Regulation 18

a business prescribed in regulation 15(1) or 16(1); or

a business of investing in any entity that carries on a business prescribed in regulation 15(1) or 16(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 55V(1)(a), (b) or (c) of the Act, or a business prescribed for the purposes of section 55V(1)(d) of the Act that is similar in economic substance and risk to a business mentioned in section 55V(1)(a), (b) or (c) of the Act; or

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 15(1) or 16(1); and

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

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

in the case of a merchant bank incorporated in Singapore —

30% of its capital funds; and

30% of the capital funds of its merchant bank group; or

in the case of the branches and offices located in Singapore of a merchant bank incorporated outside Singapore — 4% of the assets that are reflected as assets in the balance‑sheet of the branches and offices located in Singapore (less net inter‑bank lending);

the merchant 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 merchant bank incorporated in Singapore — the board of directors of the merchant bank;

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

in the case of the branches and offices located in Singapore of a merchant 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 merchant bank;

the merchant 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 merchant bank;

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

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

the entry of the merchant 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 merchant bank, or (if applicable) the date on which the entity is incorporated, formed or established by the merchant bank;

the merchant 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 merchant bank becomes aware of the change;

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

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

the merchant 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 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 entity.

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 First Schedule; and

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

having regard to the specific circumstances of a merchant bank in Singapore, including whether the risk management and governance policies and procedures of the merchant 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 merchant bank in Singapore is not satisfied by the merchant bank at any time,issue to the merchant bank a written declaration that paragraph (1) does not apply to the merchant bank in relation to any entity specified in the declaration on or after a specified date.