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Contents

Long Title

Part I PRELIMINARY

Part II MARKETS

Division 1 — Establishment of Markets

Subdivision 1 Approved exchange and recognised market operator

Subdivision 2 Exempt market operator

Division 2 — Regulation of Approved Exchanges

Subdivision 1 Obligations of approved exchanges

Subdivision 2 Rules of approved exchanges

Subdivision 3 Matters requiring approval of Authority

Subdivision 4 Powers of Authority

Subdivision 5 Immunity

Division 3 — Regulation of Recognised Market Operators

Division 4 — General Powers of Authority

Division 5 — Voluntary Transfer of Business of Approved Exchange or Recognised Market Operator

Part IIA TRADE REPOSITORIES

Division 1 — Licensing of Trade Repositories

Division 2 — Regulation of Licensed Trade Repositories

Subdivision 1 Obligations of licensed trade repositories

Subdivision 2 Rules of licensed trade repositories

Subdivision 3 Matters requiring approval of Authority

Subdivision 4 Powers of Authority

Subdivision 5 Immunity

Division 3 — Regulation of Licensed Foreign Trade Repositories

Division 4 — General Powers of Authority

Division 5 — Voluntary Transfer of Business of Licensed Trade Repository or Licensed Foreign Trade Repository

Part III CLEARING FACILITIES

Division 1 — Establishment of Clearing Facilities

Division 2 — Regulation of Approved Clearing Houses

Subdivision 1 Obligations of approved clearing houses

Subdivision 2 Rules of approved clearing houses

Subdivision 3 Matters requiring approval of Authority

Subdivision 4 Immunity

Division 3 — Regulation of Recognised Clearing Houses

Division 4 — Insolvency

Division 5 — General Powers of Authority

Division 6 — Voluntary Transfer of Business of Approved Clearing House or Recognised Clearing House

Part IIIA APPROVED HOLDING COMPANIES

Division 1 — Establishment of Approved Holding Companies

Division 2 — Regulation of Approved Holding Companies

Division 3 — Voluntary Transfer of Business of Approved Holding Company

Part IV HOLDERS OF CAPITAL MARKETS SERVICES LICENCE AND REPRESENTATIVES

Division 1 — Capital Markets Services Licence

Division 1A — Voluntary Transfer of Business of Holder of Capital Markets Services Licence

Division 2 — Representatives

Division 3 — General

Part V BOOKS, CUSTOMER ASSETS AND AUDIT

Division 1 — Books

Division 2 — Customer Assets

Division 3 — Audit

Part VI CONDUCT OF BUSINESS

Division 1 — General

Part VIA REPORTING OF DERIVATIVES CONTRACTS

Part VIB CLEARING OF DERIVATIVES CONTRACTS

Part VII DISCLOSURE OF INTERESTS

Division 1 — Disclosure of Interest in Corporation

Subdivision 1 Disclosure by directors and chief executive officer of corporation

Subdivision 2 Disclosure by substantial shareholders in corporation

Subdivision 3 Disclosure by corporation

Division 2 — Disclosure of Interest in Business Trust and Interest in Trustee-Manager of Business Trust

Subdivision 1 Disclosure by substantial unitholders of business trust

Subdivision 2 Disclosure by directors and chief executive officer of trustee-manager of business trust

Subdivision 3 Disclosure by holders of voting shares in trustee-manager

Subdivision 4 Disclosure by trustee-manager

Division 3 — Disclosure of Interests in Real Estate Investment Trust and Interests in Shares of Responsible Person

Subdivision 1 Disclosure by substantial unitholders of real estate investment trust

Subdivision 2 Disclosure by directors and chief executive officer of responsible person

Subdivision 3 Disclosure by holders of voting shares in responsible person

Subdivision 4 Disclosure by responsible person

Division 4 — Civil Penalty

Part VIII SECURITIES INDUSTRY COUNCIL AND TAKE-OVER OFFERS

Part IX SUPERVISION AND INVESTIGATION

Division 1 — Supervisory Powers

Subdivision 1 Powers of Authority to require disclosure of information about securities and futures contracts

Subdivision 2 Inspection powers of Authority

Subdivision 3 Inspection powers of foreign regulatory authority

Division 2 — Power of Minister to Appoint Inspector for Investigating Dealings in Securities, etc.

Division 3 — Investigative Powers of Authority

Subdivision 1 General

Subdivision 2 Examination of persons

Subdivision 3 Powers to obtain information

Division 4 — Transfer of Evidence

Part X ASSISTANCE TO FOREIGN REGULATORY AUTHORITIES

Part XI INVESTOR COMPENSATION SCHEME

Part XII MARKET CONDUCT

Division 1 — Prohibited Conduct — Securities

Division 2 — Prohibited Conduct — Futures Contracts, Leveraged Foreign Exchange Trading

Division 3 — Insider Trading

Division 4 — Civil Liability

Division 5 — Attributed Liability

Subdivision 1 Corporations

Subdivision 2 Partnerships and limited liability partnerships

Subdivision 3 Officers, partners, etc., of entities

Subdivision 4 General

Division 6 — Miscellaneous

Part XIII OFFERS OF INVESTMENTS

Division 1 — Shares and Debentures

Subdivision 1 Interpretation

Subdivision 2 Prospectus requirements

Subdivision 3 Debentures

Subdivision 4 Exemptions

Division 1A — Business Trusts

Subdivision 1 Interpretation

Subdivision 2 Prospectus requirements

Subdivision 2A Recognised business trusts

Subdivision 3 Exemptions

Subdivision 4 Debentures

Division 2 — Collective Investment Schemes

Subdivision 1 Interpretation

Subdivision 2 Authorisation and recognition

Subdivision 2A Voluntary transfer of business of approved trustee

Subdivision 3 Prospectus requirements

Subdivision 4 Exemptions

Division 3 — Securities Hawking

Part XIV APPEALS

Part XV MISCELLANEOUS

FIRST SCHEDULE Market

SECOND SCHEDULE Regulated Activities

THIRD SCHEDULE Specified Persons

FOURTH SCHEDULE Specified Provisions

Legislative Source Key

Legislative History

Comparative Table

 
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On 17/04/2014, you requested the version in force on 17/04/2014 incorporating all amendments published on or before 17/04/2014. The closest version currently available is that of 01/11/2013.
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Securities and Futures Act
(CHAPTER 289)

(Original Enactment: Act 42 of 2001)

