Securities and Futures Act 2001 · 2020 Revised Edition · Part 13 · Offers of Investments
301. Issue of units where prospectus indicates application to list on approved exchange
Feedback & supportLast amended by an amending law of 2017. 2 amendments in all.
Where a prospectus states or implies that application has been or will be made for permission for the units in a collective investment scheme offered thereby to be listed for quotation on any approved exchange, and —
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 permission is not applied for in the form required by the approved exchange within 3 days from the date of the issue of the prospectus; or
the permission is not granted before the expiration of 6 weeks from the date of the issue of the prospectus or such longer period not exceeding 12 weeks from the date of the issue as is, within those 6 weeks, notified to the applicant by or on behalf of the approved exchange,then —
any issue whenever made of units made on an application pursuant to the prospectus is void; and
any person who continues to issue such units after the period specified in paragraph (a) or (b) 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.
Where the permission has not been applied for, or has not been granted as mentioned under subsection (1), applications for units in the collective investment scheme have been made and —
the contributions of the applicants to the scheme have not yet been invested in accordance with the scheme —
in a case where units in the scheme have not been issued to the applicants, the responsible person for the scheme must treat such applications as having been withdrawn; or
in a case where units in the scheme have been issued to the applicants, the issue of the units is deemed to be void,and the responsible person must within 7 days after the period specified in subsection (1)(a) or (b), whichever is applicable, 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 the responsible 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 responsible person for the scheme as it deems fit, including a direction that the responsible person provide the applicants with an option, on such terms as the Authority may approve, to obtain from the responsible 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 (2)(b) to the responsible person to refund the contributions of the applicants, the Authority must consider whether the responsible person for the collective investment 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.
Any responsible person who contravenes subsection (2) or any of the directions issued 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.
Any responsible person to whom a notice is given under subsection (2) must comply with such direction as may be contained in the notice.
It is not necessary to publish any direction issued under subsection (2) in the Gazette.
All moneys received from applicants as payment for the units, including contributions to the scheme and charges which the applicants have paid to the responsible person, its agent, or any person through whom the applicant has applied for the units, must be kept in a separate bank account so long as the responsible person for the collective investment scheme may become liable to repay it under subsection (2).
Any responsible person for a scheme which is not in compliance with subsection (7) and, where the scheme is a corporation, every officer thereof, shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000 or to imprisonment for a term not exceeding 12 months or to both and, in the case of a continuing offence, to a further fine not exceeding $5,000 for every day or part of a day during which the offence continues after conviction.
corporation
“corporation” has the meaning given by section 4(1) of the Companies Act 1967;
Where the approved exchange has, within the period specified in subsection (1)(b), granted permission subject to compliance with such requirements as may be specified by the approved exchange, permission is deemed to have been granted by the approved exchange if —
approved exchange
“approved exchange” means a corporation that is approved by the Authority under section 9(1)(a) as an approved exchange;
in a case where the responsible person for the scheme is a corporation, the directors of the corporation; or
in a case where the responsible person for the scheme is not a corporation, such persons as may be required by the approved exchange,have given to the approved exchange an undertaking in writing to comply with the requirements of the approved exchange.
Any person who fails to comply with any undertaking given to an approved exchange under subsection (9) 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 of a day during which the offence continues after conviction.
A person must not issue a prospectus inviting persons to subscribe for or purchase units in a collective investment scheme if it includes —
a false or misleading statement that permission has been granted for those units to be listed for quotation on, dealt in or quoted on any approved exchange; or
any statement in any way referring to any such permission or to any application or intended application for any such permission, or to listing for quotation on, dealing in or quoting the units on any approved exchange, or to any requirements of an approved exchange, unless that statement is or is to the effect that permission has been granted or that application has been or will be made to the approved exchange within 3 days from the date of issue of the prospectus or the statement has been approved by the Authority for inclusion in the prospectus.
Any person who contravenes subsection (11) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000 or to imprisonment for a term not exceeding 12 months or to both and, in the case of a continuing offence, to a further fine not exceeding $5,000 for every day or part of a day during which the offence continues after conviction.
Where a prospectus contains a statement to the effect that the constituent documents for the collective investment scheme comply, or have been drawn so as to comply, with the requirements of any approved exchange, the prospectus is, unless the contrary intention appears from the prospectus, deemed for the purposes of subsection (11)(b) to be a prospectus that includes a statement that application has been, or will be, made for permission for the units to which the prospectus relates, to be listed for quotation on the approved exchange.