Singapore legislation
Regulation 7
of Securities and Futures (Licensing and Conduct of Business) Regulations
Regulation 7
Deposit to be lodged in respect of capital markets services licence to deal in capital markets products that are specified products
Subregulation 1
Subject to paragraph (2), an application for a capital markets services licence to carry on business in dealing in capital markets products that are specified products must be accompanied by a deposit of $100,000 to be lodged in the manner determined by the Authority.
Subregulation 2
The deposit mentioned in paragraph (1) is not required in the case of an applicant —
that is a member of an approved exchange; or
that is a person who deals in capital markets products that are specified products only with accredited investors, expert investors or institutional investors;
Subregulation 2A
The deposit mentioned in paragraph (1) must be maintained for the entire duration of the licence.
Subregulation 2B
The deposit mentioned in paragraph (1) must be lodged with the Authority —
by making payment through any electronic funds transfer system as the Authority may designate from time to time;
in the form of a banker’s guarantee issued by a bank licensed under the Banking Act 1970; or
in cash.
Subregulation 3
The deposit lodged by the holder of a capital markets services licence under paragraph (1) shall be applied by the Authority for the purpose of compensating any person (other than an accredited investor, expert investor or institutional investor) who suffers pecuniary loss as a result of any defalcation committed by the holder or by any of its agents in relation to any money or other property which, in the course of or in connection with its business in dealing in capital markets products that are specified products, was —
entrusted to or received by the holder or agent for or on behalf of any other person; or
entrusted to or received by —
the holder, as trustee (whether or not with any other person) of that money or property; or (ii)the agent as trustee of, or on behalf of the trustee of, that money or property.
Subregulation 4
Subject to these Regulations, every person who suffers pecuniary loss as provided in paragraph (3) shall be entitled to claim compensation in relation to the relevant deposit lodged with the Authority.
Subregulation 5
The amount which any claimant shall be entitled to claim as compensation shall be the amount of actual pecuniary loss suffered by him (including the reasonable cost of and disbursements incidental to the making and proof of his claim) less the amount or value of all moneys or other benefits received or receivable by him from any source, other than the Authority, in reduction of the loss.
Subregulation 6
The Authority may cause to be published in a daily newspaper published and circulating generally in Singapore a notice in Form 17 specifying a date, not being earlier than 3 months after the date of publication, on or before which claims for compensation in relation to the deposit lodged by the person specified in the notice may be made.
Subregulation 7
A claim for compensation in respect of a defalcation shall be made in writing to the Authority —
where a notice under paragraph (6) has been published, on or before the date specified in the notice; or
where no such notice has been published, within 6 months after the claimant becomes aware of the defalcation,and any claim which is not so made shall be barred unless the Authority otherwise determines.
Subregulation 8
The Authority may, subject to these Regulations and after such enquiry as it thinks fit —
allow and settle any proper claim made in accordance with paragraph (7) and determine the amount payable as compensation; or
disallow any improper claim.
Subregulation 9
For the purposes of paragraph (3), where the Authority is satisfied that the defalcation on which a claim is founded was actually committed, it may allow the claim and act accordingly notwithstanding that the person who committed the defalcation has not been convicted or prosecuted therefor or that the evidence on which the Authority acts would not be sufficient to establish the guilt of that person upon a criminal trial in respect of the defalcation.
Subregulation 10
Nothing in these Regulations shall require the Authority to settle a claim in full or in part where the relevant deposit lodged with the Authority is insufficient to meet the aggregate amount of the claims for compensation.