REVISED EDITION 2006
(1st April 2006)
An Act relating to the regulation of activities and institutions in the securities, futures and derivatives industry, including leveraged foreign exchange trading, and of clearing facilities, and for matters connected therewith.
[Act 34 of 2012 wef 01/08/2013]
[1st January 2002: Parts I, VIII, IX, X and XV (except section 314), First and Second Schedules ;
1st July 2002: Parts XIII and XIV ;
1st October 2002: Parts II to VII, XI and XII, section 314 and Third Schedule ]
PART I
PRELIMINARY
Short title
1.  This Act may be cited as the Securities and Futures Act.
Interpretation
2.
—(1)  In this Act, unless the context otherwise requires —
“advising on corporate finance” has the meaning given to it in the Second Schedule;
“advocate and solicitor” means an advocate and solicitor of the Supreme Court or a foreign lawyer as defined in section 2(1) of the Legal Profession Act (Cap. 161);
“appointed representative”, in respect of a type of regulated activity, has the meaning given to that expression in section 99D, and “appointed representative” means an appointed representative in respect of any type of regulated activity;
[2/2009 wef 26/11/2010]
“approved clearing house” means a corporation that is approved by the Authority under section 51(1)(a) as an approved clearing house;
[Act 34 of 2012 wef 01/08/2013]
“approved exchange” means a corporation that is approved by the Authority under section 8(1) as an approved exchange;
“approved holding company” means a corporation that is approved by the Authority under section 81W as an approved holding company;
“auditor” means a public accountant who is registered or deemed to be registered under the Accountants Act (Cap. 2) and, in Divisions 1 and 1A of Part XIII, when used in relation to an entity not being a company, includes —
(a)
a person who is duly registered, licensed, approved or otherwise authorised to practise as an auditor (such practice to include the issue of any opinion, report or other document on the audit of any financial statement) —
(i)
under the laws of the place where the entity is formed or constituted; or
(ii)
under the laws of the place of his practice, if the auditing standards that are or will be applied to the financial statements of the entity are —
(A)
auditing standards commonly applied in that place; or
(B)
international auditing standards (by whatever name called); or
(b)
such other person as may be approved by the Authority in any particular case to be an auditor for such entity;
“Authority” means the Monetary Authority of Singapore established under the Monetary Authority of Singapore Act (Cap. 186);
“book” includes any record, register, document or other record of information, and any account or accounting record, however compiled, recorded or stored, whether in written or printed form or on microfilm or in any other electronic form or otherwise;
“business rules”, in relation to an approved holding company, a securities exchange, a futures exchange, a recognised market operator, a licensed trade repository, a licensed foreign trade repository, an approved clearing house or a recognised clearing house, means the rules, regulations, by-laws or such similar body of statements, by whatever name called, that govern the activities and conduct of —
(a)
the approved holding company, securities exchange, futures exchange, recognised market operator, approved clearing house or recognised clearing house and its members, or the licensed trade repository or licensed foreign trade repository and its participants; and
(b)
other persons in relation to it,
whether or not those rules, regulations, by-laws or similar body of statements are made by the approved holding company, securities exchange, futures exchange, recognised market operator, licensed trade repository, licensed foreign trade repository, approved clearing house or recognised clearing house or are contained in its constituent documents; but does not include the listing rules of a securities exchange or recognised market operator (which is an overseas securities exchange);
[Act 34 of 2012 wef 01/08/2013]
“business trust” has the same meaning as in section 2 of the Business Trusts Act (Cap. 31A);
“capital markets products” means any securities, futures contracts, contracts or arrangements for the purposes of foreign exchange trading, contracts or arrangements for the purposes of leveraged foreign exchange trading, and such other products as the Authority may prescribe as capital markets products;
“capital markets services licence” means a licence that is granted by the Authority under section 86 to a person to carry on a business in any regulated activity;
“chairman” means a chairman of a board of directors;
“chief executive officer”  —
(a)
in relation to an approved exchange, a recognised market operator, a licensed trade repository, a licensed foreign trade repository, an approved clearing house, a recognised clearing house, an approved holding company or the holder of a capital markets services licence, means any person, by whatever name called, who is —
(i)
in the direct employment of, or acting for or by arrangement with, the approved exchange, recognised market operator, licensed trade repository, licensed foreign trade repository, approved clearing house, recognised clearing house, approved holding company or holder of a capital markets services licence, as the case may be; and
(ii)
principally responsible for the management and conduct of the business of the approved exchange, recognised market operator, licensed trade repository, licensed foreign trade repository, approved clearing house, recognised clearing house, approved holding company or holder of a capital markets services licence, as the case may be, in Singapore; or
[Act 34 of 2012 wef 01/08/2013]
(b)
in relation to a corporation (other than one referred to in paragraph (a)), means any person, by whatever name called, who is in the direct employment of, or acting for or by arrangement with, the corporation, and who is principally responsible for the management and conduct of the business of the corporation;
“clearing facility” has the meaning given to it in Part II of the First Schedule;
“clearing or settlement” has the meaning given to it in Part II of the First Schedule;
“closed-end fund” means an arrangement referred to in paragraph (a) or (b) of the definition of “collective investment scheme” under which units that are issued are exclusively or primarily non-redeemable at the election of the holders of units, but does not include —
(a)
an arrangement referred to in paragraph (a) of that definition —
(i)
which is a trust;
(ii)
which invests primarily in real estate and real estate-related assets specified by the Authority in the Code on Collective Investment Schemes; and
(iii)
all or any units of which are listed for quotation on a securities exchange; or
(b)
an arrangement referred to in paragraph (a) of that definition which is, or which belongs to a class or description of arrangements which is, specified by the Authority, by notification published in the Gazette, to be an arrangement that is not a closed-end fund, or a class or description of arrangements that are not closed-end funds, as the case may be;
“Code on Collective Investment Schemes” means the Code on Collective Investment Schemes referred to in section 284 which is issued by the Authority under section 321(1);
“collective investment scheme” means —
(a)
an arrangement in respect of any property —
(i)
under which —
(A)
the participants do not have day-to-day control over the management of the property, whether or not they have the right to be consulted or to give directions in respect of such management; and
(B)
the property is managed as a whole by or on behalf of a manager;
(ii)
under which the contributions of the participants and the profits or income from which payments are to be made to them are pooled; and
(iii)
the purpose or effect, or purported purpose or effect, of which is to enable the participants (whether by acquiring any right, interest, title or benefit in the property or any part of the property or otherwise) —
(A)
to participate in or receive profits, income, or other payments or returns arising from the acquisition, holding, management or disposal of, the exercise of, the redemption of, or the expiry of, any right, interest, title or benefit in the property or any part of the property; or
(B)
to receive sums paid out of such profits, income, or other payments or returns; or
(b)
an arrangement which is an arrangement, or is of a class or description of arrangements, specified by the Authority as a collective investment scheme by notice published in the Gazette,
but does not include —
(i)
an arrangement operated by a person otherwise than by way of business;
(ii)
an arrangement under which each of the participants carries on a business other than investment business and enters into the arrangement solely incidental to that other business;
(iii)
an arrangement under which each of the participants is a related corporation of the manager;
(iv)
an arrangement made by or on behalf of an entity solely for the benefit of persons, each of whom is —
(A)
a bona fide director or equivalent person, a former director or equivalent person, a consultant, an adviser, an employee or a former employee of that entity or, where that entity is a corporation, a related corporation of that entity; or
(B)
a spouse, widow or widower, or a child, adopted child or step-child below the age of 18 years, of such director or equivalent person, former director or equivalent person, employee or former employee;
(iva)
an arrangement made by or on behalf of 2 or more entities solely for the benefit of persons, each of whom is —
(A)
a bona fide director or equivalent person, a former director or equivalent person, a consultant, an adviser, an employee or a former employee of any of those entities or, where any of those entities is a corporation, a related corporation of the entity which is a corporation; or
(B)
a spouse, widow or widower, or a child, adopted child or step-child below the age of 18 years, of such director or equivalent person, former director or equivalent person, employee or former employee;
(v)
a franchise;
(vi)
an arrangement under which money received by an advocate and solicitor from his client, whether as a stakeholder or otherwise, acting in his professional capacity in the ordinary course of his practice, or under which money is received by a statutory body as a stakeholder in the carrying out of its statutory functions;
(vii)
an arrangement made by any co-operative society registered under the Co-operative Societies Act (Cap. 62) in accordance with the objects thereof solely for the benefit of its members;
(viii)
an arrangement made for the purposes of any chit fund permitted to operate under the Chit Funds Act (Cap. 39);
(ix)
an arrangement arising out of a life policy within the meaning of the Insurance Act (Cap. 142);
(x)
a closed-end fund constituted either as an entity or a trust;
(xi)
[Deleted by Act 31/2004]
(xii)
an arrangement which is an arrangement, or is of a class or description of arrangements, specified by the Authority as not constituting a collective investment scheme by notice published in the Gazette;
“commodity” means gold or any produce, item, goods, article or financial instrument, and includes an index, right or interest in such commodity other than a financial instrument; and such other index, right or interest of any nature as the Authority may, by notification in the Gazette, prescribe to be a commodity;
[Act 34 of 2012 wef 01/08/2013]
“company” has the same meaning as in section 4(1) of the Companies Act (Cap. 50);
“connected person”, in relation to —
(a)
an individual, means —
(i)
the individual’s spouse, son, adopted son, step-son, daughter, adopted daughter, step-daughter, father, step-father, mother, step-mother, brother, step-brother, sister or step-sister; and
(ii)
a firm, a limited liability partnership or a corporation in which the individual or any of the persons mentioned in sub-paragraph (i) has control of not less than 20% of the voting power in the firm, limited liability partnership or corporation, whether such control is exercised individually or jointly; or
(b)
a firm, a limited liability partnership or a corporation, means another firm, limited liability partnership or corporation in which the first-mentioned firm, limited liability partnership or corporation has control of not less than 20% of the voting power in that other firm, limited liability partnership or corporation,
and a reference in this Act to a person connected to another person shall be construed accordingly;
“corporation” has the same meaning as in section 4(1) of the Companies Act (Cap. 50);
“customer” means —
(a)
in relation to a holder of a capital markets services licence —
(i)
for the purposes of Parts IV, VI, VII and XV, a person on whose behalf the holder carries on or will carry on any regulated activity; or
(ii)
for the purposes of Part V, a person on whose behalf the holder carries on or will carry on any regulated activity, or any other person with whom the holder, as principal, enters or will enter into transactions —
(A)
for the sale or purchase of securities;
(B)
for the sale or purchase of futures contracts; or
(C)
in connection with leveraged foreign exchange trading,
but does not include such person or class of persons as may be prescribed; or
(b)
for the purposes of Part III and the definition of “user”, a person on whose behalf a member of an approved exchange, an approved clearing house or a recognised clearing house, as the case may be, carries on any activity regulated under this Act, but does not include —
(i)
the member, with respect to dealings for the member’s own account;
(ii)
any officer, director, employee or representative of the member; or
(iii)
a related corporation of the member, with respect to accepted instructions to deal for an account belonging to, and maintained wholly for the benefit of, that related corporation;
[2/2009 wef 29/03/2010]
[Act 34 of 2012 wef 01/08/2013]
“dealing in securities” has the meaning given to it in the Second Schedule;
“debenture”, except for the purposes of Part XIII, includes any debenture stock, bond, note and any other debt securities issued by a corporation or any other entity, whether constituting a charge or not, on the assets of the issuer but does not include —
(a)
a cheque, letter of credit, order for the payment of money or bill of exchange; or
(b)
for the purposes of the application of this definition to a provision of this Act in respect of which any regulations made thereunder provide that the word “debenture” does not include a prescribed document or a document included in a prescribed class of documents, that document or a document included in that class of documents, as the case may be;
“defalcation” means misapplication, including misappropriation, of any property;
“derivative”, in relation to a unit in a business trust, has the same meaning as in section 2 of the Business Trusts Act (Cap. 31A);
“derivatives contract” —
(a)
means any of the following (not being any securities or any futures contract):
(i)
a forward contract;
(ii)
an option contract;
(iii)
a swap contract;
(iv)
any contract, arrangement or transaction that is, or that belongs to a class of contracts, arrangements or transactions that is, prescribed by the Authority by regulations made under section 341 for the purposes of this sub-paragraph; but
(b)
does not include any contract, arrangement or transaction that is, or that belongs to a class of contracts, arrangements or transactions that is, prescribed by the Authority by regulations made under section 341 for the purposes of this paragraph;
[Act 34 of 2012 wef 01/08/2013]
[Deleted by Act 34 of 2012 wef 01/08/2013]
“director” has the same meaning as in section 4(1) of the Companies Act (Cap. 50);
“entity” includes a corporation, an unincorporated association, a partnership and the government of any state, but does not include a trust;
“executive officer”, in relation to an approved exchange, a recognised market operator, a licensed trade repository, a licensed foreign trade repository, an approved clearing house, a recognised clearing house, an approved holding company, the holder of a capital markets services licence, or any other corporation, means any person, by whatever name called, who is —
(a)
in the direct employment of, or acting for or by arrangement with, the approved exchange, recognised market operator, licensed trade repository, licensed foreign trade repository, approved clearing house, recognised clearing house, approved holding company, holder of a capital markets services licence, or other corporation, as the case may be; and
(b)
concerned with or takes part in the management of the approved exchange, recognised market operator, licensed trade repository, licensed foreign trade repository, approved clearing house, recognised clearing house, approved holding company, holder of a capital markets services licence, or other corporation, as the case may be, on a day-to-day basis;
“exempt market operator” means —
(a)
a corporation that is exempted under section 14(2);
(b)
a corporation declared under section 14(8) to be an exempt market operator; or
(c)
a corporation operating a market included in a class of markets in relation to which a declaration under section 14(9) is in force;
“exempt person” means a person who is exempted under section 99;
“financial instrument” includes any currency, currency index, interest rate, interest rate instrument, interest rate index, share, share index, stock, stock index, debenture, bond index, a group or groups of such financial instruments, and any other thing that is prescribed by the Authority by regulations made under section 341 for the purposes of this definition;
[Act 34 of 2012 wef 01/08/2013]
“financial year” has the same meaning as in section 4(1) of the Companies Act (Cap. 50);
“firm” has the same meaning as in section 2(1) of the Business Registration Act (Cap. 32);
“foreign company” has the same meaning as in section 4(1) of the Companies Act;
“foreign exchange trading” has the meaning given to it in the Second Schedule;
“forward contract” —
(a)
means a contract under which one party agrees to transfer title to a specified underlying thing, or a specified quantity of a specified underlying thing, to another party at a specified future time and at a specified price payable at that time, whether or not there is any intention —
(i)
to effect an actual delivery of the underlying thing;
(ii)
to effect a settlement of any difference in the price or value of the underlying thing or, if the contract relates to 2 or more underlying things, of any difference in the price of one or more of the underlying things; or
(iii)
to effect a settlement determined with reference to the underlying thing or, if the contract relates to 2 or more underlying things, determined with reference to one or more of the underlying things; but
(b)
does not include a futures contract;
[Act 34 of 2012 wef 01/08/2013]
“franchise” means a written agreement or arrangement between 2 or more persons by which —
(a)
a party (referred to in this definition as the franchisor) to the agreement or arrangement authorises or permits another party (referred to in this definition as the franchisee), or a person associated with the franchisee, to exercise the right to engage in the business of offering, selling or distributing goods or services in Singapore under a plan or system controlled by the franchisor or a person associated with the franchisor;
(b)
the business carried on by the franchisee or the person associated with the franchisee, as the case may be, is capable of being identified by the public as being substantially associated with a trade or service mark, logo, symbol or name identifying, commonly connected with or controlled by the franchisor or a person associated with the franchisor;
(c)
the franchisor exerts, or has authority to exert, a significant degree of control over the method or manner of operation of the franchisee’s business;
(d)
the franchisee or a person associated with the franchisee is required under the agreement or arrangement to make payment or give some other form of consideration to the franchisor or a person associated with the franchisor; and
(e)
the franchisor agrees to communicate to the franchisee, or a person associated with the franchisee, knowledge, experience, expertise, know-how, trade secrets or other information whether or not it is proprietary or confidential;
“fund management” has the meaning given to it in the Second Schedule;
“futures contract” means —
(a)
for the purposes of Part I of the First Schedule —
(i)
a contract the effect of which is that —
(A)
one party agrees to deliver a specified commodity, or a specified quantity of a specified commodity, to another party at a specified future time and at a specified price payable at that time; or
(B)
the parties will discharge their obligations under the contract by settling the difference between the value of a specified quantity of a specified commodity agreed at the time of the making of the contract and at a specified future time,
and includes a futures option transaction, but does not include such contract or class of contracts as the Authority may prescribe; or
(ii)
such other contract or class of contracts as the Authority may prescribe;
(b)
for the purposes of any other provision in this Act —
(i)
a contract the effect of which is that —
(A)
one party agrees to deliver a specified commodity, or a specified quantity of a specified commodity, to another party at a specified future time and at a specified price payable at that time pursuant to the terms and conditions set out in the business rules of a futures market or pursuant to the business practices of a futures market; or
(B)
the parties will discharge their obligations under the contract by settling the difference between the value of a specified quantity of a specified commodity agreed at the time of the making of the contract and at a specified future time, such difference being determined in accordance with the business rules or practices of the futures market at which the contract is made,
and includes a futures option transaction, but does not include such contract or class of contracts as the Authority may prescribe; or
(ii)
such other contract or class of contracts as the Authority may prescribe;
“futures exchange” means an approved exchange in respect of the operation of its futures market;
“futures market” has the meaning given to it in Part I of the First Schedule;
“futures option transaction” means an option on a specified futures contract which is transacted in accordance with the business rules or practices of a futures exchange, recognised market operator or futures market on which the transaction is made;
“holding company” has the same meaning as in section 5(4) of the Companies Act (Cap. 50);
“leveraged foreign exchange trading” has the meaning given to it in the Second Schedule;
“licensed foreign trade repository” means a corporation that has in force a foreign trade repository licence granted by the Authority under section 46E(2);
[Act 34 of 2012 wef 01/08/2013]
“licensed trade repository” means a corporation that has in force a trade repository licence granted by the Authority under section 46E(1);
[Act 34 of 2012 wef 01/08/2013]
“limited liability partnership” has the same meaning as in section 2(1) of the Limited Liability Partnerships Act 2005 (Act 5 of 2005);
“listing rules”, in relation to a corporation that establishes or operates, or proposes to establish or operate, a securities market of a securities exchange or a recognised market operator, or an overseas securities exchange that establishes or operates or proposes to establish or operate a securities market of a recognised market operator, means rules governing or relating to —
(a)
the admission to the official list of the corporation or overseas securities exchange, of corporations, governments, bodies unincorporate or other persons for the purpose of the quotation on the securities market of the corporation or overseas securities exchange of securities issued, or made available by such corporations, governments, bodies unincorporate or other persons, or the removal from that official list and for other purposes; or
(b)
the activities or conduct of corporations, governments, bodies unincorporate and other persons who are admitted to that list,
whether those rules are made —
(i)
by the corporation or overseas securities exchange or are contained in any of the constituent documents of the corporation or overseas securities exchange; or
(ii)
by another person and adopted by the corporation or overseas securities exchange;
“manager”, in relation to a collective investment scheme, means a person, by whatever name called, who is responsible for managing the property of, or operating, the collective investment scheme;
“market” has the meaning given to it in Part I of the First Schedule;
“member”, in relation to an approved exchange, a recognised market operator, an approved clearing house or a recognised clearing house, means a person who holds membership of any class or description in the approved exchange, recognised market operator, approved clearing house or recognised clearing house, whether or not he holds any share in the share capital of the approved exchange, recognised market operator, approved clearing house or recognised clearing house, as the case may be;
[Act 34 of 2012 wef 01/08/2013]
“newspaper” has the same meaning as in section 2 of the Newspaper and Printing Presses Act (Cap. 206);
“officer” has the same meaning as in section 4(1) of the Companies Act (Cap. 50);
“option contract” —
(a)
means a contract providing for an option to acquire or dispose of a specified underlying thing, or a specified quantity of a specified underlying thing, whether or not there is any intention —
(i)
to effect an actual delivery of the underlying thing;
(ii)
to effect a settlement of any difference in the price or value of the underlying thing or, if the contract relates to 2 or more underlying things, of any difference in the price or value of one or more of the underlying things; or
(iii)
to effect a settlement determined with reference to the underlying thing or, if the contract relates to 2 or more underlying things, determined with reference to one or more of the underlying things; but
(b)
does not include any securities;
[Act 34 of 2012 wef 01/08/2013]
“overseas futures exchange” means a person operating a futures market outside Singapore which is regulated by a financial services regulatory authority of a country or territory other than Singapore;
“overseas securities exchange” means a person operating a securities market outside Singapore which is regulated by a financial services regulatory authority of a country or territory other than Singapore;
“participant” means —
(a)
for the purposes of Part II, a person who may participate in one or more of the services provided by an approved exchange, a recognised market operator or an exempt market operator, in its capacity as an approved exchange, a recognised market operator or an exempt market operator, as the case may be;
[Act 34 of 2012 wef 01/08/2013]
(aa)
for the purposes of Part IIA, a person who may participate in one or more of the services provided by a licensed trade repository or licensed foreign trade repository, in its capacity as a licensed trade repository or licensed foreign trade repository, as the case may be;
[Act 34 of 2012 wef 01/08/2013]
(b)
for the purposes of Part III, a person who, under the business rules of an approved clearing house or a recognised clearing house, may participate in one or more of the services provided by the approved clearing house or recognised clearing house, in its capacity as an approved clearing house or a recognised clearing house, as the case may be; or
[Act 34 of 2012 wef 01/08/2013]
(c)
for the purposes of any other provision of this Act, a person who participates in a collective investment scheme by way of owning one or more units in a collective investment scheme;
“partner” and “manager”, in relation to a limited liability partnership, have the respective meanings assigned to them in section 2(1) of the Limited Liability Partnerships Act 2005 (Act 5 of 2005);
“prescribed written law” means this Act or any of the following written laws:
(a)
Banking Act (Cap. 19);
(b)
Finance Companies Act (Cap. 108);
(c)
Financial Advisers Act (Cap. 110);
(d)
Insurance Act (Cap. 142);
(e)
Monetary Authority of Singapore Act (Cap. 186);
(f)
Money-changing and Remittance Businesses Act (Cap. 187); or
(g)
such other written law as the Authority may by order prescribe;
“principal”, in relation to a representative, means a person whom the representative is in the direct employment of, is acting for or is acting by arrangement with, and on behalf of whom the representative carries or will carry out any regulated activity;
“providing credit rating services” has the meaning given to it in the Second Schedule;
[S 20/2012 wef 17/01/2012]
“providing custodial services for securities” has the meaning given to it in the Second Schedule;
“provisional representative”, in respect of a type of regulated activity, has the meaning given to that expression in section 99E, and “provisional representative” means a provisional representative in respect of any type of regulated activity;
[2/2009 wef 26/11/2010]
“public company” has the same meaning as in section 4(1) of the Companies Act (Cap. 50);
“public register of representatives” means the register of that name under section 99C(3);
[2/2009 wef 26/11/2010]
“quote”, in relation to securities and a securities market of an approved exchange or of a recognised market operator, means to display or provide, on the securities market of the approved exchange or recognised market operator, information concerning the particular prices or particular consideration at which offers or invitations to sell, purchase or exchange issued or prescribed securities are made on that securities market, being offers or invitations that are intended or may reasonably be expected, to result, directly or indirectly, in the making or acceptance of offers to sell, purchase or exchange issued or prescribed securities;
“real estate investment trust management” has the meaning given to it in the Second Schedule;
“recognised business trust” means a business trust that is recognised by the Authority under section 282TA(1);
[2/2009 wef 01/10/2012]
“recognised clearing house” mean a corporation that is recognised by the Authority under section 51(1)(b) or (2) as a recognised clearing house;
[Act 34 of 2012 wef 01/08/2013]
“recognised market operator” means a corporation that is recognised by the Authority under section 8(2) as a recognised market operator;
“record” means information that is inscribed, stored or otherwise fixed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form;
“registered business trust” has the same meaning as in section 2 of the Business Trusts Act (Cap. 31A);
“regulated activity” means an activity specified in the Second Schedule;
“related corporation” has the same meaning as in section 4(1) of the Companies Act;
“representative”, except for the purposes of Part XIII, means a person, by whatever name called, in the direct employment of, or acting for, or by arrangement with, a person who carries on business in any regulated activity, who carries out for that person any such activity (other than work ordinarily performed by accountants, clerks or cashiers), whether or not he is remunerated, and whether his remuneration, if any, is by way of salary, wages, commission or otherwise; and includes any officer of a corporation who performs for the corporation any such activity whether or not he is remunerated, and whether his remuneration, if any, is by way of salary, wages, commission or otherwise;
“responsible person”, in relation to a collective investment scheme, means —
(a)
in the case of a scheme which is constituted as a corporation, the corporation; or
(b)
in the case of a scheme which is not constituted as a corporation, the manager for the scheme;
“securities” means —
(a)
debentures or stocks issued or proposed to be issued by a government;
(b)
debentures, stocks or shares issued or proposed to be issued by a corporation or body unincorporate;
(c)
any right, option or derivative in respect of any such debentures, stocks or shares;
(d)
any right under a contract for differences or under any other contract the purpose or pretended purpose of which is to secure a profit or avoid a loss by reference to fluctuations in —
(i)
the value or price of any such debentures, stocks or shares;
(ii)
the value or price of any group of any such debentures, stocks or shares; or
(iii)
an index of any such debentures, stocks or shares;
(e)
any unit in a collective investment scheme;
(f)
any unit in a business trust;
[2/2009 wef 20/04/2009]
(g)
any derivative of a unit in a business trust; or
[2/2009 wef 20/04/2009]
(h)
such other product or class of products as the Authority may prescribe,
but does not include —
(i)
futures contracts which are traded on a futures market;
(ii)
bills of exchange;
(iii)
promissory notes;
[2/2009 wef 20/04/2009]
(iv)
certificates of deposit issued by a bank or finance company whether situated in Singapore or elsewhere; or
(v)
such other product or class of products as the Authority may prescribe as not being securities;
“securities exchange” means an approved exchange in respect of the operation of its securities market;
“securities financing” has the meaning given to it in the Second Schedule;
“Securities Industry Council” means the Securities Industry Council referred to in section 138;
“securities market” has the meaning given to it in Part I of the First Schedule;
“share” has the same meaning as in section 4(1) of the Companies Act (Cap. 50);
“subsidiary” has the same meaning as in section 5 of the Companies Act;
“substantial unitholder”  —
(a)
in relation to a collective investment scheme, means a participant who has an interest or interests in one or more voting units in the scheme, the total votes attached to that unit, or those units, being not less than 5% of the total votes attached to all the voting units in the scheme; or
(b)
in relation to a business trust, means a person who has an interest or interests in one or more voting units in the business trust, the total votes attached to that unit, or those units, being not less than 5% of the total votes attached to all the voting units in the business trust;
[2/2009 wef 19/11/2012]
“swap contract” —
(a)
means a contract for differences, or a contract the purpose or purported purpose of which is to secure a profit or avoid a loss by reference to fluctuations in —
(i)
the value or price of one or more underlying things;
(ii)
the value or price of any group of underlying things; or
(iii)
an index of one or more underlying things; but
(b)
does not include any securities;
[Act 34 of 2012 wef 01/08/2013]
“Take-over Code” means the Singapore Code on Take-overs and Mergers referred to in section 139 which is issued by the Authority under section 321(1);
“take-over offer” means —
(a)
an offer for the acquisition by or on behalf of a person of —
(i)
in the case of a public company, or of a corporation all or any of the shares of which are listed for quotation on a securities exchange —
(A)
some or all of the shares, or some or all of the shares of a particular class, in the company or corporation made to all members of the company or corporation, or where the person already holds shares in the company or corporation, made to all other members of the company or corporation; or
(B)
all of the remaining shares in the company or corporation made to all other members of the company or corporation as a result of the person acquiring or consolidating effective control of that company or corporation within the meaning of the Take-over Code;
[2/2009 wef 29/07/2009]
(ii)
in the case of a registered business trust, or of a business trust all or any of the units of which are listed for quotation on a securities exchange —
(A)
some or all of the units, or some or all of the units of a particular class, in the business trust made to all unitholders of the business trust, or where the person already holds units in the business trust, made to all other unitholders of the business trust; or
(B)
all of the remaining units in the business trust made to all other unitholders of the business trust as a result of the person acquiring or consolidating effective control of that business trust within the meaning of the Take-over Code; or
(iii)
in the case of a collective investment scheme constituted as a unit trust and authorised under section 286, that invests primarily in real estate and real estate-related assets specified by the Authority in the Code on Collective Investment Schemes, and all or any of the units in which are listed for quotation on a securities exchange —
(A)
some or all of the units, or some or all of the units of a particular class, in the scheme made to all unitholders of the scheme, or where the person already holds units in the scheme, made to all other unitholders of the scheme; or
(B)
all of the remaining units in the scheme made to all other unitholders of the scheme as a result of the person acquiring or consolidating effective control of that scheme within the meaning of the Take-over Code; or
(b)
a proposed compromise or arrangement which —
(i)
in the case of a public company, is referred to in section 210 of the Companies Act (Cap. 50); or
(ii)
in the case of a corporation all or any of the shares of which are listed for quotation on a securities exchange, complies with the laws, codes and other requirements (whether or not having the force of law) relating to take-overs, compromises and arrangements of the country or territory in which that corporation was incorporated,
and which, if executed, would result in a change in effective control of the public company or corporation within the meaning of the Take-over Code;
“temporary representative”, in respect of a type of regulated activity, has the meaning given to that expression in section 99F, and “temporary representative” means a temporary representative in respect of any type of regulated activity;
[2/2009 wef 26/11/2010]
“trading in futures contracts” has the meaning given to it in the Second Schedule;
“transaction information” means information relating to —
(a)
offers or invitations to enter into, purchase, sell, or exchange securities, futures contracts or derivatives contracts;
(b)
executed transactions in securities, futures contracts or derivatives contracts;
(c)
transactions cleared or settled by an approved clearing house or a recognised clearing house; or
(d)
transactions reported to a licensed trade repository or licensed foreign trade repository;
[Act 34 of 2012 wef 01/08/2013]
“treasury share”  —
(a)
in relation to a company, has the same meaning as in section 4(1) of the Companies Act (Cap. 50); and
(b)
in relation to a corporation (other than a company), means any share equivalent to a treasury share in a company;
[2/2009 wef 19/11/2012]
“trustee-manager”  —
(a)
in relation to a registered business trust, has the same meaning as in section 2 of the Business Trusts Act (Cap. 31A);
(b)
in relation to a business trust for which an application for registration has been made under section 4(1) of the Business Trusts Act, means the company proposed to be named as the trustee-manager in the application made under that section;
(c)
in relation to a recognised business trust, means the entity which manages and operates the recognised business trust, by whatever name called and whether incorporated or not; and
(d)
in relation to a business trust for which an application for recognition has been made under section 282TA(1), means the entity proposed to be managing and operating the trust, by whatever name called and whether incorporated or not;
[2/2009 wef 19/11/2012]
“underlying thing”, in relation to a forward contract, an option contract or a swap contract —
(a)
means —
(i)
a commodity;
(ii)
the credit of any person; or
(iii)
any arrangement, event, index, intangible property, tangible property or transaction that is, or that belongs to a class of arrangements, events, indices, intangible properties, tangible properties or transactions that is, prescribed by the Authority by regulations made under section 341 for the purposes of this sub-paragraph; but
(b)
does not include any arrangement, event, index, intangible property, tangible property or transaction that is, or that belongs to a class of arrangements, events, indices, intangible properties, tangible properties or transactions that is, prescribed by the Authority by regulations made under section 341 for the purposes of this paragraph;
[Act 34 of 2012 wef 01/08/2013]
“unit”  —
(a)
in relation to a collective investment scheme, means a right or interest (however described) in a collective investment scheme (whether or not constituted as an entity), and includes an option to acquire any such right or interest in the collective investment scheme; and
(b)
in relation to a business trust, has the same meaning as in section 2 of the Business Trusts Act (Cap. 31A);
“unitholder”  —
(a)
in relation to a collective investment scheme, means a participant of the scheme; and
(b)
in relation to a business trust, means a person who holds a unit in the business trust;
[2/2009 wef 19/11/2012]
“user” means —
(a)
in relation to an approved exchange, an approved clearing house or a recognised clearing house, a person who is —
(i)
a member of the approved exchange, approved clearing house or recognised clearing house; or
(ii)
a customer of a member of the approved exchange, approved clearing house or recognised clearing house; or
(b)
in relation to a licensed trade repository or a licensed foreign trade repository, a person who is —
(i)
a participant of the licensed trade repository or licensed foreign trade repository; or
(ii)
a client of a participant of the licensed trade repository or licensed foreign trade repository;
[Act 34 of 2012 wef 01/08/2013]
“user information” means transaction information that is referable to —
(a)
a named user; or
(b)
a group of users, from which the name of a user can be directly inferred;
“voting share” has the same meaning as in section 4(1) of the Companies Act (Cap. 50);
[2/2009 wef 19/11/2012]
“voting unit”  —
(a)
in relation to a business trust, means an issued unit in the business trust, other than —
(i)
a unit to which in no circumstances is there attached a right to vote; or
(ii)
a unit to which there is attached a right to vote only in one or more of the following circumstances:
(A)
during a period in which a distribution (or part of a distribution) in respect of the unit is in arrears;
(B)
upon a proposal to reduce the unitholders’ equity of the business trust;
(C)
upon a proposal that affects rights attached to the unit;
(D)
upon a proposal to wind up the business trust;
(E)
upon a proposal for the disposal of the whole of the property, business and undertakings of the business trust;
(F)
during the winding up of the business trust; and
(b)
in relation to a collective investment scheme, means an issued unit in the scheme, other than —
(i)
a unit to which in no circumstances is there attached a right to vote; or
(ii)
a unit to which there is attached a right to vote only in one or more of the following circumstances:
(A)
during a period in which a distribution (or part of a distribution) in respect of the unit is in arrears;
(B)
upon a proposal to reduce the participants’ funds of the scheme;
(C)
upon a proposal that affects rights attached to the unit;
(D)
upon a proposal to wind up the scheme;
(E)
upon a proposal for the disposal of the whole of the property, business and undertakings of the scheme;
(F)
during the winding up of the scheme.
[2/2009 wef 19/11/2012]
[16/2003; 5/2004; 31/2004; 1/2005; 5/2005]
(2)  Any reference in this Act to the affairs of a corporation shall, unless the contrary intention appears, be construed as including a reference to —
(a)
the promotion, formation, membership, control, business, trading, transactions and dealings (whether alone or jointly with another person or other persons and including transactions and dealings as agent, bailee or trustee), property (whether held alone or jointly with another person or other persons and including property held as agent, bailee or trustee), liabilities (including liabilities owned jointly with another person or other persons and liabilities as trustee), profits and other income, receipts, losses, outgoings and expenditure of the corporation;
(b)
in the case of a corporation (not being a trustee corporation) that is a trustee (but without limiting the generality of paragraph (a)), matters concerned with the ascertainment of the identity of the persons who are beneficiaries under the trust, their rights under the trust and any payments that they have received, or are entitled to receive, under the terms of the trust;
(c)
the internal management and proceeding of the corporation;
(d)
any act or thing done (including any contract made and any transaction entered into) by or on behalf of the corporation, or to or in relation to the corporation or its business or property, at a time when —
(i)
a receiver, or a receiver and manager, is in possession of, or has control over, property of the corporation;
(ii)
the corporation is under judicial management;
(iii)
a compromise or arrangement referred to in section 210 of the Companies Act made between the corporation and another person or other persons is being administered; or
(iv)
the corporation is being wound up,
and without limiting the generality of sub-paragraphs (i) to (iv), any conduct of such a receiver or such a receiver and manager, or such a judicial manager, or any person administering such a compromise or arrangement or of any liquidator or provisional liquidator of the corporation;
(e)
the ownership of shares in, debentures of, units of shares in, units of debentures of, and units in a collective investment scheme issued by the corporation;
(f)
the power of persons to exercise, or to control the exercise of, the rights to vote attached to shares in the corporation or to dispose of, or to exercise control over the disposal of, such shares;
(g)
matters concerned with the ascertainment of the persons who are or have been financially interested in the success or failure, or apparent success or failure, of the corporation or are or have been able to control or materially to influence the policy of the corporation;
(h)
the circumstances under which a person acquired or disposed of, or became entitled to acquire or dispose of, shares in, debentures of, units of shares in, units of debentures of, or units in a collective investment scheme issued by, the corporation;
(i)
where the corporation has issued units in a collective investment scheme, any matters concerning the financial or business undertaking, scheme, common enterprise or investment contract to which the units in a collective investment scheme relate; or
(j)
matters relating to or arising out of the audit of, or working papers or reports of an auditor concerning, any matters referred to in paragraphs (a) to (i).
(3)  Where the name of a corporation referred to in this Act is changed pursuant to the Companies Act (Cap. 50), the change of name shall not affect the identity of that corporation or the application of the relevant provisions of this Act or any other written law to that corporation.
(4)  For the purposes of this Act, a person has a substantial shareholding in a corporation if —
(a)
he has an interest or interests in one or more voting shares (excluding treasury shares) in the corporation; and
(b)
the total votes attached to that share, or those shares, is not less than 5% of the total votes attached to all the voting shares (excluding treasury shares) in the corporation.
[2/2009 wef 19/11/2012]
(5)  For the purposes of this Act, a person has a substantial shareholding in a corporation, being a corporation the share capital of which is divided into 2 or more classes of shares, if —
(a)
he has an interest or interests in one or more voting shares (excluding treasury shares) in one of those classes; and
(b)
the total votes attached to that share, or those shares, is not less than 5% of the total votes attached to all the voting shares (excluding treasury shares) in that class.
[2/2009 wef 19/11/2012]
(6)  For the purposes of this Act, a person who has a substantial shareholding in a corporation is a substantial shareholder in that corporation.
[2/2009 wef 19/11/2012]
[SIA, s. 2; FTA, s. 2; Companies, s. 4 & s. 107; UK FSMA 2000, s. 235; Aust. Corporations 2001, s. 9]
Associated person
3.
—(1)  Unless the context otherwise requires, any reference in this Act to a person associated with another person shall be construed as a reference to —
(a)
where the other person is a corporation —
(i)
a director or secretary of the corporation;
(ii)
a related corporation; or
(iii)
a director or secretary of such a related corporation;
(b)
where the matter to which the reference relates is the extent of a power to exercise, or to control the exercise of, the voting power attached to voting shares in a corporation, a person with whom the other person has, or proposes to enter into, an agreement, arrangement, understanding or undertaking, whether formal or informal, or express or implied —
(i)
by reason of which either of those persons may exercise, directly or indirectly, control the exercise of, or substantially influence the exercise of, any voting power attached to a share in the corporation;
(ii)
with a view to controlling or influencing the composition of the board of directors, or the conduct of affairs, of the corporation; or
(iii)
under which either of those persons may acquire from the other of them shares in the corporation or may be required to dispose of such shares in accordance with the directions of the other of them,
except that, in relation to a matter relating to shares in a corporation, a person may be an associate of the corporation and the corporation may be an associate of a person;
(c)
a person with whom the other person is acting, or proposes to act, in concert in relation to the matter to which the reference relates;
(d)
where the matter to which the reference relates is a matter, other than the extent of a power to exercise, or to control the exercise of, the voting power attached to voting shares in a corporation —
(i)
subject to subsection (2), a person who is a director of a corporation of which the other person is a director; or
(ii)
a trustee of a trust in relation to which the other person benefits or is capable of benefiting otherwise than by reason of transactions entered into in the ordinary course of business in connection with the lending of money;
(e)
a person with whom the other person is, according to any subsidiary legislation made under this Act, to be regarded as associated in respect of the matter to which the reference relates;
(f)
a person with whom the other person is, or proposes to become, associated, whether formally or informally, in any other way in respect of the matter to which the reference relates; or
(g)
where the other person has entered into, or proposes to enter into, a transaction, or has done, or proposes to do, any other act or thing, with a view to becoming associated with a person as referred to in paragraph (a), (b), (c), (d), (e) or (f), that last-mentioned person.
(2)  Where, in any proceedings under this Act, it is alleged that a person referred to in subsection (1)(d)(i) was associated with another person at a particular time, that the first-mentioned person shall not be considered to be so associated in relation to a matter to which the proceedings relate unless the person alleging the association proves that the first-mentioned person at that time knew or ought reasonably to have known the material particulars of that matter.
(3)  A person shall not be taken to be associated with another person by virtue of subsection (1)(b), (c), (e) or (f) by reason only of one or more of the following:
(a)
that one of those persons furnishes advice to, or acts on behalf of, the other person in the proper performance of the functions attaching to his professional capacity or to his business relationship with the other person;
(b)
that one of those persons, a customer, gives specific instructions to the other, whose ordinary business includes dealing in securities, trading in futures contracts or leveraged foreign exchange trading, to acquire shares on the customer’s behalf in the ordinary course of that business;
(c)
that one of those persons has sent, or proposes to send, to the other a take-over offer, or has made, or proposes to make, offers under a take-over announcement, within the meaning of the Take-over Code, in relation to shares held by the other;
(d)
