Banking Regulations

any holder of a capital markets services licence under the Securities and Futures Act (Cap. 289) if, and only if, the acceptance of the deposit is solely incidental to the carrying on of the business for which the licence was granted;

any advocate and solicitor, foreign lawyer who is registered under the Legal Profession Act (Cap. 161), Singapore law practice, Joint Law Venture, Formal Law Alliance, Qualifying Foreign Law Practice or licensed foreign law practice, if, and only if, the acceptance of the deposit is solely incidental to the practice of his or its legal practice; and

any insurer licensed under the Insurance Act (Cap. 142) if, and only if, the acceptance of the deposit is solely incidental to the carrying on of the business for which the insurer was licensed.

any offer or invitation to make any deposit, or to enter or offer to enter into any agreement to make any deposit, with the foreign entity; or

any advertisement containing such offer or invitation,where such offer, invitation or advertisement is made or issued to qualifying depositors in Singapore by the agent bank on behalf of the foreign entity.

the name of the foreign entity;

the jurisdiction where the deposit account would be opened;

the class of licence or registration, or the type of approval or other instrument of regulation, that the foreign entity holds or has obtained in the jurisdiction where the deposit account would be opened;

a statement to the effect that the class of licence or registration, or the type of approval or other instrument of regulation, permits the foreign entity to accept deposits in the jurisdiction where the deposit account would be opened; and

a statement to the effect that the deposit account would not be subject to the supervisory oversight of the Authority but that of the relevant supervisory authority in the jurisdiction where the deposit account would be opened and maintained.

a sum paid by or on behalf of any person in consideration for the issue to him by the recipient of —

bonds or NCDs denominated in any foreign currency;

bonds or NCDs denominated in Singapore dollars with an original maturity period of not less than 12 months; or

bonds or NCDs denominated in Singapore dollars with an original maturity period of less than 12 months and issued with a denomination of not less than $200,000;

a sum paid by or on behalf of any person whose total net personal assets exceed in value $2 million (or its equivalent in foreign currency) at the time of the payment, whose financial assets (net of any related liabilities) exceed in value $1 million (or its equivalent in foreign currency) at the time of payment, or whose income in the preceding 12 months is not less than $300,000 (or its equivalent in foreign currency) at the time of the payment, in consideration for the issue to him by the recipient of bonds or NCDs denominated in Singapore dollars with an original maturity period of less than 12 months;

a sum paid by or on behalf of a company whose total net assets exceed $10 million in value or its equivalent in foreign currency as determined by the last audited balance-sheet of the company in consideration for the issue to the company, by the recipient, of bonds or NCDs denominated in Singapore dollars with an original maturity period of less than 12 months;

a sum paid by or on behalf of an officer of the recipient, a close relative of an officer of the recipient or a close relative of the recipient (if the recipient is a natural person), in consideration for the issue to the payer by the recipient, of bonds or NCDs denominated in Singapore dollars with an original maturity of less than 12 months;

a sum paid by or on behalf of any person in consideration of the issue to him of Singapore Government Securities; or

a sum paid by or on behalf of any person in consideration of the issue to him of bonds issued by any statutory board.

the value calculated by deducting any outstanding amounts in respect of any credit facility that is secured by the residence from the estimated fair market value of the residence;

$1 million.

in any prospectus and any profile statement in respect of its issue; or

where such documents are not required in respect of its issue, in an information memorandum to be issued, circulated or distributed in respect of its issue,the additional information set out in paragraph (2).

a statement of the place of booking of the issue;

where the name of the issuer contains the word “bank”, “finance” or any of its derivatives in any language and —

the place of booking of the issue is not Singapore; or

the issuer is not regulated or authorised by the Authority under any written law,a statement that the branch or office of the issuer at which the issue is booked is not subject to regulation or supervision in Singapore;

where repayment under the bond or NCD is secured (whether by mortgage, charge, guarantee or other means), a statement of the nature of the security, the name of the mortgagor, chargor or guarantor, as the case may be, and whether such person is regulated or authorised by the Authority under any written law; and

where repayment under the bond or NCD is not secured (whether by mortgage, charge, guarantee or other means), a statement that repayment is not secured by any means.

