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Contractual recognition of sections 92 and 93 of Act

Financial Services and Markets (Resolution of Financial Institutions) Regulations 2024

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—(1) A qualifying pertinent financial institution, or any subsidiary of a qualifying pertinent financial institution, must include a provision in each specified contract to which the qualifying pertinent financial institution or subsidiary is a party, the effect of which is that the parties to the contract agree to be bound by section 92 of the Act and by any suspension of a termination right in the contract by the Authority under section 93 of the Act, where —(a)the qualifying pertinent financial institution or subsidiary enters into the specified contract on or after 1 November 2024; or(b)the qualifying pertinent financial institution or subsidiary executes any transaction under the specified contract on or after 1 November 2024.(2) This regulation does not apply to —(a)a specified contract between the qualifying pertinent financial institution and a person mentioned in regulation 32;(b)a specified contract between the subsidiary of a qualifying pertinent financial institution and a person mentioned in regulation 32; and(c)a specified contract where the obligations of the subsidiary of a qualifying pertinent financial institution under the specified contract are not guaranteed or otherwise supported by the qualifying pertinent financial institution.(3) A qualifying pertinent financial institution, or a subsidiary of the qualifying pertinent financial institution, that fails to comply with paragraph (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000.(4) In any proceedings for an offence under paragraph (3), it is a defence for the qualifying pertinent financial institution or subsidiary of a qualifying pertinent financial institution (as the case may be) to prove, on a balance of probabilities, that the qualifying pertinent financial institution or subsidiary had taken all reasonable efforts to comply with paragraph (1).(5) In this regulation —“qualifying pertinent financial institution” means a bank that is incorporated in Singapore and to which a direction is issued under section 52(1) of the Act;“specified contract” means a contract —(a)that is a financial contract;(b)that is governed by any law other than the law of Singapore; and(c)that contains a termination right, the exercise of which may be suspended, or the applicability of which may be disregarded, under the Act if the contract had been governed by the laws of Singapore;“termination right” has the meaning given by section 91 of the Act.

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