that one of those persons has appointed the other, otherwise than for valuable consideration given by the other or by an associate of the other, to vote as a proxy or representative at a meeting of members, or of a class of members, of a corporation.
[SIA, s. 3; Aust. Corporations, s. 12 (2) and s. 16 (1)]
Interest in securities
4.
—(1)  Subject to this section, a person has an interest in securities if he has authority (whether formal or informal, or express or implied) to dispose of, or to exercise control over the disposal of, those securities.
(2)  For the purposes of subsection (1), it is immaterial that the authority of a person to dispose of, or to exercise control over the disposal of, particular securities is, or is capable of being made, subject to restraint or restriction.
(3)  Where any property held in trust consists of or includes securities and a person knows, or has reasonable grounds for believing, that he has an interest under the trust, he shall be deemed to have an interest in those securities.
(4)  Where a corporation has, or is by the provisions of this section deemed to have, an interest in a security and —
(a)
the corporation is, or its directors are, accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of a person; or
(b)
a person has a controlling interest in the corporation,
that person shall be deemed to have an interest in that security.
(5)  Where a corporation has, or is by the provisions of this section (apart from this subsection) deemed to have, an interest in a security and —
(a)
a person is;
(b)
the associates of a person are; or
(c)
a person and his associates are,
entitled to exercise or control the exercise of not less than 20% of the votes attached to the voting shares in the corporation, that person shall be deemed to have an interest in that security.
(6)  For the purposes of subsection (5), a person is an associate of another person if the first-mentioned person is —
(a)
a related corporation of the second-mentioned person;
(b)
a person in accordance with whose directions, instructions or wishes that the second-mentioned person is accustomed or is under an obligation, whether formal or informal, to act in relation to the security referred to in subsection (4);
(c)
a person who is accustomed or is under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the second-mentioned person in relation to that security;
(d)
a corporation which is, or the directors of which are, accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the second-mentioned person in relation to that security; or
(e)
a corporation in accordance with the directions, instructions or wishes of which, or of the directors of which, the second-mentioned person is accustomed or under an obligation, whether formal or informal, to act in relation to that security.
(7)  A person shall be deemed to have an interest in a security in any one or more of the following circumstances:
(a)
where he has entered into a contract to purchase a security;
(b)
where he has a right, otherwise than by reason of having an interest under a trust, to have a security transferred to himself or to his order, whether the right is exercisable presently or in the future and whether on the fulfilment of a condition or not;
(c)
where he has the right to acquire a security or an interest in a security, under an option, whether the right is exercisable presently or in the future and whether on the fulfilment of a condition or not; or
(d)
where he is entitled, otherwise than by reason of his having been appointed a proxy or representative to vote at a meeting of members of a corporation or of a class of its members, to exercise or control the exercise of a right attached to a security, not being a security of which he is the registered holder.
(8)  A person shall be deemed to have an interest in a security if that security is held jointly with another person.
(9)  For the purpose of determining whether a person has an interest in a security, it is immaterial that the interest cannot be related to a particular security.
(10)  There shall be disregarded —
(a)
an interest in a security if the interest is that of a person who holds the security as bare trustee;
(b)
an interest in a security if the interest is that of a person whose ordinary business includes the lending of money if he holds the interest only by way of security for the purposes of a transaction entered into in the ordinary course of business in connection with the lending of money;
(c)
an interest of a person in a security if that interest is an interest held by him by reason of his holding a prescribed office;
(d)
an interest of a company in its own securities if that interest is purchased or otherwise acquired in accordance with sections 76B to 76G of the Companies Act (Cap. 50); and
(e)
a prescribed interest in a security being an interest of such person, or of the persons included in such class of persons, as may be prescribed.
(11)  An interest in a security shall not be disregarded by reason only of —
(a)
its remoteness;
(b)
the manner in which it arose; or
(c)
the fact that the exercise of a right conferred by the interest is, or is capable of being made subject to restraint or restriction.
[SIA, s. 4; Companies, s. 7 (4A); HK Securities Ordinance, s. 5]
Specific classes of investors
4A.
—(1)  Subject to subsection (2), unless the context otherwise requires —
(a)
“accredited investor” means —
(i)
an individual —
(A)
whose net personal assets exceed in value $2 million (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe in place of the first amount; or
(B)
whose income in the preceding 12 months is not less than $300,000 (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe in place of the first amount;
(ii)
a corporation with net assets exceeding $10 million in value (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe, in place of the first amount, as determined by —
(A)
the most recent audited balance-sheet of the corporation; or
(B)
where the corporation is not required to prepare audited accounts regularly, a balance-sheet of the corporation certified by the corporation as giving a true and fair view of the state of affairs of the corporation as of the date of the balance-sheet, which date shall be within the preceding 12 months;
(iii)
the trustee of such trust as the Authority may prescribe, when acting in that capacity; or
(iv)
such other person as the Authority may prescribe;
(b)
“expert investor” means —
(i)
a person whose business involves the acquisition and disposal, or the holding, of capital markets products, whether as principal or agent;
(ii)
the trustee of such trust as the Authority may prescribe, when acting in that capacity; or
(iii)
such other person as the Authority may prescribe;
(c)
“institutional investor” means —
(i)
a bank that is licensed under the Banking Act (Cap. 19);
(ii)
a merchant bank that is approved as a financial institution under section 28 of the Monetary Authority of Singapore Act (Cap. 186);
(iii)
a finance company that is licensed under the Finance Companies Act (Cap. 108);
(iv)
a company or co-operative society that is licensed under the Insurance Act (Cap. 142) to carry on insurance business in Singapore;
(v)
a company licensed under the Trust Companies Act 2005 (Act 11 of 2005);
(vi)
the Government;
(vii)
a statutory body established under any Act;
(viii)
a pension fund or collective investment scheme;
(ix)
the holder of a capital markets services licence for —
(A)
dealing in securities;
(B)
fund management;
(C)
providing custodial services for securities;
(CA)
real estate investment trust management;
(D)
securities financing; or
(E)
trading in futures contracts;
(x)
a person (other than an individual) who carries on the business of dealing in bonds with accredited investors or expert investors;
(xi)
the trustee of such trust as the Authority may prescribe, when acting in that capacity; or
(xii)
such other person as the Authority may prescribe.
[1/2005; 11/2005]
(2)  The definitions in subsection (1) may be subject to such modifications as the Authority may prescribe for any specified provision of this Act.
[1/2005]
Application
4B.  This Act does not apply to ––
(a)
a body corporate approved as a commodity market under section 5 of the Commodity Trading Act (Cap. 48A);
(b)
a body corporate approved as a clearing house under section 9 of that Act; or
(c)
the holder of a licence issued under that Act when acting lawfully under that Act,
but only to the extent that the activities carried out by such person are regulated under that Act.
PART II
MARKETS
Objectives of this Part
5.  The objectives of this Part are —
(a)
to promote fair, orderly and transparent markets;
(b)
to facilitate efficient markets for the allocation of capital and the transfer of risks; and
(c)
to reduce systemic risk.
[1/2005]
Division 1 — Establishment of Markets
Requirement for approval or recognition
6.
—(1)  No person shall establish or operate a market, or hold himself out as operating a market, unless the person is —
(a)
an approved exchange; or
(b)
a recognised market operator.
[1/2005]
(2)  No person shall hold himself out —
(a)
as an approved exchange unless he is an approved exchange; or
(b)
as a recognised market operator unless he is a recognised market operator.
[1/2005]
(3)  Except with the written approval of the Authority, no person other than an approved exchange shall take or use, or have attached to or exhibited at any place —
(a)
the title or description “securities exchange”, “stock exchange”, “futures exchange” or “derivatives exchange” in any language; or
(b)
any title or description which resembles a title or description referred to in paragraph (a).
[1/2005]
(4)  Any person who contravenes subsection (1) or (3) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $250,000 or to imprisonment for a term not exceeding 3 years or to both and, in the case of a continuing offence, to a further fine not exceeding $25,000 for every day or part thereof during which the offence continues after conviction.
[1/2005]
(5)  Any person who contravenes subsection (2) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000 and, in the case of a continuing offence, to a further fine not exceeding $2,000 for every day or part thereof during which the offence continues after conviction.
[1/2005]
Subdivision (1) — Approved exchange and recognised market operator
Application for approval or recognition
7.
—(1)  A corporation may apply to the Authority to be —
(a)
approved as an approved exchange; or
(b)
recognised as a recognised market operator.
[1/2005]
(2)  An application made under subsection (1) shall be —
(a)
made in such form and manner as the Authority may prescribe; and
(b)
accompanied by a non-refundable prescribed application fee, which shall be paid in the manner specified by the Authority.
[1/2005]
(3)  The Authority may require an applicant to furnish it with such information or documents as the Authority considers necessary in relation to the application.
[1/2005]
Power of Authority to approve exchanges and recognise market operators
8.
—(1)  Where —
(a)
a corporation has made an application under section 7(1)(a);
(b)
a corporation which is a recognised market operator has made an application under section 11(1) to change its status to that of an approved exchange; or
(c)
the Authority has conducted a review under section 11(5) and has determined that a corporation would be more appropriately regulated as an approved exchange,
the Authority may approve the corporation as an approved exchange.
[1/2005]
(2)  Where —
(a)
a corporation has made an application under section 7(1)(b);
(b)
a corporation which is an approved exchange has made an application under section 11(1) to change its status to that of a recognised market operator; or
(c)
the Authority has conducted a review under section 11(5) and has determined that a corporation would be more appropriately regulated as a recognised market operator,
the Authority may recognise the corporation as a recognised market operator.
[1/2005]
(3)  Notwithstanding subsections (1) and (2), the Authority may, with the consent of the applicant —
(a)
treat an application under section 7(1)(a) as an application under section 7(1)(b) if it is of the opinion that the applicant would be more appropriately regulated as a recognised market operator; or
(b)
treat an application under section 7(1)(b) as an application under section 7(1)(a) if it is of the opinion that the applicant would be more appropriately regulated as an approved exchange.
[1/2005]
(4)  The Authority may approve a corporation as an approved exchange under subsection (1) or recognise a corporation as a recognised market operator under subsection (2) subject to such conditions or restrictions as the Authority may think fit to impose by notice in writing, including conditions or restrictions relating to —
(a)
the activities that the corporation may undertake;
(b)
the securities or futures contracts that may be traded on any market established or operated by the corporation; and
(c)
the nature of the investors or participants who may use, invest in or participate in the securities or futures contracts traded on any market established or operated by the corporation.
[1/2005]
(5)  The Authority may, at any time, by notice in writing to the corporation, vary any condition or restriction or impose such further condition or restriction as it may think fit.
[1/2005]
(6)  An approved exchange or a recognised market operator shall, for the duration of the approval or recognition, satisfy all conditions and restrictions that may be imposed on it under subsections (4) and (5).
[1/2005]
(7)  The Authority may refuse to approve a corporation as an approved exchange or recognise a corporation as a recognised market operator if —
(a)
the corporation has not provided the Authority with such information relating to —
(i)
the corporation or any person employed by or associated with the corporation for the purposes of the corporation’s business; or
(ii)
any circumstances likely to affect the corporation’s manner of conducting business,
as the Authority may require;
(b)
any information or document provided by the corporation to the Authority is false or misleading;
(c)
the corporation or a substantial shareholder of the corporation is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere;
(d)
execution against the corporation or a substantial shareholder of the corporation in respect of a judgment debt has been returned unsatisfied in whole or in part;
(e)
a receiver, a receiver and manager, a judicial manager or an equivalent person has been appointed, whether in Singapore or elsewhere, in relation to, or in respect of, any property of the corporation or a substantial shareholder of the corporation;
(f)
the corporation or a substantial shareholder of the corporation has, whether in Singapore or elsewhere, entered into a compromise or scheme of arrangement with the creditors of the corporation or shareholder, as the case may be, being a compromise or scheme of arrangement that is still in operation;
(g)
the corporation, a substantial shareholder of the corporation or any officer of the corporation —
(i)
has been convicted, whether in Singapore or elsewhere, of an offence involving fraud or dishonesty or the conviction for which involved a finding that the corporation, shareholder or officer, as the case may be, had acted fraudulently or dishonestly; or
(ii)
has been convicted of an offence under this Act;
(h)
the Authority is not satisfied as to the educational or other qualifications or experience of the officers or employees of the corporation, having regard to the nature of the duties they are to perform in connection with the establishment or operation of any market;
(i)
the corporation fails to satisfy the Authority that the corporation is a fit and proper person or that all of its officers, employees and substantial shareholders are fit and proper persons;
(j)
the Authority has reason to believe that the corporation may not be able to act in the best interests of investors or its members, participants or customers, having regard to the reputation, character, financial integrity and reliability of the corporation or its officers, employees or substantial shareholders;
(k)
the Authority is not satisfied as to —
(i)
the financial standing of the corporation or any of its substantial shareholders; or
(ii)
the manner in which the business of the corporation is to be conducted;
(l)
the Authority is not satisfied as to the record of past performance or expertise of the corporation, having regard to the nature of the business which the corporation may carry on in connection with the establishment or operation of any market;
(m)
there are other circumstances which are likely to —
(i)
lead to the improper conduct of business by the corporation or any of its officers, employees or substantial shareholders; or
(ii)
reflect discredit on the manner of conducting the business of the corporation or any of its substantial shareholders;
(n)
in the case of any market that the corporation operates, the Authority has reason to believe that the corporation, or any of its officers or employees, will not operate a fair, orderly and transparent market;
(o)
the corporation does not satisfy the criteria prescribed under section 9 to be approved as an approved exchange or recognised as a recognised market operator, as the case may be; or
(p)
the Authority is of the opinion that it would be contrary to the interests of the public to approve or recognise the corporation.
[1/2005]
(8)  Subject to subsection (9), the Authority shall not refuse to approve a corporation as an approved exchange or recognise a corporation as a recognised market operator under subsection (7) without giving the corporation an opportunity to be heard.
[1/2005]
(9)  The Authority may refuse to approve a corporation as an approved exchange or recognise a corporation as a recognised market operator on any of the following grounds without giving the corporation an opportunity to be heard:
(a)
the corporation is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere;
(b)
a receiver, a receiver and manager or an equivalent person has been appointed, whether in Singapore or elsewhere, in relation to, or in respect of, any property of the corporation;
(c)
the corporation has been convicted, whether in Singapore or elsewhere, of an offence involving fraud or dishonesty or the conviction for which involved a finding that it had acted fraudulently or dishonestly.
[1/2005]
(10)  The Authority shall give notice in the Gazette of any corporation approved as an approved exchange under subsection (1) or recognised as a recognised market operator under subsection (2), and such notice may include the conditions or restrictions imposed by the Authority on the corporation under subsection (4)(b) in relation to the securities or futures contracts that may be traded on any market established or operated by the corporation.
[1/2005]
(11)  Any applicant who is aggrieved by a refusal of the Authority to grant an approval under subsection (1) or a recognition under subsection (2) may, within 30 days after the applicant is notified of the decision, appeal to the Minister whose decision shall be final.
[1/2005]
(12)  Any approved exchange or recognised market operator which contravenes subsection (6) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.
[1/2005]
[SIA, s. 16; FTA, s. 4; UK FSMA 2000, s. 289 (1) & (2)]
General criteria to be taken into account by Authority
9.
—(1)  The Authority may prescribe the criteria which it may take into account for the purposes of deciding —
(a)
whether an applicant referred to in section 7(1) or 11(1) should be approved as an approved exchange or recognised as a recognised market operator;
(b)
whether an approved exchange or a recognised market operator that is subject to a review by the Authority under section 11(5) should be approved as an approved exchange or recognised as a recognised market operator; and
(c)
the conditions or restrictions that the Authority may impose under section 8(4) or (5).
[1/2005]
(2)  Without prejudice to section 8 and subsection (1), the Authority may, for the purposes of recognising an operator of an overseas market as a recognised market operator under section 8(2), have regard, in addition to any criteria prescribed under subsection (1), to —
(a)
whether adequate arrangements exist for co-operation between the Authority and the financial services regulatory authority responsible for the supervision of the operator in the country or territory in which the head office or principal place of business of the operator is situated; and
(b)
whether the operator is, in the country or territory in which the head office or principal place of business of the operator is situated, subject to requirements and supervision comparable, in the degree to which the objectives specified in section 5 are achieved, to the requirements and supervision to which approved exchanges and recognised market operators are subject under this Act.
[1/2005]
(3)  In considering whether it is satisfied that the operator of an overseas market has met the requirements mentioned in subsection (2), the Authority may have regard to —
(a)
the relevant laws and practices of the country or territory in which the head office or principal place of business of the operator is situated; and
(b)
the rules and practices of the operator.
[1/2005]
(4)  In this section, “operator of an overseas market” means a person whose head office is situated in a country or territory outside Singapore, and who is authorised to operate a market by a financial services regulatory authority of —
(a)
that country or territory; or
(b)
the country or territory in which the principal place of business of that person is situated.
[1/2005]
Annual fees payable by approved exchange and recognised market operator
10.
—(1)  Every approved exchange and recognised market operator shall pay to the Authority such annual fees as may be prescribed in such manner as may be specified by the Authority.
[1/2005]
(2)  The Authority may, where it considers appropriate, refund or remit the whole or any part of any annual fee paid or payable to it.
[1/2005]
Change in status
11.
—(1)  A corporation which is an approved exchange or a recognised market operator may apply to the Authority to change its status in the manner referred to in subsection (6).
[1/2005]
(2)  An application under subsection (1) shall be made in such form and manner as the Authority may prescribe.
[1/2005]
(3)  An application made under subsection (1) shall be accompanied by a non-refundable prescribed application fee, which shall be paid in the manner specified by the Authority.
[1/2005]
(4)  The Authority may require an applicant to furnish it with such information or documents as the Authority considers necessary in relation to the application.
[1/2005]
(5)  The Authority may, from time to time, on its own initiative, review the status of a corporation that is an approved exchange or a recognised market operator under this Part in accordance with the criteria prescribed under section 9.
[1/2005]
(6)  Where an application is made by a corporation under subsection (1) or where a review of the status of a corporation is conducted by the Authority under subsection (5), the Authority may —
(a)
where the corporation is an approved exchange, withdraw the approval as such and recognise the corporation as a recognised market operator under section 8(2);
(b)
where the corporation is a recognised market operator, withdraw the recognition as such and approve the corporation as an approved exchange under section 8(1); or
(c)
make no change to the status of the corporation as an approved exchange or a recognised market operator.
[1/2005]
(7)  Where an application is made under subsection (1), the Authority shall not exercise its power under subsection (6)(c) without giving the corporation an opportunity to be heard.
[1/2005]
(8)  Where a review of the status of a corporation is conducted by the Authority on its own initiative under subsection (5), the Authority shall not exercise its powers under subsection (6)(a) or (b) without giving the corporation an opportunity to be heard.
[1/2005]
(9)  Any corporation which is aggrieved by a decision of the Authority made in relation to the corporation after a review under subsection (5) may, within 30 days after the corporation is notified of the decision, appeal to the Minister whose decision shall be final.
[1/2005]
Cancellation of approval or recognition
12.
—(1)  An approved exchange or a recognised market operator which intends to cease operating its market or, where it operates more than one market, all of its markets, may apply to the Authority to cancel its approval as an approved exchange or recognition as a recognised market operator, as the case may be.
[1/2005]
(2)  The Authority may cancel the approval or recognition if it is satisfied that the approved exchange or recognised market operator referred to in subsection (1) has ceased operating its market or all of its markets, as the case may be.
[1/2005]
[FTA, s. 7]
Power of Authority to revoke approval and recognition
13.
—(1)  The Authority may revoke any approval of a corporation as an approved exchange under section 8(1) or any recognition of a corporation as a recognised market operator under section 8(2) if —
(a)
there exists a ground under section 8(7) on which the Authority may refuse an application;
(b)
the corporation does not commence operating its market or, where it operates more than one market, all of its markets, within 12 months from the date on which it was granted the approval under section 8(1) or recognition under section 8(2), as the case may be;
(c)
the corporation ceases to operate its market or, where it operates more than one market, all of its markets;
(d)
the corporation contravenes —
(i)
any condition or restriction applicable in respect of its approval or recognition, as the case may be;
(ii)
any direction issued to it by the Authority under this Act; or
(iii)
any provision in this Act;
(da)
upon the Authority exercising any power under section 44B(2) or the Minister exercising any power under Division 2, 3 or 4 of Part IVB of the Monetary Authority of Singapore Act (Cap. 186) in relation to the corporation, the Authority considers that it is in the public interest to revoke the approval or recognition, as the case may be;
(e)
the corporation operates in a manner that is, in the opinion of the Authority, contrary to the interests of the public; or
(f)
any information or document provided by the corporation to the Authority is false or misleading.
[1/2005]
(2)  Subject to subsection (3), the Authority shall not revoke under subsection (1) any approval under section 8(1) or recognition under section 8(2) that was granted to a corporation without giving the corporation an opportunity to be heard.
[1/2005]
(3)  The Authority may revoke an approval under section 8(1) or a recognition under section 8(2) that was granted to a corporation on any of the following grounds without giving the corporation an opportunity to be heard:
(a)
the corporation is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere;
(b)
a receiver, a receiver and manager or an equivalent person has been appointed, whether in Singapore or elsewhere, in relation to, or in respect of, any property of the corporation;
(c)
the corporation has been convicted, whether in Singapore or elsewhere, of an offence involving fraud or dishonesty or the conviction for which involved a finding that it had acted fraudulently or dishonestly.
[1/2005]
(4)  For the purposes of subsection (1)(c), a corporation shall be deemed to have ceased to operate its market if —
(a)
it has ceased to operate the market for more than 30 days, unless it has obtained the prior approval of the Authority to do so; or
(b)
it has ceased to operate the market under a direction issued by the Authority under section 46.
[1/2005]
(5)  Any corporation which is aggrieved by a decision of the Authority made in relation to the corporation under subsection (1) may, within 30 days after the corporation is notified of the decision, appeal to the Minister whose decision shall be final.
[1/2005]
(6)  Notwithstanding the lodging of an appeal under subsection (5), any action taken by the Authority under this section shall continue to have effect pending the decision of the Minister.
[1/2005]
(7)  The Minister may, when deciding an appeal under subsection (5), make such modification as he considers necessary to any action taken by the Authority under this section, and such modified action shall have effect from the date of the decision of the Minister.
[1/2005]
(8)  Any revocation of approval or recognition of a corporation referred to in subsection (1) shall not operate so as to —
(a)
avoid or affect any agreement, transaction or arrangement entered into on a market operated by the corporation, whether the agreement, transaction or arrangement was entered into before or after the revocation of the approval or recognition; or
(b)
affect any right, obligation or liability arising under such agreement, transaction or arrangement.
[1/2005]
(9)  The Authority shall give notice in the Gazette of any revocation of approval or recognition referred to in subsection (1).
[1/2005]
[UK FSMA, s. 297; FTA, s. 7]
Subdivision (2) — Exempt market operator
Power of Authority to exempt corporations from approval or recognition
14.
—(1)  A corporation that wishes to establish or operate a market may apply to the Authority, in such form and manner as the Authority may prescribe, to be exempted from the requirement under section 6(1) to be an approved exchange or a recognised market operator.
[1/2005]
(2)  The Authority may exempt a corporation referred to in subsection (1) from the requirement under section 6(1) if, in the opinion of the Authority, the objectives specified in section 5 can be achieved without regulating the corporation as an approved exchange or a recognised market operator.
[1/2005]
(3)  An application made under subsection (1) shall be accompanied by a non-refundable prescribed application fee, which shall be paid in the manner specified by the Authority.
[1/2005]
(4)  The Authority may require an applicant to furnish it with such information or documents as the Authority considers necessary in relation to the application.
[1/2005]
(5)  The Authority may, by notice in writing, impose on a corporation exempted under subsection (2) such conditions or restrictions relating to the exemption as the Authority may think fit, including conditions or restrictions relating to —
(a)
the activities that the corporation may undertake;
(b)
the securities or futures contracts that may be traded on any market established or operated by the corporation; and
(c)
the nature of the investors or participants who may use, participate or invest in the securities or futures contracts traded on any market established or operated by the corporation.
[1/2005]
(6)  The Authority may, at any time, by notice in writing to a corporation exempted under subsection (2), vary any condition or restriction referred to in subsection (5) or impose such further condition or restriction relating to the exemption as the Authority may think fit.
[1/2005]
(7)  The Authority shall give notice in the Gazette of any corporation exempted under subsection (2), and such notice may include the conditions or restrictions imposed by the Authority on the corporation under subsection (5)(b) in relation to the securities or futures contracts that may be traded on any market established or operated by the corporation.
[1/2005]
(8)  The Authority may —
(a)
exempt any corporation operating any market from the requirement under section 6(1) to be an approved exchange or a recognised market operator;
(b)
by order published in the Gazette, declare that corporation to be an exempt market operator; and
(c)
by notice in writing to that corporation, impose such conditions or restrictions relating to the exemption as the Authority may think fit.
[1/2005]
(9)  The Authority may —
(a)
exempt corporations operating any class of markets from the requirement under section 6(1) to be approved exchanges or recognised market operators, subject to such conditions or restrictions as the Authority may think fit to impose by regulations; and
(b)
by order published in the Gazette, declare such corporations to be exempt market operators.
[1/2005]
(10)  An exempt market operator shall comply with all conditions or restrictions imposed on it under subsection (5), (6) or (8), as the case may be.
[1/2005]
(11)  Any corporation which contravenes subsection (10) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.
[1/2005]
Power of Authority to revoke exemption
15.
—(1)  The Authority may revoke any exemption granted to a corporation under section 14(2), (8) or (9) if —
(a)
the corporation does not commence operating its market or, where it operates more than one market, all of its markets, within 12 months from the date on which it was granted the exemption;
(b)
the corporation ceases to operate its market or, where it operates more than one market, all of its markets;
(c)
the corporation contravenes —
(i)
any condition or restriction relating to the exemption;
(ii)
any direction issued to it by the Authority under this Act; or
(iii)
any provision in this Act;
(d)
the Authority is of the opinion that the corporation has operated in a manner that is contrary to the interests of the public;
(e)
the corporation is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere;
(f)
a receiver, a receiver and manager or an equivalent person has been appointed, whether in Singapore or elsewhere, in relation to, or in respect of, any property of the corporation;
(g)
the corporation has been convicted, whether in Singapore or elsewhere, of an offence involving fraud or dishonesty or the conviction for which involved a finding that it had acted fraudulently or dishonestly;
(h)
the Authority is of the opinion that the corporation would be more appropriately regulated as an approved exchange or a recognised market operator; or
(i)
any information or document provided by the corporation to the Authority is false or misleading.
[1/2005]
(2)  Subject to subsection (3), the Authority shall not revoke under subsection (1) any exemption granted to a corporation without giving the corporation an opportunity to be heard.
[1/2005]
(3)  The Authority may revoke an exemption granted to a corporation on any of the following grounds without giving the corporation an opportunity to be heard:
(a)
the corporation is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere;
(b)
a receiver, a receiver and manager or an equivalent person has been appointed, whether in Singapore or elsewhere, in relation to, or in respect, of any property of the corporation;
(c)
the corporation has been convicted, whether in Singapore or elsewhere, of an offence involving fraud or dishonesty or the conviction for which involved a finding that it had acted fraudulently or dishonestly.
[1/2005]
(4)  For the purposes of subsection (1)(b), a corporation shall be deemed to have ceased to operate its market if —
(a)
it has ceased to operate the market for more than 30 days, unless it has obtained the prior approval of the Authority to do so; or
(b)
it has ceased to operate the market under a direction issued by the Authority under section 46.
[1/2005]
(5)  A corporation which is aggrieved by a decision of the Authority made in relation to the corporation under subsection (1) may, within 30 days after the corporation is notified of the decision, appeal to the Minister whose decision shall be final.
[1/2005]
(6)  Notwithstanding the lodging of an appeal under subsection (5), any action taken by the Authority under this section shall continue to have effect pending the decision of the Minister.
[1/2005]
(7)  The Minister may, when deciding an appeal under subsection (5), make such modification as he considers necessary to any action taken by the Authority under this section, and such modified action shall have effect from the date of the decision of the Minister.
[1/2005]
(8)  Any revocation under subsection (1) of an exemption granted to a corporation shall not operate so as to —
(a)
avoid or affect any agreement, transaction or arrangement entered into on a market operated by the corporation, whether the agreement, transaction or arrangement was entered into before or after the revocation of the exemption; or
(b)
affect any right, obligation or liability arising under such agreement, transaction or arrangement.
[1/2005]
(9)  The Authority shall give notice in the Gazette of any revocation of an exemption referred to in subsection (1).
[1/2005]
Division 2 — Regulation of Approved Exchanges
Subdivision (1) — Obligations of approved exchanges
General obligations
16.
—(1)  An approved exchange shall, in respect of every market it operates —
(a)
as far as is reasonably practicable, ensure that the market is fair, orderly and transparent;
(b)
manage any risks associated with its business and operations prudently;
(c)
in discharging its obligations under this Act, not act contrary to the interests of the public, having particular regard to the interests of the investing public;
(d)
ensure that access for participation in its facilities is subject to criteria that are fair and objective, and that are designed to ensure the orderly functioning of the market and to protect the interests of the investing public;
(e)
maintain business rules and, where appropriate, listing rules that make satisfactory provision for —
(i)
a fair, orderly and transparent market in securities or futures contracts that are traded through its facilities; and
(ii)
the proper regulation and supervision of its members;
(f)
enforce compliance with its business rules and, where appropriate, its listing rules;
(g)
have sufficient financial, human and system resources —
(i)
to operate a fair, orderly and transparent market;
(ii)
to meet contingencies or disasters; and
(iii)
to provide adequate security arrangements; and
(h)
ensure that it appoints or employs fit and proper persons as its chairman, chief executive officer, directors and key management officers.
[1/2005]
(2)  In subsection (1)(g), “contingencies or disasters” includes technical disruptions occurring within automated systems.
[1/2005]
Obligation to manage risks prudently
16A.
—(1)  Without prejudice to the generality of section 16(1)(b), an approved exchange shall —
(a)
ensure that the systems and controls concerning the assessment and management of risks to every market that it operates are adequate and appropriate for the scale and nature of its operations;
(b)
obtain the Authority’s approval to the limits which it intends to establish on the number of open positions which may be held by any person under any futures contract traded on a futures market that it operates, and vary those limits only in a manner approved by the Authority; and
(c)
obtain the Authority’s approval if it does not intend to establish limits on the number of open positions which may be held by any person under any futures contract traded on a futures market that it operates.
(2)  Nothing in subsection (1) shall preclude an approved exchange from —
(a)
establishing, in respect of open positions which may be held by any person under any futures contract traded on a futures market that it operates, different position limits for different futures contracts, or for different months or days in the period the positions may be held; or
(b)
establishing limits whether on long or short positions, and whether on a net or gross basis.
(3)  An approved exchange which contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $200,000 and, in the case of a continuing offence, to a further fine not exceeding $20,000 for every day or part thereof during which the offence continues after conviction.
(4)  Any person who wilfully exceeds any position limit established or varied by an approved exchange shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000.
Obligation to notify Authority of certain matters
17.
—(1)  An approved exchange shall, as soon as practicable after the occurrence of any of the following circumstances, notify the Authority of the circumstance:
(a)
any material change to the information provided by the approved exchange in its application under section 7(1) or 11(1);
(b)
the carrying on of any business by the approved exchange other than —
(i)
the business of operating a market;
(ii)
a business incidental to operating a market; or
(iii)
such business or class of businesses as the Authority may prescribe;
(c)
the acquisition by the approved exchange of a substantial shareholding in a corporation which does not carry on —
(i)
the business of operating a market;
(ii)
a business incidental to operating a market; or
(iii)
such business or class of businesses as the Authority may prescribe;
(d)
the approved exchange becoming aware of a financial irregularity or other matter which in its opinion —
(i)
may affect its ability to discharge its financial obligations; or
(ii)
may affect the ability of a member of the approved exchange to meet its financial obligations to the approved exchange;
(e)
the approved exchange reprimanding, fining, suspending, expelling or otherwise taking disciplinary action against a member of the approved exchange;
(f)
any other matter that the Authority may prescribe by regulations or specify by notice in writing to the approved exchange.
[1/2005]
(2)  Without prejudice to the generality of section 46(1), the Authority may, at any time after receiving a notification referred to in subsection (1), issue directions to the approved exchange —
(a)
where the notification relates to a matter referred to in subsection (1)(b) —
(i)
to cease carrying on the first-mentioned business referred to in subsection (1)(b); or
(ii)
to carry on the first-mentioned business referred to in subsection (1)(b) subject to such conditions or restrictions as the Authority may impose, if the Authority is of the opinion that this is necessary for any purpose referred to in section 46(1); or
(b)
where the notification relates to a matter referred to in subsection (1)(c) —
(i)
to dispose of the shareholding referred to in subsection (1)(c); or
(ii)
to exercise its rights relating to such shareholding subject to such conditions or restrictions as the Authority may impose, if the Authority is of the opinion that this is necessary for any purpose referred to in section 46(1),
and the approved exchange shall comply with such directions.
[1/2005]
Obligation to maintain proper records
18.  An approved exchange shall maintain a record of all transactions effected through its facilities in such form and manner as the Authority may prescribe, including —
(a)
the extent to which the record includes details of each transaction; and
(b)
the period of time that the record is to be maintained.
[1/2005]
Obligation to submit periodic reports
19.  An approved exchange shall submit to the Authority such reports in such form, manner and frequency as the Authority may prescribe.
[1/2005]
Obligation to assist Authority
20.  An approved exchange shall provide such assistance to the Authority as the Authority may require for the performance of the functions and duties of the Authority, including the furnishing of such returns and the provision of —
(a)
such books and other information —
(i)
relating to the business of the approved exchange; or
(ii)
in respect of such dealings in securities or trading in futures contracts; and
(b)
such other information,
as the Authority may require for the proper administration of this Act.
[1/2005]
Obligation to maintain confidentiality
21.
—(1)  Subject to subsection (2), an approved exchange and its officers and employees shall maintain, and aid in maintaining, the confidentiality of all user information that —
(a)
comes to the knowledge of the approved exchange or any of its officers or employees; or
(b)
is in the possession of the approved exchange or any of its officers or employees.
[1/2005]
(2)  Subsection (1) shall not apply to —
(a)
the disclosure of user information for such purposes, or in such circumstances, as the Authority may prescribe;
(b)
any disclosure of user information which is authorised by the Authority to be disclosed or furnished; or
(c)
the disclosure of user information pursuant to any requirement imposed under any written law or order of court in Singapore.
[1/2005]
(3)  For the avoidance of doubt, nothing in this section shall be construed as preventing an approved exchange from entering into a written agreement with a user which obliges the approved exchange to maintain a higher degree of confidentiality than that specified in this section.
[1/2005]
Penalties under this Subdivision
22.  Any approved exchange which contravenes section 16(1), 17, 18, 19, 20 or 21(1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $200,000 and, in the case of a continuing offence, to a further fine not exceeding $20,000 for every day or part thereof during which the offence continues after conviction.
[1/2005]
Subdivision (2) — Rules of approved exchanges
Business rules and listing rules of approved exchanges
23.
—(1)  Without limiting the generality of sections 16 and 45 —
(a)
the Authority may prescribe the matters that an approved exchange shall make provision for in the business rules or listing rules of the approved exchange; and
(b)
the approved exchange shall make provision for those matters in its business rules or listing rules, as the case may be.
[1/2005]
(2)  An approved exchange shall not make any amendment to its business rules or listing rules unless it complies with such requirements as the Authority may prescribe.
[1/2005]
(3)  In this Subdivision, any reference to an amendment to a business rule or listing rule shall be construed as a reference to a change to the scope of, or to any requirement, obligation or restriction under, the business rule or listing rule, as the case may be, whether the change is made by an alteration to the text of the rule or by any other notice issued by or on behalf of the approved exchange.
[1/2005]
(4)  Any approved exchange which contravenes subsection (1) or (2) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.
[1/2005]
Business rules of approved exchanges have effect as contract
24.
—(1)  The business rules of an approved exchange shall be deemed to be, and shall operate as, a binding contract —
(a)
between the approved exchange and each member; and
(b)
between each member and every other member.
[1/2005]
(2)  The approved exchange and each member shall be deemed to have agreed to observe and perform the provisions of the business rules that are in force for the time being, so far as those provisions are applicable to the approved exchange or that member, as the case may be.
[1/2005]
[Aust. Corporations 2001, s. 772A]
Power of court to order observance or enforcement of business rules or listing rules
25.
—(1)  Where any person who is under an obligation to comply with, observe, enforce or give effect to the business rules or listing rules of an approved exchange fails to do so, the High Court may, on the application of the Authority, an approved exchange or a person aggrieved by the failure, and after giving the first-mentioned person an opportunity to be heard, make an order directing the first-mentioned person to comply with, observe, enforce or give effect to those business rules or listing rules.
[1/2005]
(2)  A person against whom an order under subsection (1) may be made shall be —
(a)
a corporation which —
(i)
has been admitted to the official list of an approved exchange; and
(ii)
has not been removed from that official list;
(b)
a person associated with a corporation which —
(i)
has been admitted to the official list of an approved exchange; and
(ii)
has not been removed from that official list,
to the extent to which the business rules or listing rules purport to apply to him; or
(c)
an approved exchange.
[1/2005]
(3)  This section is in addition to, and not in derogation of, any other remedy available to an aggrieved person referred to in subsection (1).
[1/2005]
[SIA, s. 20; FTA, s. 10]
Non-compliance with business rules or listing rules not to substantially affect rights of person
26.  Any failure by an approved exchange to comply with —
(a)
this Act;
(b)
its business rules; or
(c)
where applicable, its listing rules,
in relation to a matter shall not prevent the matter from being treated, for the purposes of this Act, as done in accordance with the business rules or listing rules so long as the failure does not substantially affect the rights of any person entitled to require compliance with the business rules or listing rules.
[1/2005]
Subdivision (3) — Matters requiring approval of Authority
Control of substantial shareholding in approved exchanges
27.
—(1)  No person shall enter into any agreement to acquire shares in an approved exchange by virtue of which he would, if the agreement had been carried out, become a substantial shareholder of the approved exchange without first obtaining the approval of the Authority to enter into the agreement.
[1/2005]
(2)  No person shall become —
(a)
a 12% controller; or
(b)
a 20% controller,
of an approved exchange without first obtaining the approval of the Authority.
[1/2005]
(3)  In subsection (2) —
“12% controller” means a person, not being a 20% controller, who alone or together with his associates —
(a)
holds not less than 12% of the shares in the approved exchange; or
(b)
is in a position to control not less than 12% of the votes in the approved exchange;
“20% controller” means a person who, alone or together with his associates —
(a)
holds not less than 20% of the shares in the approved exchange; or
(b)
is in a position to control not less than 20% of the votes in the approved exchange.
[1/2005]
(4)  In this section —
(a)
a person holds a share if —
(i)
he is deemed to have an interest in that share under section 7(6) to (10) of the Companies Act (Cap. 50); or
(ii)
he otherwise has a legal or an equitable interest in that share, except such interest as is to be disregarded under section 7(6) to (10) of the Companies Act;
(b)
a reference to the control of a percentage of the votes in an approved exchange shall be construed as a reference to the control, whether direct or indirect, of that percentage of the total number of votes that might be cast in a general meeting of the approved exchange; and
(c)
a person, A, is an associate of another person, B, if —
(i)
A is the spouse, a parent, remoter lineal ancestor or step-parent, a son, daughter, remoter issue, step-son or step-daughter or a brother or sister of B;
(ii)
A is a corporation the directors of which are accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of B or, where B is a corporation, of the directors of B;
(iii)
B is a corporation the directors of which are accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of A or, where A is a corporation, of the directors of A;
(iv)
A is a person who is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of B;
(v)
B is a person who is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of A;
(vi)
A is a related corporation of B;
(vii)
A is a corporation in which B, alone or together with other associates of B as described in sub-paragraphs (ii) to (vi), is in a position to control not less than 20% of the votes in A;
(viii)
B is a corporation in which A, alone or together with other associates of A as described in sub-paragraphs (ii) to (vi), is in a position to control not less than 20% of the votes in B; or
(ix)
A is a person with whom B has an agreement or arrangement, whether oral or in writing and whether express or implied, to act together with respect to the acquisition, holding or disposal of shares or other interests in, or with respect to the exercise of their votes in relation to, the approved exchange.
[1/2005]
(5)  The Authority may grant its approval referred to in subsection (1) or (2) subject to such conditions or restrictions as the Authority may think fit.
[1/2005]
(6)  Without prejudice to subsection (11), the Authority may, for the purposes of securing compliance with subsection (1) or (2), or any condition or restriction imposed under subsection (5), by notice in writing, direct the transfer or disposal of all or any of the shares of an approved exchange in which a substantial shareholder, 12% controller or 20% controller of the approved exchange has an interest.
[1/2005]
(7)  Until a person to whom a direction has been issued under subsection (6) transfers or disposes of the shares which are the subject of the direction, and notwithstanding anything to the contrary in the Companies Act (Cap. 50) or the memorandum or articles of association or other constituent document or documents of the approved exchange —
(a)
no voting rights shall be exercisable in respect of the shares which are the subject of the direction;
(b)
