Singapore legislation

Clause 218

Prohibited conduct by connected person in possession of inside information

(1)

Subject to this Division, where —

(a)

a person who is connected to a corporation (referred to in this section as the connected person) possesses information concerning that corporation that is not generally available but, if the information were generally available, a reasonable person would expect it to have a material effect on the price or value of securities of that corporation; and

(b)

the connected person knows or ought reasonably to know that —

(i)

the information is not generally available; and

(ii)

if it were generally available, it might have a material effect on the price or value of those securities,subsections (2) to (6) shall apply.

(2)

The connected person must not (whether as principal or agent) —

(a)

subscribe for, purchase or sell, or enter into an agreement to subscribe for, purchase or sell, any such securities; or

(b)

procure another person to subscribe for, purchase or sell, or to enter into an agreement to subscribe for, purchase or sell, any such securities.

(3)

Where trading in the securities referred to in subsection (1) is permitted on the securities market of a securities exchange or futures market of a futures exchange, the connected person must not, directly or indirectly, communicate the information, or cause the information to be communicated, to another person if the connected person knows, or ought reasonably to know, that the other person would or would be likely to —

(a)

subscribe for, purchase or sell, or enter into an agreement to subscribe for, purchase or sell, any such securities; or

(b)

procure a third person to subscribe for, purchase or sell, or to enter into an agreement to subscribe for, purchase or sell, any such securities.

(4)

In any proceedings against a connected person for a contravention of subsection (2) or (3), where the prosecution or plaintiff proves that the connected person was at the material time —

(a)

in possession of information concerning the corporation to which he was connected; and

(b)

the information was not generally available,it shall be presumed, until the contrary is proved, that the connected person knew at the material time that —

(i)

the information was not generally available; and

(ii)

if the information were generally available, it might have a material effect on the price or value of securities of that corporation.

(5)

In this Division, a person is connected to a corporation if —

(a)

he is an officer of that corporation or of a related corporation;

(b)

he is a substantial shareholder within the meaning of Division 4 of Part IV of the Companies Act (Cap. 50) in that corporation or in a related corporation; or

(c)

he occupies a position that may reasonably be expected to give him access to information of a kind to which this section applies by virtue of —

(i)

any professional or business relationship existing between himself (or his employer or a corporation of which he is an officer) and that corporation or a related corporation; or

(ii)

his being an officer of a substantial shareholder within the meaning of Division 4 of Part IV of the Companies Act in that corporation or in a related corporation.

(6)

For the purposes of subsection (5), “officer”, in relation to a corporation, includes —

(a)

a director, secretary or employee of the corporation;

(b)

a receiver, or receiver and manager, of property of the corporation;

(c)

a judicial manager of the corporation;

(d)

a liquidator of the corporation; and

(e)

a trustee or other person administering a compromise or arrangement made between the corporation and another person.

Read in full context — Securities and Futures Bill →