Securities and Futures Bill

an individual whose net personal assets exceed $5 million or its equivalent in value in foreign currencies; or

a corporation with net assets exceeding $10 million in value or its equivalent in value in foreign currencies as determined in accordance with the most recent audited balance-sheet of the corporation, or in the case of a corporation which is not required to prepare audited accounts, a balance-sheet certified by the corporation to give a true and fair view of the state of affairs of the corporation as at the end of the period to which it relates;

the exchange holding company, securities exchange, futures exchange, recognised trading system provider or clearing house and its members; and

other persons in relation to it,whether or not those rules, regulations, by-laws or similar body of statements are made by the exchange holding company, securities exchange, futures exchange, recognised trading system provider or clearing house or are contained in its constituent documents, but does not include the listing rules of a securities exchange or recognised trading system provider (which is an overseas securities exchange);

an arrangement in respect of any property —

under which —

the participants do not have day-to-day control over the management of the property, whether or not they have the right to be consulted or to give directions in respect of such management; and

the property is managed as a whole by or on behalf of a manager;

under which the contributions of the participants and the profits or income from which payments are to be made to them are pooled; and (iii)the purpose or effect, or purported purpose or effect, of which 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) —

to participate in or receive profits, income, or other payments or returns arising from the acquisition, holding, management or disposal of, the exercise of, the redemption of, or the expiry of, any right, interest, title or benefit in the property or any part of the property; or

to receive sums paid out of such profits, income, or other payments or returns; or

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 published in the Gazette,but does not include —

an arrangement operated by a person otherwise than by way of business;

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;

an arrangement under which each of the participants is a related corporation of the manager;

an arrangement under which each of the participants is a bona fide employee or former employee of a corporation in the same group of related corporations as the manager, or a spouse, widow, widower, minor child (natural or adopted) or minor step-child of such employee or former employee;

a franchise;

an arrangement under which money received by an advocate and solicitor from his client, whether as a stakeholder or otherwise, acting in his professional capacity in the ordinary course of his practice, or under which money is received by a statutory body as a stakeholder in the carrying out of its statutory functions;

an arrangement made by any co-operative society registered under the Co-operative Societies Act (Cap. 62) in accordance with the objects thereof for the benefit of its members;

an arrangement made for the purposes of any chit fund permitted to operate under the Chit Funds Act (Cap. 39);

an arrangement arising out of a life policy within the meaning of the Insurance Act (Cap. 142);

a closed-end fund constituted in Singapore;

a closed-end fund constituted outside Singapore and listed on a securities exchange; or

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 published in the Gazette;

a financial instrument; or

gold, all classes of oil or such other item, good, article, service, right or interest, which is the subject of a futures contract, as the Authority may by order prescribe;

an individual, means —

the individual’s spouse, son, adopted son, step-son, daughter, adopted daughter, step-daughter, father, step-father, mother, step-mother, brother, step-brother, sister or step-sister; and

a firm or a corporation in which the individual or any of the persons mentioned in sub-paragraph (i) has control of not less than 20% of the voting power in the firm or corporation, whether such control is exercised individually or jointly; or

a firm or a corporation, means another firm or corporation in which the first-mentioned firm or corporation has control of not less than 20% of the voting power in that other firm or corporation,and a reference in this Act to a person connected to another person shall be construed accordingly;

for the purposes of Part V, a person on whose behalf a holder of a capital markets services licence carries on any regulated activity or any other person that the holder enters or will enter into transactions with as principal for the sale or purchase of securities or futures contracts, but does not include such person or class of persons as may be prescribed;

for the purposes of any other provision in this Act, a person on whose behalf a holder of a capital markets services licence carries on any regulated activity;

a cheque, letter of credit, order for the payment of money or bill of exchange; or

for the purposes of the application of this definition to a provision of this Act in respect of which any regulations made thereunder provide that the word “debenture” does not include a prescribed document or a document included in a prescribed class of documents, that document or a document included in that class of documents, as the case may be;