the approved exchange shall not offer or issue any shares (whether by way of rights, bonus, share dividend or otherwise) in respect of the shares which are the subject of the direction; and
(c)
except in a liquidation of the approved exchange, the approved exchange shall not make any payment (whether by way of cash dividend, dividend in kind or otherwise) in respect of the shares which are the subject of the direction.
[1/2005]
(8)  Any issue of shares by an approved exchange in contravention of subsection (7)(b) shall be deemed to be null and void, and a person to whom a direction has been issued under subsection (6) shall immediately return those shares to the approved exchange, upon which the approved exchange shall return to the person any payment received from him in respect of those shares.
[1/2005]
(9)  Any payment made by an approved exchange in contravention of subsection (7)(c) shall be deemed to be null and void, and a person to whom a direction has been issued under subsection (6) shall immediately return the payment he has received to the approved exchange.
[1/2005]
(10)  The Authority may exempt —
(a)
any person or class of persons; or
(b)
any class or description of shares or interests in shares,
from the requirement under subsection (1) or (2), subject to such conditions or restrictions as may be imposed by the Authority.
[1/2005]
(11)  Any person who contravenes subsection (1) or (2), or any condition or restriction imposed by the Authority under subsection (5), shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $200,000 and, in the case of a continuing offence, to a further fine not exceeding $20,000 for every day or part thereof during which the offence continues after conviction.
[1/2005]
(12)  Any person who contravenes subsection (7)(b) or (c), (8) or (9) or any direction issued by the Authority under subsection (6) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.
[1/2005]
[E (DM) A, s. 15]
Approval of chairman, chief executive officer, director and key persons
28.
—(1)  No approved exchange shall appoint a person as its chairman, chief executive officer or director unless the approved exchange has obtained the approval of the Authority.
[1/2005]
(2)  The Authority may, by notice in writing, require an approved exchange to obtain the approval of the Authority for the appointment of any person to any key management position or committee of the approved exchange and the approved exchange shall comply with the notice.
[1/2005]
(3)  An application for approval under subsection (1) or (2) shall be made in such form and manner as the Authority may prescribe.
[1/2005]
(4)  Without prejudice to the generality of section 45 and to any other matter that the Authority may consider relevant, the Authority may, in determining whether to grant its approval under subsection (1) or (2), have regard to such criteria as the Authority may prescribe or specify in directions issued by notice in writing.
[1/2005]
(5)  Subject to subsection (6), the Authority shall not refuse an application for approval under this section without giving the approved exchange an opportunity to be heard.
[1/2005]
(6)  The Authority may refuse an application for approval on any of the following grounds without giving the approved exchange an opportunity to be heard:
(a)
the person is an undischarged bankrupt, whether in Singapore or elsewhere;
(b)
the person has been convicted, whether in Singapore or elsewhere, of an offence —
(i)
involving fraud or dishonesty or the conviction for which involved a finding that he had acted fraudulently or dishonestly; and
(ii)
punishable with imprisonment for a term of 3 months or more.
[1/2005]
(7)  Where the Authority refuses an application for approval under this section, the Authority need not give the person who was proposed to be appointed an opportunity to be heard.
[1/2005]
(8)  An approved exchange shall, as soon as practicable, give written notice to the Authority of the resignation or removal of its chairman, chief executive officer, director or person referred to in the notice issued by the Authority under subsection (2).
[1/2005]
(9)  Without prejudice to the generality of section 45, the Authority may make regulations relating to the composition and duties of the board of directors or any committee of an approved exchange.
[1/2005]
(10)  In this section, “committee” includes any committee of directors, disciplinary committee, appeals committee or any body responsible for disciplinary action against a member of an approved exchange.
[1/2005]
(11)  The Authority may exempt any approved exchange or class of approved exchanges from the requirement under subsection (1) or (8), subject to such conditions or restrictions as may be imposed by the Authority.
[1/2005]
(12)  Any approved exchange which contravenes subsection (1), (2) or (8) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $200,000 and, in the case of a continuing offence, to a further fine not exceeding $20,000 for every day or part thereof during which the offence continues after conviction.
[1/2005]
Power of Authority to approve instruments, contracts and transactions
29.
—(1)  No approved exchange shall, without the approval of the Authority, list, de-list or permit the trading of —
(a)
any futures contract;
(b)
any right, option or derivative in respect of any debentures, stocks or shares;
(c)
any right under a contract for differences or under any other contract the purpose or purported purpose of which is to secure a profit or avoid a loss by reference to fluctuations in —
(i)
the value or price of any debentures, stocks or shares;
(ii)
the value or price of any group of debentures, stocks or shares; or
(iii)
an index of any debentures, stocks or shares; or
(d)
such other instrument, contract or transaction, or class of instruments, contracts or transactions as the Authority may prescribe,
on any market operated by the approved exchange.
[1/2005]
(2)  The Authority may grant approval for an approved exchange to list, de-list or permit the trading of any instrument, contract or transaction, or any class of instruments, contracts or transactions, referred to in subsection (1), subject to such conditions or restrictions as the Authority may think fit to impose by notice in writing to the approved exchange.
[1/2005]
(3)  Any approved exchange which contravenes subsection (1) or any of the conditions or restrictions imposed under subsection (2) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $200,000 and, in the case of a continuing offence, to a further fine not exceeding $20,000 for every day or part thereof during which the offence continues after conviction.
[1/2005]
Listing of approved exchanges on securities market
30.
—(1)  The securities of an approved exchange shall not be listed for quotation on a securities market that is operated by the approved exchange or any of its related corporations unless the approved exchange and the operator of the securities market have entered into such arrangements as the Authority may require —
(a)
for dealing with possible conflicts of interest that may arise from such listing; and
(b)
for the purpose of ensuring the integrity of the trading of the securities of the approved exchange on the securities market.
[1/2005]
(2)  Where the securities of an approved exchange are listed for quotation on a securities market operated by the approved exchange or any of its related corporations, the listing rules of the securities market shall be deemed to allow the Authority to act in place of the operator of the securities market in making decisions and taking action, or to require the operator of the securities market to make decisions and to take action on behalf of the Authority, on —
(a)
the admission or removal of the approved exchange to or from the official list of the securities market; and
(b)
granting approval for the securities of the approved exchange to be, or stopping or suspending the securities of the approved exchange from being, listed for quotation or quoted on the securities market.
[1/2005]
(3)  The Authority may, by notice in writing to the operator of the securities market —
(a)
modify the listing rules of the securities market for the purpose of their application to the listing for quotation or trading of the securities of the approved exchange; or
(b)
waive the application of any listing rule of the securities market to the approved exchange.
[1/2005]
(4)  Any approved exchange which contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $200,000 and, in the case of a continuing offence, to a further fine not exceeding $20,000 for every day or part thereof during which the offence continues after conviction.
[1/2005]
Subdivision (4) — Powers of Authority
Power of Authority in securities market
32.
—(1)  Without prejudice to the generality of section 46, where the Authority is of the opinion that it is necessary to prohibit trading in —
(a)
particular securities of, or made available by, an entity;
(b)
particular units or derivatives of units in a business trust; or
(c)
particular units of a collective investment scheme,
on a securities market of an approved exchange —
(i)
in order to protect persons buying or selling the securities, units or derivatives of units in a business trust or units in a collective investment scheme; or
(ii)
in the interests of the public,
the Authority may give notice in writing to the approved exchange stating that it is of that opinion and setting out the reasons for its opinion.
[1/2005]
(2)  If, after the receipt of the notice given under subsection (1), the approved exchange fails to take any action in relation to those securities, units or derivatives of units in a business trust or units in a collective investment scheme on that securities market and the Authority continues to be of the opinion that it is necessary to prohibit trading in those securities, units or derivatives of units in a business trust or units in a collective investment scheme on that securities market, the Authority may, by notice in writing to the approved exchange, prohibit trading in those securities, units or derivatives of units in a business trust or units in a collective investment scheme on that securities market for such period, not exceeding 14 days, as is specified in the notice.
[1/2005]
(3)  Where the Authority gives a notice to an approved exchange under subsection (2), the Authority shall —
(a)
at the same time send a copy of the notice to —
(i)
in the case of securities, the entity;
(ii)
in the case of units or derivatives of units in a business trust, the trustee of the business trust; or
(iii)
in the case of units in a collective investment scheme, the responsible person of the collective investment scheme,
together with a statement setting out the reasons for the giving of the notice; and
(b)
as soon as practicable, furnish to the Minister a written report setting out the reasons for the giving of the notice and send a copy of the report to the approved exchange.
[1/2005]
(4)  Any person who is aggrieved by any action taken by the Authority or an approved exchange under this section may, within 30 days after the person is notified of the action, appeal to the Minister whose decision shall be final.
[1/2005]
(5)  Notwithstanding the lodging of an appeal under subsection (4), any action taken by the Authority or an approved exchange under this section shall continue to have effect pending the decision of the Minister.
[1/2005]
(6)  The Minister may, when deciding an appeal under subsection (4), make such modification as he considers necessary to any action taken by the Authority or an approved exchange under this section, and such modified action shall have effect from the date of the decision of the Minister.
[1/2005]
(7)  Any approved exchange which permits trading in securities on the securities market of the approved exchange in contravention of a notice given under subsection (2) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 and, in the case of a continuing offence, to a further fine not exceeding $10,000 for every day or part thereof during which the offence continues after conviction.
[1/2005]
[SIA, s. 22]
Additional powers of Authority in respect of auditors
33.
—(1)  If an auditor of an approved exchange, in the course of the performance of his duties, becomes aware of —
(a)
any matter which, in his opinion, adversely affects or may adversely affect the financial position of the approved exchange to a material extent;
(b)
any matter which, in his opinion, constitutes or may constitute a breach of any provision of this Act or an offence involving fraud or dishonesty; or
(c)
any irregularity that has or may have a material effect upon the accounts of the approved exchange, including any irregularity that affects or jeopardises, or may affect or jeopardise, the funds or property of investors in securities or futures contracts,
the auditor shall immediately send to the Authority a written report of the matter or the irregularity.
[1/2005]
(2)  An auditor of an approved exchange shall not, in the absence of malice on his part, be liable to any action for defamation at the suit of any person in respect of any statement made in his report under subsection (1).
[1/2005]
(3)  Subsection (2) shall not restrict or affect any right, privilege or immunity that the auditor of an approved exchange may have, apart from this section, as a defendant in an action for defamation.
[1/2005]
(4)  The Authority may impose all or any of the following duties on an auditor of an approved exchange:
(a)
a duty to submit such additional information and reports in relation to his audit as the Authority considers necessary;
(b)
a duty to enlarge, extend or alter the scope of his audit of the business and affairs of the approved exchange;
(c)
a duty to carry out any other examination or establish any procedure in any particular case;
(d)
a duty to submit a report on any matter arising out of his audit, examination or establishment of procedure referred to in paragraph (b) or (c),
and the auditor shall carry out such duties.
[1/2005]
(5)  The approved exchange shall remunerate the auditor in respect of the discharge by him of all or any of the duties referred to in subsection (4).
[1/2005]
[E (DM) A, s. 16]
Emergency powers of Authority
34.
—(1)  Where the Authority has reason to believe that an emergency exists, or thinks that it is necessary or expedient in the interests of the public or a section of the public or for the protection of investors, the Authority may direct by notice in writing an approved exchange to take such action as it considers necessary to maintain or restore orderly trading in securities or futures contracts or any class of securities or futures contracts.
[1/2005]
(2)  Without prejudice to subsection (1), the actions which the Authority may direct an approved exchange to take shall include —
(a)
terminating or suspending trading on the approved exchange;
(b)
confining trading to liquidation of securities or futures contracts positions;
(c)
ordering the liquidation of all positions or any part thereof or the reduction in such positions;
(d)
limiting trading to a specific price range;
(e)
modifying trading days or hours;
(f)
altering conditions of delivery;
(g)
fixing the settlement price at which positions are to be liquidated;
(h)
requiring any person to act in a specified manner in relation to trading in securities or futures contracts or any class of securities or futures contracts;
(i)
requiring margins or additional margins for any securities or futures contracts; and
(j)
modifying or suspending any of the business rules of the approved exchange.
[1/2005]
(3)  Where the approved exchange fails to comply with any direction of the Authority under subsection (1) within such time as is specified by the Authority, the Authority may —
(a)
set margin levels in any securities or futures contract or class of securities or futures contracts to cater for the emergency;
(b)
set limits that may apply to market positions acquired in good faith prior to the date of the notice issued by the Authority; or
(c)
take such other action as the Authority may think fit to maintain or restore orderly trading in any securities or futures contracts or class of securities or futures contracts, or liquidation of any position in respect of any securities or futures contract or class of securities or futures contracts.
[1/2005]
(4)  In this section, “emergency” means any threatened or actual market manipulation or cornering, and includes —
(a)
any act of any government affecting a commodity or securities;
(b)
any major market disturbance which prevents the market from accurately reflecting the forces of supply and demand for such commodity or securities; or
(c)
any undesirable situation or practice which, in the opinion of the Authority, constitutes an emergency.
[1/2005]
(5)  The Authority may modify any action taken by an approved exchange under subsection (1), including the setting aside of that action.
[1/2005]
(6)  Any person who is aggrieved by any action taken by the Authority or an approved exchange under this section may, within 30 days after the person is notified of the action, appeal to the Minister whose decision shall be final.
[1/2005]
(7)  Notwithstanding the lodging of an appeal under subsection (6), any action taken by the Authority or an approved exchange under this section shall continue to have effect pending the decision of the Minister.
[1/2005]
(8)  The Minister may, when deciding an appeal under subsection (6), make such modification as he considers necessary to any action taken by the Authority or an approved exchange under this section, and such modified action shall have effect from the date of the decision of the Minister.
[1/2005]
(9)  Any approved exchange which fails to comply with a direction issued under subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.
[1/2005]
[FTA, s. 41]
Power of Authority to exempt approved exchanges from provisions of this Part
35.  The Authority may exempt an approved exchange or a class of approved exchanges from any of the provisions of this Part if it is satisfied that the non-compliance by such approved exchange or class of approved exchanges with such provision would not detract from the objectives specified in section 5, subject to such conditions or restrictions as may be imposed by the Authority.
[1/2005]
Subdivision (5) — Immunity
Immunity from criminal or civil liability
36.  No criminal or civil liability shall be incurred by —
(a)
an approved exchange; or
(b)
any person acting on behalf of an approved exchange, including —
(i)
any director of the approved exchange; or
(ii)
any member of any committee established by the approved exchange,
for any thing done (including any statement made) or omitted to be done with reasonable care and in good faith in the course of, or in connection with, the discharge or purported discharge of its obligations under this Act or the business rules or, where appropriate, listing rules of the approved exchange.
[1/2005]
Division 3 — Regulation of Recognised Market Operators
General obligations
37.
—(1)  A recognised market operator shall, in respect of every market which it operates —
(a)
as far as is reasonably practicable, ensure that the market is fair, orderly and transparent;
(b)
manage any risks associated with its business and operations prudently;
(c)
in discharging its obligations under this Act, not act contrary to the interests of the public, having particular regard to the interests of the investing public; and
(d)
have sufficient financial, human and system resources —
(i)
to operate a fair, orderly and transparent market;
(ii)
to meet contingencies or disasters; and
(iii)
to provide adequate security arrangements.
[1/2005]
(2)  In subsection (1)(d), “contingencies or disasters” includes technical disruptions occurring within automated systems.
[1/2005]
Obligation to notify Authority of certain matters
38.  A recognised market operator shall, as soon as practicable after the occurrence of any of the following circumstances, notify the Authority of the circumstance:
(a)
any material change to the information provided by the recognised market operator in its application under section 7(1) or 11(1);
(c)
the recognised market operator becoming aware of a financial irregularity or other matter which in its opinion —
(i)
may affect its ability to discharge its financial obligations; or
(ii)
may affect the ability of a participant of the recognised market operator to meet its financial obligations to the recognised market operator;
(d)
any other matter that the Authority may prescribe by regulations or specify by notice in writing to the recognised market operator.
[1/2005]
Obligation to maintain proper records
39.  A recognised market operator shall maintain a record of all transactions effected through its facilities in such form and manner as the Authority may prescribe, including —
(a)
the extent to which the record includes details of each transaction; and
(b)
the period of time that the record is to be maintained.
[1/2005]
Obligation to submit periodic reports
40.  A recognised market operator shall submit to the Authority such reports in such form, manner and frequency as the Authority may prescribe.
[1/2005]
Obligation to assist Authority
41.  A recognised market operator shall provide such assistance to the Authority as the Authority may require for the performance of the functions and duties of the Authority, including the furnishing of such returns and the provision of —
(a)
such books and other information —
(i)
relating to the business of the recognised market operator; or
(ii)
in respect of such dealings in securities or trading in futures contracts; and
(b)
such other information,
as the Authority may require for the proper administration of this Act.
[1/2005]
Power of Authority to approve instruments, contracts and transactions
42.
—(1)  No recognised market operator shall, without the approval of the Authority, list, de-list or permit the trading of —
(a)
any futures contract;
(b)
any right, option or derivative in respect of any debentures, stock or shares;
(c)
any right under a contract for differences or under any other contract the purpose or purported purpose of which is to secure a profit or avoid a loss by reference to fluctuations in —
(i)
the value or price of any debentures, stock or shares;
(ii)
the value or price of any group of debentures, stock or shares; or
(iii)
an index of any debentures, stock or shares; and
(d)
such other instrument, contract or transaction, or class of instruments, contracts or transactions, as the Authority may prescribe,
on any market operated by the recognised market operator.
[1/2005]
(2)  The Authority may grant approval for any instrument, contract or transaction, or any class of instruments, contracts or transactions, referred to in subsection (1), subject to such conditions or restrictions as the Authority may think fit to impose by notice in writing to the recognised market operator.
[1/2005]
(3)  The recognised market operator shall comply with the conditions and restrictions imposed under subsection (2).
[1/2005]
[FTA, s. 5]
Penalties under this Division
43.  Any recognised market operator which contravenes section 37(1), 38, 39, 40, 41 or 42(1) or (3) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.
[1/2005]
Power of Authority to exempt recognised market operators from provisions of this Part
43A.
—(1)  The Authority may exempt a recognised market operator or a class of recognised market operators from any of the provisions in this Part if it is satisfied that the non-compliance by such recognised market operator or class of recognised market operators with such provision would not detract from the objectives specified in section 5.
(2)  Such exemption shall be subject to such conditions or restrictions as may be imposed by the Authority.
Division 4 — General Powers of Authority
Power of Authority to remove officers
44.
—(1)  Where the Authority is satisfied that an officer of an approved exchange or a recognised market operator —
(a)
has wilfully contravened or wilfully caused that approved exchange or recognised market operator to contravene —
(i)
this Act;
(ii)
where applicable, its business rules; or
(iii)
where applicable, its listing rules;
(b)
has, without reasonable excuse, failed to ensure compliance by that approved exchange or recognised market operator, a member of that approved exchange or recognised market operator, or a person associated with that member with —
(i)
this Act;
(ii)
where applicable, the business rules of that approved exchange or recognised market operator; or
(iii)
where applicable, the listing rules of that approved exchange or recognised market operator;
(c)
has failed to discharge the duties or functions of his office or employment;
(d)
is an undischarged bankrupt, whether in Singapore or elsewhere;
(e)
has had execution against him in respect of a judgment debt returned unsatisfied in whole or in part;
(f)
has, whether in Singapore or elsewhere, made a compromise or scheme of arrangement with his creditors, being a compromise or scheme of arrangement that is still in operation; or
(g)
has been convicted, whether in Singapore or elsewhere, of an offence involving fraud or dishonesty or the conviction for which involved a finding that he had acted fraudulently or dishonestly,
the Authority may, if it thinks it necessary in the interests of the public or a section of the public or for the protection of investors, by notice in writing direct that approved exchange or recognised market operator to remove the officer from his office or employment, and that approved exchange or recognised market operator shall comply with such notice, notwithstanding the provisions of section 152 of the Companies Act (Cap. 50).
[1/2005]
(2)  Without prejudice to any other matter that the Authority may consider relevant, the Authority may, in determining whether an officer of an approved exchange or a recognised market operator has failed to discharge the duties or functions of his office or employment for the purposes of subsection (1)(c), have regard to such criteria as the Authority may prescribe or specify in directions issued by notice in writing.
[1/2005]
(3)  Subject to subsection (4), the Authority shall not direct an approved exchange or a recognised market operator to remove an officer from his office or employment without giving the approved exchange or recognised market operator an opportunity to be heard.
[1/2005]
(4)  The Authority may direct an approved exchange or a recognised market operator to remove an officer from his office or employment under subsection (1) on any of the following grounds without giving the approved exchange or recognised market operator an opportunity to be heard:
(a)
the officer is an undischarged bankrupt, whether in Singapore or elsewhere;
(b)
the officer has been convicted, whether in Singapore or elsewhere, of an offence —
(i)
involving fraud or dishonesty or the conviction for which involved a finding that he had acted fraudulently or dishonestly; and
(ii)
punishable with imprisonment for a term of 3 months or more.
[1/2005]
(5)  Where the Authority directs an approved exchange or a recognised market operator to remove an officer from his office or employment under subsection (1), the Authority need not give that officer an opportunity to be heard.
[1/2005]
(6)  Any approved exchange or a recognised market operator that is aggrieved by a direction of the Authority made in relation to the approved exchange or recognised market operator, as the case may be, under subsection (1) may, within 30 days after the approved exchange or recognised market operator, as the case may be, is notified of the direction, appeal to the Minister whose decision shall be final.
[1/2005]
(7)  Notwithstanding the lodging of an appeal under subsection (6), any action taken by the Authority under this section, shall continue to have effect pending the decision of the Minister.
[1/2005]
(8)  The Minister may, when deciding an appeal under subsection (6), make such modification as he considers necessary to any action taken by the Authority under this section, and such modified action shall have effect from the date of the decision of the Minister.
[1/2005]
(9)  Subject to subsection (10), no criminal or civil liability shall be incurred by an approved exchange or a recognised market operator in respect of any thing done or omitted to be done with reasonable care and in good faith in the discharge or purported discharge of its obligations under this section.
[1/2005]
(10)  Any approved exchange or a recognised market operator which, without reasonable excuse, contravenes a written notice issued under subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.
[1/2005]
Interpretation of sections 44A to 44F
44A.  In this section and sections 44B to 44F, unless the context otherwise requires —
“business” includes affairs and property;
“office holder”, in relation to an approved exchange or a recognised market operator, means any person acting as the liquidator, the provisional liquidator, the receiver or the receiver and manager of the approved exchange or recognised market operator (as the case may be), or acting in an equivalent capacity in relation to the approved exchange or recognised market operator (as the case may be);
“relevant business” means any business of an approved exchange or a recognised market operator —
(a)
which the Authority has assumed control of under section 44B; or
(b)
in relation to which a statutory adviser or a statutory manager has been appointed under section 44B;
“statutory adviser” means a statutory adviser appointed under section 44B;
“statutory manager” means a statutory manager appointed under section 44B.
Action by Authority if approved exchange or recognised market operator unable to meet obligations, etc.
44B.
—(1)  The Authority may exercise any one or more of the powers specified in subsection (2) as appears to it to be necessary, where —
(a)
an approved exchange or a recognised market operator informs the Authority that it is or is likely to become insolvent, or that it is or is likely to become unable to meet its obligations, or that it has suspended or is about to suspend payments;
(b)
an approved exchange or a recognised market operator becomes unable to meet its obligations, or is insolvent, or suspends payments;
(c)
the Authority is of the opinion that an approved exchange or a recognised market operator —
(i)
is carrying on its business in a manner likely to be detrimental to the interests of the public or a section of the public or the protection of investors, or to the objectives specified in section 5;
(ii)
is or is likely to become insolvent, or is or is likely to become unable to meet its obligations, or is about to suspend payments;
(iii)
has contravened any of the provisions of this Act; or
(iv)
has failed to comply with any condition or restriction imposed on it under section 8(4) or (5); or
(d)
the Authority considers it in the public interest to do so.
(2)  Subject to subsections (1) and (3), the Authority may —
(a)
require the approved exchange or recognised market operator (as the case may be) immediately to take any action or to do or not to do any act or thing whatsoever in relation to its business as the Authority may consider necessary;
(b)
appoint one or more persons as statutory adviser, on such terms and conditions as the Authority may specify, to advise the approved exchange or recognised market operator (as the case may be) on the proper management of such of the business of the approved exchange or recognised market operator (as the case may be) as the Authority may determine; or
(c)
assume control of and manage such of the business of the approved exchange or recognised market operator (as the case may be) as the Authority may determine, or appoint one or more persons as statutory manager to do so on such terms and conditions as the Authority may specify.
(3)  In the case of an approved exchange, or a recognised market operator, which is incorporated outside Singapore, any appointment of a statutory adviser or statutory manager or any assumption of control by the Authority of any business of the approved exchange or recognised market operator (as the case may be) under subsection (2) shall only be in relation to —
(a)
the business or affairs of the approved exchange or recognised market operator (as the case may be) carried on in, or managed in or from, Singapore; or
(b)
the property of the approved exchange or recognised market operator (as the case may be) located in Singapore, or reflected in the books of the approved exchange or recognised market operator (as the case may be) in Singapore, as the case may be, in relation to its operations in Singapore.
(4)  Where the Authority appoints 2 or more persons as the statutory manager of an approved exchange or a recognised market operator, the Authority shall specify, in the terms and conditions of the appointment, which of the duties, functions and powers of the statutory manager —
(a)
may be discharged or exercised by such persons jointly and severally;
(b)
shall be discharged or exercised by such persons jointly; and
(c)
shall be discharged or exercised by a specified person or such persons.
(5)  Where the Authority has exercised any power under subsection (2), it may, at any time and without prejudice to its power under section 13(1)(da), do one or more of the following:
(a)
vary or revoke any requirement of, any appointment made by or any action taken by the Authority in the exercise of such power, on such terms and conditions as it may specify;
(b)
further exercise any of the powers under subsection (2);
(c)
add to, vary or revoke any term or condition specified by the Authority under this section.
(6)  No liability shall be incurred by a statutory manager or a statutory adviser for anything done (including any statement made) or omitted to be done with reasonable care and in good faith in the course of or in connection with —
(a)
the exercise or purported exercise of any power under this Act;
(b)
the performance or purported performance of any function or duty under this Act; or
(c)
the compliance or purported compliance with this Act.
(7)  Any approved exchange or recognised market operator that fails to comply with a requirement imposed by the Authority under subsection (2)(a) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.
Effect of assumption of control under section 44B
44C.
—(1)  Upon assuming control of the relevant business of an approved exchange or a recognised market operator, the Authority or statutory manager, as the case may be, shall take custody or control of the relevant business.
(2)  During the period when the Authority or statutory manager is in control of the relevant business of an approved exchange or a recognised market operator, the Authority or statutory manager —
(a)
shall manage the relevant business of the approved exchange or recognised market operator (as the case may be) in the name of and on behalf of the approved exchange or recognised market operator (as the case may be); and
(b)
shall be deemed to be an agent of the approved exchange or recognised market operator (as the case may be).
(3)  In managing the relevant business of an approved exchange or a recognised market operator, the Authority or statutory manager —
(a)
shall take into consideration the interests of the public or the section of the public referred to in section 44B(1)(c)(i), and the need to protect investors; and
(b)
shall have all the duties, powers and functions of the members of the board of directors of the approved exchange or recognised market operator (as the case may be) (collectively and individually) under this Act, the Companies Act (Cap. 50) and the constitution of the approved exchange or recognised market operator (as the case may be), including powers of delegation, in relation to the relevant business of the approved exchange or recognised market operator (as the case may be); but nothing in this paragraph shall require the Authority or statutory manager to call any meeting of the approved exchange or recognised market operator (as the case may be) under the Companies Act or the constitution of the approved exchange or recognised market operator (as the case may be).
(4)  Notwithstanding any written law or rule of law, upon the assumption of control of the relevant business of an approved exchange or a recognised market operator by the Authority or statutory manager, any appointment of a person as the chief executive officer or a director of the approved exchange or recognised market operator (as the case may be), which was in force immediately before the assumption of control, shall be deemed to be revoked, unless the Authority gives its approval, by notice in writing to the person and the approved exchange or recognised market operator (as the case may be), for the person to remain in the appointment.
(5)  Notwithstanding any written law or rule of law, during the period when the Authority or statutory manager is in control of the relevant business of an approved exchange or a recognised market operator, except with the approval of the Authority, no person shall be appointed as the chief executive officer or a director of the approved exchange or recognised market operator (as the case may be).
(6)  Where the Authority has given its approval under subsection (4) or (5) to a person to remain in the appointment of, or to be appointed as, the chief executive officer or a director of an approved exchange or a recognised market operator, the Authority may at any time, by notice in writing to the person and the approved exchange or recognised market operator (as the case may be), revoke that approval, and the appointment shall be deemed to be revoked on the date specified in the notice.
(7)  Notwithstanding any written law or rule of law, if any person, whose appointment as the chief executive officer or a director of an approved exchange or a recognised market operator is revoked under subsection (4) or (6), acts or purports to act after the revocation as the chief executive officer or a director of the approved exchange or recognised market operator (as the case may be) during the period when the Authority or statutory manager is in control of the relevant business of the approved exchange or recognised market operator (as the case may be) —
(a)
the act or purported act of the person shall be invalid and of no effect; and
(b)
the person shall be guilty of an offence.
(8)  Notwithstanding any written law or rule of law, if any person who is appointed as the chief executive officer or a director of an approved exchange or a recognised market operator in contravention of subsection (5) acts or purports to act as the chief executive officer or a director of the approved exchange or recognised market operator (as the case may be) during the period when the Authority or statutory manager is in control of the relevant business of the approved exchange or recognised market operator (as the case may be) —
(a)
the act or purported act of the person shall be invalid and of no effect; and
(b)
the person shall be guilty of an offence.
(9)  During the period when the Authority or statutory manager is in control of the relevant business of an approved exchange or a recognised market operator —
(a)
if there is any conflict or inconsistency between —
(i)
a direction or decision given by the Authority or statutory manager (including a direction or decision to a person or body of persons referred to in sub-paragraph (ii)); and
(ii)
a direction or decision given by any chief executive officer, director, member, executive officer, employee, agent or office holder, or the board of directors, of the approved exchange or recognised market operator (as the case may be),
the direction or decision referred to in sub-paragraph (i) shall, to the extent of the conflict or inconsistency, prevail over the direction or decision referred to in sub-paragraph (ii); and
(b)
no person shall exercise any voting or other right attached to any share in the approved exchange or recognised market operator (as the case may be) in any manner that may defeat or interfere with any duty, function or power of the Authority or statutory manager, and any such act or purported act shall be invalid and of no effect.
(10)  Any person who is guilty of an offence under subsection (7) or (8) shall be liable on conviction to a fine not exceeding $150,000 or to imprisonment for a term not exceeding 3 years or to both and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.
(11)  In this section, “constitution”, in relation to an approved exchange or a recognised market operator, means the memorandum of association and articles of association of the approved exchange or recognised market operator (as the case may be).
Duration of control
44D.
—(1)  The Authority shall cease to be in control of the relevant business of an approved exchange or a recognised market operator when the Authority is satisfied that —
(a)
the reasons for the Authority’s assumption of control of the relevant business have ceased to exist; or
(b)
it is no longer necessary in the interests of the public or the section of the public referred to in section 44B(1)(c)(i) or for the protection of investors.
(2)  A statutory manager shall be deemed to have assumed control of the relevant business of an approved exchange or a recognised market operator on the date of his appointment as a statutory manager.
(3)  The appointment of a statutory manager in relation to the relevant business of an approved exchange or a recognised market operator may be revoked by the Authority at any time —
(a)
if the Authority is satisfied that —
(i)
the reasons for the appointment have ceased to exist; or
(ii)
it is no longer necessary in the interests of the public or the section of the public referred to in section 44B(1)(c)(i) or for the protection of investors; or
(b)
on any other ground,
and upon such revocation, the statutory manager shall cease to be in control of the relevant business of the approved exchange or recognised market operator (as the case may be).
(4)  The Authority shall, as soon as practicable, publish in the Gazette the date, and such other particulars as the Authority thinks fit, of —
(a)
the Authority’s assumption of control of the relevant business of an approved exchange or a recognised market operator;
(b)
the cessation of the Authority’s control of the relevant business of an approved exchange or a recognised market operator;
(c)
the appointment of a statutory manager in relation to the relevant business of an approved exchange or a recognised market operator; and
(d)
the revocation of a statutory manager’s appointment in relation to the relevant business of an approved exchange or a recognised market operator.
Responsibilities of officers, member, etc., of approved exchange or recognised market operator
44E.
—(1)  During the period when the Authority or statutory manager is in control of the relevant business of an approved exchange or a recognised market operator —
(a)
the High Court may, on an application by the Authority or statutory manager, direct any person who has ceased to be or who is still any chief executive officer, director, member, executive officer, employee, agent, banker, auditor or office holder of, or trustee for, the approved exchange or recognised market operator (as the case may be) to pay, deliver, convey, surrender or transfer to the Authority or statutory manager, within such period as the High Court may specify, any property or book of the approved exchange or recognised market operator (as the case may be) which is comprised in, forms part of or relates to the relevant business of the approved exchange or recognised market operator (as the case may be), and which is in the person’s possession or control; and
(b)
any person who has ceased to be or who is still any chief executive officer, director, member, executive officer, employee, agent, banker, auditor or office holder of, or trustee for, the approved exchange or recognised market operator (as the case may be) shall give to the Authority or statutory manager such information as the Authority or statutory manager may require for the discharge of the Authority’s or statutory manager’s duties or functions, or the exercise of the Authority’s or statutory manager’s powers, in relation to the approved exchange or recognised market operator (as the case may be), within such time and in such manner as may be specified by the Authority or statutory manager.
(2)  Any person who —
(a)
without reasonable excuse, fails to comply with subsection (1)(b); or
(b)
in purported compliance with subsection (1)(b), knowingly or recklessly furnishes any information or document that is false or misleading in a material particular,
shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000 or to imprisonment for a term not exceeding 3 years or to both and, in the case of a continuing offence, to a further fine not exceeding $5,000 for every day or part thereof during which the offence continues after conviction.
Remuneration and expenses of Authority and others in certain cases
44F.
—(1)  The Authority may at any time fix the remuneration and expenses to be paid by an approved exchange or a recognised market operator —
(a)
to a statutory manager or statutory adviser appointed in relation to the approved exchange or recognised market operator (as the case may be), whether or not the appointment has been revoked; and
(b)
where the Authority has assumed control of the relevant business of the approved exchange or recognised market operator (as the case may be), to the Authority and any person appointed by the Authority under section 320 in relation to the Authority’s assumption of control of the relevant business, whether or not the Authority has ceased to be in control of the relevant business.
(2)  The approved exchange or recognised market operator (as the case may be) shall reimburse the Authority any remuneration and expenses payable by the approved exchange or recognised market operator (as the case may be) to a statutory manager or statutory adviser.
Power of Authority to make regulations
45.
—(1)  Without prejudice to section 341, the Authority may make regulations relating to the exemption, recognition or approval of, and the requirements applicable to, persons who establish, operate or assist in establishing or operating markets.
[1/2005]
(1A)  The Authority may also make regulations for the purpose of carrying out section 16A, including —
(a)
requiring an approved exchange to reckon specified positions for the purpose of determining if limits established or varied under section 16A(1) have been exceeded;
(b)
requiring an approved exchange to take specified steps to ensure compliance with those limits; and
(c)
specifying measures to manage any risks assumed by an approved exchange.
(2)  Regulations made under this section may provide —
(a)
that a contravention of any specified provision thereof shall be an offence; and
(b)
for a penalty not exceeding a fine of $150,000 or imprisonment for a term not exceeding 12 months or both for each offence and, in the case of a continuing offence, a further penalty not exceeding a fine of 10% of the maximum fine prescribed for that offence for every day or part thereof during which the offence continues after conviction.
[1/2005]
Power of Authority to issue directions
46.
—(1)  The Authority may, if it thinks it necessary or expedient —
(a)
for ensuring fair, orderly and transparent markets;
(b)
for ensuring the integrity and stability of the capital markets or the financial system;
(c)
in the interests of the public or a section of the public or for the protection of investors;
(d)
for the effective administration of this Act; or
(e)
for ensuring compliance with any condition or restriction as may be imposed by the Authority under section 8(4) or (5), 14(5), (6), (8) or (9), 17(2), 27(5) or (10), 28(11), 29(2), 35, 42(2) or 43A(2), or such other obligations or requirements under this Act or as may be prescribed by the Authority,
[2/2009 wef 29/07/2009]
issue directions, whether of a general or specific nature, by notice in writing, to an approved exchange, a recognised market operator or an exempt market operator, and the approved exchange, recognised market operator or exempt market operator shall comply with such directions.
[1/2005]
(2)  Any approved exchange, a recognised market operator or an exempt market operator which, without reasonable excuse, contravenes a direction issued under subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.
[1/2005]
(3)  It shall not be necessary to publish any direction issued under subsection (1) in the Gazette.
Division 5 — Voluntary Transfer of Business of
Approved Exchange or Recognised Market Operator
Interpretation of this Division
46AA.  In this Division, unless the context otherwise requires —
“business” includes affairs, property, right, obligation and liability;
“Court” means the High Court or a Judge thereof;
“debenture” has the same meaning as in section 4(1) of the Companies Act (Cap. 50);
“property” includes property, right and power of every description;
“Registrar of Companies” means the Registrar of Companies appointed under the Companies Act and includes any Deputy or Assistant Registrar of Companies appointed under that Act;
“transferee” means an approved exchange or a recognised market operator, or a corporation which has applied or will be applying for approval or recognition to carry on in Singapore the usual business of an approved exchange or a recognised market operator, to which the whole or any part of a transferor’s business is, is to be or is proposed to be transferred under this Division;
“transferor” means an approved exchange or a recognised market operator the whole or any part of the business of which is, is to be, or is proposed to be transferred under this Division.
Voluntary transfer of business
46AAA.
—(1)  A transferor may transfer the whole or any part of its business (including any business that is not the usual business of an approved exchange or a recognised market operator) to a transferee, if —
(a)
the Authority has consented to the transfer;
(b)
the transfer involves the whole or any part of the business of the transferor that is the usual business of an approved exchange or a recognised market operator; and
(c)
the Court has approved the transfer.
(2)  Subsection (1) is without prejudice to the right of an approved exchange or a recognised market operator to transfer the whole or any part of its business under any law.
(3)  The Authority may consent to a transfer under subsection (1)(a) if the Authority is satisfied that —
(a)
the transferee is a fit and proper person; and
(b)
the transferee will conduct the business of the transferor prudently and comply with the provisions of this Act.
(4)  The Authority may at any time appoint one or more persons to perform an independent assessment of, and furnish a report on, the proposed transfer of a transferor’s business (or any part thereof) under this Division.
(5)  The remuneration and expenses of any person appointed under subsection (4) shall be paid by the transferor and the transferee jointly and severally.
(6)  The Authority shall serve a copy of any report furnished under subsection (4) on the transferor and the transferee.
(7)  The Authority may require a person to furnish, within the period and in the manner specified by the Authority, any information or document that the Authority may reasonably require for the discharge of its duties or functions, or the exercise of its powers, under this Division.
(8)  Any person who —
(a)
without reasonable excuse, fails to comply with any requirement under subsection (7); or
(b)
in purported compliance with any requirement under subsection (7), knowingly or recklessly furnishes any information or document that is false or misleading in a material particular,
shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $200,000 or to imprisonment for a term not exceeding 3 years or to both and, in the case of a continuing offence, to a further fine not exceeding $20,000 for every day or part thereof during which the offence continues after conviction.
(9)  Where a person claims, before furnishing the Authority with any information or document that he is required to furnish under subsection (7), that the information or document might tend to incriminate him, the information or document shall not be admissible in evidence against him in criminal proceedings other than proceedings under subsection (8).
Approval of transfer
46AAB.
—(1)  A transferor shall apply to the Court for its approval of the transfer of the whole or any part of the business of the transferor to the transferee under this Division.
(2)  Before making an application under subsection (1) —
(a)
the transferor shall lodge with the Authority a report setting out such details of the transfer and furnish such supporting documents as the Authority may specify;
(b)
