65. Operation of trust account
Feedback & supportAn investment adviser shall make arrangements for a custodian to maintain a trust account for his clients in Singapore.
investment adviser
“investment adviser” means a person who —(a)carries on a business of advising others concerning securities;(b)as part of a regular business issues or promulgates analyses or reports concerning securities; or(c)pursuant to a contract or arrangement with a client, undertakes on behalf of the client (whether on a discretionary authority granted by the client or otherwise) the management of a portfolio of securities for the purpose of investment,but that expression does not include —(i)a bank as defined in section 2 of the Banking Act; (ii)a company or society registered under the Insurance Act; (iii)an advocate and solicitor or accountant in practice whose carrying on of that business is solely incidental to the practice of his profession;(iv)a company registered under the Trust Companies Act; (v)a dealer or his employee or a dealer’s representative or an exempt dealer whose carrying on of that business is solely incidental to the conduct of his business of dealing in securities; or(vi)a person who is the proprietor of a newspaper and holder of a permit issued under the Newspaper and Printing Presses Act, where —(A)insofar as the newspaper is distributed generally to the public it is distributed only to subscribers to, and purchasers of, the newspaper for value;(B)the advice is given or the analyses or reports are issued or promulgated only through that newspaper;(C)that person receives no commission or other consideration for giving the advice or for issuing or promulgating the analyses or reports; and(D)the advice is given and the analyses and reports are issued or promulgated solely as incidental to the conduct of that person’s business as a newspaper proprietor;
For the purpose of this Division, “custodian”, in relation to a client of an investment adviser means —
a financial institution appointed by the investment adviser with the prior written consent of that client; or
a financial institution appointed by that client.
In this Division, “trust account” means a current or deposit account or property account which —
trust account
“trust account” means a trust account established under section 58 or 65;
is kept with a custodian; and
contains in its title the words “Trust Account/ Clients”.
An investment adviser shall pay client’s money or property into the trust account, maintained by a custodian, not later than the next bank business day following the day on which the investment adviser has received the client’s money or property.
Notwithstanding subsection (1), where money or property that is required by this section to be paid or deposited into a trust account is received by an investment adviser in a place outside Singapore, the investment adviser may pay that money or deposit that property into a trust account maintained by him in that place.
An investment adviser who withdraws any moneys from a trust account except for the purpose of making a payment —
to the person entitled thereto; or
that is otherwise authorised by law, shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding one year or to both.
An investment adviser who, with intent to defraud, withdraws money from a trust account shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $30,000 or to imprisonment for a term not exceeding 3 years or to both.
Except as otherwise provided in this Division, money or property held in a trust account shall not be available for payment of the debts of an investment adviser or liable to be paid or taken in execution under the order or process of a court.
The holder of an investment representative’s licence shall neither accept nor hold client’s money or property unless he does so on behalf of an investment adviser and in the course of employment under a contract of service with that investment adviser.
investment representative
“investment representative” means a person, in the direct employment of or acting for or by arrangement with an investment adviser, who performs for such investment adviser any of the functions of an investment adviser (other than work ordinarily performed by accountants, clerks or cashiers) whether his remuneration is by way of salary, wages, commission or otherwise; and includes any director or officer of a body corporate who performs for such body corporate any of those functions (whether or not his remuneration is as aforesaid);
Nothing in this Division shall be construed as taking away or affecting any lawful claim or lien which any person has against or upon any money or property held in a trust account or against or upon any money or property received for the purchase or from the sale of securities before such money or property is paid into the trust account.
securities
“securities” means —(a)debentures, stocks or bonds issued or proposed to be issued by a government;(b)debentures, stocks, shares, bonds or notes issued or proposed to be issued by a body corporate or unincorporate;(c)any right or option in respect of any such debentures, stocks, shares, bonds or notes; or(d)any interest as defined in section 107 of the Companies Act, but does not include —(e)futures contracts that are governed by any written law regulating trading in futures contracts;(f)bills of exchange;(g)promissory notes; or(h)certificates of deposit issued by a bank;
In this section, “property” includes securities.