a party (referred to in this definition as the franchisor) to the agreement or arrangement (not being a collective investment scheme) authorises or permits another party (referred to in this definition as the franchisee), or a person associated with the franchisee, to exercise the right to engage in the business of offering, selling or distributing goods or services in Singapore under a plan or system controlled by the franchisor or a person associated with the franchisor;

the business carried on by the franchisee or the person associated with the franchisee, as the case may be, is capable of being identified by the public as being substantially associated with a trade or service mark, logo, symbol or name identifying, commonly connected with or controlled by the franchisor or a person associated with the franchisor;

the franchisor exerts, or has authority to exert, a significant degree of control over the method or manner of operation of the franchisee’s business;

the franchisee or a person associated with the franchisee is required under the agreement or arrangement to make payment or give some other form of consideration to the franchisor or a person associated with the franchisor; and

the franchisor agrees to communicate to the franchisee, or a person associated with the franchisee, knowledge, experience, expertise, know-how, trade secrets or other information whether or not it is proprietary or confidential;

one party agrees to deliver a specified commodity, or a specified quantity of a specified commodity, to another party at a specified future time and at a specified price payable at that time pursuant to terms and conditions set out in the business rules or practices of a futures exchange, recognised trading system provider or futures market; or

the parties will discharge their obligations under the contract by settling the difference between the value of a specified quantity of a specified commodity agreed at the time of the making of the contract and at a specified future time, such difference being determined in accordance with the business rules or practices of a futures exchange, recognised trading system provider or futures market at which the contract is made,and includes a futures option transaction;

the admission to the official list of the corporation or overseas securities exchange, of corporations, governments, bodies unincorporate or other persons for the purpose of the quotation on the securities market of the corporation or overseas securities exchange of securities issued, or made available by such corporations, governments, bodies unincorporate or other persons, or the removal from that official list and for other purposes; or

the activities or conduct of corporations, governments, bodies unincorporate and other persons who are admitted to that list,whether those rules are made —

by the corporation or overseas securities exchange or are contained in any of the constituent documents of the corporation or overseas securities exchange; or (ii)by another person and adopted by the corporation or overseas securities exchange;

Finance Companies Act (Cap. 108);

Financial Advisers Act 2001;

Insurance Act (Cap. 142);

Monetary Authority of Singapore Act (Cap. 186);

Money-changing and Remittance Businesses Act (Cap. 187); or

such other written law as the Authority may by order prescribe;

debentures or stocks issued or proposed to be issued by a government;

debentures, stocks or shares issued or proposed to be issued by a corporation or body unincorporate;

any right, option or derivative in respect of any such debentures, stocks or shares;

any right under a contract for differences or under any other contract the purpose or pretended purpose of which is to secure a profit or avoid a loss by reference to fluctuations in —

the value or price of any such debentures, stocks or shares;

the value or price of any group of any such debentures, stocks or shares; or

an index of any such debentures, stocks or shares; or

any unit in a collective investment scheme,but does not include —

futures contracts;

bills of exchange;

promissory notes; or

certificates of deposit issued by a bank or finance company whether situated in Singapore or outside Singapore;

an offer for the acquisition by or on behalf of a person of —

some or all of the shares in a public company or some or all of the shares of a particular class in a public company, made to all members of the company, or where the person already holds shares in the company, made to all other members of the company; or

all of the remaining shares in a public company made to all other members of the company as a result of the person acquiring or consolidating effective control of that company within the meaning of the Take-over Code; or

a proposed compromise or arrangement referred to in section 210 of the Companies Act that if executed would result in a change in effective control of the public company concerned within the meaning of the Take-over Code;

the promotion, formation, membership, control, business, trading, transactions and dealings (whether alone or jointly with another person or other persons and including transactions and dealings as agent, bailee or trustee), property (whether held alone or jointly with another person or other persons and including property held as agent, bailee or trustee), liabilities (including liabilities owned jointly with another person or other persons and liabilities as trustee), profits and other income, receipts, losses, outgoings and expenditure of the corporation;

in the case of a corporation (not being a trustee corporation) that is a trustee (but without limiting the generality of paragraph (a)), matters concerned with the ascertainment of the identity of the persons who are beneficiaries under the trust, their rights under the trust and any payments that they have received, or are entitled to receive, under the terms of the trust;

