Singapore legislation
Regulation 25
Regulation 25
Qualified major stake entity over which merchant bank has no effective control
Subregulation 1
Where a qualified major stake entity falls within the definition of “affiliated entity” of a merchant bank under regulation 20(1)(a), (b), (c) or (e) but not regulation 20(1)(d), and the Authority is satisfied that —
the qualified major stake entity is not under the effective control of the merchant bank; and
the merchant bank is not exposed to any material risk because of —
the qualified major stake entity’s beneficial interest in the share capital, accumulated funds or contributed capital of other entities;
the qualified major stake entity’s control of voting power in other entities; or
the qualified major stake entity’s interest in other entities,the Authority may, by written notice to the merchant bank, declare that any shares held by the qualified major stake entity in the merchant bank or any holding company of the merchant bank, must be excluded in determining whether there is a contravention of regulation 24(1), (2), (3) or (4) and in such event, the exclusion takes effect starting on the date specified in the declaration until such time as the declaration is revoked.
Subregulation 2
Upon making a declaration under paragraph (1), the Authority may at any time, impose any condition that it considers appropriate and if any condition is not complied with at any time, the Authority may revoke the declaration by written notice to the merchant bank.
Subregulation 3
The Authority may add to, vary or revoke any condition imposed under paragraph (2).
Subregulation 4
Without affecting paragraph (2), the Authority may, by written notice to a merchant bank, revoke a declaration made under paragraph (1) if the Authority is satisfied that —
the qualified major stake entity has come under the effective control of the merchant bank; or
the merchant bank has become exposed to material risk because of —
the qualified major stake entity’s beneficial interest in the share capital, accumulated funds or contributed capital of other entities;
the qualified major stake entity’s control of voting power in other entities; or
the qualified major stake entity’s interest in other entities,and in such event, any shares held by the qualified major stake entity in the merchant bank or any holding company of the merchant bank must, starting on the date specified in the notice of revocation, be included in determining whether there is a contravention of regulation 24(1), (2), (3) or (4).
Subregulation 5
Without affecting paragraph (4), a declaration under paragraph (1) is automatically revoked if the qualified major stake entity falls within the definition of “affiliated entity” under regulation 20(1)(d), whether or not the qualified major stake entity continues to fall within the definition of “affiliated entity” under regulation 20(1)(a), (b), (c) or (e).