the person uses the bank’s name, logo or trade mark in connection with an event that is —

organised by the person; and

sponsored by the bank; and

the bank permits the person to use the bank’s name, logo or trade mark in connection with the event.

the bank causes or permits the person to use the bank’s name, logo or trade mark only in connection with an event that is —

organised by the person; and

sponsored by the bank; and

the board of directors of the bank approves the person’s use of the bank’s name, logo or trade mark in connection with the event.

the bank permits the person to use the bank’s name, logo or trade mark;

the bank has not entered into any partnership, joint venture or other arrangement with the person to carry on any business prescribed by regulation 23G or 23I; and

the person is not an entity in which the bank acquired or holds a major stake for which the bank is exempt from section 32 of the Act under regulation 7B.

the bank has not entered into any partnership, joint venture or other arrangement with the person to carry on any business prescribed by regulation 23G or 23I; and

the person is not an entity in which the bank acquired or holds a major stake for which the bank is exempt from section 32 of the Act under regulation 7B.

an over-allotment option has been made giving the bank the right to purchase a number of securities equivalent to the number of securities over-allotted —

in a case where more than one tranche of securities is offered at different prices, at or below the issue price for each tranche; or

in any other case, at or below the issue price; and

the total number of securities subscribed for or purchased by the bank as a result of its stabilising action does not exceed the number of securities over-allotted.

any entity which carries on a business prescribed in regulation 23F(1) (whether as its principal business or otherwise); or

any other entity whose principal business is that of investing in any entity referred to in sub-paragraph (a).

not carrying on any substantial business or not in operation;

carrying on the business of engaging in property-related activities;

carrying on the business of factoring, leasing equipment or otherwise purchasing debt obligations from others; or

an entity, or an entity within a class of entities, specified by the Authority by notice in writing by reference to a bank or a class of banks.

the bank has an agreement with the wholly-owned subsidiary to allow the Authority and any person appointed by the Authority, at any time, to obtain any information from the wholly-owned subsidiary and to inspect the books of the wholly-owned subsidiary;

where the wholly-owned subsidiary is a financial institution regulated by an overseas regulatory authority, the bank is satisfied, from its own due diligence or from having taken professional advice, that the Authority and any person appointed by the Authority are not prohibited from obtaining any information from, or inspecting the books of, the wholly-owned subsidiary; and (c)the bank ensures that the wholly-owned subsidiary of the bank carries on its business in a manner that satisfies such conditions relating to the operations or activities of the wholly-owned subsidiary as the Authority may impose, from time to time, by notice in writing.

a business prescribed in regulation 23G(1) or 23H(1); or

a business of investing in any entity that carries on a business prescribed in regulation 23G(1) or 23H(1).

in a case where the entity carries on a business mentioned in paragraph (1)(a) and other businesses — each of such other businesses is a business mentioned in section 30(1)(a), (b) or (c) of the Act, or a business prescribed for the purposes of section 30(1)(d) of the Act that is similar in economic substance and risk to a business mentioned in section 30(1)(a), (b) or (c) of the Act;

in a case where the entity carries on a business mentioned in paragraph (1)(b) and other businesses —

at least one of such other businesses is a business prescribed in regulation 23G(1) or 23H(1); and

each of such other businesses is a business mentioned in sub-paragraph (a).

the aggregate non-financial business size of the bank concerned, after acquiring or holding a major stake in the entity, does not exceed —

in the case of a bank incorporated in Singapore —

10% of its capital funds; and

10% of the capital funds of its bank group; or

in the case of the branches and offices located within Singapore of a bank incorporated outside Singapore — 1.5% of the assets that are reflected as assets in the balance sheet of those branches and offices (less net inter-bank lending);

the bank puts in place risk management and governance policies and procedures that are commensurate with the risks posed by all the businesses carried on by the entity;

the policies and procedures mentioned in sub-paragraph (b) have been approved by —

in the case of a bank incorporated in Singapore — the board of directors of the bank;

in the case of the branches and offices located within Singapore of a bank incorporated outside Singapore, the head office of which has never carried on a materially similar business before — the board of directors of the bank; or