the transferor shall obtain the consent of the Authority under section 46AAA(1)(a);
(c)
the transferor and the transferee shall, if they intend to serve on their respective participants a summary of the transfer, obtain the Authority’s approval of the summary;
(d)
the transferor shall, at least 15 days before the application is made but not earlier than one month after the report referred to in paragraph (a) is lodged with the Authority, publish in the Gazette and in such newspaper or newspapers as the Authority may determine a notice of the transferor’s intention to make the application and containing such other particulars as may be prescribed;
(e)
the transferor and the transferee shall keep at their respective offices in Singapore, for inspection by any person who may be affected by the transfer, a copy of the report referred to in paragraph (a) for a period of 15 days after the publication of the notice referred to in paragraph (d) in the Gazette; and
(f)
unless the Court directs otherwise, the transferor and the transferee shall serve on their respective participants affected by the transfer, at least 15 days before the application is made, a copy of the report referred to in paragraph (a) or a summary of the transfer approved by the Authority under paragraph (c).
(3)  The Authority and any person who, in the opinion of the Court, is likely to be affected by the transfer —
(a)
shall have the right to appear before and be heard by the Court in any proceedings relating to the transfer; and
(b)
may make any application to the Court in relation to the transfer.
(4)  The Court shall not approve the transfer if the Authority has not consented under section 46AAA(1)(a) to the transfer.
(5)  The Court may, after taking into consideration the views, if any, of the Authority on the transfer —
(a)
approve the transfer without modification or subject to any modification agreed to by the transferor and the transferee; or
(b)
refuse to approve the transfer.
(6)  If the transferee is not approved as an approved exchange or recognised as a recognised market operator by the Authority, the Court may approve the transfer on terms that the transfer shall take effect only in the event of the transferee being approved as an approved exchange or recognised as a recognised market operator by the Authority.
(7)  The Court may by the order approving the transfer or by any subsequent order provide for all or any of the following matters:
(a)
the transfer to the transferee of the whole or any part of the business of the transferor;
(b)
the allotment or appropriation by the transferee of any share, debenture, policy or other interest in the transferee which under the transfer is to be allotted or appropriated by the transferee to or for any person;
(c)
the continuation by (or against) the transferee of any legal proceedings pending by (or against) the transferor;
(d)
the dissolution, without winding up, of the transferor;
(e)
the provisions to be made for persons who are affected by the transfer;
(f)
such incidental, consequential and supplementary matters as are, in the opinion of the Court, necessary to secure that the transfer is fully effective.
(8)  Any order under subsection (7) may —
(a)
provide for the transfer of any business, whether or not the transferor otherwise has the capacity to effect the transfer in question;
(b)
make provision in relation to any property which is held by the transferor as trustee; and
(c)
make provision as to any future or contingent right or liability of the transferor, including provision as to the construction of any instrument under which any such right or liability may arise.
(9)  Subject to subsection (10), where an order made under subsection (7) provides for the transfer to the transferee of the whole or any part of the transferor’s business, then by virtue of the order the business (or part thereof) of the transferor specified in the order shall be transferred to and vest in the transferee, free in the case of any particular property (if the order so directs) from any charge which by virtue of the transfer is to cease to have effect.
(10)  No order under subsection (7) shall have any effect or operation in transferring or otherwise vesting land in Singapore until the appropriate entries are made with respect to the transfer or vesting of that land by the appropriate authority.
(11)  If any business specified in an order under subsection (7) is governed by the law of any foreign country or territory, the Court may order the transferor to take all necessary steps for securing that the transfer of the business to the transferee is fully effective under the law of that country or territory.
(12)  Where an order is made under this section, the transferor and the transferee shall each lodge within 7 days after the order is made —
(a)
a copy of the order with the Registrar of Companies and with the Authority; and
(b)
where the order relates to land in Singapore, an office copy of the order with the appropriate authority concerned with the registration or recording of dealings in that land.
(13)  A transferor or transferee which contravenes subsection (12), and every officer of the transferor or transferee (as the case may be) who fails to take all reasonable steps to secure compliance by the transferor or transferee (as the case may be) with that subsection, shall each be guilty of an offence and shall each be liable on conviction to a fine not exceeding $2,000 and, in the case of a continuing offence, to a further fine not exceeding $200 for every day or part thereof during which the offence continues after conviction.
PART IIA
TRADE REPOSITORIES
[Act 34 of 2012 wef 01/08/2013]
Objectives of this Part
46A.  The objectives of this Part are —
(a)
to promote safe and efficient trade repositories;
(b)
to promote transparent markets through timely and reliable access to information on transactions; and
(c)
to reduce systemic risks.
[Act 34 of 2012 wef 01/08/2013]
Interpretation of this Part
46B.  In this Part, unless the context otherwise requires —
“foreign trade repository” means a trade repository which is incorporated or formed outside Singapore;
“foreign trade repository licence” means a licence that is granted by the Authority to a foreign trade repository under section 46E(2);
“Singapore trade repository” means a trade repository which is incorporated in Singapore;
“trade repository” means a corporation that collects and maintains information on any transactions relating to any securities, futures contracts or derivatives contracts, or any other transactions or class of transactions that the Authority may prescribe by regulations made under section 341 for the purposes of this definition;
“trade repository licence” means a licence that is granted by the Authority to a Singapore trade repository under section 46E(1).
[Act 34 of 2012 wef 01/08/2013]
Division 1 — Licensing of Trade Repositories
Holding out as licensed trade repository or licensed foreign trade repository
46C.
—(1)  No person shall hold himself out —
(a)
as a licensed trade repository, unless he has in force a trade repository licence granted by the Authority under section 46E(1); or
(b)
as a licensed foreign trade repository, unless he has in force a foreign trade repository licence granted by the Authority under section 46E(2).
(2)  Any person who contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000 and, in the case of a continuing offence, to a further fine not exceeding $2,000 for every day or part thereof during which the offence continues after conviction.
[Act 34 of 2012 wef 01/08/2013]
Application for licence
46D.
—(1)  A corporation that is, or intends to be, a Singapore trade repository may apply to the Authority for the grant of a trade repository licence.
(2)  A corporation that is, or intends to be, a foreign trade repository may apply to the Authority for the grant of a foreign trade repository licence.
(3)  An application under subsection (1) or (2) shall be —
(a)
made in such form and manner as the Authority may prescribe; and
(b)
accompanied by a non-refundable prescribed application fee, which shall be paid in the manner specified by the Authority.
(4)  The Authority may require an applicant to furnish the Authority with such information or documents as the Authority considers necessary in relation to the application.
[Act 34 of 2012 wef 01/08/2013]
Power of Authority to grant trade repository licence or foreign trade repository licence
46E.
—(1)  Where a corporation referred to in section 46D(1) has made an application under that provision, the Authority may grant the corporation a trade repository licence.
(2)  Where a corporation referred to in section 46D(2) has made an application under that provision, the Authority may grant the corporation a foreign trade repository licence.
(3)  The Authority may grant a corporation a trade repository licence under subsection (1) or a foreign trade repository licence under subsection (2) subject to such conditions or restrictions as the Authority may think fit to impose by notice in writing, including conditions or restrictions, either of a general or specific nature, relating to —
(a)
the activities that the corporation may undertake;
(b)
the transactions that may be reported to the corporation in its capacity as a trade repository; and
(c)
the nature of the investors or participants who may use or have an interest in the corporation as a trade repository.
(4)  The Authority may, at any time, by notice in writing to the corporation, vary any condition or restriction or impose such further condition or restriction as the Authority may think fit.
(5)  A licensed trade repository or licensed foreign trade repository shall, for the duration of the licence, satisfy every condition or restriction that may be imposed on it under subsection (3) or (4).
(6)  The Authority shall not grant an applicant a trade repository licence or foreign trade repository licence, unless the applicant meets such requirements, including minimum financial requirements, as the Authority may prescribe, either generally or specifically.
(7)  Without prejudice to subsections (3), (4) and (6), the Authority may, for the purposes of granting a foreign trade repository licence under subsection (2), have regard, in addition to any requirements prescribed under subsection (6), to —
(a)
whether adequate arrangements exist for co-operation between the Authority and the primary financial services regulatory authority responsible for the supervision of the foreign trade repository in the country or territory in which the head office or principal place of business of the foreign trade repository is situated; and
(b)
whether the foreign trade repository is, in the country or territory in which the head office or principal place of business is situated, subject to requirements and supervision comparable, in the degree to which the objectives specified in section 46A are achieved, to the requirements and supervision to which licensed trade repositories are subject under this Act.
(8)  In considering whether a foreign trade repository has satisfied the requirements specified in subsection (7)(b), the Authority may have regard to —
(a)
the relevant laws and practices of the country or territory in which the head office or principal place of business of the foreign trade repository is situated; and
(b)
the rules and practices of the foreign trade repository acting in its capacity as a trade repository.
(9)  The Authority may refuse to grant a corporation a trade repository licence or foreign trade repository licence, if —
(a)
the corporation has not provided the Authority with such information as the Authority may require, relating to —
(i)
the corporation or any person employed by or associated with the corporation for the purposes of the corporation’s business or operations; or
(ii)
any circumstances likely to affect the corporation’s manner of conducting business or operations;
(b)
any information or document provided by the corporation to the Authority is false or misleading;
(c)
the corporation or a substantial shareholder of the corporation is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere;
(d)
execution against the corporation or a substantial shareholder of the corporation in respect of a judgment debt has been returned unsatisfied in whole or in part;
(e)
a receiver, a receiver and manager, a judicial manager or a person in an equivalent capacity has been appointed, whether in Singapore or elsewhere, in relation to, or in respect of, any property of the corporation or a substantial shareholder of the corporation;
(f)
the corporation or a substantial shareholder of the corporation has, whether in Singapore or elsewhere, entered into a compromise or scheme of arrangement with the creditors of the corporation or shareholder, as the case may be, being a compromise or scheme of arrangement that is still in operation;
(g)
the corporation, a substantial shareholder of the corporation or any officer of the corporation —
(i)
has been convicted, whether in Singapore or elsewhere, of an offence committed before, on or after the date of commencement of section 6 of the Securities and Futures (Amendment) Act 2012, involving fraud or dishonesty or the conviction for which involved a finding that the corporation, shareholder or officer, as the case may be, had acted fraudulently or dishonestly; or
(ii)
has been convicted of an offence under this Act committed before, on or after the date of commencement of section 6 of the Securities and Futures (Amendment) Act 2012;
(h)
the Authority is not satisfied as to the educational or other qualifications or experience of the officers or employees of the corporation, having regard to the nature of the duties they are to perform in connection with the establishment or operation of any licensed trade repository or licensed foreign trade repository;
(i)
the corporation fails to satisfy the Authority that the corporation is a fit and proper person or that all of its officers, employees and substantial shareholders are fit and proper persons;
(j)
the Authority has reason to believe that the corporation may not be able to act in the best interests of its participants, having regard to the reputation, character, financial integrity and reliability of the corporation or its officers, employees or substantial shareholders;
(k)
the Authority is not satisfied as to —
(i)
the financial standing of the corporation or any of its substantial shareholders; or
(ii)
the manner in which the business of the corporation is to be conducted, or the operations of the corporation are to be conducted;
(l)
the Authority is not satisfied as to the record of past performance or expertise of the corporation, having regard to the nature of the business or operations which the corporation may carry on or conduct in connection with the establishment or operation of any licensed trade repository or licensed foreign trade repository;
(m)
there are other circumstances which are likely to —
(i)
lead to the improper conduct of business or operations by the corporation or any of its officers, employees or substantial shareholders; or
(ii)
reflect discredit on the manner of conducting the business or operations of the corporation or any of its substantial shareholders;
(n)
the Authority has reason to believe that the corporation, or any of its officers or employees, will not operate a safe and efficient trade repository; or
(o)
the Authority is of the opinion that it would be contrary to the interests of the public to grant the corporation a trade repository licence or foreign trade repository licence.
(10)  Subject to subsection (11), the Authority shall not refuse to grant a corporation a trade repository licence or foreign trade repository licence under subsection (9) without giving the corporation an opportunity to be heard.
(11)  The Authority may refuse to grant a corporation a trade repository licence or foreign trade repository licence on any of the following grounds without giving the corporation an opportunity to be heard:
(a)
the corporation is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere;
(b)
a receiver, a receiver and manager or a person in an equivalent capacity has been appointed, whether in Singapore or elsewhere, in relation to, or in respect of, any property of the corporation;
(c)
the corporation has been convicted, whether in Singapore or elsewhere, of an offence committed before, on or after the date of commencement of section 6 of the Securities and Futures (Amendment) Act 2012, involving fraud or dishonesty or the conviction for which involved a finding that it had acted fraudulently or dishonestly.
(12)  The Authority shall give notice in the Gazette of any corporation granted a trade repository licence under subsection (1) or a foreign trade repository licence under subsection (2), and such notice may include all or any of the conditions or restrictions imposed by the Authority on the corporation under subsections (3) and (4).
(13)  Any applicant which is aggrieved by a refusal of the Authority under subsection (6), (9) or (11) to grant to the applicant a trade repository licence or foreign trade repository licence may, within 30 days after the applicant is notified of the refusal, appeal to the Minister, whose decision shall be final.
(14)  Any licensed trade repository or licensed foreign trade repository which contravenes subsection (5) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.
[Act 34 of 2012 wef 01/08/2013]
Annual fees payable by licensed trade repository or licensed foreign trade repository
46F.
—(1)  Every licensed trade repository and every licensed foreign trade repository shall pay to the Authority such annual fees as may be prescribed in such manner as may be specified by the Authority.
(2)  The Authority may, where it considers appropriate, refund or remit the whole or any part of any annual fee paid or payable to it.
[Act 34 of 2012 wef 01/08/2013]
Cancellation of trade repository licence or foreign trade repository licence
46G.
—(1)  A corporation which intends to cease operating as a licensed trade repository or licensed foreign trade repository may apply to the Authority to cancel its trade repository licence or foreign trade repository licence, as the case may be.
(2)  An application under subsection (1) shall be made in such form and manner, and not later than such time, as the Authority may prescribe.
(3)  The Authority may cancel the trade repository licence or foreign trade repository licence on such application if the Authority is satisfied that the cancellation of the trade repository licence or foreign trade repository licence, as the case may be, will not detract from the objectives specified in section 46A.
[Act 34 of 2012 wef 01/08/2013]
Power of Authority to revoke trade repository licence or foreign trade repository licence
46H.
—(1)  The Authority may revoke a trade repository licence or foreign trade repository licence granted to a corporation, if —
(a)
there exists at any time a ground under section 46E(6) or (9) on which the Authority may refuse an application;
(b)
the corporation does not commence operating as a licensed trade repository or licensed foreign trade repository, as the case may be, within 12 months after the date on which it was granted the trade repository licence or foreign trade repository licence, as the case may be;
(c)
the corporation ceases to operate as a trade repository;
(d)
the corporation contravenes —
(i)
any condition or restriction applicable in respect of its trade repository licence or foreign trade repository licence, as the case may be;
(ii)
any direction issued to it by the Authority under this Act; or
(iii)
any provision in this Act;
(da)
upon the Authority exercising any power under section 46ZIB(2) or the Minister exercising any power under Division 2, 3 or 4 of Part IVB of the Monetary Authority of Singapore Act (Cap. 186) in relation to the corporation, the Authority considers that it is in the public interest to revoke the trade repository licence or foreign trade repository licence, as the case may be;
[Act 10 of 2013 wef 02/08/2013]
(e)
the corporation operates in a manner that is, in the opinion of the Authority, contrary to the interests of the public; or
(f)
any information or document provided by the corporation to the Authority is false or misleading.
(2)  Subject to subsection (3), the Authority shall not revoke under subsection (1) a trade repository licence or foreign trade repository licence that was granted to a corporation without giving the corporation an opportunity to be heard.
(3)  The Authority may revoke a trade repository licence or foreign trade repository licence that was granted to a corporation on any of the following grounds without giving the corporation an opportunity to be heard:
(a)
the corporation is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere;
(b)
a receiver, a receiver and manager or a person in an equivalent capacity has been appointed, whether in Singapore or elsewhere, in relation to, or in respect of, any property of the corporation;
(c)
the corporation has been convicted, whether in Singapore or elsewhere, of an offence committed before, on or after the date of commencement of section 6 of the Securities and Futures (Amendment) Act 2012, involving fraud or dishonesty or the conviction for which involved a finding that it had acted fraudulently or dishonestly.
(4)  For the purposes of subsection (1)(c), a corporation shall be deemed to have ceased to operate as a trade repository if —
(a)
it has ceased to operate as a trade repository for more than 30 days, unless it has obtained the prior approval of the Authority to do so; or
(b)
it has ceased to operate as a trade repository under a direction issued by the Authority under section 46ZK.
(5)  Any corporation which is aggrieved by a decision of the Authority made in relation to the corporation under subsection (1) may, within 30 days after the corporation is notified of the decision, appeal to the Minister, whose decision shall be final.
(6)  Notwithstanding the lodging of an appeal under subsection (5), any action taken by the Authority under this section shall continue to have effect pending the decision of the Minister.
(7)  The Minister may, when deciding an appeal under subsection (5), make such modifications as he considers necessary to any action taken by the Authority under this section, and such modified action shall have effect from the date of the decision of the Minister.
(8)  Any revocation under subsection (1) or (3) of a trade repository licence or foreign trade repository licence granted to a corporation shall not operate as to affect any report to the corporation made under Part VIA, or any obligation under Part VIA that was satisfied by making a report to the corporation, while the corporation was a licensed trade repository or licensed foreign trade repository, as the case may be.
(9)  The Authority shall give notice in the Gazette of any revocation under subsection (1) or (3) of a trade repository licence or foreign trade repository licence.
[Act 34 of 2012 wef 01/08/2013]
Division 2 — Regulation of Licensed Trade Repositories
Subdivision (1) — Obligations of licensed trade repositories
General obligations
46I.
—(1)  A licensed trade repository —
(a)
shall operate in a safe and efficient manner in its capacity as a trade repository;
(b)
shall manage any risks associated with its business and operations prudently;
(c)
in discharging its obligations under this Act, shall not act contrary to the interests of the public, having particular regard to the interests of the investing public;
(d)
shall ensure that access for participation in the licensed trade repository is subject to criteria that are fair and objective, and that are designed to ensure the safe and efficient functioning of the licensed trade repository and to protect the interests of the investing public;
(e)
shall maintain business rules that make satisfactory provision for the licensed trade repository to be operated in a safe and efficient manner;
(f)
shall enforce compliance by its participants with its business rules;
(g)
shall have sufficient financial, human and system resources —
(i)
to operate in a safe and efficient manner in its capacity as a trade repository;
(ii)
to meet contingencies or disasters; and
(iii)
to provide adequate security arrangements;
(h)
shall ensure that the Authority is provided with access to all information on transactions reported to the licensed trade repository;
(i)
shall maintain governance arrangements that are adequate for the licensed trade repository to be operated in a safe and efficient manner; and
(j)
shall ensure that it appoints or employs fit and proper persons as its chairman, chief executive officer, directors and key management officers.
(2)  In subsection (1)(g), “contingencies or disasters” includes technical disruptions occurring within automated systems.
[Act 34 of 2012 wef 01/08/2013]
Obligation to manage risks prudently
46J.  Without prejudice to the generality of section 46I(1)(b), a licensed trade repository shall —
(a)
ensure that the systems and controls concerning the assessment and management of risks to the licensed trade repository are adequate and appropriate for the scale and nature of its operations; and
(b)
have adequate arrangements, processes, mechanisms or services to collect and maintain information on transactions reported to the licensed trade repository.
[Act 34 of 2012 wef 01/08/2013]
Obligation to notify Authority of certain matters
46K.
—(1)  A licensed trade repository shall, as soon as practicable after the occurrence of any of the following circumstances, give the Authority notice of the circumstance:
(a)
any material change to the information provided by the licensed trade repository in its application under section 46D(1);
(b)
the carrying on of any business (referred to in this section as a proscribed business) by the licensed trade repository that is —
(i)
not the business of operating as a trade repository;
(ii)
not incidental to operating as a trade repository; or
(iii)
not such business, or within such class of businesses, as the Authority may prescribe;
(c)
the acquisition by the licensed trade repository of a substantial shareholding in a corporation (referred to in this section as a proscribed corporation) which carries on any business that is —
(i)
not the business of operating as a trade repository;
(ii)
not incidental to operating as a trade repository; or
(iii)
not such business, or within such class of businesses, as the Authority may prescribe;
(d)
the licensed trade repository becoming aware of any financial irregularity or other matter which in its opinion may affect its ability to discharge its financial obligations;
(e)
the licensed trade repository reprimanding, fining, suspending, expelling or otherwise taking disciplinary action against a participant of the licensed trade repository;
(f)
any other matter that the Authority may —
(i)
prescribe by regulations made under section 46ZJ for the purposes of this paragraph; or
(ii)
specify by notice in writing to the licensed trade repository in any particular case.
(2)  Without prejudice to the generality of section 46ZK(1), the Authority may, at any time after receiving a notice referred to in subsection (1), issue directions to the licensed trade repository —
(a)
where the notice relates to a matter referred to in subsection (1)(b) —
(i)
to cease carrying on the proscribed business; or
(ii)
to carry on the proscribed business subject to such conditions or restrictions as the Authority may impose, if the Authority is of the opinion that this is necessary for any purpose referred to in section 46ZK(1); or
(b)
where the notice relates to a matter referred to in subsection (1)(c) —
(i)
to dispose of all or any part of its shareholding in the proscribed corporation within such time and subject to such conditions as the Authority considers appropriate; or
(ii)
to exercise its rights relating to such shareholding, or to not exercise such rights, subject to such conditions or restrictions as the Authority may impose, if the Authority is of the opinion that this is necessary for any purpose referred to in section 46ZK(1).
(3)  A licensed trade repository shall comply with every direction issued to it under subsection (2), notwithstanding anything to the contrary in the Companies Act (Cap. 50) or any other law.
[Act 34 of 2012 wef 01/08/2013]
Obligation to maintain proper records
46L.
—(1)  A licensed trade repository shall maintain a record of all transactions reported to the licensed trade repository.
(2)  The Authority may prescribe by regulations made under section 46ZJ —
(a)
the form and manner in which the record referred to in subsection (1) shall be maintained;
(b)
the information and details relating to each transaction that are to be maintained in the record; and
(c)
the period of time that the record is to be maintained.
[Act 34 of 2012 wef 01/08/2013]
Obligation to submit periodic reports
46M.  A licensed trade repository shall submit to the Authority such reports in such form and manner, and at such frequency, as the Authority may prescribe.
[Act 34 of 2012 wef 01/08/2013]
Obligation to assist Authority
46N.  A licensed trade repository shall provide such assistance to the Authority as the Authority may require for the performance of the functions and duties of the Authority, including —
(a)
the furnishing of such returns as the Authority may require for the proper administration of this Act; and
(b)
the provision of —
(i)
such books and information as the Authority may require for the proper administration of this Act, being books and information —
(A)
relating to the business or operations of the licensed trade repository; or
(B)
in respect of any transaction or class of transactions reported to the licensed trade repository; and
(ii)
such other information as the Authority may require for the proper administration of this Act.
[Act 34 of 2012 wef 01/08/2013]
Obligation to maintain confidentiality
46O.
—(1)  Subject to subsection (2), a licensed trade repository and its officers and employees shall maintain, and aid in maintaining, the confidentiality of all user information and transaction information that —
(a)
comes to the knowledge of the licensed trade repository or any of its officers or employees; or
(b)
is in the possession of the licensed trade repository or any of its officers or employees.
(2)  Subsection (1) shall not apply to —
(a)
the disclosure of user information or transaction information for such purposes, or in such circumstances, as the Authority may prescribe;
(b)
any disclosure of user information or transaction information which is authorised by the Authority to be disclosed or furnished; or
(c)
the disclosure of user information or transaction information pursuant to any requirement imposed under any written law or order of court in Singapore.
(3)  For the avoidance of doubt, nothing in this section shall be construed as preventing a licensed trade repository from entering into a written agreement with a participant which obliges the licensed trade repository to maintain a higher degree of confidentiality than that specified in this section.
(4)  A licensed trade repository shall comply with such other requirements relating to confidentiality as the Authority may prescribe.
[Act 34 of 2012 wef 01/08/2013]
Penalties under this Subdivision
46P.  Any licensed trade repository which contravenes section 46I(1), 46J, 46K(1) or (3), 46L(1), 46M, 46N or 46O(1) or (4) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $200,000 and, in the case of a continuing offence, to a further fine not exceeding $20,000 for every day or part thereof during which the offence continues after conviction.
[Act 34 of 2012 wef 01/08/2013]
Subdivision (2) — Rules of licensed trade repositories
Business rules of licensed trade repositories
46Q.
—(1)  Without limiting the generality of sections 46I and 46ZJ —
(a)
the Authority may prescribe the matters that a licensed trade repository shall make provision for in the business rules of the licensed trade repository; and
(b)
the licensed trade repository shall make provision for those matters in its business rules.
(2)  A licensed trade repository shall not make any amendments to its business rules unless it complies with such requirements as the Authority may prescribe.
(3)  In this Subdivision, any reference to an amendment to a business rule shall be construed as a reference to a change to the scope of, or to any requirement, obligation or restriction under, the business rule, whether the change is made by an alteration to the text of the business rule or by any other notice issued by or on behalf of the licensed trade repository.
(4)  Any licensed trade repository which contravenes subsection (1) or (2) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.
[Act 34 of 2012 wef 01/08/2013]
Business rules of licensed trade repositories have effect as contract
46R.
—(1)  The business rules of a licensed trade repository shall be deemed to be, and shall operate as, a binding contract between the licensed trade repository and each participant.
(2)  The licensed trade repository and each participant shall be deemed to have agreed to observe, and perform the obligations under, the provisions of the business rules that are in force for the time being, so far as those provisions are applicable to the licensed trade repository or participant, as the case may be.
[Act 34 of 2012 wef 01/08/2013]
Power of court to order observance or enforcement of business rules
46S.
—(1)  Where any person who is under an obligation to comply with, observe, enforce or give effect to the business rules of a licensed trade repository fails to do so, the High Court may, on the application of the Authority, the licensed trade repository or a person aggrieved by the failure, and after giving the first-mentioned person an opportunity to be heard, make an order directing the first-mentioned person to comply with, observe, enforce or give effect to those business rules.
(2)  In this section, “person” includes a licensed trade repository.
(3)  This section is in addition to, and not in derogation of, any other remedy available to an aggrieved person referred to in subsection (1).
[Act 34 of 2012 wef 01/08/2013]
Non-compliance with business rules not to substantially affect rights of person
46T.  Any failure by a licensed trade repository to comply with this Act or its business rules in relation to a matter shall not prevent the matter from being treated, for the purposes of this Act, as done in accordance with the business rules, so long as the failure does not substantially affect the rights of any person entitled to require compliance with the business rules.
[Act 34 of 2012 wef 01/08/2013]
Subdivision (3) — Matters requiring approval of Authority
Control of substantial shareholding in licensed trade repository
46U.
—(1)  No person shall enter into any agreement to acquire shares in a licensed trade repository, being an agreement by virtue of which he would, if the agreement had been carried out, become a substantial shareholder of the licensed trade repository, without first obtaining the approval of the Authority to enter into the agreement.
(2)  No person shall become either of the following without first obtaining the approval of the Authority:
(a)
a 12% controller of a licensed trade repository;
(b)
a 20% controller of a licensed trade repository.
(3)  In subsection (2) —
“12% controller”, in relation to a licensed trade repository, means a person, not being a 20% controller, who alone or together with his associates —
(a)
holds not less than 12% of the shares in the licensed trade repository; or
(b)
is in a position to control not less than 12% of the votes in the licensed trade repository;
“20% controller”, in relation to a licensed trade repository, means a person who, alone or together with his associates —
(a)
holds not less than 20% of the shares in the licensed trade repository; or
(b)
is in a position to control not less than 20% of the votes in the licensed trade repository.
(4)  In this section —
(a)
a person holds a share if —
(i)
he is deemed to have an interest in that share under section 7(6) to (10) of the Companies Act (Cap. 50); or
(ii)
he otherwise has a legal or an equitable interest in that share, except such interest as is to be disregarded under section 7(6) to (10) of the Companies Act;
(b)
a reference to the control of a percentage of the votes in a licensed trade repository shall be construed as a reference to the control, whether direct or indirect, of that percentage of the total number of votes that might be cast in a general meeting of the licensed trade repository; and
(c)
a person, A, is an associate of another person, B, if —
(i)
A is the spouse, a parent, remoter lineal ancestor or step-parent, a son, daughter, remoter issue, step-son or step-daughter or a brother or sister of B;
(ii)
A is a corporation the directors of which are accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of B or, where B is a corporation, of the directors of B;
(iii)
B is a corporation the directors of which are accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of A or, where A is a corporation, of the directors of A;
(iv)
A is a person who is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of B;
(v)
B is a person who is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of A;
(vi)
A is a related corporation of B;
(vii)
A is a corporation in which B, whether alone or together with other associates of B as described in sub-paragraphs (ii) to (vi), is in a position to control not less than 20% of the votes in A;
(viii)
B is a corporation in which A, whether alone or together with other associates of A as described in sub-paragraphs (ii) to (vi), is in a position to control not less than 20% of the votes in B; or
(ix)
A is a person with whom B has an agreement or arrangement, whether oral or in writing and whether express or implied, to act together with respect to the acquisition, holding or disposal of shares or other interests in, or with respect to the exercise of their votes in relation to, the licensed trade repository.
(5)  The Authority may grant its approval referred to in subsection (1) or (2) subject to such conditions or restrictions as the Authority may think fit.
(6)  Without prejudice to subsection (13), the Authority may, for the purposes of securing compliance with subsection (1) or (2) or any condition or restriction imposed under subsection (5), by notice in writing, direct the transfer or disposal of all or any of the shares of a licensed trade repository in which a substantial shareholder, 12% controller or 20% controller of the licensed trade repository has an interest.
(7)  Until a person to whom a direction has been issued under subsection (6) transfers or disposes of the shares which are the subject of the direction, and notwithstanding anything to the contrary in the Companies Act or the memorandum or articles of association or other constituent document or documents of the licensed trade repository —
(a)
no voting rights shall be exercisable in respect of the shares which are the subject of the direction;
(b)
the licensed trade repository shall not offer or issue any shares (whether by way of rights, bonus, share dividend or otherwise) in respect of the shares which are the subject of the direction; and
(c)
except in a liquidation of the licensed trade repository, the licensed trade repository shall not make any payment (whether by way of cash dividend, dividend in kind or otherwise) in respect of the shares which are the subject of the direction.
(8)  Any issue of shares by a licensed trade repository in contravention of subsection (7)(b) shall be deemed to be null and void, and a person to whom a direction has been issued under subsection (6) shall immediately return those shares to the licensed trade repository, upon which the licensed trade repository shall return to the person any payment received from the person in respect of those shares.
(9)  Any payment made by a licensed trade repository in contravention of subsection (7)(c) shall be deemed to be null and void, and a person to whom a direction has been issued under subsection (6) shall immediately return the payment he has received to the licensed trade repository.
(10)  Without prejudice to sections 46ZL(1) and 337(1), the Authority may, by regulations made under section 46ZJ, exempt all or any of the following from subsection (1) or (2), subject to such conditions or restrictions as the Authority may prescribe in those regulations:
(a)
any person or class of persons;
(b)
any class or description of shares or interests in shares.
(11)  Without prejudice to sections 46ZL(2) and 337(3) and (4), the Authority may, by notice in writing, exempt any person, shares or interests in shares from subsection (1) or (2), subject to such conditions or restrictions as the Authority may specify by notice in writing.
(12)  It shall not be necessary to publish any exemption granted under subsection (11) in the Gazette.
(13)  Any person who contravenes subsection (1) or (2), or any condition or restriction imposed by the Authority under subsection (5), shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $200,000 and, in the case of a continuing offence, to a further fine not exceeding $20,000 for every day or part thereof during which the offence continues after conviction.
(14)  Any person who contravenes subsection (7)(b) or (c), (8) or (9) or any direction issued by the Authority under subsection (6) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.
[Act 34 of 2012 wef 01/08/2013]
Approval of chairman, chief executive officer, director and key persons
46V.
—(1)  No licensed trade repository shall appoint a person as its chairman, chief executive officer or director unless the licensed trade repository has obtained the approval of the Authority.
(2)  The Authority may, by notice in writing, require a licensed trade repository to obtain the approval of the Authority for the appointment of any person to any key management position or committee of the licensed trade repository, and the licensed trade repository shall comply with the notice.
(3)  An application for approval under subsection (1) or (2) shall be made in such form and manner as the Authority may prescribe.
(4)  Without prejudice to the generality of section 46ZJ and to any other matter that the Authority may consider relevant, the Authority may, in determining whether to grant its approval under subsection (1) or (2), have regard to such criteria as the Authority may prescribe or specify in directions issued by notice in writing.
(5)  Subject to subsection (6), the Authority shall not refuse an application for approval under this section without giving the licensed trade repository an opportunity to be heard.
(6)  The Authority may refuse an application for approval on any of the following grounds without giving the licensed trade repository an opportunity to be heard:
(a)
the person is an undischarged bankrupt, whether in Singapore or elsewhere;
(b)
the person has been convicted, whether in Singapore or elsewhere, of an offence committed before, on or after the date of commencement of section 6 of the Securities and Futures (Amendment) Act 2012 —
(i)
involving fraud or dishonesty or the conviction for which involved a finding that he had acted fraudulently or dishonestly; and
(ii)
punishable with imprisonment for a term of 3 months or more.
(7)  Where the Authority refuses an application for approval under this section, the Authority need not give the person who was proposed to be appointed an opportunity to be heard.
(8)  A licensed trade repository shall, as soon as practicable, give written notice to the Authority of the resignation or removal of its chairman, chief executive officer or director or of any person referred to in the notice issued by the Authority under subsection (2).
(9)  The Authority may make regulations under section 46ZJ relating to the composition and duties of the board of directors or any committee of a licensed trade repository.
(10)  In this section, “committee” includes any committee of directors, disciplinary committee or appeals committee of a licensed trade repository, and any body responsible for disciplinary action against a participant of a licensed trade repository.
(11)  Without prejudice to sections 46ZL(1) and 337(1), the Authority may, by regulations made under section 46ZJ, exempt any licensed trade repository or class of licensed trade repositories from complying with subsection (1) or (8), subject to such conditions or restrictions as the Authority may prescribe in those regulations.
(12)  Without prejudice to sections 46ZL(2) and 337(3) and (4), the Authority may, by notice in writing, exempt any licensed trade repository from complying with subsection (1) or (8), subject to such conditions or restrictions as the Authority may specify by notice in writing.
(13)  It shall not be necessary to publish any exemption granted under subsection (12) in the Gazette.
(14)  Subject to subsections (11) and (12), any licensed trade repository which contravenes subsection (1), (2) or (8) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $200,000 and, in the case of a continuing offence, to a further fine not exceeding $20,000 for every day or part thereof during which the offence continues after conviction.
[Act 34 of 2012 wef 01/08/2013]
Subdivision (4) — Powers of Authority
46W.  [Repealed by Act 10 of 2013 wef 02/08/2013]
Additional powers of Authority in respect of auditors
46X.
—(1)  If an auditor of a licensed trade repository, in the course of the performance of his duties, becomes aware of any matter or irregularity referred to in the following paragraphs, he shall immediately send to the Authority a written report of that matter or irregularity:
(a)
any matter which, in his opinion, adversely affects or may adversely affect the financial position of the licensed trade repository to a material extent;
(b)
any matter which, in his opinion, constitutes or may constitute a breach of any provision of this Act or an offence involving fraud or dishonesty;
(c)
any irregularity that has or may have a material effect upon the accounts of the licensed trade repository, including any irregularity that affects or jeopardises, or may affect or jeopardise, the funds or property of investors.
(2)  An auditor of a licensed trade repository shall not, in the absence of malice on his part, be liable to any action for defamation at the suit of any person in respect of any statement made in his report under subsection (1).
(3)  Subsection (2) shall not restrict or affect any right, privilege or immunity that the auditor of a licensed trade repository may have, apart from this section, as a defendant in an action for defamation.
(4)  The Authority may impose all or any of the following duties on an auditor of a licensed trade repository, and the auditor shall carry out the duties so imposed:
(a)
a duty to submit such additional information and reports in relation to his audit as the Authority considers necessary;
(b)
a duty to enlarge, extend or alter the scope of his audit of the business and affairs of the licensed trade repository;
(c)
a duty to carry out any other examination or establish any procedure in any particular case;
(d)
a duty to submit a report on any matter arising out of his audit, examination or establishment of procedure referred to in paragraph (b) or (c).
(5)  The licensed trade repository shall remunerate the auditor in respect of the discharge by him of all or any of the duties referred to in subsection (4).
[Act 34 of 2012 wef 01/08/2013]
Emergency powers of Authority
46Y.
—(1)  Where the Authority has reason to believe that an emergency exists, or thinks that it is necessary or expedient in the interests of the public or a section of the public or for the protection of investors, the Authority may direct by notice in writing a licensed trade repository to take such action as the Authority considers necessary to maintain or restore the safe and efficient operation of the licensed trade repository.
(2)  Where a licensed trade repository fails to comply with any direction of the Authority under subsection (1) within such time as is specified by the Authority, the Authority may take such action as the Authority thinks fit to maintain or restore the safe and efficient operation of the licensed trade repository.
(3)  In this section, “emergency” includes —
(a)
any threatened or actual market manipulation;
(b)
any act of any government affecting any commodity or securities;
(c)
any major market disturbance which prevents a market from accurately reflecting the forces of supply and demand for such commodity or securities; or
(d)
any undesirable situation or practice which, in the opinion of the Authority, constitutes an emergency.
(4)  The Authority may modify any action taken by a licensed trade repository under subsection (1), including the setting aside of that action.
(5)  Any person who is aggrieved by any action taken by the Authority, or by a licensed trade repository, under this section may, within 30 days after the person is notified of the action, appeal to the Minister, whose decision shall be final.
(6)  Notwithstanding the lodging of an appeal under subsection (5), any action taken by the Authority, or by a licensed trade repository, under this section shall continue to have effect pending the decision of the Minister.
(7)  The Minister may, when deciding an appeal under subsection (5), make such modification as he considers necessary to any action taken by the Authority, or by a licensed trade repository, under this section, and any such modified action shall have effect from the date of the decision of the Minister.
(8)  Any licensed trade repository which fails to comply with a direction issued under subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.
[Act 34 of 2012 wef 01/08/2013]
Power of Authority to remove officers of licensed trade repository
46Z.
—(1)  Where the Authority is satisfied that any of the following applies to an officer of a licensed trade repository, the Authority may, if it thinks it necessary in the interests of the public or a section of the public or for the protection of investors, by notice in writing direct the licensed trade repository to remove the officer from his office or employment, and the licensed trade repository shall comply with such notice, notwithstanding the provisions of section 152 of the Companies Act (Cap. 50) or anything in any other law or in the memorandum or articles of association or other constituent document or documents of the licensed trade repository:
(a)
the officer has wilfully contravened, or wilfully caused the licensed trade repository to contravene, this Act or the business rules of the licensed trade repository;
(b)
the officer has, without reasonable excuse, failed to ensure compliance with this Act, or with the business rules of the licensed trade repository, by the licensed trade repository, by a participant of the licensed trade repository or by a person associated with that participant;
(c)
the officer has failed to discharge the duties or functions of his office or employment;
(d)
the officer is an undischarged bankrupt, whether in Singapore or elsewhere;
(e)
the officer has had execution against him in respect of a judgment debt returned unsatisfied in whole or in part;
(f)
the officer has, whether in Singapore or elsewhere, made a compromise or scheme of arrangement with his creditors, being a compromise or scheme of arrangement that is still in operation;
(g)
the officer has been convicted, whether in Singapore or elsewhere, of an offence committed before, on or after the date of commencement of section 6 of the Securities and Futures (Amendment) Act 2012, involving fraud or dishonesty or the conviction for which involved a finding that he had acted fraudulently or dishonestly.
(2)  Without prejudice to any other matter that the Authority may consider relevant, the Authority may, in determining whether an officer of a licensed trade repository has failed to discharge the duties or functions of his office or employment for the purposes of subsection (1)(c), have regard to such criteria as the Authority may prescribe or specify in directions issued by notice in writing.
(3)  Subject to subsection (4), the Authority shall not direct a licensed trade repository to remove an officer from his office or employment without giving the licensed trade repository an opportunity to be heard.
(4)  The Authority may direct a licensed trade repository to remove an officer from his office or employment under subsection (1) on any of the following grounds without giving the licensed trade repository an opportunity to be heard:
(a)
the officer is an undischarged bankrupt, whether in Singapore or elsewhere;
(b)
the officer has been convicted, whether in Singapore or elsewhere, of an offence committed before, on or after the date of commencement of section 6 of the Securities and Futures (Amendment) Act 2012 —
