Securities and Futures Act 2001 · 2020 Revised Edition · Part 13 · Offers of Investments
297. Stop order for prospectus and profile statement
Feedback & supportLast amended by an amending law of 2017. 2 amendments in all.
If a prospectus has been registered and —
the Authority is of the opinion that the prospectus contains a false or misleading statement;
there is an omission from the prospectus of any information that is required to be included, or an inclusion in the prospectus of any information that is prohibited, by virtue of requirements prescribed under section 296;
the Authority is of the opinion that the prospectus does not comply with the requirements of this Act; or
the Authority is of the opinion that it is in the public interest to do so,the Authority may by a written order (called in this section a stop order) served on the person making the offer of units in a collective investment scheme to which the prospectus relates, direct that no or no further units in the scheme be issued or sold.
If a profile statement has been registered and —
the Authority is of the opinion that the profile statement contains a false or misleading statement;
there is an omission from the profile statement of any information that is required to be included, or an inclusion in the profile statement of any information that is prohibited, by virtue of requirements prescribed under section 296;
the Authority is of the opinion that the profile statement does not comply with the requirements of this Act; or
the Authority is of the opinion that it is in the public interest to do so,the Authority may by a written order (called in this section a stop order) served on the person making the offer of units in a collective investment scheme to which the profile statement relates, direct that no or no further units in the scheme be issued or sold.
If —
a prospectus or a profile statement has been registered;
the prospectus or profile statement relates to units in a collective investment scheme recognised under section 287; and
the Authority is of the opinion that it is necessary to stop the person making the offer of units in the scheme from issuing or selling units in the scheme to give effect to an arrangement relating to cross‑border offers of collective investment schemes to which Singapore or the Authority is a party,the Authority may serve a written order (called in this section a stop order) on the person making the offer of units in the scheme directing that no or no further units in the scheme be issued or sold.
The Authority must not serve a stop order under subsection (1), (2) or (2A) if —
any of the units in a collective investment scheme to which the prospectus or profile statement relates —
has been issued or sold; and
has been listed for quotation on an approved exchange; and
trading in any of the units in the collective investment scheme mentioned in paragraph (a) has commenced.
The Authority must not serve a stop order under subsection (1), (2) or (2A) without giving the person making the offer of units in the collective investment scheme an opportunity to be heard, except that an opportunity to be heard need not be given if the stop order is served on the ground that it is in the public interest to do so on the basis of any of the following circumstances:
collective investment scheme
“collective investment scheme” means —(a)an arrangement in respect of any property —(i)under which the participants do not have day‑to‑day control over the management of the property, whether or not the participants have the right to be consulted or to give directions in respect of such management;(ii)under which either or both of the following characteristics are present:(A)the property is managed as a whole by or on behalf of a manager;(B)the contributions of the participants, and the profits or income out of which payments are to be made to the participants, are pooled; and(iii)under which either or both of the following characteristics are present:(A)the effect of the arrangement is to enable the participants (whether by acquiring any right, interest, title or benefit in the property or any part of the property or otherwise) —(AA)to participate in or receive profits, income, or other payments or returns arising from the acquisition, holding, management, disposal, exercise, redemption or expiry of, any right, interest, title or benefit in the property or any part of the property; or(AB)to receive sums paid out of such profits, income, or other payments or returns;(B)the purpose, purported purpose or purported effect of the arrangement is to enable the participants (whether by acquiring any right, interest, title or benefit in the property or any part of the property or otherwise) —(BA)to participate in or receive profits, income, or other payments or returns arising from the acquisition, holding, management, disposal, exercise, redemption or expiry of, any right, interest, title or benefit in the property or any part of the property; or(BB)to receive sums paid out of such profits, income, or other payments or returns,whether or not —(BC)the arrangement provides for the participants to receive any benefit other than those set out in sub‑paragraph (BA) or (BB) in the event that the purpose, purported purpose or purported effect is not realised; or(BD)the purpose, purported purpose or purported effect is realised; or(b)an arrangement which is an arrangement, or is of a class or description of arrangements, specified by the Authority as a collective investment scheme by notice in the Gazette,but does not include —(c)an arrangement operated by a person otherwise than by way of business;(d)an arrangement under which each of the participants carries on a business other than investment business and enters into the arrangement solely incidental to that other business;(e)an arrangement under which each of the participants is a related corporation of the manager;(f)an arrangement made by or on behalf of an entity solely for the benefit of persons, each of whom is —(i)a bona fide director or equivalent person, a former director or equivalent person, a consultant, an adviser, an employee or a former employee of that entity or, where that entity is a corporation, a related corporation of that entity; or(ii)a spouse, widow or widower, or a child, adopted child or stepchild below 18 years of age, of such director or equivalent person, former director or equivalent person, employee or former employee;(g)an arrangement made by or on behalf of 2 or more entities solely for the benefit of persons, each of whom is —(i)a bona fide director or equivalent person, a former director or equivalent person, a