in the case of the branches and offices located within Singapore of a bank incorporated outside Singapore, the head office of which has carried on or is carrying on a materially similar business — by an authorised person of the bank;

the bank notifies the Authority of the following matters:

a description of all the businesses carried on by the entity;

any regulation or licensing requirement that the entity is or will be subject to, whether in Singapore or elsewhere;

the nature and extent of the major stake in the entity acquired or held by the bank;

the date on which the major stake in the entity is acquired by the bank, or (if applicable) the date on which the entity is incorporated, formed or established by the bank,at least 14 days before the earliest of the following:

any public announcement that the bank intends to acquire the major stake in the entity, or (if applicable) incorporate, form or establish the entity;

the entry of the bank into any agreement to acquire the major stake in the entity, or (if applicable) incorporate, form or establish the entity;

the date on which the major stake in the entity is acquired by the bank, or (if applicable) the date on which the entity is incorporated, formed or established by the bank;

the bank notifies the Authority of any change to the matters in relation to which information had been provided in the notification mentioned in sub-paragraph (d), before making the change or as soon as the bank becomes aware of the change;

the bank obtains prior approval from the Authority for the issuance by the bank of any guarantee, indemnity, letter of comfort or any other letter that imposes similar obligations on the bank as a guarantee or indemnity, or similar expectations on the bank as a letter of comfort, in respect of any business carried on by the entity;

where the entity is or is to be a subsidiary of the bank —

the bank has an agreement with the entity to allow the Authority and any person appointed by the Authority, at any time, to obtain any information from the entity and to inspect the books of the entity; and

where the entity is regulated by a regulatory authority in a foreign country or territory, the bank is satisfied, from its own due diligence or based on professional advice, that the Authority and any person appointed by the Authority are not prohibited from obtaining any information from, or inspecting the books of, the entity; and

where the entity is a related corporation of the bank, the entity does not use the bank’s name, logo or trade mark in the course of the business.

submit a report to the Authority within 30 days after the last day of every quarter, or a later date approved by the Authority in writing, containing the information specified in the Second Schedule; and

provide any other information that the Authority may require, in relation to any entity in which the bank acquired or holds a major stake under this regulation.

having regard to the specific circumstances of a bank in Singapore, including whether the risk management and governance policies and procedures of the bank in Singapore are sufficiently robust to effectively monitor and manage the risks of the entity; or

if any condition or requirement imposed on a bank in Singapore is not satisfied by the bank at any time,issue to the bank a written declaration that paragraph (1) does not apply to the bank in relation to any entity specified in the declaration on or after a specified date.

any subsidiary of the bank;

any entity in which the bank and its subsidiaries hold in the aggregate a beneficial interest in not less than 20% of the share capital, accumulated funds or contributed capital;

any entity in which the bank and its subsidiaries control in the aggregate not less than 20% of the voting power;

any other entity where the management of the entity is accustomed or under an obligation, whether formal or informal, to act in accordance with the bank’s directions, instructions or wishes, or where the bank is in a position to determine the policy of the entity; or

any subsidiary of an entity referred to in sub-paragraph (b), (c) or (d).

acquired by a bank or any entity referred to in paragraph (1) (referred to in this paragraph as the relevant entity) pursuant to an arrangement with a person who has a trading account with the relevant entity, and transferred to the trading account of that person within 2 market days from the date of acquisition; or

acquired or held by the relevant entity in the course of satisfaction of debts due to it and disposed of at the earliest suitable opportunity,shall be excluded for the purpose of determining whether the entity is an affiliated entity of the bank.

for the benefit of any person other than the bank or its subsidiary, or any other affiliated entity of the bank (referred to in this paragraph as the beneficiary) pursuant to an obligation imposed under any written law, rule of law, contract or order of court; and

used or exercised by the bank or its subsidiary primarily for the benefit of the beneficiary,shall be excluded for the purpose of determining whether the entity is an affiliated entity of the bank, unless —

the control of voting power in the entity is held by a bank’s subsidiary that is an insurer licensed under the Insurance Act (Cap. 142), through —

any insurance fund established and maintained under the Insurance Act for its general business;

any insurance fund established and maintained under the Insurance Act (Cap. 142) for its non-participating policies;