(i)
involving fraud or dishonesty or the conviction for which involved a finding that he had acted fraudulently or dishonestly; and
(ii)
punishable with imprisonment for a term of 3 months or more.
(5)  Where the Authority directs a licensed trade repository to remove an officer from his office or employment under subsection (1), the Authority need not give that officer an opportunity to be heard.
(6)  Any licensed trade repository that is aggrieved by a direction of the Authority made in relation to the licensed trade repository under subsection (1) may, within 30 days after the licensed trade repository is notified of the direction, appeal to the Minister, whose decision shall be final.
(7)  Notwithstanding the lodging of an appeal under subsection (6), any action taken by the Authority under this section shall continue to have effect pending the decision of the Minister.
(8)  The Minister may, when deciding an appeal under subsection (6), make such modification as he considers necessary to any action taken by the Authority under this section, and such modified action shall have effect from the date of the decision of the Minister.
(9)  Subject to subsection (10), no criminal or civil liability shall be incurred by a licensed trade repository in respect of any thing done or omitted to be done with reasonable care and in good faith in the discharge or purported discharge of its obligations under this section.
(10)  Any licensed trade repository which, without reasonable excuse, contravenes a written notice issued under subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.
[Act 34 of 2012 wef 01/08/2013]
Subdivision (5) — Immunity
Immunity from criminal or civil liability
46ZA.
—(1)  No criminal or civil liability shall be incurred by a licensed trade repository, or by any person specified in subsection (2), for any thing done (including any statement made) or omitted to be done with reasonable care and in good faith in the course of, or in connection with, the discharge or purported discharge of the obligations of the licensed trade repository under this Act or under the business rules of the licensed trade repository.
(2)  For the purposes of subsection (1), the specified person is any person acting on behalf of the licensed trade repository, including —
(a)
any director of the licensed trade repository; or
(b)
any member of any committee established by the licensed trade repository.
[Act 34 of 2012 wef 01/08/2013]
Division 3 — Regulation of Licensed Foreign Trade Repositories
General obligations
46ZB.
—(1)  A licensed foreign trade repository —
(a)
shall operate in a safe and efficient manner in its capacity as a trade repository;
(b)
shall manage any risks associated with its business and operations prudently;
(c)
in discharging its obligations under this Act, shall not act contrary to the interests of the public, having particular regard to the interests of the investing public;
(d)
shall ensure that access for participation in the licensed foreign trade repository is subject to criteria that are fair and objective, and that are designed to ensure the safe and efficient functioning of the licensed foreign trade repository and to protect the interests of the investing public;
(e)
shall maintain business rules that make satisfactory provision for the licensed foreign trade repository to be operated in a safe and efficient manner;
(f)
shall enforce compliance by its participants with its business rules;
(g)
shall have sufficient financial, human and system resources —
(i)
to operate in a safe and efficient manner in its capacity as a trade repository;
(ii)
to meet contingencies or disasters; and
(iii)
to provide adequate security arrangements;
(h)
shall ensure that the Authority is provided with access to all information on transactions reported to the licensed foreign trade repository;
(i)
shall maintain governance arrangements that are adequate for the licensed foreign trade repository to be operated in a safe and efficient manner; and
(j)
shall ensure that it appoints or employs fit and proper persons as its chairman, chief executive officer, directors and key management officers.
(2)  In subsection (1)(g), “contingencies or disasters” includes technical disruptions occurring within automated systems.
[Act 34 of 2012 wef 01/08/2013]
Obligation to manage risks prudently
46ZC.  Without prejudice to the generality of section 46ZB(1)(b), a licensed foreign trade repository shall —
(a)
ensure that the systems and controls concerning the assessment and management of risks to the licensed foreign trade repository are adequate and appropriate for the scale and nature of its operations; and
(b)
have adequate arrangements, processes, mechanisms or services to collect and maintain information on transactions reported to the licensed foreign trade repository.
[Act 34 of 2012 wef 01/08/2013]
Obligation to notify Authority of certain matters
46ZD.  A licensed foreign trade repository shall, as soon as practicable after the occurrence of any of the following circumstances, give the Authority notice of the circumstance:
(a)
any material change to the information provided by the licensed foreign trade repository in its application under section 46D(2);
(b)
the licensed foreign trade repository becoming aware of any financial irregularity or other matter which in its opinion may affect its ability to discharge its financial obligations;
(c)
any other matter that the Authority may —
(i)
prescribe by regulations made under section 46ZJ for the purposes of this paragraph; or
(ii)
specify by notice in writing to the licensed foreign trade repository in any particular case.
[Act 34 of 2012 wef 01/08/2013]
Obligation to maintain proper records
46ZE.
—(1)  A licensed foreign trade repository shall maintain a record of all transactions reported to the licensed foreign trade repository.
(2)  The Authority may prescribe by regulations made under section 46ZJ —
(a)
the form and manner in which the record referred to in subsection (1) shall be maintained;
(b)
the information and details relating to each transaction that are to be maintained in the record; and
(c)
the period of time that the record is to be maintained.
[Act 34 of 2012 wef 01/08/2013]
Obligation to submit periodic reports
46ZF.  A licensed foreign trade repository shall submit to the Authority such reports in such form and manner, and at such frequency, as the Authority may prescribe.
[Act 34 of 2012 wef 01/08/2013]
Obligation to assist Authority
46ZG.  A licensed foreign trade repository shall provide such assistance to the Authority as the Authority may require for the performance of the functions and duties of the Authority, including —
(a)
the furnishing of such returns as the Authority may require for the proper administration of this Act; and
(b)
the provision of —
(i)
such books and information as the Authority may require for the proper administration of this Act, being books and information —
(A)
relating to the business or operations of the licensed foreign trade repository; or
(B)
in respect of any transaction or class of transactions reported to the licensed foreign trade repository; and
(ii)
such other information as the Authority may require for the proper administration of this Act.
[Act 34 of 2012 wef 01/08/2013]
Obligation to maintain confidentiality
46ZH.
—(1)  Subject to subsection (2), a licensed foreign trade repository and its officers and employees shall maintain, and aid in maintaining, the confidentiality of all user information or transaction information that —
(a)
comes to the knowledge of the licensed foreign trade repository or any of its officers or employees; or
(b)
is in the possession of the licensed foreign trade repository or any of its officers or employees.
(2)  Subsection (1) shall not apply to —
(a)
the disclosure of user information or transaction information for such purposes, or in such circumstances, as the Authority may prescribe;
(b)
any disclosure of user information or transaction information which is authorised by the Authority to be disclosed or furnished; or
(c)
the disclosure of user information or transaction information pursuant to any requirement imposed under any written law or order of court in Singapore.
(3)  For the avoidance of doubt, nothing in this section shall be construed as preventing a licensed foreign trade repository from entering into a written agreement with a participant which obliges the licensed foreign trade repository to maintain a higher degree of confidentiality than that specified in this section.
(4)  A licensed foreign trade repository shall comply with such other requirements relating to confidentiality as the Authority may prescribe.
[Act 34 of 2012 wef 01/08/2013]
Penalties under this Division
46ZI.  Any licensed foreign trade repository which contravenes section 46ZB(1), 46ZC, 46ZD, 46ZE(1), 46ZF, 46ZG or 46ZH(1) or (4) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.
[Act 34 of 2012 wef 01/08/2013]
Division 4 — General Powers of Authority
Interpretation of sections 46ZIA to 46ZIF
46ZIA.  In this section and sections 46ZIB to 46ZIF, unless the context otherwise requires —
“business” includes affairs and property;
“office holder”, in relation to a licensed trade repository or licensed foreign trade repository, means any person acting as the liquidator, the provisional liquidator, the receiver or the receiver and manager of the licensed trade repository or licensed foreign trade repository (as the case may be), or acting in an equivalent capacity in relation to the licensed trade repository or licensed foreign trade repository (as the case may be);
“relevant business” means any business of a licensed trade repository or licensed foreign trade repository —
(a)
which the Authority has assumed control of under section 46ZIB; or
(b)
in relation to which a statutory adviser or a statutory manager has been appointed under section 46ZIB;
“statutory adviser” means a statutory adviser appointed under section 46ZIB;
“statutory manager” means a statutory manager appointed under section 46ZIB.
[Act 10 of 2013 wef 02/08/2013]
Action by Authority if licensed trade repository unable to meet obligations, etc.
46ZIB.
—(1)  The Authority may exercise any one or more of the powers specified in subsection (2) as appears to it to be necessary, where —
(a)
a licensed trade repository or licensed foreign trade repository informs the Authority that it is or is likely to become insolvent, or that it is or is likely to become unable to meet its obligations, or that it has suspended or is about to suspend payments;
(b)
a licensed trade repository or licensed foreign trade repository becomes unable to meet its obligations, or is insolvent, or suspends payments;
(c)
the Authority is of the opinion that a licensed trade repository or licensed foreign trade repository —
(i)
is carrying on its business in a manner likely to be detrimental to the interests of the public or a section of the public or the protection of investors, or to the objectives specified in section 46A;
(ii)
is or is likely to become insolvent, or is or is likely to become unable to meet its obligations, or is about to suspend payments;
(iii)
has contravened any of the provisions of this Act; or
(iv)
has failed to comply with any condition or restriction imposed on it under section 46E(3) or (4); or
(d)
the Authority considers it in the public interest to do so.
(2)  Subject to subsections (1) and (3), the Authority may —
(a)
require the licensed trade repository or licensed foreign trade repository (as the case may be) immediately to take any action or to do or not to do any act or thing whatsoever in relation to its business as the Authority may consider necessary;
(b)
appoint one or more persons as statutory adviser, on such terms and conditions as the Authority may specify, to advise the licensed trade repository or licensed foreign trade repository (as the case may be) on the proper management of such of the business of the licensed trade repository or licensed foreign trade repository (as the case may be) as the Authority may determine; or
(c)
assume control of and manage such of the business of the licensed trade repository or licensed foreign trade repository (as the case may be) as the Authority may determine, or appoint one or more persons as statutory manager to do so on such terms and conditions as the Authority may specify.
(3)  In the case of a licensed foreign trade repository, any appointment of a statutory adviser or statutory manager or any assumption of control by the Authority of any business of the licensed foreign trade repository under subsection (2) shall only be in relation to —
(a)
the business or affairs of the licensed foreign trade repository carried on in, or managed in or from, Singapore; or
(b)
the property of the licensed foreign trade repository located in Singapore, or reflected in the books of the licensed foreign trade repository in Singapore, as the case may be, in relation to its operations in Singapore.
(4)  Where the Authority appoints 2 or more persons as the statutory manager of a licensed trade repository or licensed foreign trade repository, the Authority shall specify, in the terms and conditions of the appointment, which of the duties, functions and powers of the statutory manager —
(a)
may be discharged or exercised by such persons jointly and severally;
(b)
shall be discharged or exercised by such persons jointly; and
(c)
shall be discharged or exercised by a specified person or such persons.
(5)  Where the Authority has exercised any power under subsection (2), it may, at any time and without prejudice to its power under section 46H(1)(da), do one or more of the following:
(a)
vary or revoke any requirement of, any appointment made by or any action taken by the Authority in the exercise of such power, on such terms and conditions as it may specify;
(b)
further exercise any of the powers under subsection (2);
(c)
add to, vary or revoke any term or condition specified by the Authority under this section.
(6)  No liability shall be incurred by a statutory manager or a statutory adviser for anything done (including any statement made) or omitted to be done with reasonable care and in good faith in the course of or in connection with —
(a)
the exercise or purported exercise of any power under this Act;
(b)
the performance or purported performance of any function or duty under this Act; or
(c)
the compliance or purported compliance with this Act.
(7)  Any licensed trade repository or licensed foreign trade repository that fails to comply with a requirement imposed by the Authority under subsection (2)(a) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.
[Act 10 of 2013 wef 02/08/2013]
Effect of assumption of control under section 46ZIB
46ZIC.
—(1)  Upon assuming control of the relevant business of a licensed trade repository or licensed foreign trade repository, the Authority or statutory manager, as the case may be, shall take custody or control of the relevant business.
(2)  During the period when the Authority or statutory manager is in control of the relevant business of a licensed trade repository or licensed foreign trade repository, the Authority or statutory manager —
(a)
shall manage the relevant business of the licensed trade repository or licensed foreign trade repository (as the case may be) in the name of and on behalf of the licensed trade repository or licensed foreign trade repository (as the case may be); and
(b)
shall be deemed to be an agent of the licensed trade repository or licensed foreign trade repository (as the case may be).
(3)  In managing the relevant business of a licensed trade repository or licensed foreign trade repository, the Authority or statutory manager —
(a)
shall take into consideration the interests of the public or the section of the public referred to in section 46ZIB(1)(c)(i), and the need to protect investors; and
(b)
shall have all the duties, powers and functions of the members of the board of directors of the licensed trade repository or licensed foreign trade repository (as the case may be) (collectively and individually) under this Act, the Companies Act (Cap. 50) and the constitution of the licensed trade repository or licensed foreign trade repository (as the case may be), including powers of delegation, in relation to the relevant business of the licensed trade repository or licensed foreign trade repository (as the case may be); but nothing in this paragraph shall require the Authority or statutory manager to call any meeting of the licensed trade repository or licensed foreign trade repository (as the case may be) under the Companies Act or the constitution of the licensed trade repository or licensed foreign trade repository (as the case may be).
(4)  Notwithstanding any written law or rule of law, upon the assumption of control of the relevant business of a licensed trade repository or licensed foreign trade repository by the Authority or statutory manager, any appointment of a person as the chief executive officer or a director of the licensed trade repository or licensed foreign trade repository (as the case may be), which was in force immediately before the assumption of control, shall be deemed to be revoked, unless the Authority gives its approval, by notice in writing to the person and the licensed trade repository or licensed foreign trade repository (as the case may be), for the person to remain in the appointment.
(5)  Notwithstanding any written law or rule of law, during the period when the Authority or statutory manager is in control of the relevant business of a licensed trade repository or licensed foreign trade repository, except with the approval of the Authority, no person shall be appointed as the chief executive officer or a director of the licensed trade repository or licensed foreign trade repository (as the case may be).
(6)  Where the Authority has given its approval under subsection (4) or (5) to a person to remain in the appointment of, or to be appointed as, the chief executive officer or a director of a licensed trade repository or licensed foreign trade repository, the Authority may at any time, by notice in writing to the person and the licensed trade repository or licensed foreign trade repository (as the case may be), revoke that approval, and the appointment shall be deemed to be revoked on the date specified in the notice.
(7)  Notwithstanding any written law or rule of law, if any person, whose appointment as the chief executive officer or a director of a licensed trade repository or licensed foreign trade repository is revoked under subsection (4) or (6), acts or purports to act after the revocation as the chief executive officer or a director of the licensed trade repository or licensed foreign trade repository (as the case may be) during the period when the Authority or statutory manager is in control of the relevant business of the licensed trade repository or licensed foreign trade repository (as the case may be) —
(a)
the act or purported act of the person shall be invalid and of no effect; and
(b)
the person shall be guilty of an offence.
(8)  Notwithstanding any written law or rule of law, if any person who is appointed as the chief executive officer or a director of a licensed trade repository or licensed foreign trade repository in contravention of subsection (5) acts or purports to act as the chief executive officer or a director of the licensed trade repository or licensed foreign trade repository (as the case may be) during the period when the Authority or statutory manager is in control of the relevant business of the licensed trade repository or licensed foreign trade repository (as the case may be) —
(a)
the act or purported act of the person shall be invalid and of no effect; and
(b)
the person shall be guilty of an offence.
(9)  During the period when the Authority or statutory manager is in control of the relevant business of a licensed trade repository or licensed foreign trade repository —
(a)
if there is any conflict or inconsistency between —
(i)
a direction or decision given by the Authority or statutory manager (including a direction or decision to a person or body of persons referred to in sub-paragraph (ii)); and
(ii)
a direction or decision given by any chief executive officer, director, member, executive officer, employee, agent or office holder, or the board of directors, of the licensed trade repository or licensed foreign trade repository (as the case may be),
the direction or decision referred to in sub-paragraph (i) shall, to the extent of the conflict or inconsistency, prevail over the direction or decision referred to in sub-paragraph (ii); and
(b)
no person shall exercise any voting or other right attached to any share in the licensed trade repository or licensed foreign trade repository (as the case may be) in any manner that may defeat or interfere with any duty, function or power of the Authority or statutory manager, and any such act or purported act shall be invalid and of no effect.
(10)  Any person who is guilty of an offence under subsection (7) or (8) shall be liable on conviction to a fine not exceeding $150,000 or to imprisonment for a term not exceeding 3 years or to both and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.
(11)  In this section, “constitution”, in relation to a licensed trade repository or licensed foreign trade repository, means the memorandum of association and articles of association of the licensed trade repository or licensed foreign trade repository (as the case may be).
[Act 10 of 2013 wef 02/08/2013]
Duration of control
46ZID.
—(1)  The Authority shall cease to be in control of the relevant business of a licensed trade repository or licensed foreign trade repository when the Authority is satisfied that —
(a)
the reasons for the Authority’s assumption of control of the relevant business have ceased to exist; or
(b)
it is no longer necessary in the interests of the public or the section of the public referred to in section 46ZIB(1)(c)(i) or for the protection of investors.
(2)  A statutory manager shall be deemed to have assumed control of the relevant business of a licensed trade repository or licensed foreign trade repository on the date of his appointment as a statutory manager.
(3)  The appointment of a statutory manager in relation to the relevant business of a licensed trade repository or licensed foreign trade repository may be revoked by the Authority at any time —
(a)
if the Authority is satisfied that —
(i)
the reasons for the appointment have ceased to exist; or
(ii)
it is no longer necessary in the interests of the public or the section of the public referred to in section 46ZIB(1)(c)(i) or for the protection of investors; or
(b)
on any other ground,
and upon such revocation, the statutory manager shall cease to be in control of the relevant business of the licensed trade repository or licensed foreign trade repository (as the case may be).
(4)  The Authority shall, as soon as practicable, publish in the Gazette the date, and such other particulars as the Authority thinks fit, of —
(a)
the Authority’s assumption of control of the relevant business of a licensed trade repository or licensed foreign trade repository;
(b)
the cessation of the Authority’s control of the relevant business of a licensed trade repository or licensed foreign trade repository;
(c)
the appointment of a statutory manager in relation to the relevant business of a licensed trade repository or licensed foreign trade repository; and
(d)
the revocation of a statutory manager’s appointment in relation to the relevant business of a licensed trade repository or licensed foreign trade repository.
[Act 10 of 2013 wef 02/08/2013]
Responsibilities of officers, member, etc., of licensed trade repository
46ZIE.
—(1)  During the period when the Authority or statutory manager is in control of the relevant business of a licensed trade repository or licensed foreign trade repository —
(a)
the High Court may, on an application by the Authority or statutory manager, direct any person who has ceased to be or who is still any chief executive officer, director, member, executive officer, employee, agent, banker, auditor or office holder of, or trustee for, the licensed trade repository or licensed foreign trade repository (as the case may be) to pay, deliver, convey, surrender or transfer to the Authority or statutory manager, within such period as the High Court may specify, any property or book of the licensed trade repository or licensed foreign trade repository (as the case may be) which is comprised in, forms part of or relates to the relevant business of the licensed trade repository or licensed foreign trade repository (as the case may be), and which is in the person’s possession or control; and
(b)
any person who has ceased to be or who is still any chief executive officer, director, member, executive officer, employee, agent, banker, auditor or office holder of, or trustee for, the licensed trade repository or licensed foreign trade repository (as the case may be) shall give to the Authority or statutory manager such information as the Authority or statutory manager may require for the discharge of the Authority’s or statutory manager’s duties or functions, or the exercise of the Authority’s or statutory manager’s powers, in relation to the licensed trade repository or licensed foreign trade repository (as the case may be), within such time and in such manner as may be specified by the Authority or statutory manager.
(2)  Any person who —
(a)
without reasonable excuse, fails to comply with subsection (1)(b); or
(b)
in purported compliance with subsection (1)(b), knowingly or recklessly furnishes any information or document that is false or misleading in a material particular,
shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000 or to imprisonment for a term not exceeding 3 years or to both and, in the case of a continuing offence, to a further fine not exceeding $5,000 for every day or part thereof during which the offence continues after conviction.
[Act 10 of 2013 wef 02/08/2013]
Remuneration and expenses of Authority and others in certain cases
46ZIF.
—(1)  The Authority may at any time fix the remuneration and expenses to be paid by a licensed trade repository or licensed foreign trade repository —
(a)
to a statutory manager or statutory adviser appointed in relation to the licensed trade repository or licensed foreign trade repository (as the case may be), whether or not the appointment has been revoked; and
(b)
where the Authority has assumed control of the relevant business of the licensed trade repository or licensed foreign trade repository (as the case may be), to the Authority and any person appointed by the Authority under section 320 in relation to the Authority’s assumption of control of the relevant business, whether or not the Authority has ceased to be in control of the relevant business.
(2)  The licensed trade repository or licensed foreign trade repository (as the case may be) shall reimburse the Authority any remuneration and expenses payable by the licensed trade repository or licensed foreign trade repository (as the case may be) to a statutory manager or statutory adviser.
[Act 10 of 2013 wef 02/08/2013]
Power of Authority to make regulations
46ZJ.
—(1)  Without prejudice to section 341, the Authority may make regulations for the purposes of this Part, including regulations relating to —
(a)
the grant of a trade repository licence or foreign trade repository licence;
(b)
the requirements applicable to a licensed trade repository or licensed foreign trade repository;
(c)
the measures that a licensed trade repository or licensed foreign trade repository shall adopt for the purposes of managing or mitigating risks;
(d)
the maintenance of records of transactions reported to a licensed trade repository or licensed foreign trade repository; and
(e)
the submission of reports by a licensed trade repository or licensed foreign trade repository.
(2)  Regulations made under this section may provide —
(a)
that a contravention of any specified provision thereof shall be an offence; and
(b)
for a penalty not exceeding a fine of $150,000 or imprisonment for a term not exceeding 12 months or both for each offence and, in the case of a continuing offence, for a further penalty not exceeding a fine of 10% of the maximum fine prescribed for that offence for every day or part thereof during which the offence continues after conviction.
[Act 34 of 2012 wef 01/08/2013]
Power of Authority to issue directions
46ZK.
—(1)  The Authority may issue directions, whether of a general or specific nature, by notice in writing, to a licensed trade repository or licensed foreign trade repository, if the Authority thinks it necessary or expedient —
(a)
for ensuring the safe and efficient operation of the licensed trade repository or licensed foreign trade repository, or of licensed trade repositories or licensed foreign trade repositories in general;
(b)
for ensuring the integrity and stability of the capital markets or the financial system;
(c)
in the interests of the public or a section of the public or for the protection of investors;
(d)
for the effective administration of this Act; or
(e)
for ensuring compliance with any condition or restriction as may be imposed by the Authority under section 46E(3) or (4), 46K(2), 46U(5) or (10), 46V(11) or (12) or 46ZL(1) or (2), or such other obligations or requirements under this Act or as may be prescribed by the Authority.
(2)  Without prejudice to the generality of subsection (1), the Authority may issue directions, by notice in writing, to a licensed trade repository or licensed foreign trade repository —
(a)
with respect to the publication of any information relating to any transaction reported to the licensed trade repository or licensed foreign trade repository, as the case may be; or
(b)
for ensuring that the Authority and such other entities as the Authority may specify are provided with access to any information on any transaction reported to the licensed trade repository or licensed foreign trade repository.
(3)  A licensed trade repository or licensed foreign trade repository shall comply with every direction issued to it under subsection (1) or (2).
(4)  Any licensed trade repository or licensed foreign trade repository which, without reasonable excuse, contravenes a direction issued to it under subsection (1) or (2) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.
(5)  It shall not be necessary to publish any direction issued under subsection (1) or (2) in the Gazette.
[Act 34 of 2012 wef 01/08/2013]
Power of Authority to exempt licensed trade repository or licensed foreign trade repository from provisions of this Part
46ZL.
—(1)  Without prejudice to section 337(1), the Authority may, by regulations made under section 46ZJ, exempt any licensed trade repository, licensed foreign trade repository, or class of licensed trade repositories or licensed foreign trade repositories from any provision of this Part, subject to such conditions or restrictions as the Authority may prescribe in those regulations.
(2)  Without prejudice to section 337(3) and (4), the Authority may, by notice in writing, exempt any licensed trade repository or licensed foreign trade repository from any provision of this Part, subject to such conditions or restrictions as the Authority may specify by notice in writing, if the Authority is satisfied that the non-compliance by that licensed trade repository or licensed foreign trade repository with that provision will not detract from the objectives specified in section 46A.
(3)  It shall not be necessary to publish any exemption granted under subsection (2) in the Gazette.
[Act 34 of 2012 wef 01/08/2013]
Division 5 — Voluntary Transfer of Business of
Licensed Trade Repository or Licensed Foreign
Trade Repository
Interpretation of this Division
46ZM.  In this Division, unless the context otherwise requires —
“business” includes affairs, property, right, obligation and liability;
“Court” means the High Court or a Judge thereof;
“debenture” has the same meaning as in section 4(1) of the Companies Act (Cap. 50);
“property” includes property, right and power of every description;
“Registrar of Companies” means the Registrar of Companies appointed under the Companies Act and includes any Deputy or Assistant Registrar of Companies appointed under that Act;
“transferee” means a licensed trade repository or licensed foreign trade repository, or a corporation which has applied or will be applying for a trade repository licence or foreign trade repository licence, to which the whole or any part of a transferor’s business is, is to be or is proposed to be transferred under this Division;
“transferor” means a licensed trade repository or licensed foreign trade repository the whole or any part of the business of which is, is to be, or is proposed to be transferred under this Division.
[Act 10 of 2013 wef 02/08/2013]
Voluntary transfer of business
46ZN.
—(1)  A transferor may transfer the whole or any part of its business (including any business that is not the usual business of a licensed trade repository or licensed foreign trade repository) to a transferee, if —
(a)
the Authority has consented to the transfer;
(b)
the transfer involves the whole or any part of the business of the transferor that is the usual business of a licensed trade repository or licensed foreign trade repository; and
(c)
the Court has approved the transfer.
(2)  Subsection (1) is without prejudice to the right of a licensed trade repository or licensed foreign trade repository to transfer the whole or any part of its business under any law.
(3)  The Authority may consent to a transfer under subsection (1)(a) if the Authority is satisfied that —
(a)
the transferee is a fit and proper person; and
(b)
the transferee will conduct the business of the transferor prudently and comply with the provisions of this Act.
(4)  The Authority may at any time appoint one or more persons to perform an independent assessment of, and furnish a report on, the proposed transfer of a transferor’s business (or any part thereof) under this Division.
(5)  The remuneration and expenses of any person appointed under subsection (4) shall be paid by the transferor and the transferee jointly and severally.
(6)  The Authority shall serve a copy of any report furnished under subsection (4) on the transferor and the transferee.
(7)  The Authority may require a person to furnish, within the period and in the manner specified by the Authority, any information or document that the Authority may reasonably require for the discharge of its duties or functions, or the exercise of its powers, under this Division.
(8)  Any person who —
(a)
without reasonable excuse, fails to comply with any requirement under subsection (7); or
(b)
in purported compliance with any requirement under subsection (7), knowingly or recklessly furnishes any information or document that is false or misleading in a material particular,
shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $200,000 or to imprisonment for a term not exceeding 3 years or to both and, in the case of a continuing offence, to a further fine not exceeding $20,000 for every day or part thereof during which the offence continues after conviction.
(9)  Where a person claims, before furnishing the Authority with any information or document that he is required to furnish under subsection (7), that the information or document might tend to incriminate him, the information or document shall not be admissible in evidence against him in criminal proceedings other than proceedings under subsection (8).
[Act 10 of 2013 wef 02/08/2013]
Approval of transfer
46ZO.
—(1)  A transferor shall apply to the Court for its approval of the transfer of the whole or any part of the business of the transferor to the transferee under this Division.
(2)  Before making an application under subsection (1) —
(a)
the transferor shall lodge with the Authority a report setting out such details of the transfer and furnish such supporting documents as the Authority may specify;
(b)
the transferor shall obtain the consent of the Authority under section 46ZN(1)(a);
(c)
the transferor and the transferee shall, if they intend to serve on their respective participants a summary of the transfer, obtain the Authority’s approval of the summary;
(d)
the transferor shall, at least 15 days before the application is made but not earlier than one month after the report referred to in paragraph (a) is lodged with the Authority, publish in the Gazette and in such newspaper or newspapers as the Authority may determine a notice of the transferor’s intention to make the application and containing such other particulars as may be prescribed;
(e)
the transferor and the transferee shall keep at their respective offices in Singapore, for inspection by any person who may be affected by the transfer, a copy of the report referred to in paragraph (a) for a period of 15 days after the publication of the notice referred to in paragraph (d) in the Gazette; and
(f)
unless the Court directs otherwise, the transferor and the transferee shall serve on their respective participants affected by the transfer, at least 15 days before the application is made, a copy of the report referred to in paragraph (a) or a summary of the transfer approved by the Authority under paragraph (c).
(3)  The Authority and any person who, in the opinion of the Court, is likely to be affected by the transfer —
(a)
shall have the right to appear before and be heard by the Court in any proceedings relating to the transfer; and
(b)
may make any application to the Court in relation to the transfer.
(4)  The Court shall not approve the transfer if the Authority has not consented under section 46ZN(1)(a) to the transfer.
(5)  The Court may, after taking into consideration the views, if any, of the Authority on the transfer —
(a)
approve the transfer without modification or subject to any modification agreed to by the transferor and the transferee; or
(b)
refuse to approve the transfer.
(6)  If the transferee is not granted a trade repository licence or foreign trade repository licence by the Authority, the Court may approve the transfer on terms that the transfer shall take effect only in the event of the transferee being granted a trade repository licence or foreign trade repository licence by the Authority.
(7)  The Court may by the order approving the transfer or by any subsequent order provide for all or any of the following matters:
(a)
the transfer to the transferee of the whole or any part of the business of the transferor;
(b)
the allotment or appropriation by the transferee of any share, debenture, policy or other interest in the transferee which under the transfer is to be allotted or appropriated by the transferee to or for any person;
(c)
the continuation by (or against) the transferee of any legal proceedings pending by (or against) the transferor;
(d)
the dissolution, without winding up, of the transferor;
(e)
the provisions to be made for persons who are affected by the transfer;
(f)
such incidental, consequential and supplementary matters as are, in the opinion of the Court, necessary to secure that the transfer is fully effective.
(8)  Any order under subsection (7) may —
(a)
provide for the transfer of any business, whether or not the transferor otherwise has the capacity to effect the transfer in question;
(b)
make provision in relation to any property which is held by the transferor as trustee; and
(c)
make provision as to any future or contingent right or liability of the transferor, including provision as to the construction of any instrument under which any such right or liability may arise.
(9)  Subject to subsection (10), where an order made under subsection (7) provides for the transfer to the transferee of the whole or any part of the transferor’s business, then by virtue of the order the business (or part thereof) of the transferor specified in the order shall be transferred to and vest in the transferee, free in the case of any particular property (if the order so directs) from any charge which by virtue of the transfer is to cease to have effect.
(10)  No order under subsection (7) shall have any effect or operation in transferring or otherwise vesting land in Singapore until the appropriate entries are made with respect to the transfer or vesting of that land by the appropriate authority.
(11)  If any business specified in an order under subsection (7) is governed by the law of any foreign country or territory, the Court may order the transferor to take all necessary steps for securing that the transfer of the business to the transferee is fully effective under the law of that country or territory.
(12)  Where an order is made under this section, the transferor and the transferee shall each lodge within 7 days after the order is made —
(a)
a copy of the order with the Registrar of Companies and with the Authority; and
(b)
where the order relates to land in Singapore, an office copy of the order with the appropriate authority concerned with the registration or recording of dealings in that land.
(13)  A transferor or transferee which contravenes subsection (12), and every officer of the transferor or transferee (as the case may be) who fails to take all reasonable steps to secure compliance by the transferor or transferee (as the case may be) with that subsection, shall each be guilty of an offence and shall each be liable on conviction to a fine not exceeding $2,000 and, in the case of a continuing offence, to a further fine not exceeding $200 for every day or part thereof during which the offence continues after conviction.
[Act 10 of 2013 wef 02/08/2013]
PART III
CLEARING FACILITIES
[Act 34 of 2012 wef 01/08/2013]
Objectives of this Part
47.  The objectives of this Part are —
(a)
to promote safe and efficient clearing facilities; and
(b)
to reduce systemic risk.
[Act 34 of 2012 wef 01/08/2013]
Interpretation of this Part
48.
—(1)  In this Part, unless the context otherwise requires —
“default proceedings” means any proceedings or other action taken by an approved clearing house or a recognised clearing house under its default rules;
“default rules”, in relation to an approved clearing house or a recognised clearing house, means the business rules of the approved clearing house or recognised clearing house which provide for the taking of proceedings or other action if a participant has failed, or appears to be unable or to be likely to become unable, to meet his obligations for any unsettled or open market contract to which he is a party;
“defaulter” means a participant who is the subject of any default proceedings;
“foreign corporation” means a corporation which is incorporated or formed outside Singapore;
“market charge” means a security interest, whether fixed or floating, granted in favour of an approved clearing house, or a recognised clearing house, over market collateral;
“market collateral” means any property held by or deposited with an approved clearing house or a recognised clearing house, for the purpose of securing any liability arising directly in connection with the ensuring of the performance of market contracts by the approved clearing house or recognised clearing house;
“market contract” means —
(a)
a contract subject to the business rules of an approved clearing house or a recognised clearing house, that is entered into between the approved clearing house or recognised clearing house and a participant pursuant to a novation (however described), whether before or after default proceedings have commenced, which is in accordance with those business rules and for the purposes of the clearing or settlement of transactions using the clearing facility of the approved clearing house or recognised clearing house; or
(b)
a transaction which is being cleared or settled using the clearing facility of an approved clearing house or a recognised clearing house, and in accordance with the business rules of the approved clearing house or recognised clearing house, whether or not a novation referred to in paragraph (a) is to take place;
“property”, in relation to a market charge or market collateral, means —
(a)
any money, letter of credit, banker’s draft, certified cheque, guarantee or other similar instrument;
(b)
any securities;
(c)
any futures contract, derivatives contract or other similar financial contract, arrangement or transaction; or
(d)
any other asset of value acceptable to an approved clearing house or a recognised clearing house;
“relevant office holder” means —
(a)
the Official Assignee exercising his powers under the Bankruptcy Act (Cap. 20);
(b)
a person acting in relation to a corporation as the liquidator, the provisional liquidator, the receiver, the receiver and manager or the judicial manager of the corporation, or acting in an equivalent capacity in relation to a corporation; or
(c)
a person acting in relation to an individual as the trustee in bankruptcy, or the interim receiver of the property, of the individual, or acting in an equivalent capacity in relation to an individual;
“settlement”, in relation to a market contract, includes partial settlement;
“Singapore corporation” means a corporation which is incorporated in Singapore.
(2)  Where a charge is granted partly for the purpose specified in the definition of “market charge” in subsection (1) and partly for any other purpose or purposes, the charge shall be treated as a market charge under this Part insofar as it has effect for that specified purpose.
(3)  Where any collateral is granted partly for the purpose specified in the definition of “market collateral” in subsection (1) and partly for any other purpose or purposes, the collateral shall be treated as market collateral under this Part insofar as it has been provided for that specified purpose.
(4)  Any references in this Part to the law of insolvency is a reference to —
(a)
the Bankruptcy Act;
(b)
Parts VIIIA, IX and X of the Companies Act (Cap. 50); and
(c)
any other written law, whether in Singapore or elsewhere, which is concerned with, or in any way related to, the bankruptcy or insolvency of a person, other than the Banking Act (Cap. 19).
(5)  Any reference in this Part to a settlement, in relation to a market contract, is a reference to the discharge of the rights and liabilities of the parties to the market contract, whether by performance, compromise or otherwise.
[Act 34 of 2012 wef 01/08/2013]
Division 1 — Establishment of Clearing Facilities
Requirement for approval or recognition
49.
—(1)  No person shall establish or operate a clearing facility, or hold himself out as operating a clearing facility, unless the person is —
(a)
an approved clearing house; or
(b)
a recognised clearing house.
(2)  No person shall hold himself out —
(a)
as an approved clearing house, unless he is an approved clearing house; or
(b)
as a recognised clearing house, unless he is a recognised clearing house.
(3)  Except with the written approval of the Authority, no person, other than an approved clearing house or a recognised clearing house, shall take or use, or have attached to or exhibited at any place —
(a)
the title or description “securities clearing house” or “futures clearing house” in any language; or
(b)
any title or description which resembles a title or description referred to in paragraph (a).
(4)  Any person who contravenes subsection (1) or (3) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $250,000 or to imprisonment for a term not exceeding 3 years or to both and, in the case of a continuing offence, to a further fine not exceeding $25,000 for every day or part thereof during which the offence continues after conviction.
(5)  Any person who contravenes subsection (2) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000 and, in the case of a continuing offence, to a further fine not exceeding $2,000 for every day or part thereof during which the offence continues after conviction.
(6)  Without prejudice to section 337(1), the Authority may, by regulations made under section 81Q, exempt any corporation or class of corporations from subsection (1), subject to such conditions or restrictions as the Authority may prescribe in those regulations.
(7)  Without prejudice to section 337(3) and (4), the Authority may, by notice in writing, exempt any corporation from subsection (1), subject to such conditions or restrictions as the Authority may specify by notice in writing, if the Authority is satisfied that the exemption will not detract from the objectives specified in section 47.
(8)  It shall not be necessary to publish any exemption granted under subsection (7) in the Gazette.
(9)  The Authority may, at any time, by notice in writing —
(a)
add to the conditions and restrictions referred to in subsection (7); or
(b)
vary or revoke any condition or restriction referred to in that subsection.
(10)  Every corporation that is granted an exemption under subsection (6) shall satisfy every condition or restriction imposed on it under that subsection.
(11)  Every corporation that is granted an exemption under subsection (7) shall, for the duration of the exemption, satisfy every condition or restriction imposed on it under that subsection or subsection (9).
(12)  Any corporation which contravenes subsection (10) or (11) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.
[Act 34 of 2012 wef 01/08/2013]
Application for approval or recognition
50.
—(1)  A Singapore corporation may apply to the Authority to be —
(a)
approved as an approved clearing house; or
(b)
recognised as a recognised clearing house.
(2)  A foreign corporation may apply to the Authority to be recognised as a recognised clearing house.
(3)  An application under subsection (1) or (2) shall be —
(a)
made in such form and manner as the Authority may prescribe; and
(b)
accompanied by a non-refundable prescribed application fee, which shall be paid in the manner specified by the Authority.
(4)  The Authority may require an applicant to furnish the Authority with such information or documents as the Authority considers necessary in relation to the application.
[Act 34 of 2012 wef 01/08/2013]
Power of Authority to approve or recognise clearing house
51.
—(1)  Where a Singapore corporation has made an application under section 50(1), the Authority may —
(a)
in the case of an application to be approved as an approved clearing house, approve the Singapore corporation as an approved clearing house; or
(b)
in the case of an application to be recognised as a recognised clearing house, recognise the Singapore corporation as a recognised clearing house.
(2)  Where a foreign corporation has made an application under section 50(2), the Authority may recognise the corporation as a recognised clearing house.
(3)  Notwithstanding subsection (1), the Authority may, with the consent of the applicant —
(a)
treat an application under section 50(1)(a) as an application under section 50(1)(b), if the Authority is of the opinion that the applicant would be more appropriately regulated as a recognised clearing house; or
(b)
treat an application under section 50(1)(b) as an application under section 50(1)(a), if the Authority is of the opinion that the applicant would be more appropriately regulated as an approved clearing house.
(4)  The Authority may approve a Singapore corporation as an approved clearing house under subsection (1)(a), recognise a Singapore corporation as a recognised clearing house under subsection (1)(b) or recognise a foreign corporation as a recognised clearing house under subsection (2), subject to such conditions or restrictions as the Authority may think fit to impose by notice in writing, including conditions or restrictions, either of a general or specific nature, relating to —
(a)
the activities that the corporation may undertake;
(b)
the products that may be cleared or settled by any clearing facility established or operated by the corporation; and
(c)
the nature of the investors or participants who may use or have an interest in any clearing facility established or operated by the corporation.
(5)  The Authority may, at any time, by notice in writing to the corporation, vary any condition or restriction or impose such further condition or restriction as the Authority may think fit.
(6)  An approved clearing house or a recognised clearing house shall, for the duration of the approval or recognition, satisfy every condition or restriction that may be imposed on it under subsection (4) or (5).
(7)  The Authority shall not approve an applicant as an approved clearing house, or recognise an applicant as a recognised clearing house, unless the applicant meets such requirements, including minimum financial requirements, as the Authority may prescribe, either generally or specifically.
(8)  The Authority may refuse to approve a Singapore corporation as an approved clearing house, or recognise a Singapore corporation or foreign corporation as a recognised clearing house, if —
