Singapore legislation
Regulation 43
of Securities and Futures (Licensing and Conduct of Business) Regulations
Regulation 43
Limits for unsecured credit and credit facilities
Subregulation 1
The holder of a capital markets services licence shall not grant, whether directly or indirectly, any unsecured advance, unsecured loan or unsecured credit facility to —
any of its directors (other than a director who is also its employee); or
in relation to a director who is not an employee of the holder, any connected person of such director who is himself also not an employee of the holder.
Subregulation 2
Subject to paragraph (1) and section 162 of the Companies Act 1967, the holder of a capital markets services licence shall not grant, whether directly or indirectly, any unsecured advance, unsecured loan or unsecured credit facility to any relevant person of the holder, which in the aggregate and outstanding at any one time exceeds one year’s emoluments of such relevant person.
Subregulation 3
For the purpose of paragraph (2), any unsecured advance, unsecured loan or unsecured credit facility granted by the holder of a capital markets services licence to any person to purchase, subscribe for or trade in any capital markets product for —
the account of a relevant person of the holder;
an account in which a relevant person of the holder has an interest;
an account of any person who acts jointly with, under the control of, or in accordance with, the direction of a relevant person of the holder; or
an account of any connected person of a relevant person of the holder, where the connected person is not himself a relevant person of the holder,shall be deemed to be an unsecured advance, unsecured loan or unsecured credit facility granted by the holder to that relevant person.
Subregulation 4
In this regulation —
Definition
“market value”, in relation to assets which are specified products listed for quotation or quoted on an approved exchange or an overseas exchange, means —
the last transacted price of the specified products traded on the exchange on the preceding business day;
if there was no trading in the specified products on the exchange on the preceding business day, then, subject to paragraph (c), the lower of the last transacted price and the last bid price of the specified products on the exchange; or
if there was no trading in the specified products on the exchange in the preceding 30 days, the value of the specified products as estimated by the exchange or the holder and approved by the Authority;
Definition
“relevant person”, in relation to the holder of a capital markets services licence, means —
an officer of the holder (other than a director who is not its employee); or (b)an employee of the holder;
Definition
“unsecured advance, unsecured loan or unsecured credit facility” includes —
any advance, loan or credit facility made by the holder of a capital markets services licence to its relevant person without security, whether it has been drawn down or not;
in respect of any advance, loan or credit facility made by the holder to its relevant person with security, any part thereof which at any time exceeds the market value of the assets constituting that security or, where the Authority is satisfied that there is no established market value for those assets, on the basis of a valuation approved by the Authority; and
any guarantee or performance bond entered into by the holder, or the provision of any security by the holder, in connection with a loan, advance or credit facility made by another party to its relevant person.