any insurance fund established and maintained under the Insurance Act for its participating policies, and which relates to assets held other than for the purpose of meeting the liabilities in respect of the policies of the insurance fund; or

any insurance fund established and maintained under the Insurance Act for its investment-linked policies, and which relates to assets held other than for the purpose of meeting those liabilities in respect of the policies of the insurance fund, the values of which are dependent on the value of the underlying assets; or

the Authority (having regard to the specific circumstances of the case including whether the bank or its subsidiaries has investment and voting policies that comply with guidelines issued by the Authority) is of the opinion that the control of voting power in the entity is in fact not being used or exercised primarily for the benefit of the beneficiary, and the Authority issues a declaration by notice in writing to the bank that such control of voting power in the entity shall, with effect from the date of the declaration, be included for the purpose of determining whether that entity is an affiliated entity of the bank.

any beneficial interest in the share capital, accumulated funds or contributed capital of an entity held by an affiliated entity of the bank shall be deemed to be a beneficial interest in that share capital, accumulated funds or contributed capital held by that bank;

any control of voting power in an entity held by an affiliated entity of the bank shall be deemed to be a control of such voting power held by that bank; and

any interest in an entity (where the management of the entity is accustomed or under an obligation, whether formal or informal, to act in accordance with the bank’s directions, instructions or wishes, or where the bank is in a position to determine the policy of the entity) held by an affiliated entity of the bank shall be deemed to be an interest held by that bank.

for the benefit of any person other than the affiliated entity, the bank or any other affiliated entity of the bank (referred to in this paragraph as the beneficiary), pursuant to an obligation imposed under any written law, rule of law, contract or order of court; and

used or exercised by that affiliated entity primarily for the benefit of the beneficiary,unless —

that affiliated entity is an insurer licensed under the Insurance Act (Cap. 142), and it holds the control of voting power or interest in the entity through any of the insurance funds specified in regulation 12(3)(i)(A) to (D); or

the Authority (having regard to the specific circumstances of the case including whether the affiliated entity has investment and voting policies that comply with guidelines issued by the Authority) is of the opinion that the control of voting power or interest in the entity is in fact not being used or exercised primarily for the benefit of the beneficiary, and the Authority issues a declaration by notice in writing to the bank that paragraph (1)(b) or (c), as the case may be, shall, with effect from the date of the declaration apply to the control of voting power or interest in the entity held by that affiliated entity.

the affiliated entity is not under the effective control of the bank; and

the bank is not exposed to any material risk by virtue of —

that affiliated entity’s beneficial interest in the share capital, accumulated funds or contributed capital of other entities;

that affiliated entity’s control of voting power in other entities; or

that affiliated entity’s interest in other entities,the Authority may, by notice in writing to the bank, declare that regulation 13(1) shall not apply to any beneficial interest in the share capital, accumulated funds or contributed capital of any entity, any control of voting power in any entity, or any interest in any entity, held by that affiliated entity, and in such event, regulation 13(1) shall not apply accordingly with effect from the date specified in the declaration, until such time as the declaration is revoked.

the affiliated entity has come under the effective control of the bank; or

the bank has become exposed to material risk by virtue of —

that affiliated entity’s beneficial interest in the share capital, accumulated funds or contributed capital of other entities;

that affiliated entity’s control of voting power in other entities; or

that affiliated entity’s interest in other entities,and in such event, regulation 13(1) shall apply to that affiliated entity accordingly with effect from the date specified in the notice of revocation.

any percentage of the voting power in the bank; and

any percentage of the voting power in any of the holding companies of the bank,such that the sum total of the percentages referred to in sub-paragraphs (a) and (b) (notwithstanding that they are percentages of voting powers in different companies) exceeds 2.