(a)
the corporation has not provided the Authority with such information as the Authority may require, relating to —
(i)
the corporation or any person employed by or associated with the corporation for the purposes of the corporation’s business; or
(ii)
any circumstances likely to affect the corporation’s manner of conducting business;
(b)
any information or document provided by the corporation to the Authority is false or misleading;
(c)
the corporation or a substantial shareholder of the corporation is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere;
(d)
execution against the corporation or a substantial shareholder of the corporation in respect of a judgment debt has been returned unsatisfied in whole or in part;
(e)
a receiver, a receiver and manager, a judicial manager or a person in an equivalent capacity has been appointed, whether in Singapore or elsewhere, in relation to, or in respect of, any property of the corporation or a substantial shareholder of the corporation;
(f)
the corporation or a substantial shareholder of the corporation has, whether in Singapore or elsewhere, entered into a compromise or scheme of arrangement with the creditors of the corporation or shareholder, as the case may be, being a compromise or scheme of arrangement that is still in operation;
(g)
the corporation, a substantial shareholder of the corporation or any officer of the corporation —
(i)
has been convicted, whether in Singapore or elsewhere, of an offence committed before, on or after the date of commencement of section 7 of the Securities and Futures (Amendment) Act 2012, involving fraud or dishonesty or the conviction for which involved a finding that the corporation, shareholder or officer, as the case may be, had acted fraudulently or dishonestly; or
(ii)
has been convicted of an offence under this Act committed before, on or after the date of commencement of section 7 of the Securities and Futures (Amendment) Act 2012;
(h)
the Authority is not satisfied as to the educational or other qualifications or experience of the officers or employees of the corporation, having regard to the nature of the duties they are to perform in connection with the establishment or operation of any clearing facility;
(i)
the corporation fails to satisfy the Authority that the corporation is a fit and proper person or that all of its officers, employees and substantial shareholders are fit and proper persons;
(j)
the Authority has reason to believe that the corporation may not be able to act in the best interests of investors or its members, participants or customers, having regard to the reputation, character, financial integrity and reliability of the corporation or its officers, employees or substantial shareholders;
(k)
the Authority is not satisfied as to —
(i)
the financial standing of the corporation or any of its substantial shareholders; or
(ii)
the manner in which the business of the corporation is to be conducted;
(l)
the Authority is not satisfied as to the record of past performance or expertise of the corporation, having regard to the nature of the business which the corporation may carry on in connection with the establishment or operation of any clearing facility;
(m)
there are other circumstances which are likely to —
(i)
lead to the improper conduct of business by the corporation or any of its officers, employees or substantial shareholders; or
(ii)
reflect discredit on the manner of conducting the business of the corporation or any of its substantial shareholders;
(n)
in the case of any clearing facility that the corporation operates, the Authority has reason to believe that the corporation, or any of its officers or employees, will not operate a safe and efficient clearing facility;
(o)
the corporation does not satisfy the criteria prescribed under section 52 to be approved as an approved clearing house or recognised as a recognised clearing house, as the case may be; or
(p)
the Authority is of the opinion that it would be contrary to the interests of the public to approve or recognise the corporation.
(9)  Subject to subsection (10), the Authority shall not refuse to approve a Singapore corporation as an approved clearing house, or recognise a Singapore corporation or foreign corporation as a recognised clearing house, under subsection (8) without giving the corporation an opportunity to be heard.
(10)  The Authority may refuse to approve a Singapore corporation as an approved clearing house, or recognise a Singapore corporation or foreign corporation as a recognised clearing house, on any of the following grounds without giving the corporation an opportunity to be heard:
(a)
the corporation is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere;
(b)
a receiver, a receiver and manager or a person in an equivalent capacity has been appointed, whether in Singapore or elsewhere, in relation to, or in respect of, any property of the corporation;
(c)
the corporation has been convicted, whether in Singapore or elsewhere, of an offence committed before, on or after the date of commencement of section 7 of the Securities and Futures (Amendment) Act 2012, involving fraud or dishonesty or the conviction for which involved a finding that it had acted fraudulently or dishonestly.
(11)  The Authority shall give notice in the Gazette of any corporation approved as an approved clearing house under subsection (1)(a) or recognised as a recognised clearing house under subsection (1)(b) or (2), and such notice may include all or any of the conditions and restrictions imposed by the Authority on the corporation under subsections (4) and (5).
(12)  Any applicant which is aggrieved by a refusal of the Authority to grant to the applicant an approval under subsection (1)(a) or a refusal of the Authority to recognise the applicant under subsection (1)(b) or (2) may, within 30 days after the applicant is notified of the refusal, appeal to the Minister, whose decision shall be final.
(13)  Any approved clearing house or recognised clearing house which contravenes subsection (6) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.
[Act 34 of 2012 wef 01/08/2013]
General criteria to be taken into account by Authority
52.
—(1)  The Authority may prescribe the criteria which it may take into account for the purposes of deciding —
(a)
whether a Singapore corporation referred to in section 50(1) or 54(1) should be approved as an approved clearing house or recognised as a recognised clearing house;
(b)
whether a foreign corporation referred to in section 50(2) should be recognised as a recognised clearing house; and
(c)
whether an approved clearing house or a recognised clearing house that is subject to a review by the Authority under section 54(4) should be approved as an approved clearing house or recognised as a recognised clearing house.
(2)  Without prejudice to section 51 and subsection (1), the Authority may, for the purposes of deciding whether to recognise a foreign corporation as a recognised clearing house under section 51(2), have regard, in addition to any requirements prescribed under section 51(7) and any criteria prescribed under subsection (1), to —
(a)
whether adequate arrangements exist for co-operation between the Authority and the primary financial services regulatory authority responsible for the supervision of the foreign corporation in the country or territory in which the head office or principal place of business of the foreign corporation is situated; and
(b)
whether the foreign corporation is, in the country or territory in which the head office or principal place of business of the foreign corporation is situated, subject to requirements and supervision comparable, in the degree to which the objectives specified in section 47 are achieved, to the requirements and supervision to which approved clearing houses and recognised clearing houses are subject under this Act.
(3)  In considering whether a foreign corporation has met the requirements mentioned in subsection (2)(b), the Authority may have regard to —
(a)
the relevant laws and practices of the country or territory in which the head office or principal place of business of the foreign corporation is situated; and
(b)
the rules and practices of the foreign corporation.
[Act 34 of 2012 wef 01/08/2013]
Annual fees payable by approved clearing house or recognised clearing house
53.
—(1)  Every approved clearing house and every recognised clearing house shall pay to the Authority such annual fees as may be prescribed in such manner as may be specified by the Authority.
(2)  The Authority may, where it considers appropriate, refund or remit the whole or any part of any annual fee paid or payable to it.
[Act 34 of 2012 wef 01/08/2013]
Change in status
54.
—(1)  A Singapore corporation which is an approved clearing house or a recognised clearing house may apply to the Authority to change its status in the manner referred to in subsection (5).
(2)  An application under subsection (1) shall be —
(a)
made in such form and manner as the Authority may prescribe; and
(b)
accompanied by a non-refundable prescribed application fee, which shall be paid in the manner specified by the Authority.
(3)  The Authority may require an applicant to furnish the Authority with such information or documents as the Authority considers necessary in relation to the application.
(4)  The Authority may, from time to time, on its own initiative, review the status of a Singapore corporation that is an approved clearing house or a recognised clearing house in accordance with the requirements prescribed under section 51(7) and the criteria prescribed under section 52(1).
(5)  Where an application is made by a Singapore corporation under subsection (1), or where a review of the status of a Singapore corporation is conducted by the Authority under subsection (4), the Authority may —
(a)
if the corporation is an approved clearing house, withdraw the approval as such and recognise the corporation as a recognised clearing house under section 51(1)(b);
(b)
if the corporation is a recognised clearing house, withdraw the recognition as such and approve the corporation as an approved clearing house under section 51(1)(a); or
(c)
make no change to the status of the corporation as an approved clearing house or a recognised clearing house.
(6)  Where an application is made under subsection (1), the Authority shall not exercise its power under subsection (5)(c) without giving the Singapore corporation an opportunity to be heard.
(7)  Where a review of the status of a Singapore corporation is conducted by the Authority on its own initiative under subsection (4), the Authority shall not exercise its powers under subsection (5)(a) or (b) without giving the corporation an opportunity to be heard.
(8)  Any Singapore corporation which is aggrieved by a decision of the Authority made in relation to the corporation after a review under subsection (4) may, within 30 days after the corporation is notified of the decision, appeal to the Minister, whose decision shall be final.
[Act 34 of 2012 wef 01/08/2013]
Cancellation of approval or recognition
55.
—(1)  An approved clearing house or a recognised clearing house which intends to cease operating its clearing facility or, where it operates more than one clearing facility, all of its clearing facilities, may apply to the Authority to cancel its approval as an approved clearing house or recognition as a recognised clearing house, as the case may be.
(2)  An application under subsection (1) shall be made in such form and manner, and not later than such time, as the Authority may prescribe.
(3)  The Authority may cancel the approval of an approved clearing house, or the recognition of a recognised clearing house, on such application if the Authority is satisfied that —
(a)
the approved clearing house or recognised clearing house has ceased operating its clearing facility or all of its clearing facilities, as the case may be; and
(b)
the cancellation of the approval or recognition, as the case may be, will not detract from the objectives specified in section 47.
[Act 34 of 2012 wef 01/08/2013]
Power of Authority to revoke approval and recognition
56.
—(1)  The Authority may revoke any approval of a Singapore corporation as an approved clearing house under section 51(1)(a), any recognition of a Singapore corporation as a recognised clearing house under section 51(1)(b) or any recognition of a foreign corporation as a recognised clearing house under section 51(2), if —
(a)
there exists at any time a ground under section 51(7) or (8) on which the Authority may refuse an application;
(b)
the corporation does not commence operating its clearing facility, or, where it operates more than one clearing facility, all of its clearing facilities, within 12 months after the date on which it was granted the approval under section 51(1)(a) or was recognised under section 51(1)(b) or (2), as the case may be;
(c)
the corporation ceases to operate its clearing facility or, where it operates more than one clearing facility, all of its clearing facilities;
(d)
the corporation contravenes —
(i)
any condition or restriction applicable in respect of its approval or recognition, as the case may be;
(ii)
any direction issued to it by the Authority under this Act; or
(iii)
any provision in this Act;
(da)
upon the Authority exercising any power under section 81SAA(2) or the Minister exercising any power under Division 2, 3 or 4 of Part IVB of the Monetary Authority of Singapore Act (Cap. 186) in relation to the corporation, the Authority considers that it is in the public interest to revoke the approval or recognition, as the case may be;
[Act 10 of 2013 wef 02/08/2013]
(e)
the corporation operates in a manner that is, in the opinion of the Authority, contrary to the interests of the public; or
(f)
any information or document provided by the corporation to the Authority is false or misleading.
(2)  Subject to subsection (3), the Authority shall not revoke under subsection (1) any approval under section 51(1)(a) or recognition under section 51(1)(b) or (2) that was granted to a corporation without giving the corporation an opportunity to be heard.
(3)  The Authority may revoke an approval under section 51(1)(a), or a recognition under section 51(1)(b) or (2), that was granted to a corporation on any of the following grounds without giving the corporation an opportunity to be heard:
(a)
the corporation is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere;
(b)
a receiver, a receiver and manager or a person in an equivalent capacity has been appointed, whether in Singapore or elsewhere, in relation to, or in respect of, any property of the corporation;
(c)
the corporation has been convicted, whether in Singapore or elsewhere, of an offence committed before, on or after the date of commencement of section 7 of the Securities and Futures (Amendment) Act 2012, involving fraud or dishonesty or the conviction for which involved a finding that it had acted fraudulently or dishonestly.
(4)  For the purposes of subsection (1)(c), a corporation shall be deemed to have ceased to operate its clearing facility if —
(a)
it has ceased to operate the clearing facility for more than 30 days, unless it has obtained the prior approval of the Authority to do so; or
(b)
it has ceased to operate the clearing facility under a direction issued by the Authority under section 81R.
(5)  Any corporation which is aggrieved by a decision of the Authority made in relation to the corporation under subsection (1) may, within 30 days after the corporation is notified of the decision, appeal to the Minister, whose decision shall be final.
(6)  Notwithstanding the lodging of an appeal under subsection (5), any action taken by the Authority under this section shall continue to have effect pending the decision of the Minister.
(7)  The Minister may, when deciding an appeal under subsection (5), make such modification as he considers necessary to any action taken by the Authority under this section, and such modified action shall have effect from the date of the decision of the Minister.
(8)  Any revocation under subsection (1) or (3) of the approval or recognition of a corporation under section 51(1) or (2) shall not operate so as to —
(a)
avoid or affect any agreement, transaction or arrangement entered into in connection with the use of a clearing facility operated by the corporation, whether the agreement, transaction or arrangement was entered into before, on or after the revocation of the approval or recognition; or
(b)
affect any right, obligation or liability arising under any such agreement, transaction or arrangement.
(9)  The Authority shall give notice in the Gazette of any revocation under subsection (1) or (3) of any approval or recognition of a corporation under section 51(1) or (2).
[Act 34 of 2012 wef 01/08/2013]
Division 2 — Regulation of Approved Clearing Houses
Subdivision (1) — Obligations of approved clearing houses
General obligations
57.
—(1)  An approved clearing house —
(a)
shall operate a safe and efficient clearing facility;
(b)
shall manage any risks associated with its business and operations prudently;
(c)
in discharging its obligations under this Act, shall not act contrary to the interests of the public, having particular regard to the interests of the investing public;
(d)
shall ensure that access for participation in its clearing facility is subject to criteria that are fair and objective, and that are designed to ensure the safe and efficient functioning of its facility and to protect the interests of the investing public;
(e)
shall maintain business rules that make satisfactory provision for —
(i)
the clearing facility to be operated in a safe and efficient manner; and
(ii)
the proper regulation and supervision of its members;
(f)
shall enforce compliance by its members with its business rules;
(g)
shall have sufficient financial, human and system resources —
(i)
to operate a safe and efficient clearing facility;
(ii)
to meet contingencies or disasters; and
(iii)
to provide adequate security arrangements;
(h)
shall maintain governance arrangements that are adequate for the clearing facility to be operated in a safe and efficient manner; and
(i)
shall ensure that it appoints or employs fit and proper persons as its chairman, chief executive officer, directors and key management officers.
(2)  The obligations imposed on an approved clearing house under this Act shall apply to all facilities for clearing or settlement operated by the approved clearing house.
(3)  Notwithstanding subsection (2), the Authority may by notice in writing exempt any clearing facility operated by an approved clearing house from all or any of the provisions of this Act, if the Authority is satisfied that such exemption would not detract from the objectives specified in section 47.
(4)  It shall not be necessary to publish any exemption granted under subsection (3) in the Gazette.
(5)  In subsection (1)(g), “contingencies or disasters” includes technical disruptions occurring within automated systems.
[Act 34 of 2012 wef 01/08/2013]
Obligation to notify Authority of certain matters
58.
—(1)  An approved clearing house shall, as soon as practicable after the occurrence of any of the following circumstances, give the Authority notice of the circumstance:
(a)
any material change to the information provided by the approved clearing house in its application under section 50(1) or 54(1);
(b)
the carrying on of any business (referred to in this section as a proscribed business) by the approved clearing house that is —
(i)
not the business of operating a clearing facility;
(ii)
not incidental to operating a clearing facility; or
(iii)
not such business, or within such class of businesses, as the Authority may prescribe;
(c)
the acquisition by the approved clearing house of a substantial shareholding in a corporation (referred to in this section as a proscribed corporation) which carries on any business that is —
(i)
not the business of operating a clearing facility;
(ii)
not incidental to operating a clearing facility; or
(iii)
not such business, or within such class of businesses, as the Authority may prescribe;
(d)
the approved clearing house becoming aware of any financial irregularity or other matter which in its opinion —
(i)
may affect its ability to discharge its financial obligations; or
(ii)
may affect the ability of a member of the approved clearing house to meet its financial obligations to the approved clearing house;
(e)
the approved clearing house reprimanding, fining, suspending, expelling or otherwise taking disciplinary action against a member of the approved clearing house;
(f)
any other matter that the Authority may —
(i)
prescribe by regulations made under section 81Q for the purposes of this paragraph; or
(ii)
specify by notice in writing to the approved clearing house in any particular case.
(2)  Without prejudice to the generality of section 81R(1), the Authority may, at any time after receiving a notice referred to in subsection (1), issue directions to the approved clearing house —
(a)
where the notice relates to a matter referred to in subsection (1)(b) —
(i)
to cease carrying on the proscribed business; or
(ii)
to carry on the proscribed business subject to such conditions or restrictions as the Authority may impose, if the Authority is of the opinion that this is necessary for any purpose referred to in section 81R(1); or
(b)
where the notice relates to a matter referred to in subsection (1)(c) —
(i)
to dispose of all or any part of its shareholding in the proscribed corporation within such time and subject to such conditions as the Authority considers appropriate; or
(ii)
to exercise its rights relating to such shareholding, or to not exercise such rights, subject to such conditions or restrictions as the Authority may impose, if the Authority is of the opinion that this is necessary for any purpose referred to in section 81R(1).
(3)  An approved clearing house shall comply with every direction issued to it under subsection (2) notwithstanding anything to the contrary in the Companies Act (Cap. 50) or any other law.
(4)  An approved clearing house shall notify the Authority of any matter that the Authority may prescribe by regulations made under section 81Q for the purposes of this subsection, no later than such time as the Authority may prescribe by those regulations.
(5)  An approved clearing house shall notify the Authority of any matter that the Authority may specify by notice in writing to the recognised clearing house, no later than such time as the Authority may specify in that notice.
[Act 34 of 2012 wef 01/08/2013]
Obligation to manage risks prudently, etc.
59.
—(1)  Without prejudice to the generality of section 57(1)(b), an approved clearing house shall —
(a)
ensure that the systems and controls concerning the assessment and management of risks to its clearing facility are adequate and appropriate for the scale and nature of its operations;
(b)
obtain the Authority’s approval to the limits which the approved clearing house intends to establish on the number of open positions which may be held by any person under any futures contract cleared or settled with the approved clearing house, and vary those limits only in a manner approved by the Authority; and
(c)
obtain the Authority’s approval if the approved clearing house does not intend to establish limits on the number of open positions which may be held by any person under any futures contract cleared or settled with the approved clearing house.
(2)  Nothing in subsection (1) shall preclude an approved clearing house from —
(a)
establishing, in respect of open positions which may be held by any person under any futures contract cleared or settled with the approved clearing house, different position limits for different futures contracts, or for different months or days in the period the positions may be held; or
(b)
establishing limits whether on long or short positions, and whether on a net or gross basis.
(3)  Any person who wilfully exceeds any position limit established or varied by an approved clearing house shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000.
[Act 34 of 2012 wef 01/08/2013]
Obligation in relation to customers’ money and assets held by approved clearing house
60.
—(1)  Without prejudice to sections 81Q and 341, the Authority may make regulations —
(a)
relating to how any money or assets deposited with or paid to an approved clearing house by its members, for or in relation to any contracts of the customers of those members, are to be held by the approved clearing house and, in particular, requiring any such money or assets to be deposited in trust accounts or custody accounts;
(b)
relating to the circumstances under which, and the purposes for which, the money or assets referred to in paragraph (a) may be used by the approved clearing house;
(c)
relating to how the approved clearing house may invest the money or assets referred to in paragraph (a); and
(d)
for any other purpose relating to the handling of the money and assets referred to in paragraph (a).
(2)  Regulations made under this section may provide —
(a)
that a contravention of any specified provision thereof shall be an offence; and
(b)
for a penalty not exceeding a fine of $200,000 and, in the case of a continuing offence, for a further penalty not exceeding $20,000 for every day or part thereof during which the offence continues after conviction.
[Act 34 of 2012 wef 01/08/2013]
Obligation to maintain proper records
61.
—(1)  An approved clearing house shall maintain a record of all transactions effected through its clearing facility.
(2)  The Authority may prescribe by regulations made under section 81Q —
(a)
the form and manner in which the record referred to in subsection (1) shall be maintained;
(b)
the extent to which the record includes details of each transaction; and
(c)
the period of time that the record is to be maintained.
[Act 34 of 2012 wef 01/08/2013]
Obligation to submit periodic reports
62.  An approved clearing house shall submit to the Authority such reports in such form and manner, and at such frequency, as the Authority may prescribe.
[Act 34 of 2012 wef 01/08/2013]
Obligation to assist Authority
63.  An approved clearing house shall provide such assistance to the Authority as the Authority may require for the performance of the functions and duties of the Authority, including —
(a)
the furnishing of such returns as the Authority may require for the proper administration of this Act; and
(b)
the provision of —
(i)
such books and information as the Authority may require for the proper administration of this Act, being books and information —
(A)
relating to the business of the approved clearing house; or
(B)
in respect of any transaction or class of transactions cleared or settled by the approved clearing house; and
(ii)
such other information as the Authority may require for the proper administration of this Act.
[Act 34 of 2012 wef 01/08/2013]
Obligation to maintain confidentiality
64.
—(1)  Subject to subsection (2), an approved clearing house and its officers and employees shall maintain, and aid in maintaining, confidentiality of all user information that —
(a)
comes to the knowledge of the approved clearing house or any of its officers or employees; or
(b)
is in the possession of the approved clearing house or any of its officers or employees.
(2)  Subsection (1) shall not apply to —
(a)
the disclosure of user information for such purposes, or in such circumstances, as the Authority may prescribe;
(b)
any disclosure of user information which is authorised by the Authority to be disclosed or furnished; or
(c)
the disclosure of user information pursuant to any requirement imposed under any written law or order of court in Singapore.
(3)  For the avoidance of doubt, nothing in this section shall be construed as preventing an approved clearing house from entering into a written agreement with a user which obliges the approved clearing house to maintain a higher degree of confidentiality than that specified in this section.
[Act 34 of 2012 wef 01/08/2013]
Penalties under this Subdivision
65.  Any approved clearing house which contravenes section 57(1), 58(1) or (3), 59(1), 61(1), 62, 63 or 64(1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $200,000 and, in the case of a continuing offence, to a further fine not exceeding $20,000 for every day or part thereof during which the offence continues after conviction.
[Act 34 of 2012 wef 01/08/2013]
Subdivision (2) — Rules of approved clearing houses
Business rules of approved clearing houses
66.
—(1)  Without limiting the generality of sections 57 and 81Q —
(a)
the Authority may prescribe the matters that an approved clearing house shall make provision for in the business rules of the approved clearing house; and
(b)
the approved clearing house shall make provision for those matters in its business rules.
(2)  An approved clearing house shall not make any amendment to its business rules unless it complies with such requirements as the Authority may prescribe.
(3)  In this Subdivision, any reference to an amendment to a business rule shall be construed as a reference to a change to the scope of, or to any requirement, obligation or restriction under, the business rule, whether the change is made by an alteration to the text of the business rule or by any other notice issued by or on behalf of the approved clearing house.
(4)  Any approved clearing house which contravenes subsection (1) or (2) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.
[Act 34 of 2012 wef 01/08/2013]
Business rules of approved clearing houses have effect as contract
67.
—(1)  The business rules of an approved clearing house shall be deemed to be, and shall operate as, a binding contract —
(a)
between the approved clearing house and each issuer of securities;
(b)
between the approved clearing house and each participant;
(c)
between each issuer of securities and each participant; and
(d)
between each participant and every other participant.
(2)  The approved clearing house, each issuer of securities and each participant shall be deemed to have agreed to observe, and perform the obligations under, the provisions of the business rules that are in force for the time being, so far as those provisions are applicable to the approved clearing house, issuer or participant, as the case may be.
(3)  In this section, “issuer”, in relation to any securities, means a person who issued or made available, or proposes to issue or make available, the securities, being securities that are cleared or settled by the approved clearing house.
[Act 34 of 2012 wef 01/08/2013]
Power of court to order observance or enforcement of business rules
68.
—(1)  Where any person who is under an obligation to comply with, observe, enforce or give effect to the business rules of an approved clearing house fails to do so, the High Court may, on the application of the Authority, the approved clearing house or a person aggrieved by the failure, and after giving the first-mentioned person an opportunity to be heard, make an order directing the first-mentioned person to comply with, observe, enforce or give effect to those business rules.
(2)  In this section, “person” includes an approved clearing house.
(3)  This section is in addition to, and not in derogation of, any other remedy available to the aggrieved person referred to in subsection (1).
[Act 34 of 2012 wef 01/08/2013]
Non-compliance with business rules not to substantially affect rights of person
69.  Any failure by an approved clearing house to comply with this Act or its business rules in relation to a matter shall not prevent the matter from being treated, for the purposes of this Act, as done in accordance with the business rules, so long as the failure does not substantially affect the rights of any person entitled to require compliance with the business rules.
[Act 34 of 2012 wef 01/08/2013]
Subdivision (3) — Matters requiring approval of Authority
Control of substantial shareholding in approved clearing house
70.
—(1)  No person shall enter into any agreement to acquire shares in an approved clearing house, being an agreement by virtue of which he would, if the agreement had been carried out, become a substantial shareholder of the approved clearing house, without first obtaining the approval of the Authority to enter into the agreement.
(2)  No person shall become either of the following without first obtaining the approval of the Authority:
(a)
a 12% controller of an approved clearing house;
(b)
a 20% controller of an approved clearing house.
(3)  In subsection (2) —
“12% controller”, in relation to an approved clearing house, means a person, not being a 20% controller, who alone or together with his associates —
(a)
holds not less than 12% of the shares in the approved clearing house; or
(b)
is in a position to control not less than 12% of the votes in the approved clearing house;
“20% controller”, in relation to an approved clearing house, means a person who, alone or together with his associates —
(a)
holds not less than 20% of the shares in the approved clearing house; or
(b)
is in a position to control not less than 20% of the votes in the approved clearing house.
(4)  In this section —
(a)
a person holds a share if —
(i)
he is deemed to have an interest in that share under section 7(6) to (10) of the Companies Act (Cap. 50); or
(ii)
he otherwise has a legal or an equitable interest in that share, except such interest as is to be disregarded under section 7(6) to (10) of the Companies Act;
(b)
a reference to the control of a percentage of the votes in an approved clearing house shall be construed as a reference to the control, whether direct or indirect, of that percentage of the total number of votes that might be cast in a general meeting of the approved clearing house; and
(c)
a person, A, is an associate of another person, B, if —
(i)
A is the spouse, a parent, remoter lineal ancestor or step-parent, a son, daughter, remoter issue, step-son or step-daughter or a brother or sister of B;
(ii)
A is a corporation the directors of which are accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of B or, where B is a corporation, of the directors of B;
(iii)
B is a corporation the directors of which are accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of A or, where A is a corporation, of the directors of A;
(iv)
A is a person who is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of B;
(v)
B is a person who is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of A;
(vi)
A is a related corporation of B;
(vii)
A is a corporation in which B, whether alone or together with other associates of B as described in sub-paragraphs (ii) to (vi), is in a position to control not less than 20% of the votes in A;
(viii)
B is a corporation in which A, whether alone or together with other associates of A as described in sub-paragraphs (ii) to (vi), is in a position to control not less than 20% of the votes in B; or
(ix)
A is a person with whom B has an agreement or arrangement, whether oral or in writing and whether express or implied, to act together with respect to the acquisition, holding or disposal of shares or other interests in, or with respect to the exercise of their votes in relation to, the approved clearing house.
(5)  The Authority may grant its approval referred to in subsection (1) or (2) subject to such conditions or restrictions as the Authority may think fit.
(6)  Without prejudice to subsection (13), the Authority may, for the purposes of securing compliance with subsection (1) or (2) or any condition or restriction imposed under subsection (5), by notice in writing, direct the transfer or disposal of all or any of the shares of an approved clearing house in which a substantial shareholder, 12% controller or 20% controller of the approved clearing house has an interest.
(7)  Until a person to whom a direction has been issued under subsection (6) transfers or disposes of the shares which are the subject of the direction, and notwithstanding anything to the contrary in the Companies Act or the memorandum or articles of association or other constituent document or documents of the approved clearing house —
(a)
no voting rights shall be exercisable in respect of the shares which are the subject of the direction;
(b)
the approved clearing house shall not offer or issue any shares (whether by way of rights, bonus, share dividend or otherwise) in respect of the shares which are the subject of the direction; and
(c)
except in a liquidation of the approved clearing house, the approved clearing house shall not make any payment (whether by way of cash dividend, dividend in kind or otherwise) in respect of the shares which are the subject of the direction.
(8)  Any issue of shares by an approved clearing house in contravention of subsection (7)(b) shall be deemed to be null and void, and a person to whom a direction has been issued under subsection (6) shall immediately return those shares to the approved clearing house, upon which the approved clearing house shall return to the person any payment received from the person in respect of those shares.
(9)  Any payment made by an approved clearing house in contravention of subsection (7)(c) shall be deemed to be null and void, and a person to whom a direction has been issued under subsection (6) shall immediately return the payment he has received to the approved clearing house.
(10)  Without prejudice to sections 81SB(1) and 337(1), the Authority may, by regulations made under section 81Q, exempt all or any of the following from subsection (1) or (2), subject to such conditions or restrictions as the Authority may prescribe in those regulations:
(a)
any person or class of persons;
(b)
any class or description of shares or interests in shares.
(11)  Without prejudice to sections 81SB(2) and 337(3) and (4), the Authority may, by notice in writing, exempt any person, shares or interests in shares from subsection (1) or (2), subject to such conditions or restrictions as the Authority may specify by notice in writing.
(12)  It shall not be necessary to publish any exemption granted under subsection (11) in the Gazette.
(13)  Any person who contravenes subsection (1) or (2), or any condition or restriction imposed by the Authority under subsection (5), shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $200,000 and, in the case of a continuing offence, to a further fine not exceeding $20,000 for every day or part thereof during which the offence continues after conviction.
(14)  Any person who contravenes subsection (7)(b) or (c), (8) or (9) or any direction issued by the Authority under subsection (6) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.
[Act 34 of 2012 wef 01/08/2013]
Approval of chairman, chief executive officer, director and key persons
71.
—(1)  No approved clearing house shall appoint a person as its chairman, chief executive officer or director unless the approved clearing house has obtained the approval of the Authority.
(2)  The Authority may, by notice in writing, require an approved clearing house to obtain the approval of the Authority for the appointment of any person to any key management position or committee of the approved clearing house, and the approved clearing house shall comply with the notice.
(3)  An application for approval under subsection (1) or (2) shall be made in such form and manner as the Authority may prescribe.
(4)  Without prejudice to the generality of section 81Q and to any other matter that the Authority may consider relevant, the Authority may, in determining whether to grant its approval under subsection (1) or (2), have regard to such criteria as the Authority may prescribe or specify in directions issued by notice in writing.
(5)  Subject to subsection (6), the Authority shall not refuse an application for approval under this section without giving the approved clearing house an opportunity to be heard.
(6)  The Authority may refuse an application for approval on any of the following grounds without giving the approved clearing house an opportunity to be heard:
(a)
the person is an undischarged bankrupt, whether in Singapore or elsewhere;
(b)
the person has been convicted, whether in Singapore or elsewhere, of an offence committed before, on or after the date of commencement of section 7 of the Securities and Futures (Amendment) Act 2012 —
(i)
involving fraud or dishonesty or the conviction for which involved a finding that he had acted fraudulently or dishonestly; and
(ii)
punishable with imprisonment for a term of 3 months or more.
(7)  Where the Authority refuses an application for approval under this section, the Authority need not give the person who was proposed to be appointed an opportunity to be heard.
(8)  An approved clearing house shall, as soon as practicable, give written notice to the Authority of the resignation or removal of its chairman, chief executive officer or director or of any person referred to in any notice issued by the Authority to the approved clearing house under subsection (2).
(9)  The Authority may make regulations under section 81Q relating to the composition and duties of the board of directors or any committee of an approved clearing house.
(10)  In this section, “committee” includes any committee of directors, disciplinary committee or appeals committee of an approved clearing house, and any body responsible for disciplinary action against a member of an approved clearing house.
(11)  Without prejudice to sections 81SB(1) and 337(1), the Authority may, by regulations made under section 81Q, exempt any approved clearing house or class of approved clearing houses from complying with subsection (1) or (8), subject to such conditions or restrictions as the Authority may prescribe in those regulations.
(12)  Without prejudice to sections 81SB(2) and 337(3) and (4), the Authority may, by notice in writing, exempt any approved clearing house from complying with subsection (1) or (8), subject to such conditions or restrictions as the Authority may specify by notice in writing.
(13)  It shall not be necessary to publish any exemption granted under subsection (12) in the Gazette.
(14)  Subject to subsections (11) and (12), any approved clearing house which contravenes subsection (1), (2) or (8) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $200,000 and, in the case of a continuing offence, to a further fine not exceeding $20,000 for every day or part thereof during which the offence continues after conviction.
[Act 34 of 2012 wef 01/08/2013]
Listing of approved clearing houses on securities market
72.
—(1)  The securities of an approved clearing house shall not be listed for quotation on a securities market that is operated by any of its related corporations, unless the approved clearing house and the operator of the securities market have entered into such arrangements as the Authority may require —
(a)
for dealing with possible conflicts of interest that may arise from such listing; and
(b)
for the purpose of ensuring the integrity of the trading of the securities of the approved clearing house.
(2)  Where the securities of an approved clearing house are listed for quotation on a securities market operated by any of its related corporations, the listing rules of the securities market shall be deemed to allow the Authority to act in place of the operator of the securities market in making decisions and taking action, or to require the operator of the securities market to make decisions and to take action on behalf of the Authority, on —
(a)
the admission or removal of the approved clearing house to or from the official list of the securities market; and
(b)
the granting of approval for the securities of the approved clearing house to be, or the stopping or suspending of the securities of the approved clearing house from being, listed for quotation or quoted on the securities market.
(3)  The Authority may, by notice in writing to the operator of the securities market —
(a)
modify the listing rules of the securities market for the purpose of their application to the listing of the securities of the approved clearing house for quotation or trading; or
(b)
waive the application of any listing rule of the securities market to the approved clearing house.
(4)  Any approved clearing house which contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $200,000 and, in the case of a continuing offence, to a further fine not exceeding $20,000 for every day or part thereof during which the offence continues after conviction.
[Act 34 of 2012 wef 01/08/2013]
Additional powers of Authority in respect of auditors
73.
—(1)  If an auditor of an approved clearing house, in the course of the performance of his duties, becomes aware of any matter or irregularity referred to in the following paragraphs, he shall immediately send to the Authority a written report of that matter or irregularity:
(a)
any matter which, in his opinion, adversely affects or may adversely affect the financial position of the approved clearing house to a material extent;
(b)
any matter which, in his opinion, constitutes or may constitute a breach of any provision of this Act or an offence involving fraud or dishonesty;
(c)
any irregularity that has or may have a material effect upon the accounts of the approved clearing house, including any irregularity that affects or jeopardises, or may affect or jeopardise, the funds or property of investors.
(2)  An auditor of an approved clearing house shall not, in the absence of malice on his part, be liable to any action for defamation at the suit of any person in respect of any statement made in his report under subsection (1).
(3)  Subsection (2) shall not restrict or affect any right, privilege or immunity that the auditor of an approved clearing house may have, apart from this section, as a defendant in an action for defamation.
(4)  The Authority may impose all or any of the following duties on an auditor of an approved clearing house, and the auditor shall carry out the duties so imposed:
(a)
a duty to submit such additional information and reports in relation to his audit as the Authority considers necessary;
(b)
a duty to enlarge, extend or alter the scope of his audit of the business and affairs of the approved clearing house;
(c)
a duty to carry out any other examination or establish any procedure in any particular case;
(d)
a duty to submit a report on any matter arising out of his audit, examination or establishment of procedure referred to in paragraph (b) or (c).
(5)  The approved clearing house shall remunerate the auditor in respect of the discharge by him of all or any of the duties referred to in subsection (4).
[Act 34 of 2012 wef 01/08/2013]
Subdivision (4) — Immunity
Immunity from criminal or civil liability
74.
—(1)  No criminal or civil liability shall be incurred by an approved clearing house, or by any person specified in subsection (2), for any thing done (including any statement made) or omitted to be done with reasonable care and in good faith in the course of, or in connection with, the discharge or purported discharge of the obligations of the approved clearing house under this Act or under the business rules of the approved clearing house (including the default rules of the approved clearing house).
(2)  For the purposes of subsection (1), the specified person is any person acting on behalf of the approved clearing house, including —
(a)
any director of the approved clearing house; or
(b)
any member of any committee established by the approved clearing house.
[Act 34 of 2012 wef 01/08/2013]
Division 3 — Regulation of Recognised Clearing Houses
General obligations
75.
—(1)  A recognised clearing house —
(a)
shall operate a safe and efficient clearing facility;
(b)
shall manage any risks associated with its business and operations prudently;
(c)
in discharging its obligations under this Act, shall not act contrary to the interests of the public, having particular regard to the interests of the investing public;
(d)
shall ensure that access for participation in its clearing facility is subject to criteria that are fair and objective, and that are designed to ensure the safe and efficient functioning of its facility and to protect the interests of the investing public;
(e)
shall maintain business rules that make satisfactory provision for —
(i)
the clearing facility to be operated in a safe and efficient manner; and
(ii)
the proper regulation and supervision of its members;
(f)
shall enforce compliance by its members with its business rules;
(g)
shall have sufficient financial, human and system resources —
(i)
to operate a safe and efficient clearing facility;
(ii)
to meet contingencies or disasters; and
(iii)
to provide adequate security arrangements;
(h)
shall maintain governance arrangements that are adequate for the clearing facility to be operated in a safe and efficient manner; and
(i)
shall ensure that it appoints or employs fit and proper persons as its chairman, chief executive officer, directors and key management officers.
(2)  The obligations imposed on a recognised clearing house under this Act shall apply to all facilities for clearing or settlement operated by the recognised clearing house.
(3)  Notwithstanding subsection (2), the Authority may by notice in writing exempt any clearing facility operated by a recognised clearing house from all or any of the provisions of this Act, if the Authority is satisfied that such exemption would not detract from the objectives specified in section 47.
(4)  It shall not be necessary to publish any exemption granted under subsection (3) in the Gazette.
(5)  In subsection (1)(g), “contingencies or disasters” includes technical disruptions occurring within automated systems.
[Act 34 of 2012 wef 01/08/2013]
Obligation to notify Authority of certain matters
76.
—(1)  A recognised clearing house shall, as soon as practicable after the occurrence of any of the following circumstances, give the Authority notice of the circumstance:
(a)
any material change to the information provided by the recognised clearing house in its application under section 50(1) or (2) or 54(1);
(b)
the recognised clearing house becoming aware of any financial irregularity or other matter which in its opinion —
(i)
may affect its ability to discharge its financial obligations; or
(ii)
may affect the ability of a member of the recognised clearing house to meet its financial obligations to the recognised clearing house;
(c)
any other matter that the Authority may —
(i)
prescribe by regulations made under section 81Q for the purposes of this paragraph; or
(ii)
specify by notice in writing to the recognised clearing house in any particular case.
(2)  A recognised clearing house shall notify the Authority of any matter that the Authority may prescribe by regulations made under section 81Q for the purposes of this subsection, no later than such time as the Authority may prescribe by those regulations.
(3)  A recognised clearing house shall notify the Authority of any matter that the Authority may specify by notice in writing to the recognised clearing house, no later than such time as the Authority may specify in that notice.
[Act 34 of 2012 wef 01/08/2013]
Obligation in relation to customers’ money and assets held by recognised clearing house
77.
—(1)  Without prejudice to sections 81Q and 341, the Authority may make regulations —
(a)
relating to how any money or assets deposited with or paid to a recognised clearing house by its members, for or in relation to any contracts of the customers of those members, are to be held by the recognised clearing house and, in particular, requiring any such money or assets to be deposited in trust accounts or custody accounts;
(b)
relating to the circumstances under which, and the purposes for which, the money or assets referred to in paragraph (a) may be used by the recognised clearing house;
(c)
relating to how the recognised clearing house may invest the money or assets referred to in paragraph (a); and
(d)
for any other purpose relating to the handling of the money or assets referred to in paragraph (a).
(2)  Regulations made under this section may provide —
(a)
that a contravention of any specified provision thereof shall be an offence; and
(b)
for a penalty not exceeding a fine of $150,000 and, in the case of a continuing offence, for a further penalty not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.
[Act 34 of 2012 wef 01/08/2013]
Obligation to maintain proper records
78.
—(1)  A recognised clearing house shall maintain a record of all transactions effected through its clearing facility.
(2)  The Authority may prescribe by regulations made under section 81Q —
(a)
the form and manner in which the record referred to in subsection (1) shall be maintained;
(b)
the extent to which the record includes details of each transaction; and
(c)
the period of time that the record is to be maintained.
[Act 34 of 2012 wef 01/08/2013]
Obligation to submit periodic reports
