Securities and Futures Act 2001 · 2020 Revised Edition · Part 13 · Offers of Investments
305. Offer made to accredited investors and certain other persons
Feedback & supportLast amended by an amending law of 2017. 2 amendments in all.
Except to such extent and with such modifications as the Authority may prescribe, Subdivisions (2) and (3) of this Division do not apply to an offer of units in a collective investment scheme (called in this section a restricted scheme), where the offer is made to a relevant person, if the conditions in subsection (3) are satisfied.
Except to such extent and with such modifications as the Authority may prescribe, Subdivisions (2) and (3) of this Division do not apply to an offer of units in a collective investment scheme (also called in this section a restricted scheme) to a person who acquires the units as principal if the offer is on terms that the units may only be acquired at a consideration of not less than $200,000 (or its equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange of units in a collective investment scheme, securities, securities‑based derivatives contracts or other assets, and if the conditions in subsection (3) are satisfied.
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 conditions referred to in subsections (1) and (2) are —
the offer is not 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 the 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 the offer 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.
[Deleted by Act 2 of 2009]
In this section —
“advertisement” means —
a written or printed communication;
a communication by radio, television or other medium of communication; or
a communication by means of a recorded telephone message,that is published in connection with an offer of units in a collective investment scheme, but does not include —
an information memorandum;
a publication which consists solely of a disclosure, notice or report required under this Act, or any listing rules or other requirements of an approved exchange or overseas exchange, which is made by any person; or
approved exchange
“approved exchange” means a corporation that is approved by the Authority under section 9(1)(a) as an approved exchange;
a publication which consists solely of a notice or report of a meeting or proposed meeting of the participants of the collective investment scheme, or a general meeting or proposed general meeting of the person making the offer, the responsible person or any entity, or a presentation of oral or written material on matters so contained in the notice or report at the meeting or general meeting;
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;
“information memorandum” means a document —
purporting to describe the units in a collective investment scheme being offered; and
purporting to have been prepared for delivery to and review by relevant persons and persons to whom an offer referred to in subsection (2) is to be made so as to assist them in making an investment decision in respect of the units being offered;
“relevant person” means —
an accredited investor;
a corporation the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor;
corporation
“corporation” has the meaning given by section 4(1) of the Companies Act 1967;
a trustee of a trust the sole purpose of which is to hold investments and each beneficiary of which is an individual who is an accredited investor;
an officer or equivalent person of the person making the offer (such person being an entity) or a spouse, parent, brother, sister, son or daughter of that officer or equivalent person; or
officer
“officer” has the meaning given by section 4(1) of the Companies Act 1967;
a spouse, parent, brother, sister, son or daughter of the person making the offer (such person being an individual).
Despite any requirement under section 99 or any regulations made thereunder that a person has to deal in capital markets products that are units in a collective investment scheme for the person’s own account with or through a person prescribed by the Authority so that the firstmentioned person can qualify as an exempt person, a person who acquires units in a collective investment scheme under section 304 or this section for the person’s own account without complying with such requirement is considered an exempt person even though the person does not comply with that requirement.
capital markets products
“capital markets products” means any securities, units in a collective investment scheme, derivatives contracts, spot foreign exchange contracts for the purposes of leveraged foreign exchange trading, and such other products as the Authority may prescribe as capital markets products;
The Authority may, by order in the Gazette, specify an amount in substitution of any amount specified in subsection (2).