the internal management and proceeding of the corporation;

any act or thing done (including any contract made and any transaction entered into) by or on behalf of the corporation, or to or in relation to the corporation or its business or property, at a time when —

a receiver, or a receiver and manager, is in possession of, or has control over, property of the corporation;

the corporation is under judicial management;

a compromise or arrangement referred to in section 210 of the Companies Act (Cap. 50) made between the corporation and another person or other persons is being administered; or

the corporation is being wound up,and without limiting the generality of sub-paragraphs (i) to (iv), any conduct of such a receiver or such a receiver and manager, or such a judicial manager, or any person administering such a compromise or arrangement or of any liquidator or provisional liquidator of the corporation;

the ownership of shares in, debentures of, units of shares in, units of debentures of, and units in a collective investment scheme issued by the corporation;

the power of persons to exercise, or to control the exercise of, the rights to vote attached to shares in the corporation or to dispose of, or to exercise control over the disposal of, such shares;

matters concerned with the ascertainment of the persons who are or have been financially interested in the success or failure, or apparent success or failure, of the corporation or are or have been able to control or materially to influence the policy of the corporation;

the circumstances under which a person acquired or disposed of, or became entitled to acquire or dispose of, shares in, debentures of, units of shares in, units of debentures of, or units in a collective investment scheme issued by, the corporation;

where the corporation has issued units in a collective investment scheme, any matters concerning the financial or business undertaking, scheme, common enterprise or investment contract to which the units in a collective investment scheme relate; or

matters relating to or arising out of the audit of, or working papers or reports of an auditor concerning, any matters referred to in paragraphs (a) to (i).

where the other person is a corporation —

a director or secretary of the corporation;

a related corporation; or

a director or secretary of such a related corporation;

where the matter to which the reference relates is the extent of a power to exercise, or to control the exercise of, the voting power attached to voting shares in a corporation, a person with whom the other person has, or proposes to enter into, an agreement, arrangement, understanding or undertaking, whether formal or informal and whether express or implied —

by reason of which either of those persons may exercise, directly or indirectly, control the exercise of, or substantially influence the exercise of, any voting power attached to a share in the corporation;

with a view to controlling or influencing the composition of the board of directors, or the conduct of affairs, of the corporation; or

under which either of those persons may acquire from the other of them shares in the corporation or may be required to dispose of such shares in accordance with the directions of the other of them,except that, in relation to a matter relating to shares in a corporation, a person may be an associate of the corporation and the corporation may be an associate of a person;

a person in concert with whom the other person is acting, or proposes to act, in relation to the matter to which the reference relates;

where the matter to which the reference relates is a matter, other than the extent of a power to exercise, or to control the exercise of, the voting power attached to voting shares in a corporation —

subject to subsection (2), a person who is a director of a corporation of which the other person is a director; or (ii)a trustee of a trust in relation to which the other person benefits or is capable of benefiting otherwise than by reason of transactions entered into in the ordinary course of business in connection with the lending of money;

a person with whom the other person is to be regarded, according to any subsidiary legislation made under this Act, as associated in respect of the matter to which the reference relates;

a person with whom the other person is, or proposes to become, associated, whether formally or informally, in any other way in respect of the matter to which the reference relates; or

where the other person has entered into, or proposes to enter into, a transaction, or has done, or proposes to do, any other act or thing, with a view to becoming associated with a person as referred to in paragraphs (a) to (f), that last-mentioned person.

that one of those persons furnishes advice to, or acts on behalf of, the other person in the proper performance of the functions attaching to his professional capacity or to his business relationship with the other person;

that one of those persons, a customer, gives specific instructions to the other, whose ordinary business includes dealing in securities, trading in futures contracts or leveraged foreign exchange trading, to acquire shares on the customer’s behalf in the ordinary course of that business;

that one of those persons has sent, or proposes to send, to the other a take-over offer, or has made, or proposes to make, offers under a take-over announcement, within the meaning of the Take-over Code, in relation to shares held by the other;

that one of those persons has appointed the other, otherwise than for valuable consideration given by the other or by an associate of the other, to vote as a proxy or representative at a meeting of members, or of a class of members, of a corporation.