for the benefit of any person other than the qualified major stake entity or any other qualified major stake entity of that bank (referred to in this paragraph as the beneficiary), pursuant to an obligation imposed under any written law, rule of law, contract or order of court; and

used or exercised by the qualified major stake entity for the benefit of the beneficiary,shall be disregarded, unless —

the qualified major stake entity is an insurer licensed under the Insurance Act (Cap. 142), and the control of voting power is held by it through any of the insurance funds specified in regulation 12(3)(i)(A) to (D); or

the Authority (having regard to the specific circumstances of the case including whether the qualified major stake entity has investment and voting policies that comply with guidelines issued by the Authority) is of the opinion that the control of voting power in the bank or holding company of the bank is in fact not being used or exercised primarily for the benefit of the beneficiary, and the Authority issues a declaration by notice in writing to the qualified major stake entity that such control of voting power in the bank or holding company of the bank shall, with effect from the date of the declaration, be included for the purpose of determining whether there is a contravention of paragraph (1), (2), (3) or (4).

the entity is not under the effective control of the bank; and

the bank is not exposed to any material risk by virtue of —

that entity’s beneficial interest in the share capital, accumulated funds or contributed capital of other entities;

that entity’s control of voting power in other entities; or

that entity’s interest in other entities,the Authority may, by notice in writing to the bank, declare that any shares held by that entity in the bank or any holding company of the bank, shall be excluded for the purpose of determining whether there is a contravention of regulation 16(1), (2), (3) or (4) and in such event, the exclusion shall take effect from the date specified in the declaration until such time as the declaration is revoked.

the entity has come under the effective control of the bank; or

the bank has become exposed to material risk by virtue of —

that entity’s beneficial interest in the share capital, accumulated funds or contributed capital of other entities;

that entity’s control of voting power in other entities; or

that entity’s interest in other entities,and in such event, any shares held by that entity in the bank or any holding company of the bank shall, with effect from the date specified in the notice of revocation, be included for the purpose of determining whether there is a contravention of regulation 16(1), (2), (3) or (4).

it became a qualified major stake entity of the bank by virtue of, or the contravention resulted from, circumstances beyond its control; or

it had, at the time of its acquisition or holding of shares in the bank or any holding company of the bank, reasonable grounds for believing that such acquisition or holding would not result in a contravention of regulation 16(1), (2) or (3), as the case may be,and it had, within 14 days of becoming aware of the contravention, notified the Authority in writing of the contravention and taken such action as directed by the Authority within such time as may be determined by the Authority.

the contravention resulted from circumstances beyond its control; or

it did not know and had no reason to suspect that there was an acquisition or holding of shares in itself or any of its holding companies by its qualified major stake entity or entities which would result in it being in contravention of regulation 16(4),and it had, within 14 days of becoming aware of the contravention, notified the Authority in writing of that contravention, and taken such action as directed by the Authority within such time as may be determined by the Authority.

the business of providing a money‑changing service;

the business of providing a cross‑border money transfer service.

the bank, at the request of and for the purpose of financing the purchase of each of those assets by a customer, purchases the asset from the seller in circumstances where the asset is existing at the time of the purchase;

the bank sells the asset to the customer;

the customer is under a legal obligation to the bank to take delivery of the asset;

the amount payable by the customer for the asset (the marked-up price) is greater than the amount paid by the bank for the asset (the original price), and the difference between the marked-up price and original price is the profit or return to the bank for providing such financing to the customer;

the bank does not derive any gain or suffer any loss from any movement in the market value of the asset other than as part of the profit or return referred to in sub-paragraph (d); and

the marked-up price or any part thereof is not required to be paid until after the date of the sale.

intention to commence the business referred to in paragraph (1); or

commencement of such business within 14 days after the commencement of such business.

for the purpose of making funds of a customer available to a bank, the customer appoints the bank or any other person as agent, to purchase on his behalf, an asset for an amount of money (the original price), in circumstances where the asset is existing at the time of the purchase; (b)[Deleted by S 18/2009 wef 19/01/2009](c)the bank purchases the asset from the customer at a price (the marked-up price) that is greater than the original price, and sells the asset or appoints the customer, or any other person as an agent of the bank, to sell the asset on its behalf;

the bank and customer, respectively, do not derive any gain or suffer any loss from any movement in the market value of the asset other than the difference between the marked-up price and the original price (which represents the profit or return to the customer for making funds available to the bank); and

the marked-up price or any part thereof is not required to be paid by the bank to the customer until after the date of sale of the asset by the bank.

intention to commence the business referred to in paragraph (1); or

commencement of such business within 14 days after the commencement of such business.

