Securities and Futures Act 2001 · 2020 Revised Edition · Part 13 · Offers of Investments
302C. Private placement
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Subdivisions (2) and (3) of this Division do not apply to offers of units in a collective investment scheme that are made by a person if —
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 offers are made to no more than 50 persons within any period of 12 months;
none of the offers is accompanied by an advertisement making an offer or calling attention to the offer or intended offer;
no selling or promotional expenses are paid or incurred in connection with each offer other than those incurred for administrative or professional services, or by way of commission or fee for services rendered by any of the persons specified in section 302B(1)(d)(i), (ii), (iii), (iv), (v) and (vi); and
no prospectus in respect of any of the offers has been registered by the Authority or, where a prospectus has been registered —
the prospectus has expired pursuant to section 299; or
the person making the offer has before making the offer —
informed the Authority by written notice of its intent to make the offer in reliance on the exemption under this subsection; and
taken reasonable steps to inform in writing the person to whom the offer is made that the offer is made in reliance on the exemption under this subsection.
The Authority may prescribe such other number of persons in substitution for the number specified in subsection (1)(a).
In determining whether offers of units in a collective investment scheme by a person are made to no more than the applicable number of persons specified in subsection (1)(a) within a period of 12 months, each person to whom —
an offer of units in the same collective investment scheme is made by the firstmentioned person; or
an offer of units in a collective investment scheme, securities or securities‑based derivatives contracts is made by the firstmentioned person or another person where such offer is a closely related offer,(if any) within that period in reliance on the exemption under this section or section 272B must be included.
Whether an offer is a closely related offer under subsection (3) is determined by considering such factors as the Authority may prescribe.
For the purposes of subsection (1) —
an offer of units in a collective investment scheme to an entity or to a trustee is treated as an offer to a single person, provided that the entity or trust is not formed primarily for the purpose of acquiring the units which are the subject of the offer;
an offer of units in a collective investment scheme to an entity or to a trustee is treated as an offer to the equity owners, partners or members of that entity, or to the beneficiaries of the trust (as the case may be) if the entity or trust is formed primarily for the purpose of acquiring the units which are the subject of the offer;
an offer of units in a collective investment scheme to 2 or more persons who will own the units acquired as joint owners is treated as an offer to a single person;
an offer of units in a collective investment scheme to a person acting on behalf of another person (whether as an agent or otherwise) is treated as an offer made to that other person;
offers of units in a collective investment scheme made by a person as an agent of another person are treated as offers made by that other person;
where an offer of units in a collective investment scheme is made to a person with a view to another person acquiring an interest in those units by virtue of section 4, only the second‑mentioned person is counted for the purposes of determining whether offers of the units are made to no more than the applicable number of persons specified in subsection (1)(a); and
where —
an offer of units in a collective investment scheme is made to a person in reliance on the exemption under subsection (1) with a view to those units being subsequently offered for sale to another person; and
that subsequent offer —
is not made in reliance on an exemption under any provision of this Subdivision; or
is made in reliance on an exemption under subsection (1) or section 305C,both persons are counted for the purposes of determining whether offers of the units are made to no more than the applicable number of persons specified in subsection (1)(a).
In subsection (1)(b), “advertisement” has the meaning given by section 302B(10).