Singapore legislation
Regulation 33
Regulation 33
Liabilities included in deposit liabilities of merchant bank
For the purposes of section 62(3)(b) of the Act as applied by section 62B(5) of the Act, “deposit liabilities”, in relation to a merchant bank, includes the liabilities of a merchant bank to a person under the following arrangement:
the person pays a sum of money to the person’s agent or the merchant bank for the purpose of making the person’s funds available to the merchant bank and to enable the person’s agent or the merchant bank to purchase an asset on the person’s behalf, being an asset that exists at the time of the purchase;
the merchant bank purchases the asset from the person at a price (the marked‑up price) that is greater than the sum of money paid by the person, and sells the asset;
both the person and the merchant bank do not derive any gain or suffer any loss from any movement in the market value of the asset other than the difference between the marked‑up price and the sum of money paid by the person (which represents the return to the person for making the person’s funds available to the merchant bank);
the merchant bank is not required to pay any part of the marked‑up price to the person until after the date of the sale of the asset mentioned in paragraph (b) by the merchant bank.