;
all moneys paid to or recovered by the Authority as a financial penalty under section 8; and
all other moneys lawfully paid into the Fund.
The Fund shall be used for the objects and purposes of the Scheme set out in this Act.
For the avoidance of doubt, the Fund shall not be a fund of the Agency or the Authority.[HK DPS Ord 2004, s. 14; MAS 1999 Ed., s. 30A]
Expenditure of moneys of Fund
In carrying out the objects of this Act, there shall be paid out of the Fund as required and at such time as the Agency considers proper —
all expenses incurred in or incidental to —
the establishment and maintenance of the Scheme;
the administration and management of the Fund;
the administration and management of the Agency and the performance of the duties and functions of the Agency under this Act; and
the conduct of any investigations by the Agency for the purpose of determining the eligibility and entitlement of insured depositors to compensation;
any fees payable to agents appointed by the Agency for the purposes of this Act; and
all other moneys payable out of the Fund in accordance with this Act.
Notwithstanding subsection (1), the Authority may recover from the Agency out of the Fund, all expenses incurred in the establishment of the Agency and all expenses incurred in connection with the discharge of the functions and responsibilities of the Authority under sections 8, 22, 23 and 24 of this Act.[HK DPS Ord 2004, s. 16; MAS 1999 Ed., s. 30B]
Investment
The Agency may invest any moneys in the Fund in one or more of the following:
any security issued by the Government;
Singapore dollar deposits with the Authority;
such other investments, with the objects of capital preservation and maintenance of liquidity, as may be approved by the Minister.
The Agency may delegate, on such conditions or restrictions as it thinks fit, all or any of its powers and functions under subsection (1) to any employee or agent as it may appoint.
The Agency may pay to any person appointed under subsection (2) a reasonable fee for any service rendered in exercise of any power and function delegated to that person under that subsection.
The Agency may continue to exercise any power conferred upon it or perform any function under this Act notwithstanding the delegation of such power or function to an employee or agent under this section.[MAS 1999 Ed., s. 30 (2) and (3)]
Designation of company to be deposit insurance agency
The Minister may, by notification in the Gazette, designate a company incorporated in Singapore to be the deposit insurance agency for the purposes of this Act.
Objects, functions and powers of Agency
Subject to the provisions of this Act, the objects of the Agency shall be —
to administer the Scheme; and
to administer and manage the Fund.
Without prejudice to the generality of subsection (1), the functions of the Agency shall include the following:
collect premium contributions levied on Scheme members;
make payments of compensation in respect of insured deposits to insured depositors out of the Fund after the Agency has determined the eligibility and entitlement of the depositors;
make interim payments of compensation out of the Fund to insured depositors of such amounts as the Agency considers appropriate;
claim from the failed Scheme member for reimbursement of the amount of compensation paid to the insured depositors concerned out of the Fund, together with any interest accrued thereon;
claim payment from the liquidator or provisional liquidator of a failed Scheme member, out of the assets of the failed Scheme member, for reimbursement of the amount of compensation paid to the insured depositors concerned out of the Fund, together with any interest accrued thereon;
educate the public on the Scheme.
The Agency shall have the power to do anything for the purpose of discharging its functions under this Act or any other written law, or which is incidental or conducive to the discharge of those functions.
Amendment to memorandum and articles of association of Agency
Notwithstanding any provision in the Companies Act (Cap. 50), the Agency shall not amend the memorandum and articles of association of the Agency without the prior approval of the Minister.
Any amendment made to the memorandum and articles of association of the Agency without the approval of the Minister shall be void.
Appointment of board of directors
This section shall have effect notwithstanding any provision in the Companies Act and the memorandum and articles of association of the Agency.
The board of directors of the Agency shall consist of —
a Chairman who shall be appointed by the board; and
not less than 4 but not more than 9 other directors.
A director shall hold office for a term not exceeding 3 years and shall be eligible for reappointment.
No person shall be appointed as or remain a director on the board of directors if he is a substantial shareholder, a director or an employee of —
any Scheme member; or
a related corporation of any Scheme member.