for the purpose of making funds of the bank (“A”) available to another bank or merchant bank (“B”), A purchases, or appoints B or any other person as an agent of A to purchase on its behalf, an asset for an amount of money (the original price), in circumstances where the asset is existing at the time of the purchase;

B purchases the asset from A at a price (the marked-up price) that is greater than the original price, and sells the asset, or appoints A, or any other person as an agent of B, to sell the asset on its behalf;

A and B, respectively, do not derive any gain or suffer any loss from any movement in the market value of the asset other than the difference between the marked-up price and the original price (which represents the profit or return to A for making funds available to B); and

the marked-up price or any part thereof is not required to be paid by B to A until after the date of sale of the asset by B.

intention to commence the business referred to in paragraph (1); or

commencement of such business within 14 days after the commencement of such business.

the bank, or the bank’s agent, purchases an asset at the request of a customer for an amount of money (the original price) for the purposes of financing the use or purchase, or both, of the asset by the customer;

the bank, or the bank’s agent, leases the asset to the customer;

in a case where the asset is not in existence at the time the bank, or the bank’s agent, leases the asset to the customer, an amount of money (the advance payment) may be paid by the customer to the bank, or the bank’s agent, for the subsequent use of the asset;

an amount of money (the rental) is paid by the customer to the bank, or the bank’s agent, for the lease of the asset;

the bank, or the bank’s agent, appoints the customer, or a third party, to take on the obligations in connection with the use of the asset, including its maintenance and insurance;

in the event of an early termination of the lease, the customer, or a third party, shall purchase the asset from the bank, or the bank’s agent, at a price determined at the start of the lease (the early termination price);

upon expiry of the lease —

where the aggregate of all rental and advance payments made under the lease is greater than the original price, the bank, or the bank’s agent, shall, whether with or without consideration, transfer the ownership of the asset to the customer or a third party;

where the aggregate of all rental and advance payments made under the lease is equal to or less than the original price, the customer or a third party shall purchase the asset from the bank, or the bank’s agent, at a sale price determined at the start of the lease (the sale price), which amount shall be consideration for the transfer of the asset;

the total amount payable by the customer and such third party referred to in either sub-paragraph (f) or (g), if any, for the asset comprising —

the advance payment;

the rental; and

the sale price or early termination price,is greater than the original price, and the difference between the total amount payable and original price is the profit or return to the bank for providing such financing to the customer;

the bank, or the bank’s agent, does not derive any gain or suffer any loss from any movement in the market value of the asset, including total loss of the asset, other than as part of the profit or return referred to in sub-paragraph (h).

intention to commence the business referred to in paragraph (1); or

commencement of such business within 14 days after the commencement of such business.

the bank, or the bank’s agent, jointly purchases an asset with the customer at the request of the customer and contributes an amount of money towards the purchase price (the contribution) for the purposes of financing the use or purchase, or both, of the asset by the customer;

the bank, or the bank’s agent —

sells a portion of its share of the asset on a periodic basis to the customer for an amount of money determined at the start of the arrangement (the redemption); and

leases the unsold portion of its share of the asset to the customer for an amount of money determined at the start of the arrangement (the rental);

in a case where the asset is not in existence at the time of the joint purchase and the bank, or the bank’s agent, leases the unsold portion of its share of the asset to the customer, an amount of money (the advance payment) may be paid by the customer to the bank, or the bank’s agent, for the subsequent use of that portion of the asset;

the bank, or the bank’s agent, appoints the customer, or a third party, to take on the obligations in connection with the use of the asset, including its maintenance and insurance;

in the event of an early termination of the arrangement, the customer shall purchase from the bank, or the bank’s agent, the remainder of the unsold portion of the bank’s, or the bank’s agent’s, share of the asset at a price determined at the start of the arrangement (the early termination price);

upon expiry of the arrangement, the customer shall have purchased from the bank, or the bank’s agent, the whole of the bank’s, or the bank’s agent’s, share of the asset and obtained full ownership of the asset;

the total amount payable by the customer for the asset comprising —

the advance payment;

the redemption; (iii)the rental; and

the early termination price,is greater than the contribution, and the difference between the total amount payable and the contribution is the profit or return to the bank for providing such financing to the customer;

the bank, or the bank’s agent, does not derive any gain or suffer any loss from any movement in the market value of the asset, including total loss of the asset, other than as part of the profit or return referred to in sub-paragraph (g), except in circumstances provided in sub-paragraph (i); and

in a case where the customer is unable to pay the bank, or the bank’s agent, the early termination price, the bank, or the bank’s agent, may sell the asset to a third party at a price lower than the outstanding amount payable by the customer.

