Singapore legislation

Regulation 3

of Securities and Futures (Corporate Governance of Approved Exchanges, Approved Clearing Houses, Licensed Trade Repositories and Approved Holding Companies) Regulations 2024

Regulation 3

Independence from management and business relationships

Subregulation 1

In these Regulations, subject to regulation 5, a director is considered to be independent from management and business relationships with a regulated institution if —

(a)

the director has no management relationship with the regulated institution or any of its subsidiaries; and

(b)

the director has no business relationship with the regulated institution or any of its subsidiaries, or with any officer of the regulated institution,that could interfere, or be reasonably regarded as interfering, with the exercise of the director’s independent business judgment with regard to the interest of the regulated institution.

Subregulation 2

Without limiting paragraph (1)(a), a director is not considered to be independent from management relationships with a regulated institution or any of its subsidiaries if —

(a)

he or she is employed by the regulated institution or any of its subsidiaries, or has been so employed at any time during the current financial year or any of the preceding 3 financial years of the regulated institution or any of its subsidiaries;

(b)

any member of his or her immediate family —

(i)

is employed by the regulated institution or any of its subsidiaries as an executive officer whose compensation is determined by the Remuneration Committee of the regulated institution or any of its subsidiaries; or

(ii)

has been so employed at any time during the current financial year or any of the preceding 3 financial years of the regulated institution or any of its subsidiaries; or

(c)

he or she is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the management of the regulated institution or any of its subsidiaries.

Subregulation 3

Without limiting paragraph (1)(b) but subject to regulation 5 and paragraph (5), a director is not considered to be independent from business relationships with a regulated institution or any of its subsidiaries if —

(a)

he or she is a director, a substantial shareholder or an executive officer of any corporation, or a partner of a firm or a limited liability partnership or a sole proprietor, where the corporation, firm, limited liability partnership or sole proprietor carries on a business for purposes of profit to which the regulated institution or any of its subsidiaries has made, or from which the regulated institution or any of its subsidiaries has received, substantial payments in the current or immediately preceding financial year;

(b)

he or she is receiving or has received, any compensation from the regulated institution or from any of its subsidiaries, other than compensation received for his or her services as a director or as an employee, at any time during the current or immediately preceding financial year of the regulated institution;

(c)

he or she is a director or a substantial shareholder of a corporation which is —

(i)

a member of; or

(ii)

a related corporation of a member of,the regulated institution or any of its subsidiaries;

(d)

he or she is employed by, is receiving or has, at any time during the current or immediately preceding financial year of the regulated institution, received any compensation from a corporation which is —

(i)

a member of the regulated institution;

(ii)

a related corporation of a member of the regulated institution;

(iii)

a member of a subsidiary of the regulated institution; or

(iv)

a related corporation of a member of a subsidiary of the regulated institution,and, in the case of sub‑paragraph (ii) or (iv), he or she is responsible for or engages in the activities of the member; or

(e)

any member of his or her immediate family is —

(i)

a director or a substantial shareholder of a corporation which is a member of —

(A)

the regulated institution; or

(B)

any of the subsidiaries of the regulated institution; or

(ii)

employed by a corporation which is a member of —

(A)

the regulated institution; or

(B)

any of the subsidiaries of the regulated institution,as an executive officer whose compensation is determined by the Remuneration Committee of that corporation.

Subregulation 4

For the purposes of paragraph (3)(a), “payments” does not include payments for transactions involving standard services with published rates, or for routine or retail transactions or relationships, unless special or favourable treatment is accorded.

Subregulation 5

Paragraph (3)(c), (d) and (e) does not apply to a director of a regulated institution that is —

(a)

a licensed trade repository; or

(b)

an approved holding company of a licensed trade repository which is not also a holding company of an approved exchange or an approved clearing house.

Read in full context — Securities and Futures (Corporate Governance of Approved Exchanges, Approved Clearing Houses, Licensed Trade Repositories and Approved Holding Companies) Regulations 2024 →