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Prescribed purchase and sale business at spot price

Banking Regulations

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—(1) For the purposes of section 30(1)(d) of the Act, and subject to paragraph (2), the business of purchasing and selling assets at spot price is prescribed as a business that any bank in Singapore may carry on, or enter into any partnership, joint venture or other arrangement with any person to carry on, if such business is carried on under the following arrangement:(a)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 —(i)the bank undertakes to purchase an asset from a customer (bank purchase undertaking);(ii)the customer undertakes to purchase an asset from the bank (customer purchase undertaking);(iii)the bank undertakes to sell an asset to a customer (bank sale undertaking); or(iv)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);(b)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;(d)the bank does not take physical delivery of the asset; and(e)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.(2) The bank shall notify the Authority of its —(a)intention to commence the business referred to in paragraph (1); or(b)commencement of such business within 14 days after the commencement of such business.

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