Singapore legislation
Regulation 19
Regulation 19
Corporate governance requirements applicable to major stake financial company
Subregulation 1
Subject to paragraph (2) and regulation 12(4), a major stake financial company must have a Board, the majority of whom —
where the DFHC (Bank) is a subsidiary of another DFHC (called in this regulation the parent company) — are independent from both the substantial shareholders of the DFHC (Bank) (other than the parent company) and the substantial shareholders of the parent company;
where the DFHC (Bank) is a subsidiary of a bank incorporated in Singapore (called in this regulation the parent bank) — are independent from both the substantial shareholders of the DFHC (Bank) (other than the parent bank) and the substantial shareholders of the parent bank;
where the DFHC (Bank) is a subsidiary of a licensed insurer incorporated in Singapore (called in this regulation the parent insurer) — are independent from both the substantial shareholders of the DFHC (Bank) (other than the parent insurer) and the substantial shareholders of the parent insurer; or
in any other case — are independent from all substantial shareholders of the DFHC (Bank).
Subregulation 2
Where a single substantial shareholder holds 50% or more of the share capital or the voting power in a major stake financial company, paragraph (1) does not apply to the major stake financial company in respect of the independence of its directors from that substantial shareholder.
Subregulation 3
The Nominating Committee of a major stake financial company or, where the company does not have a Nominating Committee, the Nominating Committee of the DFHC (Bank) that has a major stake in the company (called in this regulation the relevant Nominating Committee) must determine —
where a person is proposed to be appointed as a director of a major stake financial company — before the person’s appointment; or
in the case of an existing director of a major stake financial company — before every annual general meeting of a major stake financial company,whether the person or director is independent of a substantial shareholder of the DFHC (Bank), parent company, parent bank or parent insurer (as the case may be) using the criteria set out in regulation 4 and, where applicable, in accordance with regulation 12.
Subregulation 4
Subject to paragraph (5), a major stake financial company must not, without the prior approval of the Authority, appoint any person as its executive officer while that person is concurrently —
employed by a substantial shareholder of a DFHC (Bank) that holds a major stake in the company;
an executive officer of an affiliate of a substantial shareholder of the DFHC (Bank);
where the DFHC (Bank) is a subsidiary of a parent company — employed by a substantial shareholder of the parent company or an affiliate of the substantial shareholder of the parent company;
where the DFHC (Bank) is a subsidiary of a parent bank — employed by a substantial shareholder of the parent bank or an affiliate of a substantial shareholder of the parent bank; or
where the DFHC (Bank) is a subsidiary of a parent insurer — employed by a substantial shareholder of the parent insurer or an affiliate of a substantial shareholder of the parent insurer.
Subregulation 5
Paragraph (4)(a) does not apply in relation to a major stake financial company where the substantial shareholder of a DFHC (Bank) that holds a major stake in the major stake financial company is —
where the DFHC (Bank) is a subsidiary of a parent company — the parent company;
where the DFHC (Bank) is a subsidiary of a bank — the parent bank; or
where the DFHC (Bank) is a subsidiary of a licensed insurer — the parent insurer.
Subregulation 6
A major stake financial company that contravenes paragraph (1) or (4) shall be guilty of an offence and shall be liable on conviction —
to a fine not exceeding $25,000; and
in the case of a continuing offence, to a further fine not exceeding $2,500 for every day or part of a day during which the offence continues after conviction.