the corporation is, or its directors are, accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of a person; or

a person has a controlling interest in the corporation,that person shall be deemed to have an interest in that security.

a person is;

the associates of a person are; or

a person and his associates are,entitled to exercise or control the exercise of not less than 20% of the votes attached to the voting shares in the corporation, that person shall be deemed to have an interest in that security.

a related corporation of that other person;

a person in accordance with whose directions, instructions or wishes that the second-mentioned person is accustomed or is under an obligation, whether formal or informal, to act in relation to the security referred to in subsection (4);

a person who is accustomed or is under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the second-mentioned person in relation to that security;

a corporation which is, or the directors of which are, accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the second-mentioned person in relation to that security; or

a corporation in accordance with the directions, instructions or wishes of which, or of the directors of which, the second-mentioned person is accustomed or under an obligation, whether formal or informal, to act in relation to that security.

where he has entered into a contract to purchase a security;

where he has a right, otherwise than by reason of having an interest under a trust, to have a security transferred to himself or to his order, whether the right is exercisable presently or in the future and whether on the fulfilment of a condition or not;

where he has the right to acquire a security or an interest in a security, under an option, whether the right is exercisable presently or in the future and whether on the fulfilment of a condition or not; or

where he is entitled, otherwise than by reason of his having been appointed a proxy or representative to vote at a meeting of members of a corporation or of a class of its members, to exercise or control the exercise of a right attached to a security, not being a security of which he is the registered holder.

an interest in a security if the interest is that of a person who holds the security as bare trustee;

an interest in a security if the interest is that of a person whose ordinary business includes the lending of money if he holds the interest only by way of security for the purposes of a transaction entered into in the ordinary course of business in connection with the lending of money;

an interest of a person in a security if that interest is an interest held by him by reason of his holding a prescribed office;

an interest of a company in its own securities if that interest is purchased or otherwise acquired in accordance with sections 76B to 76G of the Companies Act (Cap. 50); and

a prescribed interest in a security being an interest of such person, or of the persons included in such class of persons, as may be prescribed.

its remoteness;

the manner in which it arose; or

the fact that the exercise of a right conferred by the interest is, or is capable of being made subject to restraint or restriction.

keep, or cause to be kept, such books as will sufficiently explain the transactions and financial position of its business and enable true and fair profit and loss accounts and balance-sheets to be prepared from time to time; and

keep or cause to be kept, such books in such a manner as will enable them to be conveniently and properly audited.

furnish such returns and records in such form and manner as may be prescribed or as may be notified by the Authority in writing; and

provide such information relating to its business as the Authority may require.

do so on the basis that the money or other assets shall be applied solely for such purpose as may be agreed to by the customer, when or before it receives the money or other assets;

pending such application, pay or deposit the money or other assets in such manner as may be prescribed; and

record and maintain a separate book entry for each customer in accordance with the provisions of this Act in relation to that customer’s money or other assets.

prepare a true and fair profit and loss account and a balance-sheet made up to the last day of the financial year; and

lodge the account and balance-sheet with the Authority within 5 months, or such extension thereof permitted by the Authority under subsection (2), after the end of the financial year, together with an auditor’s report on the account and balance-sheet.

at any time direct the holder to remove the auditor; and

direct the holder, as soon as practicable thereafter, to appoint another auditor,and the holder shall comply with such direction.

a holder of a capital markets services licence fails to lodge an auditor’s report under section 107; or

the Authority receives a report under section 108,the Authority may, without prejudice to its powers under section 115, if it is satisfied that it is in the interests of the holder, the customers of the holder or the general public to do so, appoint in writing an auditor to examine and audit, either generally or in relation to any particular matter, the books of the holder.