intention to commence the business referred to in paragraph (1); or

commencement of such business within 14 days after the commencement of such arrangement.

for the purposes of effecting payment resulting from the carrying on of any business by the bank under section 30(1)(a), (b) or (c) of the Act —

the bank undertakes to purchase an asset from a customer (bank purchase undertaking);

the customer undertakes to purchase an asset from the bank (customer purchase undertaking);

the bank undertakes to sell an asset to a customer (bank sale undertaking); or

the customer undertakes to sell an asset to the bank (customer sale undertaking),for an amount of money determined at the time the undertaking is given by the bank or the customer, as the case may be (the agreed price);

where the bank purchase undertaking is exercised by the customer, or the customer sale undertaking is exercised by the bank, the bank will purchase the asset from the customer at the agreed price in circumstances where the asset is existing at the time of the purchase, and immediately sells the asset to a third party at spot price; (c)where the customer purchase undertaking is exercised by the bank, or the bank sale undertaking is exercised by the customer, the bank will purchase the asset from a third party at spot price in circumstances where the asset is existing at the time of the purchase, and immediately sells the asset to the customer at the agreed price;

the bank does not take physical delivery of the asset; and

the bank does not derive any gain or suffer any loss from any movement in the market value of the asset other than the difference between the spot price and the agreed price.

intention to commence the business referred to in paragraph (1); or

commencement of such business within 14 days after the commencement of such business.

the bank, or the bank’s agent, at the request of the customer and for the purposes of financing the procurement and the use or purchase, or both, of an asset by the customer, commissions the customer to construct the asset in accordance with the customer’s specifications for an amount of money (the purchase price);

contemporaneously with the commissioning referred to in sub-paragraph (a) —

the bank, or the bank’s agent, and the customer enter into an arrangement prescribed under regulation 23B where the asset is not in existence at the time the asset is leased to the customer (the lease arrangement); or

the customer gives an undertaking to the bank, or the bank’s agent, to purchase the asset from the bank, or the bank’s agent, immediately after the transfer of the ownership of the asset to the bank, or the bank’s agent, by the customer under sub-paragraph (e)(i) (the purchase undertaking);

the customer procures the construction of the asset by a third party;

the bank, or the bank’s agent, makes payment of the purchase price to the customer on a periodic basis (the progress payment);

one of the following takes place:

the customer transfers the ownership of the asset to the bank, or the bank’s agent, on a mutually agreed date on or after the completion of the construction of the asset by the third party;

the customer refunds all progress payments to the bank, or the bank’s agent, and the lease arrangement or the purchase undertaking, as the case may be, is cancelled; or

the bank, or the bank’s agent, agrees to the substitution of the asset that is the subject of the lease arrangement or the purchase undertaking with a comparable asset, and the customer transfers the ownership of the comparable asset to the bank, or the bank’s agent, on a mutually agreed date;

the bank, or the bank’s agent, does not take physical delivery of the asset or the comparable asset;

at the end of the arrangement, the bank, or the bank’s agent, transfers ownership of the asset, or of the comparable asset, to the customer pursuant to the lease arrangement or the purchase undertaking, except in the circumstances referred to in sub-paragraph (e)(ii);

the amount payable by the customer for the asset, or the comparable asset, is greater than the purchase price, and the difference between the total amount payable and the purchase price is the profit or return to the bank for providing such financing to the customer; and

the bank, or the bank’s agent, does not derive any gain or suffer any loss from any movement in the market value of the asset, including from the total loss of the asset, other than the profit or return referred to in sub-paragraph (h).

intention to commence the business referred to in paragraph (1); or

commencement of such business within 14 days after the commencement of such business.