“related corporation” has the same meaning as in section 4(1) of the Companies Act (Cap. 50);
“substantial shareholder” has the same meaning as in section 81 of the Companies Act.
Board to be accountable to Minister
The board of directors shall be accountable to the Minister for its acts and decisions.[MAS 1999 Ed., s. 9 (4)]
Salaries, fees and allowances payable to Chairman and directors
There shall be paid to the Chairman of the board of directors and directors of the Agency out of the Fund such salaries, fees and allowances as the Minister may, from time to time, determine.[ACRA 2004, 1st Sch., para. 11]
Appointment of Chief Executive, officers and employees, etc.
The board of directors shall appoint a Chief Executive on such terms and conditions as the board may determine.
The Chief Executive shall —
be known by such designation as the board of directors may determine; and
be responsible to the board of directors for the proper administration and management of the functions and affairs of the Agency in accordance with the policies and directions established by the board.
The board of directors may appoint any other person to perform the duties of the Chief Executive whenever the Chief Executive is unable to perform his duties for any period because of absence from Singapore, illness or any other reason.
The Agency may, from time to time, appoint and employ, on such terms and conditions as it may determine, such other officers, employees, consultants and agents as may be necessary for the effective performance of its functions.[ACRA 2004, s. 10]
Rules issued by Agency
The Agency may issue, and in its discretion publish for information in the Gazette or in any other manner it considers appropriate, Rules for any matter relating to any of its functions under this Act.
Without prejudice to the generality of subsection (1), such Rules may provide for —
the manner and method of collection of premium contributions and late payment fees;
the disclosure by Scheme members as to whether their financial products are insured deposits and the manner of such disclosure;
the particulars to be recorded in, or in respect of, books kept by Scheme members for the purpose of computing the amount of insured deposits placed with the Scheme members;
the manner in which compensation is to be paid to insured depositors from the Fund; and
the collection from any Scheme member by the Agency of any information in relation to its insured deposits and insured depositors for the purpose of computing the amount of compensation which is to be paid to the insured depositors.
The Agency may, at any time, amend or revoke the whole or part of any Rule issued under this section.
Without limiting the operation of any other provision of this Act, the Rules shall bind the Agency and the Scheme members to the same extent as if the Rules had been contained in properly executed agreements on the part of the Agency and each Scheme member, to observe and comply with all the Rules.
For the avoidance of doubt, no person, other than the Agency or a Scheme member, shall have any right to enforce the observance of or compliance with any of the Rules.
For the avoidance of doubt, any Rules issued under this section shall be deemed not to be subsidiary legislation.[LT (Strata) 1999 Ed., s. 41 (4) (repealed)]
Power of court to order observance of or compliance with Rules
Where any person who is bound to observe or comply with the Rules fails to do so, the High Court may, on the application of the Agency or a Scheme member, and after giving the first-mentioned person an opportunity to be heard, make an order directing the first-mentioned person to observe or comply with those Rules.
This section is in addition to, and not in derogation of, any other remedy available to the Agency or the Scheme member.[SFA 2002 Ed., s. 25]
Occurrence of events precipitating payment of compensation
Where, on or after the effective date —
an order is made by a court in Singapore or elsewhere to wind up a Scheme member; or
the Authority is of the opinion that a Scheme member is insolvent, unable or likely to become unable to meet its obligations, or about to suspend payments,the Authority may determine that compensation shall be paid out of the Fund to the insured depositors of the Scheme member in accordance with this Act.
Where the Authority determines that compensation shall be paid out of the Fund under subsection (1), the Authority shall immediately give notice in writing to the Agency of its determination.
The notice in writing referred to in subsection (2) shall be in such form and contain such information as may be agreed between the Authority and the Agency.
The Agency shall, as soon as practicable upon receiving the notice referred to in subsection (2), publish a notice in the Gazette stating that a payment of compensation shall be made out of the Fund.
For the purposes of this Act, the Minister shall by notification in the Gazette1 appoint a date to be the effective date.1 The effective date is 1st April 2006 — vide S 181/2006.