examine, on oath or affirmation, any officer, employee or agent of the holder or any other auditor appointed under this Act in relation to those books;

require any officer, employee or agent of the holder, or any other auditor appointed under this Act, to produce any of the books held by or on behalf of the holder relating to its business, and to make copies of or take extracts from, or retain possession of, such books for such period as is necessary to enable them to be inspected;

require a securities exchange, futures exchange or clearing house to produce any of the books kept by it, or any information in its possession, relating to the business of the holder;

employ such persons as he considers necessary to assist him in carrying out the examination and audit; and

authorise in writing any person employed by him to do, in relation to the examination and audit, any act or thing that he could do as an auditor under this subsection, other than the examination of any person on oath or affirmation.

destroys, conceals or alters any book relating to the business of a holder of a capital markets services licence; or

sends, or conspires with any other person to send, out of Singapore, any book or asset of any description belonging to, in the possession of or under the control of a holder of a capital markets services licence,shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 or to imprisonment for a term not exceeding 2 years or to both.

destroyed, concealed or altered any book referred to in subsection (1)(a); or

sent, or conspired to send, out of Singapore, any such book or any other asset referred to in subsection (1)(b),the onus of proving that in so doing he did not act with intent to prevent, delay or obstruct the carrying out of an examination and audit under this Division shall lie on him.

to prevent falsification of the books required to be kept by it under this Act; and

to facilitate the discovery of any falsification of any such book.

a duty to submit to the Authority such additional information in relation to his audit as the Authority considers necessary;

a duty to enlarge or extend the scope of his audit of the business and affairs of the holder;

a duty to carry out any other examination or establish any procedure in any particular case;

a duty to submit a report to the Authority on any of the matters referred to in paragraphs (b) and (c),and the auditor shall carry out such additional duty or duties.

any statement made orally or in writing in the discharge of his duties under this Part; or

the sending of any report to the Authority under section 108, 109 or 115.

a person operating a securities market or futures market, an intermediary or any other person regulated by the regulatory authority; or

the issuance of or trading in securities, or the trading in futures contracts in the foreign country of the regulatory authority.

the request by the regulatory authority for assistance is received by the Authority on or after 6th March 2000;

the assistance is intended to enable the regulatory authority, or any other authority of the foreign country, to carry out the supervision, investigation or enforcement;

the contravention of the law or regulatory requirement to which the request relates took place on or after 6th March 2000;

the regulatory authority has given a written undertaking that any material or copy thereof obtained pursuant to its request shall not be used for any purpose other than a purpose that is specified in the request and approved by the Authority;

the regulatory authority has given a written undertaking not to disclose to a third party (other than a designated third party of the foreign country in accordance with paragraph (f)) any material received pursuant to the request unless the regulatory authority is compelled to do so by the law or a court of the foreign country;

the regulatory authority has given a written undertaking to obtain the prior consent of the Authority before disclosing any material received pursuant to the request to a designated third party, and to make such disclosure only in accordance with such conditions as may be imposed by the Authority;

the material requested for is of sufficient importance to the carrying out of the supervision, investigation or enforcement to which the request relates and cannot reasonably be obtained by any other means;

the matter to which the request relates is of sufficient gravity; and

the rendering of assistance will not be contrary to the public interest or the interest of the investing public.

any person or body responsible for supervising the regulatory authority in question;

any authority of the foreign country responsible for carrying out the supervision, investigation or enforcement in question; or

any authority of the foreign country exercising a function that corresponds to a regulatory function of the Authority under this Act.

transmit to the regulatory authority any material in the possession of the Authority that is requested by the regulatory authority or a copy thereof;

order any person to furnish to the Authority any material that is requested by the regulatory authority or a copy thereof, and transmit the material or copy to the regulatory authority;

order any person to transmit directly to the regulatory authority any material that is requested by the regulatory authority or a copy thereof;

order any person to make an oral statement to the Authority on any information requested by the regulatory authority, record such statement, and transmit the recorded statement to the regulatory authority; or

request any Ministry, Government department or statutory authority to furnish to the Authority any material that is requested by the regulatory authority or a copy thereof, and transmit the material or copy to the regulatory authority.

to furnish or transmit any material or copy thereof that contains; or

to disclose,a privileged communication made by or to him in that capacity.