consultant, an adviser, an employee or a former employee of any of those entities or, where any of those entities is a corporation, a related corporation of the entity which is a corporation; or(ii)a spouse, widow or widower, or a child, adopted child or stepchild below 18 years of age, of such director or equivalent person, former director or equivalent person, employee or former employee;(h)a franchise;(i)an arrangement under which money received by an advocate and solicitor from his or her client, whether as a stakeholder or otherwise, acting in his or her professional capacity in the ordinary course of his or her practice, or under which money is received by a statutory body as a stakeholder in the carrying out of its statutory functions;(j)an arrangement made by any co‑operative society registered under the Co‑operative Societies Act 1979 in accordance with the objects thereof solely for the benefit of its members;(k)an arrangement made for the purposes of any chit fund permitted to operate under the Chit Funds Act 1971;(l)an arrangement arising out of a life policy within the meaning of the Insurance Act 1966;(m)a closed‑end fund constituted either as an entity, a sub‑fund or a trust;(n)an arrangement under which the whole amount of each participant’s contribution is a deposit as defined in section 4B of the Banking Act 1970;(o)an arrangement of which —(i)the predominant purpose is to enable the participants to share in the use or enjoyment of the property or to make its use or enjoyment available gratuitously to others; and(ii)the property does not consist of any of the following:(A)any currency of any country or territory;(B)any capital markets products;(C)any policy as defined in the First Schedule to the Insurance Act 1966;(D)any deposit as defined in section 4B of the Banking Act 1970;(E)any credit facilities as defined in section 2(1) of the Banking Act 1970;(p)an arrangement which is an arrangement, or is of a class or description of arrangements, specified by the Authority as not constituting a collective investment scheme by notice in the Gazette;
the person making the offer (being an entity), the responsible person or the collective investment scheme itself, is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere;
the person making the offer (being an individual) is an undischarged bankrupt, whether in Singapore or elsewhere;
a receiver, a receiver and 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 making the offer (being an entity), the responsible person or the collective investment scheme.
Where applications for units in a collective investment scheme have been made prior to the service of a stop order, and —
the contributions of the applicants to the scheme have not yet been invested in accordance with the scheme —
where units in the scheme have not been issued to the applicants, the applications are deemed to have been withdrawn and cancelled; or
where units in the scheme have been issued to the applicants, the issue of the units is deemed to be void,and the person making the offer of units in the scheme must, within 7 days from the date of the stop order, pay to the applicants all moneys which the applicants have paid for the units, including contributions to the scheme and charges the applicants have paid to that person, its agent, or any person through whom the applicant has applied for the units; or
the contributions of the applicants to the scheme have been invested in accordance with the scheme, the Authority may by written notice issue such directions to the person making the offer of units in the scheme as it deems fit, including a direction that the person provide the applicants with an option, on such terms as the Authority may approve, to obtain from that person a refund of all moneys contributed by the applicants or to redeem their units in accordance with the scheme.
In determining whether to issue a direction under subsection (4) to the person making the offer of units in the collective investment scheme to refund the contributions of the applicants, the Authority must consider whether the responsible person for the scheme will be able to liquidate the property of the scheme without material adverse financial effect to the applicants, and for this purpose, the factors which the Authority may take into account include —
responsible person
“responsible person”, in relation to a collective investment scheme, means —(a)in the case of a scheme that is constituted as a VCC or a sub‑fund — the VCC;(b)in the case of a scheme that is constituted as a corporation other than a VCC — the corporation; or(c)in the case of any other scheme — the manager for the scheme;
whether a significant amount of the contributions of the participants has been invested;
the liquidity of the property of the scheme; and
the penalties (if any) payable for liquidating the property.
It is not necessary to publish any direction issued under subsection (4) in the Gazette.
If the Authority is of the opinion that any delay in serving a stop order pending the hearing required under subsection (3) is not in the interests of the public, the Authority may, without giving the person making the offer of units in the collective investment scheme an opportunity to be heard, serve an interim stop order on such person directing that no or no further units in a collective investment scheme to which the prospectus or profile statement relates be issued or sold.
An interim stop order, unless revoked, is in force —
in a case where —
it is served during a hearing under subsection (3); or
a hearing under subsection (3) is commenced while it is in force,until the Authority makes an order under subsection (1), (2) or (2A); or
in any other case, for a period of 14 days from the day on which the interim stop order is served.
Subsection (4) does not apply where only an interim stop order has been served.
Any person who fails to comply with a stop order served under subsection (1), (2) or (2A) or an interim stop order served under subsection (7) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 or to imprisonment for a term not exceeding 2 years or to both and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part of a day during which the offence continues after conviction.
Any person who contravenes subsection (4), or any direction issued to the person under that subsection, 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 of a day during which the offence continues after conviction.
For the purposes of subsections (1)(a) and (2)(a), any reference to a statement includes a reference to any information presented, regardless of whether such information is in text or otherwise.