Singapore legislation
Regulation 24
Regulation 24
Limitation of mutual shareholdings
Subregulation 1
A qualified major stake entity of a merchant bank incorporated in Singapore must not acquire or hold shares in the merchant bank that has the effect of enabling it, whether alone or jointly with other qualified major stake entities of the merchant bank, to control more than 2% of the voting power in the merchant bank.
Subregulation 2
A qualified major stake entity of a merchant bank incorporated in Singapore must not acquire or hold shares in any holding company of the merchant bank that has the effect of enabling it, whether alone or jointly with other qualified major stake entities of the merchant bank, to control more than 2% of the voting power in the holding company.
Subregulation 3
A qualified major stake entity of a merchant bank incorporated in Singapore must not acquire or hold shares in the merchant bank or any holding company of the merchant bank that has the effect of enabling it, whether alone or jointly with other qualified major stake entities of the merchant bank, to control —
any percentage of the voting power in the merchant bank; and
any percentage of the voting power in any holding company of the merchant bank,such that the aggregate of the percentages mentioned in sub‑paragraphs (a) and (b) (even if they are percentages of voting powers in different companies) exceeds 2.
Subregulation 4
A merchant bank incorporated in Singapore must not cause or knowingly permit any qualified major stake entity of the merchant bank to acquire or hold shares in the merchant bank or any holding company of the merchant bank in contravention of paragraph (1), (2) or (3).
Subregulation 5
In determining whether there is a contravention of paragraph (1), (2), (3) or (4), any control of voting power in a merchant bank or any holding company of the merchant bank that is held by a qualified major stake entity of the merchant bank —
for the benefit of any person other than the qualified major stake entity or any other qualified major stake entity of that merchant bank (called in this paragraph and paragraph (6) the beneficiary), under 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,is disregarded.
Subregulation 6
Paragraph (5) does not apply if —
the qualified major stake entity is an insurer licensed under the Insurance Act, and the voting power is controlled by it through any of the insurance funds specified in regulation 20(4)(a); or
the Authority —
is of the opinion, 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, that the control of voting power in the merchant bank or holding company of the merchant bank is in fact not being used or exercised primarily for the benefit of the beneficiary; and
issues a declaration under paragraph (7) by written notice to the qualified major stake entity.
Subregulation 7
For the purpose of paragraph (6)(b)(ii), the Authority may issue a declaration by written notice to the qualified major stake entity that, starting from the date specified in the declaration, its control of voting power in the merchant bank or holding company of the merchant bank must be included in determining whether there is a contravention of paragraph (1), (2), (3) or (4).