Clause 25

This section applies to all individuals whether resident in Singapore or not and whether citizens of Singapore or not, and to all bodies corporate or unincorporate, whether incorporated or carrying on business in Singapore or not.(2) No person shall enter into any arrangement in relation to shares in a licensed financial adviser that is a company by virtue of which he would, if the arrangement is carried out, obtain effective control of the licensed financial adviser, unless he has obtained the prior approval of the Authority to his entering into the arrangement.(3) An application for the Authority’s approval under subsection (2) shall be made in writing, and the Authority may approve the application if the Authority is satisfied that —

the applicant is a fit and proper person to have effective control of the licensed financial adviser;

having regard to the applicant’s likely influence, the licensed financial adviser is likely to continue to conduct its business prudently and comply with the provisions of this Act and directions made thereunder; and

the applicant satisfies such other criteria as may be prescribed or as may be specified in written directions by the Authority.(4) Any approval under subsection (3) may be granted to the applicant subject to such conditions as the Authority may determine, including any condition —

restricting his disposal or further acquisition of shares or voting power in the licensed financial adviser; or

restricting his exercise of voting power in the licensed financial adviser,and the applicant shall comply with such conditions.(5) Any condition imposed under subsection (4) shall have effect notwithstanding any provision of the Companies Act (Cap. 50) or anything contained in the memorandum or articles of association of the licensed financial adviser.(6) For the purposes of this section and section 57B —

a reference to a person entering into an arrangement in relation to shares includes —

entering into an agreement or any formal or informal scheme, arrangement or understanding, to acquire those shares;

making or publishing a statement, however expressed, that expressly or impliedly invites the holder of those shares to offer to dispose of his shares to the first person;

the first person obtaining a right to acquire shares under an option, or to have shares transferred to himself or to his order, whether the right is exercisable presently or in the future and whether on fulfilment of a condition or not; and

becoming a trustee of a trust in respect of those shares;

a person shall be regarded as obtaining effective control of a licensed financial adviser by virtue of an arrangement if the person alone or acting together with any connected person would, if the arrangement is carried out —

acquire or hold, directly or indirectly, 20% or more of the issued share capital of the licensed financial adviser; or

control, directly or indirectly, 20% or more of the voting power in the licensed financial adviser; and

a reference to the voting power in the licensed financial adviser is a reference to the total number of votes that may be cast in a general meeting of the licensed financial adviser.(7) Any person who contravenes subsection (2) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $75,000 or to imprisonment for a term not exceeding 3 years or to both.(8) Any person who contravenes subsection (4) shall be guilty of an offence.Objection to control of licensed financial adviser57B.—

The Authority may serve a written notice of objection on —

any person required to obtain the Authority’s approval or who has obtained the approval under section 57A; or

any person who, whether before, on or after the date of commencement of this section, either alone or together with any connected person, holds, directly or indirectly, 20% or more of the issued share capital of the licensed financial adviser or controls, directly or indirectly, 20% or more of the voting power in the licensed financial adviser,if the Authority is satisfied that —

any condition of approval imposed on the person under section 57A(4) has not been complied with;

the person is not or ceases to be a fit and proper person to have effective control of the licensed financial adviser;

having regard to the likely influence of the person, the licensed financial adviser is not able to or is no longer likely to conduct its business prudently or to comply with the provisions of this Act or any direction made thereunder;

the person does not or ceases to satisfy such criteria as may be prescribed;

the person has furnished false or misleading information or documents in connection with an application under section 57A; or

the Authority would not have granted its approval under section 57A had it been aware, at that time, of circumstances relevant to the person’s application for such approval.(2) The Authority shall not serve a notice of objection on any person without giving the person an opportunity to be heard, except in the following circumstances:

the person is in the course of being wound up or otherwise dissolved or, in the case of an individual, is an undischarged bankrupt whether in Singapore or elsewhere;

a receiver, a receiver and manager, a judicial manager or an equivalent person has been appointed, whether in Singapore or elsewhere, in relation to or in respect of any property of the person;

a prohibition order under section 59 has been made by the Authority, and remains in force, against the person;

the person has been convicted, whether in Singapore or elsewhere, of any offence involving fraud or dishonesty or the conviction for which involved a finding that the person had acted fraudulently or dishonestly.(3) The Authority shall, in any written notice of objection, specify a reasonable period within which the person to be served the written notice of objection shall —

take such steps as are necessary to ensure that he ceases to be a party to the arrangement described in section 57A(2) or ceases to have control of a licensed financial adviser in the manner described in subsection (1)(b); or

comply with such other requirements as the Authority may specify in written directions.(4) Any person served with a notice of objection under this section shall comply with the notice.(5) Any person who contravenes subsection (4) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $75,000 or to imprisonment for a term not exceeding 3 years or to both.”.