Singapore legislation

Regulation 12

Board of directors of trustee-manager

Subregulation 1

For the purposes of section 14(1) of the Act and subject to paragraphs (2), (5) and (6), the composition of the board of directors of the trustee-manager of a registered business trust shall be in accordance with the following requirements:

(a)

at least a majority of the directors shall be independent from management and business relationships with the trustee-manager;

(b)

at least one-third of the directors shall be independent from management and business relationships with the trustee-manager and from every substantial shareholder of the trustee-manager; and

(c)

at least a majority of the directors shall be independent from any single substantial shareholder of the trustee-manager.

Subregulation 2

The requirements prescribed in paragraph (1) shall not apply —

(a)

where —

(i)

there is a change in status of a director under regulation 3 or 4 during the period between the date immediately after the date of the director’s appointment and the date immediately before the next annual general meeting of the trustee-manager; and

(ii)

the trustee-manager could not reasonably have known of that change on or before the date of the director’s appointment; or

(b)

where —

(i)

there is a change in status of a director under regulation 3 or 4 during the period between the date immediately after an annual general meeting of the trustee-manager and the date immediately before the next annual general meeting of the trustee-manager (other than the period referred to in sub-paragraph (a)(i)); and

(ii)

the trustee-manager could not reasonably have known of that change on or before the date of the first-mentioned annual general meeting.

Subregulation 3

In the circumstances prescribed in paragraph (2)(a)(i) or (b)(i), the trustee-manager shall, within 14 days of becoming aware of the change in status of a director, notify the Authority of the change.

Subregulation 4

The Authority may, upon being notified of a change in status of a director under paragraph (3), direct the trustee-manager of the registered business trust concerned to rectify the composition of the board of directors in accordance with the requirements prescribed in paragraph (1) within such time, and subject to such conditions or requirements, as the Authority may specify.

Subregulation 5

Where a single substantial shareholder has an interest in 50% or more of the voting shares in the trustee-manager of a registered business trust, paragraph (1)(c) shall not apply to the trustee-manager in respect of the independence of its directors from that substantial shareholder.

Subregulation 6

The board of directors of the trustee-manager of a registered business trust may determine that a director who is —

(a)

not considered to be independent from management and business relationships with the trustee-manager under regulation 3; or

(b)

not considered to be independent from a substantial shareholder of the trustee-manager under regulation 4,is nonetheless independent from management and business relationships with the trustee-manager or independent from a substantial shareholder of the trustee-manager, as the case may be, if the board of directors is satisfied that the director’s independent judgment and ability to act with regard to the interests of all the unitholders of the registered business trust as a whole will not be interfered with, despite the relationships.

Subregulation 7

The board of directors of the trustee-manager of a registered business trust shall, prior to every annual general meeting of the registered business trust, review and determine the following using the criteria set out in regulation 3 or 4, as the case may be, and, where applicable, in accordance with paragraph (6):

(a)

whether a director is independent from management and business relationships with the trustee-manager; and

(b)

whether a director is independent from each substantial shareholder of the trustee-manager.

Subregulation 8

Upon the board of directors’ review and determination under paragraph (7), the board of directors shall disclose in a written statement annexed to the profit and loss account of the registered business trust required under section 76(1) of the Act for each director in respect of each of the following:

(a)

whether he is independent from management and business relationships with the trustee-manager;

(b)

whether he is independent from management and business relationships with the trustee-manager and from every substantial shareholder of the trustee-manager; and

(c)

whether he is independent from every substantial shareholder of the trustee-manager,and if he is not independent under any or all of the circumstances specified in sub-paragraphs (a), (b) and (c), to describe and explain the relationship of such non-independence.

Subregulation 9

Where the board of directors determines that a director is nonetheless independent under paragraph (6), the board of directors shall disclose in a written statement annexed to the profit and loss account of the registered business trust required under section 76(1) of the Act —

(a)

the nature of that director’s relationship; and

(b)

an explanation of the grounds for the determination of that director’s independence by the board of directors.

Subregulation 10

Where the board of directors of the trustee-manager of any registered business trust has contravened paragraph (7), (8) or (9), any director who permits or authorises the contravention shall be guilty of an offence.

Subregulation 11

For the purposes of this regulation, a reference to a director shall include a reference to a person proposed to be appointed as a director.

Read in full context — Business Trusts Regulations →