Singapore legislation
Regulation 18
Regulation 18
Unsecured advances, unsecured loans and unsecured credit facilities
Subregulation 1
No licensed financial adviser shall grant any unsecured advance, unsecured loan or unsecured credit facility —
to a director of the licensed financial adviser who is not an employee of the licensed financial adviser; or (b)to any other officer or an employee of the licensed financial adviser (including a director who is its employee) or any of its representatives,which in the aggregate and outstanding at any one time, exceeds $3,000.
Subregulation 2
In this regulation —
Definition
“director” includes the spouse, father, step-father, mother, step-mother, son, adopted son, step-son, daughter, adopted daughter, step-daughter, brother, step-brother, sister or step-sister, of the director;
Definition
“market value”, in relation to assets which are specified products listed for quotation, or quoted, on an approved exchange or an overseas exchange, means —
the last transacted price of the specified products traded on the approved exchange or overseas exchange on the immediately preceding business day;
if there was no trading in the specified products on the immediately preceding business day, then, subject to paragraph (c), the lower of the last transacted price and last bid price of the specified products in the immediately preceding 30 days; or
if there was no trading in the specified products in the immediately preceding 30 days —
the value of the specified products as estimated by the exchange; or
in the absence of such a value, zero value or any other value as approved by the Authority before the grant of the advance, loan or credit facility as mentioned in paragraph (1), or provision of those assets as fresh security, as the case may be;
Definition
“unsecured advance”, “unsecured loan” or “unsecured credit facility” includes —
any advance or loan made without security; (b)any advance, loan or credit facility made with security, where the advance, loan or credit facility or any amount due and owing thereunder at any time exceeds —
the market value of the assets constituting that security; or
where the Authority is satisfied that there is no established market value for those assets, on the basis of a valuation of those assets as approved by the Authority and notified to the licensed financial adviser before the grant of the advance, loan or credit facility;
any guarantee or performance bond entered into by the licensed financial adviser, or the provision of any security by the licensed financial adviser, in connection with any advance, loan or credit facility made by another party to any of its officers, employees or representatives; and
any credit facility without security, whether it has been drawn-down or not.
Subregulation 3
Any licensed financial adviser which contravenes paragraph (1) shall be guilty of an offence.
Subregulation 4
For the avoidance of doubt, this regulation is without prejudice to section 162 of the Companies Act 1967 (loans to directors).