Entitlement to compensation
Subject to sections 32 and 33, where an insured depositor has one or more insured deposits (other than any moneys, denominated in Singapore dollars, placed with a Scheme member under the CPFIS) placed with a failed Scheme member, which —
the insured depositor holds in his own right;
the insured depositor holds in his own right jointly with one or more other persons in a joint account;
a depositor holds as a trustee for the insured depositor under a trust; or
a depositor holds in a client account for the insured depositor as the depositor’s client,the insured depositor shall be entitled to compensation from the Fund of a specified amount which shall not exceed $20,000, regardless of the number or amount of insured deposits that the insured depositor has placed with the failed Scheme member.
Where any insured deposit of an insured depositor placed with a failed Scheme member consists of moneys, denominated in Singapore dollars, placed with the failed Scheme member under the CPFIS, such moneys shall not be aggregated with his other insured deposits placed with that failed Scheme member for the purposes of determining the amount of compensation that the insured depositor is entitled to, and the insured depositor shall be entitled, in respect of moneys, denominated in Singapore dollars, placed with the failed Scheme member under the CPFIS, to compensation from the Fund of an amount not exceeding $20,000.
For the purposes of this section —
“specified amount” means the amount by which the aggregate amount, as at the quantification date, of insured deposits (other than any moneys, denominated in Singapore dollars, placed with the failed Scheme member under the CPFIS) which the insured depositor has placed with the failed Scheme member exceeds the aggregate amount, as at the quantification date, of liabilities of the insured depositor to that failed Scheme member in respect of which a right of set-off would have existed had a winding-up order been made in respect of the failed Scheme member; and
in determining the amount of liabilities of the insured depositor to the failed Scheme member, the same rules shall apply with regard to future and contingent liabilities as are in force for the time being under the law relating to bankruptcy in relation to the estates of persons adjudged bankrupt, as if the failed Scheme member were a person so adjudged.
Deposits in own right and joint accounts
Where an insured depositor holds an insured deposit in his own right, the insured depositor is entitled, in respect of the insured deposit as at the quantification date, to compensation from the Fund.
Where there are 2 or more insured depositors in respect of any insured deposit, each of those insured depositors is entitled, in respect of his share in the insured deposit as at the quantification date, to compensation from the Fund.
For the purposes of determining the share of an insured depositor in an insured deposit under subsection (2), each depositor holding such an insured deposit, whether or not he is an insured depositor, shall be deemed to have an equal share in the insured deposit unless there is an express provision to the contrary in the books of the failed Scheme member.
For the avoidance of doubt —
any insured deposit of a deceased person held in an estate account shall be treated as an insured deposit held by the deceased person in his own right; and
subsection (3) does not affect any rights as between the depositors themselves.
Deposits under trust
Where a depositor of an insured deposit placed with a failed Scheme member holds the insured deposit as a trustee under a trust and the books of the Scheme member disclose —
the identity of a beneficiary of the trust and his share of the insured deposit; or
the identity of a beneficiary of the trust and the total number of beneficiaries of the trust,any beneficiary who is an insured depositor, but not the depositor, shall be entitled, in respect of the insured deposit held under the trust as at the quantification date, to compensation from the Fund.
Where a depositor of an insured deposit placed with a failed Scheme member holds the insured deposit as a trustee under 2 or more trusts and the books of the Scheme member disclose —
the identity of a beneficiary of any one of those trusts and his share of the insured deposit; or
the identity of a beneficiary of any one of those trusts, the part of the insured deposit under that trust and the total number of beneficiaries of that trust,the beneficiary of each of those trusts who is an insured depositor, but not the depositor, shall be entitled, in respect of the part of the insured deposit held under the trust as at the quantification date, to compensation from the Fund.
For the purposes of subsections (1) and (2), where the beneficiaries of a trust consist of 2 or more insured depositors, each of those insured depositors shall be entitled, in respect of his share in the insured deposit as at the quantification date, to compensation from the Fund.
