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Disapplication of section 32 of Act to subsidiary acquired or held to segregate risks from carrying on business in regulation 15

Banking (Merchant Banks) Regulations 2021

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—(1) Subject to paragraph (2), section 32 of the Act (as applied by section 55ZF(2) of the Act) does not apply to a wholly‑owned subsidiary of a merchant bank in Singapore, where the merchant bank acquires or holds the major stake in that subsidiary primarily for the purpose of segregating any risk arising from the carrying on of any business prescribed in regulation 15(1), in order to prevent such risk from affecting the financial soundness and stability of the merchant bank.(2) Paragraph (1) applies only if —(a)the merchant bank has an agreement with the subsidiary to allow the Authority and any person appointed by the Authority, at any time —(i)to obtain any information from the subsidiary; and(ii)to inspect the books of the subsidiary;(b)where the subsidiary is a financial institution regulated by a regulatory authority in a foreign country or territory — the merchant 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 subsidiary; and(c)the merchant bank ensures that the subsidiary carries on its business in a manner that satisfies any condition relating to the operations or activities of the subsidiary that the Authority may impose, from time to time, by written notice.(3) In this regulation, “regulatory authority” has the meaning given by regulation 18(7).

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