shall not be admissible in evidence against him in criminal proceedings other than proceedings for an offence under section 173; but(b)shall be admissible in evidence in civil proceedings under Part XII.

furnishing to the Authority or transmitting any material or copy thereof to the Authority or a regulatory authority of a foreign country if he had furnished or transmitted that material or copy in good faith in compliance with an order made under section 172(1)(b) or (c);

making a statement to the Authority in good faith and in compliance with an order made under section 172(1)(d); or (c)doing or omitting to do any act, if he had done or omitted to do the act in good faith and as a result of complying with such an order.

approved as a securities exchange under section 9(4); or

recognised as a recognised trading system provider under section 36(4).

in the opinion of the Authority, the carrying on of the activities referred to in subsection (1) is not the predominant business (as may be prescribed) of the holder or the exempt person; and

one of the regulated activities to which the holder’s licence relates or which is carried on by the exempt person is dealing in securities.

the person ceases to operate its securities market;

the person is being wound up or otherwise dissolved whether in Singapore or elsewhere;

the person is contravening or is likely to contravene or has contravened any condition or restriction of its exemption or that is applicable to it under this Act; (d)the person is contravening or is likely to contravene or has contravened any direction issued to it by the Authority; or (e)the person is operating in a manner that is, in the opinion of the Authority, contrary to the public interest.

the person or its substantial shareholder is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere;

execution against the person or its substantial shareholder in respect of a judgment debt has been returned unsatisfied in whole or in part;

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

the person or its substantial shareholder has, whether in Singapore or elsewhere, entered into a compromise or scheme of arrangement with its creditors, being a compromise or scheme of arrangement that is still in operation; or

the person or its substantial shareholder, or any officer of the person has been convicted, whether in Singapore or elsewhere, of an offence involving fraud or dishonesty or the conviction for which involved a finding that it or he acted fraudulently or dishonestly,the Authority need not give the person an opportunity to be heard.

avoid or affect any agreement, transaction or arrangement entered into on the securities market operated by the person, whether the agreement, transaction or arrangement was entered into before or after the revocation of the exemption; or

affect any right, obligation or liability arising under such agreement, transaction or arrangement.

approved as a futures exchange under section 9(4); or

recognised as a recognised trading system provider under section 36(4).

in the opinion of the Authority, the carrying on of the activities referred to in subsection (1) is not the predominant business (as may be prescribed) of the holder or the exempt person; and

one of the regulated activities to which the holder’s licence relates or which is carried on by the exempt person is trading in futures contracts.

the person ceases to operate its futures market; (b)the person is being wound up or otherwise dissolved, whether in Singapore or elsewhere; (c)the person is contravening or is likely to contravene or has contravened any condition or restriction of its approval or that is applicable to it under this Act; (d)the person is contravening or is likely to contravene or has contravened any direction issued to it by the Authority; (e)the person is operating in a manner that is, in the opinion of the Authority, contrary to the public interest.

the person or its substantial shareholder is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere;

execution against the person or its substantial shareholder in respect of a judgment debt has been returned unsatisfied in whole or in part;

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

the person or its substantial shareholder has, whether in Singapore or elsewhere, entered into a compromise or scheme of arrangement with its creditors, being a compromise or scheme of arrangement that is still in operation; or

the person or its substantial shareholder, or any officer of the person has been convicted, whether in Singapore or elsewhere, of an offence involving fraud or dishonesty or the conviction for which involved a finding that it or he acted fraudulently or dishonestly,the Authority need not give the person an opportunity to be heard.

avoid or affect any agreement, transaction or arrangement entered into on the futures market operated by the person, whether the agreement, transaction or arrangement was entered into before or after the revocation of the exemption; or

affect any right, obligation or liability arising under such agreement, transaction or arrangement.

the approval of a corporation as a securities exchange or futures exchange;

the recognition of an overseas securities exchange, an overseas futures exchange or a corporation as a recognised trading system provider;

the requirements applicable to a securities exchange, futures exchange, recognised trading system provider, person granted an exemption under section 5(3) or 6(3) or person operating an exempt market.