For the purposes of determining the share of each insured depositor in an insured deposit under subsection (3), each beneficiary of such an insured deposit held under a trust, whether or not he is an insured depositor, shall be deemed to have an equal share in the insured deposit or part of the insured deposit, as the case may be, unless there is an express provision to the contrary in the books of the failed Scheme member.
For the avoidance of doubt, subsection (4) does not affect any rights as between the beneficiaries themselves.
Deposits in client accounts
Where a depositor of an insured deposit placed with a failed Scheme member holds the insured deposit in a client account and the books of the Scheme member disclose —
the identity of a client and his share of the insured deposit; or
the identity of a client and the total number of clients in that client account,any client who is an insured depositor, but not the depositor, shall be entitled, in respect of the insured deposit held in the client account as at the quantification date, to compensation from the Fund.
For the purposes of subsection (1), where the clients in a client account consist of 2 or more insured depositors, each of those insured depositors shall be entitled, in respect of his share in the insured deposit as at the quantification date, to compensation from the Fund.
For the purposes of determining the share of each insured depositor in an insured deposit under subsection (2), each client in a client account which contains an insured deposit, whether or not he is an insured depositor, shall be deemed to have an equal share in the insured deposit unless there is an express provision to the contrary in the books of the failed Scheme member.
For the avoidance of doubt, subsection (3) does not affect any rights as between the clients themselves.[HK DPS Ord 2004, s. 29 (3) to (5)]
Restrictions on entitlement to compensation
Where the Agency has paid an insured depositor the full amount of compensation payable to the insured depositor in respect of his insured deposits in accordance with this Act, no other person is entitled, in respect of the insured deposits, to compensation under this Act.[HK DPS Ord 2004, s. 31 (4)]
Computation and method of payment of compensation
The Agency shall compute the amount of compensation due to an insured depositor in respect of his insured deposits placed with a failed Scheme member in accordance with this Act.
In determining the eligibility and entitlement of an insured depositor to compensation and computing the amount of compensation due to an insured depositor, the Agency is entitled to rely on the books of the failed Scheme member and any other books which, in the opinion of the Agency, are relevant for such computation.
Subject to subsection (4), the Agency shall pay the compensation in such form and manner as may be specified in the Rules.
The Authority may make regulations for the purposes of payment of compensation by the Agency.
Without prejudice to the generality of subsection (4), such regulations may —
specify the person to whom, or the account into which, payment of compensation is to be made for the benefit of an insured depositor who is entitled to compensation under this Act;
provide for the payment of compensation in respect of a depositor holding insured deposits in different accounts; and
provide for the payment of compensation into an equivalent account with another Scheme member and for such compensation to be held in that account in a manner equivalent to the manner of holding of the original insured deposit.
Subrogation
On payment out of the Fund of any compensation under this Act to, or for the benefit of, any insured depositor in respect of his insured deposit, the Agency shall be subrogated to the extent of such payment to all the rights and remedies of —
the insured depositor;
the person who received the compensation on behalf of the insured depositor;
in the case where payment is made to an insured depositor who is a beneficiary of a trust, the trustee; or
in the case where payment is made to an insured depositor who is a client in a client account, the depositor who held the insured deposit in that client account,as the case may be, in respect of the insured deposit in priority over —
the rights and remedies of the insured depositor, the person who received the compensation on behalf of the insured depositor, the trustee or the depositor of a client account, as the case may be, in relation to that insured deposit; and
the rights and remedies of any person who is subrogated, whether or not before the Agency’s subrogation, to the rights and remedies of any of the persons referred to in paragraphs (a), (b), (c) and (d) in relation to that insured deposit,and may maintain an action in respect of those rights and remedies in the name of the person referred to in paragraph (a), (b), (c) or (d), as the case may be, or in the name of the Agency.
The persons referred to in paragraphs (a), (b), (c) and (d) of subsection (1), or any person who is subrogated, whether or not before the Agency’s subrogation, to the rights and remedies of those persons, shall not be entitled to receive any amount from, or out of, the assets of the failed Scheme member until the Agency has been reimbursed in full the amount of compensation paid to those persons.
The Agency shall be entitled —
in the case where the failed Scheme member is wound up, to be reimbursed out of the assets of the failed Scheme member for the expenses incurred in —
the payment of any compensation to insured depositors; and
the lodging of a claim with the liquidator of the failed Scheme member for any compensation that has been paid out to insured depositors; or
in any other case, to be reimbursed by the failed Scheme member or the provisional liquidator of the failed Scheme member, as the case may be, for the expenses incurred in —
the payment of any compensation to insured depositors; and
where a claim has been lodged with the provisional liquidator of the failed Scheme member for any compensation that has been paid out to insured depositors, the lodging of the claim.[HK DPS Ord 2004, s. 38]
Recovery of compensation paid in excess or wrongly paid
If —
any compensation paid to, or for the benefit of, an insured depositor out of the Fund is in excess of what ought to have been paid to the insured depositor under this Act; or
any compensation is wrongly paid to any person,the Agency may recover the amount paid in excess or wrongly paid from the person who received the compensation paid out by the Agency in such manner and within such period as may be specified by the Agency to that person.
Without prejudice to any other remedy, any amount paid in excess or wrongly paid to any person shall be recoverable as a debt due to the Agency by that person.
Upon the recovery of any amount paid in excess or wrongly paid from any person under this section, the Agency shall pay such amount into the Fund.[HK DPS Ord 2004, s. 37]
Insured Deposit
FIRST SCHEDULESection 2Insured DepositIn this Act, “insured deposit” means —
any of the following deposits in Singapore dollars, placed with a Scheme member in any of its branches in Singapore:
a deposit in a savings account;
a deposit in a fixed deposit account;
a deposit in a current account;
a deposit under the Supplementary Retirement Scheme,including any accrued interest for each of the deposits specified in sub-paragraphs (i) to (iv);
any moneys denominated in Singapore dollars, placed with a Scheme member under the CPFIS; and
any other type of moneys placed with a Scheme member as may be prescribed by the Authority,but does not include —
any structured deposit as defined in the Financial Advisers Act (Cap. 110);
any deposit which is pledged, charged or secured as collateral; and
in a case where there is a contractual set-off agreement between a Scheme member and a depositor, any deposit or part thereof placed with the Scheme member which is set aside in respect of any debt owing by the depositor to that Scheme member, and such deposit or part thereof which has been set aside cannot be withdrawn by the depositor unless and until the debt is fully paid up.
Financial Provisions With Respect to Fund
SECOND SCHEDULESection 47Financial Provisions With Respect to FundFinancial year
1. The financial year of the Fund shall begin on 1st April of every year and end on 31st March of the following year, except that the first financial year of the Fund shall begin on 18th October 2005 and end on 31st March of the following year.Accounts of Fund
2. The Agency shall —
keep or cause to be kept proper accounts and records of the transactions and affairs in respect of the Fund; and
after the close of each financial year prepare financial statements in respect of the Fund for that year.Auditor
3. The accounts shall be audited by the Auditor-General or such other auditor as may be appointed annually by the Agency in consultation with the Auditor-General.Appointment of auditor
4. A person shall not be qualified for appointment as an auditor under paragraph 3 unless he is a public accountant who is registered or deemed to be registered under the Accountants Act (Cap. 2).Remuneration of auditor
5. The remuneration of the auditor shall be paid out of the Fund.Duties of auditor
6. The auditor shall in his report state —
whether the financial statements show fairly the financial transactions and the state of affairs of the Fund;
whether proper accounting and other records have been kept, including records of all assets of the Fund, whether purchased, donated or otherwise;
whether the receipts, expenditure and investment of moneys by the Fund during the financial year were in accordance with the provisions of this Act; and
such other matters arising from the audit as he considers necessary.Auditor’s report
7. The auditor shall, as soon as practicable after the accounts have been submitted for audit, send a report of his audit to the Agency. He shall also submit such periodical and special reports to the Minister and to the Agency as may appear to him to be necessary or as the Minister or the Agency may require.Powers of auditor8.—
The auditor or any person authorised by him shall be entitled at all reasonable times to full and free access to all accounting and other records relating, directly or indirectly, to the financial transactions of the Fund, and may make copies of or extracts from any such accounting and other records.
The auditor or any person authorised by him may require any person to furnish him with such information in the possession of that person or to which that person has access as the auditor considers necessary for the purposes of his functions under this Act.Penalty for obstructing auditor
9. Any person who fails, without reasonable excuse, to comply with any requirement of the auditor under paragraph 8(2) or who otherwise hinders, obstructs or delays the auditor in the performance of his duties or the exercise of his powers shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $4,000.Presentation of audited financial statements and auditor’s report
10. The Agency shall, as soon as the financial statements have been audited in accordance with the provisions of this Act, submit a copy of the audited financial statements, together with a copy of the auditor’s report, to the Minister.Copy of auditor’s report for Auditor-General
11. Where the Auditor-General is not the auditor of the Fund, the Agency shall cause to be sent to the Auditor-General a copy of the audited financial statements and any report made by the auditor at the same time they are submitted to the Minister.
Financial Provisions With Respect to Agency
THIRD SCHEDULESection 48Financial Provisions With Respect to AgencyFinancial year
1. The financial year of the Agency shall comprise such period as may be specified in the memorandum and articles of association of the Agency.Accounts of Agency
2. The Agency shall keep proper accounts and records of its transactions and affairs and shall do all things necessary to ensure that all payments out of its moneys are properly authorised and correctly made and that adequate control is maintained over the assets of, or in the custody of, the Agency and over the expenditure incurred by the Agency.Auditor
3. The accounts of the Agency shall be audited by the Auditor-General or such other auditor as may be appointed annually by the Agency in consultation with the Auditor-General.Appointment of auditor
4. A person shall not be qualified for appointment as an auditor under paragraph 3 unless he is a public accountant who is registered or deemed to be registered under the Accountants Act (Cap. 2).Remuneration of auditor
5. The remuneration of the auditor shall be paid out of the Fund.Annual financial statements
6. The Agency shall, as soon as practicable after the close of each financial year, prepare and submit financial statements in respect of that year to the auditor of the Agency.Duties of auditor
7. The auditor shall in his report state —
whether the financial statements show fairly the financial transactions and the state of affairs of the Agency;
whether proper accounting and other records have been kept, including records of all assets of the Agency, whether purchased, donated or otherwise;
whether the receipts, expenditure and investment of moneys and the acquisition and disposal of assets by the Agency during the financial year were in accordance with the provisions of this Act; and
such other matters arising from the audit as he considers necessary.Auditor’s report
8. The auditor shall, as soon as practicable after the accounts have been submitted for audit, send a report of his audit to the Agency. He shall also submit such periodical and special reports to the Minister and to the Agency as may appear to him to be necessary or as the Minister or the Agency may require.Powers of auditor9.—
The auditor or any person authorised by him shall be entitled at all reasonable times to full and free access to all accounting and other records relating, directly or indirectly, to the financial transactions of the Agency and may make copies of or extracts from any such accounting and other records.
The auditor or any person authorised by him may require any person to furnish him with such information in the possession of that person or to which that person has access as the auditor considers necessary for the purposes of his functions under this Act.Penalty for obstructing auditor
10. Any person who fails, without reasonable excuse, to comply with any requirement of the auditor under paragraph 9(2) or who otherwise hinders, obstructs or delays the auditor in the performance of his duties or the exercise of his powers shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $4,000.Presentation of audited financial statements and auditor’s report
11. The Agency shall, as soon as the financial statements have been audited in accordance with the provisions of this Act, submit a copy of the audited financial statements, together with a copy of the auditor’s report, to the Minister.Copy of auditor’s report for Auditor-General
12. Where the Auditor-General is not the auditor of the Agency, the Agency shall cause to be sent to the Auditor-General a copy of the audited financial statements and any report made by the auditor at the same time they are submitted to the Minister.
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