79.  A recognised clearing house shall submit to the Authority such reports in such form and manner, and at such frequency, as the Authority may prescribe.
[Act 34 of 2012 wef 01/08/2013]
Obligation to assist Authority
80.  A recognised clearing house shall provide such assistance to the Authority as the Authority may require for the performance of the functions and duties of the Authority, including —
(a)
the furnishing of such returns as the Authority may require for the proper administration of this Act; and
(b)
the provision of —
(i)
such books and information as the Authority may require for the proper administration of this Act, being books and information —
(A)
relating to the business of the recognised clearing house; or
(B)
in respect of any transaction or class of transactions cleared or settled by the recognised clearing house; and
(ii)
such other information as the Authority may require for the proper administration of this Act.
[Act 34 of 2012 wef 01/08/2013]
Obligation to maintain confidentiality
81.
—(1)  Subject to subsection (2), a recognised clearing house and its officers and employees shall maintain, and aid in maintaining, confidentiality of all user information that —
(a)
comes to the knowledge of the recognised clearing house or any of its officers or employees; or
(b)
is in the possession of the recognised clearing house or any of its officers or employees.
(2)  Subsection (1) shall not apply to —
(a)
the disclosure of user information for such purposes, or in such circumstances, as the Authority may prescribe;
(b)
any disclosure of user information which is authorised by the Authority to be disclosed or furnished; or
(c)
the disclosure of user information pursuant to any requirement imposed under any written law or order of court in Singapore.
(3)  For the avoidance of doubt, nothing in this section shall be construed as preventing a recognised clearing house from entering into a written agreement with a user which obliges the recognised clearing house to maintain a higher degree of confidentiality than that specified in this section.
[Act 34 of 2012 wef 01/08/2013]
Penalties under this Division
81A.  Any recognised clearing house which contravenes section 75(1), 76, 78(1), 79, 80 or 81(1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.
[Act 34 of 2012 wef 01/08/2013]
Division 4 — Insolvency
Application of this Division
81B.  This Division shall apply to such transaction or class of transactions cleared or settled by any approved clearing house or recognised clearing house, or by any class of approved clearing houses or recognised clearing houses, and to such extent, as may be prescribed by the Authority.
[Act 34 of 2012 wef 01/08/2013]
Proceedings of approved clearing house or recognised clearing house shall take precedence over law of insolvency
81C.
—(1)  The following shall not be invalid to any extent at law by reason only of inconsistency with any written law or rule of law relating to the distribution of the assets of a person on insolvency, bankruptcy or winding up, or on the appointment of a receiver, a receiver and manager or a person in an equivalent capacity over any of the assets of a person:
(a)
a market contract;
(b)
a disposition of property pursuant to a market contract;
(c)
the provision of market collateral;
(d)
a contract effected by an approved clearing house or a recognised clearing house for the purpose of realising property provided as market collateral, or any disposition of property pursuant to such a contract;
(e)
a disposition of property in accordance with the business rules of an approved clearing house, or a recognised clearing house, relating to the application of property provided as market collateral;
(f)
a disposition of property as a result of which the property becomes subject to a market charge, or any transaction pursuant to which that disposition is made;
(g)
a disposition of property for the purpose of enforcing a market charge;
(h)
a market charge;
(i)
any default proceedings.
(2)  A relevant office holder, or a court applying the law relating to insolvency in Singapore, shall not exercise his or its power to prevent, or interfere with —
(a)
the settlement of a market contract in accordance with the business rules of an approved clearing house or a recognised clearing house, or any proceedings or other action taken under those business rules; or
(b)
any default proceedings.
(3)  Subsection (2) shall not operate to prevent a relevant office holder from recovering an amount under section 81I after the completion of a specified event referred to in section 81I(3).
(4)  Where a participant which is also a bank licensed under the Banking Act (Cap. 19) becomes insolvent, the liabilities of the bank accorded priority under sections 61 and 62 of that Act and the Payment and Settlement Systems (Finality and Netting) Act (Cap. 231) shall have priority over any unsecured liabilities of the bank arising from and after the settlement of market contracts.
(5)  For the avoidance of doubt, subsection (4) shall not affect the settlement of market contracts in accordance with the business rules of an approved clearing house or a recognised clearing house.
[Act 34 of 2012 wef 01/08/2013]
Supplementary provisions as to default proceedings
81D.
—(1)  A court may, on the application of a relevant office holder, make an order to alter, or to release the relevant office holder from complying with, the functions of his office that are affected by default proceedings, if default proceedings have been, could be, or could have been, taken.
(2)  The functions of the relevant office holder shall be construed subject to an order made under subsection (1).
(3)  Sections 45, 74 and 76 of the Bankruptcy Act (Cap. 20) and sections 210, 258, 260, 262(3), 299(1) and 309 of the Companies Act (Cap. 50) shall not prevent, or interfere with, any default proceedings.
[Act 34 of 2012 wef 01/08/2013]
Duty to report on completion of default proceedings
81E.
—(1)  An approved clearing house or a recognised clearing house —
(a)
shall, upon the conclusion of any default proceedings commenced by it, make a report on those proceedings stating, as the case may be, in respect of each defaulter who is a subject of those proceedings —
(i)
the net sum, if any, certified by it to be payable by or to the defaulter; or
(ii)
the fact that no sum is so payable; and
(b)
may include in that report such other particulars in respect of those proceedings as it thinks fit.
(2)  An approved clearing house, or a recognised clearing house, which has made a report under subsection (1) shall supply the report to —
(a)
the Authority;
(b)
any relevant office holder acting in relation to —
(i)
the defaulter to whom the report relates; or
(ii)
the estate of that defaulter; and
(c)
where there is no relevant office holder referred to in paragraph (b), the defaulter to whom the report relates.
(3)  The approved clearing house or recognised clearing house shall publish a notice of the fact that a report has been made under subsection (1) in such manner as it thinks appropriate to bring that fact to the attention of the creditors of the defaulter to whom the report relates.
(4)  Where a relevant office holder or defaulter receives under subsection (2) a report made under subsection (1), he shall, at the request of a creditor of the defaulter to whom the report relates —
(a)
make the report available for inspection by the creditor; and
(b)
on payment of such reasonable fee as the relevant office holder or defaulter, as the case may be, determines, supply to the creditor the whole or any part of that report.
(5)  In subsections (2), (3) and (4), “report” includes a copy of a report.
[Act 34 of 2012 wef 01/08/2013]
Net sum payable on completion of default proceedings
81F.
—(1)  This section shall apply to any net sum certified under section 81E(1)(a)(i) by an approved clearing house or a recognised clearing house, upon the completion by it of any default proceedings, to be payable by or to a defaulter.
(2)  Notwithstanding sections 87 and 88 of the Bankruptcy Act (Cap. 20) and section 327 of the Companies Act (Cap. 50), where, on or after the date of commencement of section 7 of the Securities and Futures (Amendment) Act 2012, a receiving order or winding up order has been made, or a resolution for voluntary winding up has been passed, any net sum as certified under section 81E(1)(a)(i) shall —
(a)
be provable in the bankruptcy or winding up or payable to the relevant office holder, as the case may be; and
(b)
be taken into account, where appropriate, under section 88 of the Bankruptcy Act or section 327 of the Companies Act.
[Act 34 of 2012 wef 01/08/2013]
Disclaimer of onerous property, rescission of contracts, etc.
81G.
—(1)  Section 110 of the Bankruptcy Act (Cap. 20) and section 332 of the Companies Act (Cap. 50) shall not apply to —
(a)
a market contract;
(b)
a contract effected by an approved clearing house, or a recognised clearing house, for the purpose of realising property provided as market collateral;
(c)
a market charge; or
(d)
any default proceedings.
(2)  Section 77 of the Bankruptcy Act and sections 259 and 299(1) of the Companies Act shall not apply to any act, matter or thing which has been done under —
(a)
a market contract;
(b)
a disposition of property pursuant to a market contract;
(c)
the provision of market collateral;
(d)
a contract effected by an approved clearing house, or a recognised clearing house, for the purpose of realising property provided as market collateral, or any disposition of property pursuant to such a contract;
(e)
a disposition of property in accordance with the business rules of an approved clearing house, or a recognised clearing house, relating to the application of property provided as market collateral;
(f)
a disposition of property as a result of which the property becomes subject to a market charge, or any transaction pursuant to which that disposition is made;
(g)
a disposition of property for the purpose of enforcing a market charge;
(h)
a market charge; or
(i)
any default proceedings.
[Act 34 of 2012 wef 01/08/2013]
Adjustment of prior transactions
81H.
—(1)  No order shall be made, on or after the date of commencement of section 7 of the Securities and Futures (Amendment) Act 2012, in relation to any matter to which this section applies, by a court under any of the following provisions in any proceedings, whether instituted before, on or after the date of commencement of section 7 of the Securities and Futures (Amendment) Act 2012:
(a)
section 98 or 99 of the Bankruptcy Act (Cap. 20);
(b)
section 227T, 329 or 331 of the Companies Act (Cap. 50);
(c)
section 73B of the Conveyancing and Law of Property Act (Cap. 61).
(2)  The matters to which this section applies are as follows:
(a)
a market contract;
(b)
a disposition of property pursuant to a market contract;
(c)
the provision of market collateral;
(d)
a contract effected by an approved clearing house, or a recognised clearing house, for the purpose of realising property provided as market collateral;
(e)
a disposition of property in accordance with the business rules of an approved clearing house, or a recognised clearing house, relating to the application of property provided as market collateral;
(f)
a disposition of property as a result of which the property becomes subject to a market charge, or any transaction pursuant to which that disposition is made;
(g)
a disposition of property for the purpose of enforcing a market charge;
(h)
a market charge;
(i)
any default proceedings.
[Act 34 of 2012 wef 01/08/2013]
Right of relevant office holder to recover certain amounts arising from certain transactions
81I.
—(1)  Where a participant (referred to in this section as the first participant) sells securities at an over-value to, or purchases securities at an under-value from, another participant (referred to in this section as the second participant) in the circumstances referred to in subsection (3), and thereafter a relevant office holder acts for —
(a)
the second participant;
(b)
the principal of the second participant in the sale or purchase; or
(c)
the estate of the second participant or person referred to in paragraph (b),
then, unless a court otherwise orders, the relevant office holder may recover from the first participant, or the principal of the first participant, an amount equal to the specified gain obtained under the sale or purchase by the first participant, or the principal of the first participant.
(2)  The amount equal to the specified gain is recoverable even if the sale or purchase may have been discharged according to the business rules of an approved clearing house, or a recognised clearing house, and replaced by a market contract.
(3)  The circumstances referred to in subsection (1) are that —
(a)
a specified event has occurred in relation to the second participant, or the principal of the second participant, within the period of 6 months immediately following the date on which the sale or purchase was entered into; and
(b)
at the time the sale or purchase was entered into, the first participant, or the principal of the first participant, knew, or ought reasonably to have known, that a specified event was likely to occur in relation to the second participant, or the principal of the second participant.
(4)  In this section —
“specified event”, in relation to the second participant or a person who is or was, in respect of a sale or purchase referred to in subsection (1), the principal of the second participant, means —
(a)
the making of a bankruptcy order against the second participant or that person, as the case may be;
(b)
the making of a statutory declaration in respect of the second participant or that person, as the case may be, under section 291(1) of the Companies Act (Cap. 50);
(c)
the summoning of a meeting of creditors in relation to the second participant or that person, as the case may be, under section 296 of the Companies Act;
(d)
the making of an application for the winding up of the second participant or that person, as the case may be, before a court; or
(e)
the making of a judicial management order by a court under Part VIIIA of the Companies Act in respect of the second participant or that person, as the case may be;
“specified gain”, in relation to a sale or purchase referred to in subsection (1), means the difference, as at the time the sale or purchase was entered into, between —
(a)
the market value of the securities which are the subject of the sale or purchase; and
(b)
the value of the consideration for the sale or purchase.
[Act 34 of 2012 wef 01/08/2013]
Application of market collateral not affected by certain other interest, etc.
81J.
—(1)  This section shall have effect with respect to the application by an approved clearing house, or a recognised clearing house, of property provided as market collateral (referred to in this section as the property).
(2)  The property may be applied in accordance with the business rules or default rules of the approved clearing house or recognised clearing house, so far as it is necessary for it to be so applied, notwithstanding —
(a)
any prior equitable interest or right, or any right or remedy arising from a breach of fiduciary duty, unless the approved clearing house or recognised clearing house had actual notice of the interest, right or breach of duty (other than any interest or right arising from the situation referred to in paragraph (b)), as the case may be, at the time the property was provided as market collateral; or
(b)
that the property is deposited by the approved clearing house or recognised clearing house in a trust account held for the benefit of a participant.
(3)  No right or remedy arising subsequent to the provision of the property as market collateral may be enforced to prevent, or interfere with, the application of the property by the approved clearing house or recognised clearing house in accordance with its business rules or default rules.
(4)  Where an approved clearing house, or a recognised clearing house, has power under this section to apply the property notwithstanding an interest, a right or a remedy, a person to whom the approved clearing house or recognised clearing house disposes of the property in accordance with its business rules or default rules shall take free from that interest, right or remedy.
[Act 34 of 2012 wef 01/08/2013]
Enforcement of judgments over property subject to market charge, etc.
81K.
—(1)  Where, whether before, on or after the date of commencement of section 7 of the Securities and Futures (Amendment) Act 2012, any property is subject to a market charge or has been provided as market collateral, no execution or other legal process for the enforcement of any judgment or order may be commenced or continued, and no distress may be levied, against the property by a person not seeking to enforce any interest in, or security over, the property, except with the consent of the approved clearing house or recognised clearing house in favour of which the market charge was granted.
(2)  Where by virtue of this section a person would not be entitled to enforce a judgment or an order against any property, any injunction or other remedy granted by any court with a view to facilitating the enforcement of any such judgment or order shall not extend to that property.
[Act 34 of 2012 wef 01/08/2013]
Law of insolvency in other jurisdictions
81L.
—(1)  Notwithstanding any other written law or rule of law, a court shall not recognise or give effect to —
(a)
an order of a court exercising jurisdiction under the law of insolvency in any place outside Singapore; or
(b)
an act of a person appointed in any place outside Singapore to perform a function under the law of insolvency in that place,
insofar as the making of the order by a court in Singapore, or the doing of the act by a relevant office holder, would be prohibited under this Act.
(2)  In this section, “law of insolvency”, in relation to a place outside Singapore, means any law of that place which is similar to, or serves the same purposes as, any part of the law of insolvency in Singapore.
[Act 34 of 2012 wef 01/08/2013]
Participant to be party to certain transactions as principal
81M.
—(1)  Where —
(a)
a participant, in his capacity as such, enters into any transaction (including a market contract) with an approved clearing house or a recognised clearing house; and
(b)
but for this subsection or any provision in the business rules or default rules of the approved clearing house or recognised clearing house, the participant would be a party to that transaction as agent,
then, notwithstanding any other written law or rule of law, as between, and only as between, the approved clearing house or recognised clearing house and the participant or the person who is his principal in respect of that transaction, the participant shall, for all purposes (including any action, claim or demand, whether civil or criminal), be deemed to be a party to that transaction as principal, and not as agent.
(2)  Where —
(a)
2 or more participants, in their capacities as such, enter into any transaction; and
(b)
but for this subsection, any of the participants would be a party to that transaction as agent,
then, notwithstanding any other written law or rule of law, except as between, and only as between, a participant to whom paragraph (b) applies and the person who is his principal in respect of that transaction, the participant shall, for all purposes (including any action, claim or demand, whether civil or criminal), be deemed to be a party to that transaction as principal, and not as agent.
[Act 34 of 2012 wef 01/08/2013]
Preservation of rights, etc.
81N.  Except to the extent that it expressly provides, this Division shall not operate to limit, restrict or otherwise affect —
(a)
any right, title, interest, privilege, obligation or liability of a person; or
(b)
any investigation, legal proceedings or remedy in respect of any such right, title, interest, privilege, obligation or liability.
[Act 34 of 2012 wef 01/08/2013]
Immunity from criminal or civil liability
81O.
—(1)  No criminal or civil liability shall be incurred by —
(a)
a person discharging, by virtue of a delegation under the default rules of an approved clearing house or a recognised clearing house, an obligation of the approved clearing house or recognised clearing house in connection with any default proceedings; or
(b)
any person acting on behalf of a person referred to in paragraph (a), including —
(i)
any member of the board of directors of the person referred to in paragraph (a); and
(ii)
any member of any committee established by the person referred to in paragraph (a),
for any thing done (including any statement made) or omitted to be done with reasonable care and in good faith in the course of, or in connection with, the discharge or purported discharge of that obligation.
(2)  Where a relevant office holder takes action in relation to any property of a defaulter which is liable to be dealt with in accordance with the default rules of an approved clearing house or a recognised clearing house, and the relevant office holder reasonably believes or has reasonable grounds for believing that he is entitled to take that action, the relevant office holder shall not be liable to any person in respect of any loss or damage resulting from any action of the relevant office holder, except insofar as the loss or damage, as the case may be, is caused by the negligence of the relevant office holder.
[Act 34 of 2012 wef 01/08/2013]
Division 5 — General Powers of Authority
Power of Authority to remove officers
81P.
—(1)  Where the Authority is satisfied that any of the following applies to an officer of an approved clearing house or a recognised clearing house (such approved clearing house or recognised clearing house being a Singapore corporation), the Authority may, if it thinks it necessary in the interests of the public or a section of the public or for the protection of investors, by notice in writing direct the approved clearing house or recognised clearing house to remove the officer from his office or employment, and the approved clearing house or recognised clearing house shall comply with such notice, notwithstanding the provisions of section 152 of the Companies Act (Cap. 50) or anything in any other law or in the memorandum or articles of association or other constituent document or documents of the approved clearing house or recognised clearing house:
(a)
the officer has wilfully contravened, or wilfully caused the approved clearing house or recognised clearing house to contravene, this Act or the business rules of the approved clearing house or recognised clearing house;
(b)
the officer has, without reasonable excuse, failed to ensure compliance with this Act, or with the business rules of the approved clearing house or recognised clearing house, by the approved clearing house or recognised clearing house, by a member of the approved clearing house or recognised clearing house or by a person associated with that member;
(c)
the officer has failed to discharge the duties or functions of his office or employment;
(d)
the officer is an undischarged bankrupt, whether in Singapore or elsewhere;
(e)
the officer has had execution against him in respect of a judgment debt returned unsatisfied in whole or in part;
(f)
the officer has, whether in Singapore or elsewhere, made a compromise or scheme of arrangement with his creditors, being a compromise or scheme of arrangement that is still in operation;
(g)
the officer has been convicted, whether in Singapore or elsewhere, of an offence committed before, on or after the date of commencement of section 7 of the Securities and Futures (Amendment) Act 2012, involving fraud or dishonesty or the conviction for which involved a finding that he had acted fraudulently or dishonestly.
(2)  Without prejudice to any other matter that the Authority may consider relevant, the Authority may, in determining whether an officer of an approved clearing house, or a recognised clearing house, has failed to discharge the duties or functions of his office or employment for the purposes of subsection (1)(c), have regard to such criteria as the Authority may prescribe or specify in directions issued by notice in writing.
(3)  Subject to subsection (4), the Authority shall not direct an approved clearing house, or a recognised clearing house, to remove an officer from his office or employment without giving the approved clearing house or recognised clearing house an opportunity to be heard.
(4)  The Authority may direct an approved clearing house, or a recognised clearing house, to remove an officer from his office or employment under subsection (1) on any of the following grounds without giving the approved clearing house or recognised clearing house an opportunity to be heard:
(a)
the officer is an undischarged bankrupt, whether in Singapore or elsewhere;
(b)
the officer has been convicted, whether in Singapore or elsewhere, of an offence committed before, on or after the date of commencement of section 7 of the Securities and Futures (Amendment) Act 2012 —
(i)
involving fraud or dishonesty or the conviction for which involved a finding that he had acted fraudulently or dishonestly; and
(ii)
punishable with imprisonment for a term of 3 months or more.
(5)  Where the Authority directs an approved clearing house, or a recognised clearing house, to remove an officer from his office or employment under subsection (1), the Authority need not give that officer an opportunity to be heard.
(6)  Any approved clearing house or recognised clearing house that is aggrieved by a direction of the Authority made in relation to the approved clearing house or recognised clearing house under subsection (1) may, within 30 days after the approved clearing house or recognised clearing house is notified of the direction, appeal to the Minister, whose decision shall be final.
(7)  Notwithstanding the lodging of an appeal under subsection (6), any action taken by the Authority under this section shall continue to have effect pending the decision of the Minister.
(8)  The Minister may, when deciding an appeal under subsection (6), make such modification as he considers necessary to any action taken by the Authority under this section, and such modified action shall have effect from the date of the decision of the Minister.
(9)  Subject to subsection (10), no criminal or civil liability shall be incurred by an approved clearing house, or a recognised clearing house, in respect of any thing done or omitted to be done with reasonable care and in good faith in the discharge or purported discharge of its obligations under this section.
(10)  Any approved clearing house or recognised clearing house which, without reasonable excuse, contravenes a written notice issued under subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.
[Act 34 of 2012 wef 01/08/2013]
Power of Authority to make regulations
81Q.
—(1)  Without prejudice to section 341, the Authority may make regulations for the purposes of this Part, including regulations —
(a)
relating to the approval of approved clearing houses and the recognition of recognised clearing houses;
(b)
relating to the requirements applicable to any person who establishes, operates or assists in establishing or operating a clearing facility, whether or not the person is approved as an approved clearing house under section 51(1)(a) or recognised as a recognised clearing house under section 51(1)(b) or (2); and
(c)
for the purposes of section 59 and, in particular —
(i)
requiring an approved clearing house to take into account specified positions for the purposes of determining if any limits established or varied under section 59(1) have been exceeded;
(ii)
requiring an approved clearing house to take specified steps to ensure compliance with those limits; and
(iii)
specifying measures to manage any risks assumed by an approved clearing house.
(2)  Regulations made under this section may provide —
(a)
that a contravention of any specified provision thereof shall be an offence; and
(b)
for a penalty not exceeding a fine of $150,000 or imprisonment for a term not exceeding 12 months or both for each offence and, in the case of a continuing offence, for a further penalty not exceeding a fine of 10% of the maximum fine prescribed for that offence for every day or part thereof during which the offence continues after conviction.
[Act 34 of 2012 wef 01/08/2013]
Power of Authority to issue directions
81R.
—(1)  The Authority may issue directions, whether of a general or specific nature, by notice in writing, to an approved clearing house or a recognised clearing house, if the Authority thinks it necessary or expedient —
(a)
for ensuring the safe and efficient operation of any clearing facility operated by the approved clearing house or recognised clearing house, or of clearing facilities, operated by approved clearing houses or recognised clearing houses, in general;
(b)
for ensuring the integrity and stability of the capital markets or the financial system;
(c)
in the interests of the public or a section of the public or for the protection of investors;
(d)
for the effective administration of this Act; or
(e)
for ensuring compliance with any condition or restriction as may be imposed by the Authority under section 58(2), 70(5) or (10), 71(11) or (12) or 81SB(1) or (2), or such other obligations or requirements under this Act or as may be prescribed by the Authority.
(2)  An approved clearing house or a recognised clearing house shall comply with every direction issued to it under subsection (1).
(3)  Any approved clearing house or recognised clearing house which, without reasonable excuse, contravenes a direction issued to it under subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.
(4)  It shall not be necessary to publish any direction issued under subsection (1) in the Gazette.
[Act 34 of 2012 wef 01/08/2013]
Emergency powers of Authority
81S.
—(1)  Where the Authority has reason to believe that an emergency exists, or thinks that it is necessary or expedient in the interests of the public or a section of the public or for the protection of investors, the Authority may direct by notice in writing an approved clearing house or a recognised clearing house to take such action as the Authority considers necessary to maintain or restore the safe and efficient operation of the clearing facilities operated by the approved clearing house or recognised clearing house.
(2)  Without prejudice to subsection (1), the actions which the Authority may direct an approved clearing house or a recognised clearing house to take include —
(a)
ordering the liquidation of all positions or any part thereof, or the reduction of such positions;
(b)
altering the conditions of delivery of transactions cleared or settled, or to be cleared or settled, through the clearing facility;
(c)
fixing the settlement price at which transactions are to be liquidated;
(d)
requiring margins or additional margins for transactions cleared or settled, or to be cleared or settled, through the clearing facility; and
(e)
modifying or suspending any of the business rules of the approved clearing house or recognised clearing house.
(3)  Where an approved clearing house or a recognised clearing house fails to comply with any direction of the Authority under subsection (1) within such time as is specified by the Authority, the Authority may —
(a)
set margin levels for transactions cleared or settled, or to be cleared or settled, through the clearing facility to cater for the emergency;
(b)
set limits that may apply to positions acquired in good faith prior to the date of the notice issued by the Authority; or
(c)
take such other action as the Authority thinks fit to maintain or restore the safe and efficient operation of the clearing facilities operated by the approved clearing house or recognised clearing house.
(4)  In this section, “emergency” means any threatened or actual market manipulation or cornering, and includes —
(a)
any act of any government affecting any commodity or securities;
(b)
any major market disturbance which prevents a market from accurately reflecting the forces of supply and demand for any commodity or securities; or
(c)
any undesirable situation or practice which, in the opinion of the Authority, constitutes an emergency.
(5)  The Authority may modify any action taken by an approved clearing house or a recognised clearing house under subsection (1), including the setting aside of that action.
(6)  Any person who is aggrieved by any action taken by the Authority, or by an approved clearing house or a recognised clearing house, under this section may, within 30 days after the person is notified of the action, appeal to the Minister, whose decision shall be final.
(7)  Notwithstanding the lodging of an appeal under subsection (6), any action taken by the Authority, or by an approved clearing house or recognised clearing house, under this section shall continue to have effect pending the decision of the Minister.
(8)  The Minister may, when deciding an appeal under subsection (6), make such modification as he considers necessary to any action taken by the Authority, or by an approved clearing house or a recognised clearing house, under this section, and any such modified action shall have effect from the date of the decision of the Minister.
(9)  Any approved clearing house or recognised clearing house which fails to comply with a direction issued under subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.
[Act 34 of 2012 wef 01/08/2013]
Interpretation of sections 81SA to 81SAE
81SA.  In this section and sections 81SAA to 81SAE, unless the context otherwise requires —
“business” includes affairs and property;
“office holder”, in relation to an approved clearing house or a recognised clearing house, means any person acting as the liquidator, the provisional liquidator, the receiver or the receiver and manager of the approved clearing house or recognised clearing house (as the case may be), or acting in an equivalent capacity in relation to the approved clearing house or recognised clearing house (as the case may be);
“relevant business” means any business of an approved clearing house or a recognised clearing house —
(a)
which the Authority has assumed control of under section 81SAA; or
(b)
in relation to which a statutory adviser or a statutory manager has been appointed under section 81SAA;
“statutory adviser” means a statutory adviser appointed under section 81SAA;
“statutory manager” means a statutory manager appointed under section 81SAA.
[Act 10 of 2013 wef 02/08/2013]
Action by Authority if approved clearing house or recognised clearing house unable to meet obligations, etc.
81SAA.
—(1)  The Authority may exercise any one or more of the powers specified in subsection (2) as appears to it to be necessary, where —
(a)
an approved clearing house or a recognised clearing house informs the Authority that it is or is likely to become insolvent, or that it is or is likely to become unable to meet its obligations, or that it has suspended or is about to suspend payments;
(b)
an approved clearing house or a recognised clearing house becomes unable to meet its obligations, or is insolvent, or suspends payments;
(c)
the Authority is of the opinion that an approved clearing house or a recognised clearing house —
(i)
is carrying on its business in a manner likely to be detrimental to the interests of the public or a section of the public or the protection of investors, or to the objectives specified in section 47;
(ii)
is or is likely to become insolvent, or is or is likely to become unable to meet its obligations, or is about to suspend payments;
(iii)
has contravened any of the provisions of this Act; or
(iv)
has failed to comply with any condition or restriction imposed on it under section 51(4) or (5); or
(d)
the Authority considers it in the public interest to do so.
(2)  Subject to subsections (1) and (3), the Authority may —
(a)
require the approved clearing house or recognised clearing house (as the case may be) immediately to take any action or to do or not to do any act or thing whatsoever in relation to its business as the Authority may consider necessary;
(b)
appoint one or more persons as statutory adviser, on such terms and conditions as the Authority may specify, to advise the approved clearing house or recognised clearing house (as the case may be) on the proper management of such of the business of the approved clearing house or recognised clearing house (as the case may be) as the Authority may determine; or
(c)
assume control of and manage such of the business of the approved clearing house or recognised clearing house (as the case may be) as the Authority may determine, or appoint one or more persons as statutory manager to do so on such terms and conditions as the Authority may specify.
(3)  In the case of a recognised clearing house which is incorporated outside Singapore, any appointment of a statutory adviser or statutory manager or any assumption of control by the Authority of any business of the recognised clearing house under subsection (2) shall only be in relation to —
(a)
the business or affairs of the recognised clearing house carried on in, or managed in or from, Singapore; or
(b)
the property of the recognised clearing house located in Singapore, or reflected in the books of the recognised clearing house in Singapore, as the case may be, in relation to its operations in Singapore.
(4)  Where the Authority appoints 2 or more persons as the statutory manager of an approved clearing house or a recognised clearing house, the Authority shall specify, in the terms and conditions of the appointment, which of the duties, functions and powers of the statutory manager —
(a)
may be discharged or exercised by such persons jointly and severally;
(b)
shall be discharged or exercised by such persons jointly; and
(c)
shall be discharged or exercised by a specified person or such persons.
(5)  Where the Authority has exercised any power under subsection (2), it may, at any time and without prejudice to its power under section 56(1)(da), do one or more of the following:
(a)
vary or revoke any requirement of, any appointment made by or any action taken by the Authority in the exercise of such power, on such terms and conditions as it may specify;
(b)
further exercise any of the powers under subsection (2);
(c)
add to, vary or revoke any term or condition specified by the Authority under this section.
(6)  No liability shall be incurred by a statutory manager or a statutory adviser for anything done (including any statement made) or omitted to be done with reasonable care and in good faith in the course of or in connection with —
(a)
the exercise or purported exercise of any power under this Act;
(b)
the performance or purported performance of any function or duty under this Act; or
(c)
the compliance or purported compliance with this Act.
(7)  Any approved clearing house or recognised clearing house that fails to comply with a requirement imposed by the Authority under subsection (2)(a) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.
[Act 10 of 2013 wef 02/08/2013]
Effect of assumption of control under section 81SAA
81SAB.
—(1)  Upon assuming control of the relevant business of an approved clearing house or a recognised clearing house, the Authority or statutory manager, as the case may be, shall take custody or control of the relevant business.
(2)  During the period when the Authority or statutory manager is in control of the relevant business of an approved clearing house or a recognised clearing house, the Authority or statutory manager —
(a)
shall manage the relevant business of the approved clearing house or recognised clearing house (as the case may be) in the name of and on behalf of the approved clearing house or recognised clearing house (as the case may be); and
(b)
shall be deemed to be an agent of the approved clearing house or recognised clearing house (as the case may be).
(3)  In managing the relevant business of an approved clearing house or a recognised clearing house, the Authority or statutory manager —
(a)
shall take into consideration the interests of the public or the section of the public referred to in section 81SAA(1)(c)(i), and the need to protect investors; and
(b)
shall have all the duties, powers and functions of the members of the board of directors of the approved clearing house or recognised clearing house (as the case may be) (collectively and individually) under this Act, the Companies Act (Cap. 50) and the constitution of the approved clearing house or recognised clearing house (as the case may be), including powers of delegation, in relation to the relevant business of the approved clearing house or recognised clearing house (as the case may be); but nothing in this paragraph shall require the Authority or statutory manager to call any meeting of the approved clearing house or recognised clearing house (as the case may be) under the Companies Act or the constitution of the approved clearing house or recognised clearing house (as the case may be).
(4)  Notwithstanding any written law or rule of law, upon the assumption of control of the relevant business of an approved clearing house or a recognised clearing house by the Authority or statutory manager, any appointment of a person as the chief executive officer or a director of the approved clearing house or recognised clearing house (as the case may be), which was in force immediately before the assumption of control, shall be deemed to be revoked, unless the Authority gives its approval, by notice in writing to the person and the approved clearing house or recognised clearing house (as the case may be), for the person to remain in the appointment.
(5)  Notwithstanding any written law or rule of law, during the period when the Authority or statutory manager is in control of the relevant business of an approved clearing house or a recognised clearing house, except with the approval of the Authority, no person shall be appointed as the chief executive officer or a director of the approved clearing house or recognised clearing house (as the case may be).
(6)  Where the Authority has given its approval under subsection (4) or (5) to a person to remain in the appointment of, or to be appointed as, the chief executive officer or a director of an approved clearing house or a recognised clearing house, the Authority may at any time, by notice in writing to the person and the approved clearing house or recognised clearing house (as the case may be), revoke that approval, and the appointment shall be deemed to be revoked on the date specified in the notice.
(7)  Notwithstanding any written law or rule of law, if any person, whose appointment as the chief executive officer or a director of an approved clearing house or a recognised clearing house is revoked under subsection (4) or (6), acts or purports to act after the revocation as the chief executive officer or a director of the approved clearing house or recognised clearing house (as the case may be) during the period when the Authority or statutory manager is in control of the relevant business of the approved clearing house or recognised clearing house (as the case may be) —
(a)
the act or purported act of the person shall be invalid and of no effect; and
(b)
the person shall be guilty of an offence.
(8)  Notwithstanding any written law or rule of law, if any person who is appointed as the chief executive officer or a director of an approved clearing house or a recognised clearing house in contravention of subsection (5) acts or purports to act as the chief executive officer or a director of the approved clearing house or recognised clearing house (as the case may be) during the period when the Authority or statutory manager is in control of the relevant business of the approved clearing house or recognised clearing house (as the case may be) —
(a)
the act or purported act of the person shall be invalid and of no effect; and
(b)
the person shall be guilty of an offence.
(9)  During the period when the Authority or statutory manager is in control of the relevant business of an approved clearing house or a recognised clearing house —
(a)
if there is any conflict or inconsistency between —
(i)
a direction or decision given by the Authority or statutory manager (including a direction or decision to a person or body of persons referred to in sub-paragraph (ii)); and
(ii)
a direction or decision given by any chief executive officer, director, member, executive officer, employee, agent or office holder, or the board of directors, of the approved clearing house or recognised clearing house (as the case may be),
the direction or decision referred to in sub-paragraph (i) shall, to the extent of the conflict or inconsistency, prevail over the direction or decision referred to in sub-paragraph (ii); and
(b)
no person shall exercise any voting or other right attached to any share in the approved clearing house or recognised clearing house (as the case may be) in any manner that may defeat or interfere with any duty, function or power of the Authority or statutory manager, and any such act or purported act shall be invalid and of no effect.
(10)  Any person who is guilty of an offence under subsection (7) or (8) shall be liable on conviction to a fine not exceeding $15,000 or to imprisonment for a term not exceeding 3 years or to both and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.
(11)  In this section, “constitution”, in relation to an approved clearing house or a recognised clearing house, means the memorandum of association and articles of association of the approved clearing house or recognised clearing house (as the case may be).
[Act 10 of 2013 wef 02/08/2013]
Duration of control
81SAC.
—(1)  The Authority shall cease to be in control of the relevant business of an approved clearing house or a recognised clearing house when the Authority is satisfied that —
(a)
the reasons for the Authority’s assumption of control of the relevant business have ceased to exist; or
(b)
it is no longer necessary in the interests of the public or the section of the public referred to in section 81SAA(1)(c)(i) or for the protection of investors.
(2)  A statutory manager shall be deemed to have assumed control of the relevant business of an approved clearing house or a recognised clearing house on the date of his appointment as a statutory manager.
(3)  The appointment of a statutory manager in relation to the relevant business of an approved clearing house or a recognised clearing house may be revoked by the Authority at any time —
(a)
if the Authority is satisfied that —
(i)
the reasons for the appointment have ceased to exist; or
(ii)
it is no longer necessary in the interests of the public or the section of the public referred to in section 81SAA(1)(c)(i) or for the protection of investors; or
(b)
on any other ground,
and upon such revocation, the statutory manager shall cease to be in control of the relevant business of the approved clearing house or recognised clearing house (as the case may be).
(4)  The Authority shall, as soon as practicable, publish in the Gazette the date, and such other particulars as the Authority thinks fit, of —
(a)
the Authority’s assumption of control of the relevant business of an approved clearing house or a recognised clearing house;
(b)
the cessation of the Authority’s control of the relevant business of an approved clearing house or a recognised clearing house;
(c)
the appointment of a statutory manager in relation to the relevant business of an approved clearing house or a recognised clearing house; and
(d)
the revocation of a statutory manager’s appointment in relation to the relevant business of an approved clearing house or a recognised clearing house.
[Act 10 of 2013 wef 02/08/2013]
Responsibilities of officers, member, etc., of approved clearing house or recognised clearing house
81SAD.
—(1)  During the period when the Authority or statutory manager is in control of the relevant business of an approved clearing house or a recognised clearing house —
(a)
the High Court may, on an application by the Authority or statutory manager, direct any person who has ceased to be or who is still any chief executive officer, director, member, executive officer, employee, agent, banker, auditor or office holder of, or trustee for, the approved clearing house or recognised clearing house (as the case may be) to pay, deliver, convey, surrender or transfer to the Authority or statutory manager, within such period as the High Court may specify, any property or book of the approved clearing house or recognised clearing house (as the case may be) which is comprised in, forms part of or relates to the relevant business of the approved clearing house or recognised clearing house (as the case may be), and which is in the person’s possession or control; and
(b)
any person who has ceased to be or who is still any chief executive officer, director, member, executive officer, employee, agent, banker, auditor or office holder of, or trustee for, the approved clearing house or recognised clearing house (as the case may be) shall give to the Authority or statutory manager such information as the Authority or statutory manager may require for the discharge of the Authority’s or statutory manager’s duties or functions, or the exercise of the Authority’s or statutory manager’s powers, in relation to the approved clearing house or recognised clearing house (as the case may be), within such time and in such manner as may be specified by the Authority or statutory manager.
(2)  Any person who —
(a)
without reasonable excuse, fails to comply with subsection (1)(b); or
(b)
in purported compliance with subsection (1)(b), knowingly or recklessly furnishes any information or document that is false or misleading in a material particular,
shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000 or to imprisonment for a term not exceeding 3 years or to both and, in the case of a continuing offence, to a further fine not exceeding $5,000 for every day or part thereof during which the offence continues after conviction.
[Act 10 of 2013 wef 02/08/2013]
Remuneration and expenses of Authority and others in certain cases
81SAE.
—(1)  The Authority may at any time fix the remuneration and expenses to be paid by an approved clearing house or a recognised clearing house —
(a)
to a statutory manager or statutory adviser appointed in relation to the approved clearing house or recognised clearing house (as the case may be), whether or not the appointment has been revoked; and
(b)
where the Authority has assumed control of the relevant business of the approved clearing house or recognised clearing house (as the case may be), to the Authority and any person appointed by the Authority under section 320 in relation to the Authority’s assumption of control of the relevant business, whether or not the Authority has ceased to be in control of the relevant business.
(2)  The approved clearing house or recognised clearing house (as the case may be) shall reimburse the Authority any remuneration and expenses payable by the approved clearing house or recognised clearing house (as the case may be) to a statutory manager or statutory adviser.
[Act 10 of 2013 wef 02/08/2013]
Power of Authority to exempt approved clearing house or recognised clearing house from provisions of this Part
81SB.
—(1)  Without prejudice to section 337(1), the Authority may, by regulations made under section 81Q, exempt any approved clearing house, recognised clearing house, or class of approved clearing houses or recognised clearing houses from any provision of this Part, subject to such conditions or restrictions as the Authority may prescribe in those regulations.
(2)  Without prejudice to section 337(3) and (4), the Authority may, by notice in writing, exempt any approved clearing house or recognised clearing house from any provision of this Part, subject to such conditions or restrictions as the Authority may specify by notice in writing, if the Authority is satisfied that the non-compliance by that approved clearing house or recognised clearing house with that provision will not detract from the objectives specified in section 47.
(3)  It shall not be necessary to publish any exemption granted under subsection (2) in the Gazette.
[Act 34 of 2012 wef 01/08/2013]
Division 6 — Voluntary Transfer of Business of
Approved Clearing House or Recognised
Clearing House
Interpretation of this Division
81SC.  In this Division, unless the context otherwise requires —
“business” includes affairs, property, right, obligation and liability;
“Court” means the High Court or a Judge thereof;
“debenture” has the same meaning as in section 4(1) of the Companies Act (Cap. 50);
“property” includes property, right and power of every description;
“Registrar of Companies” means the Registrar of Companies appointed under the Companies Act and includes any Deputy or Assistant Registrar of Companies appointed under that Act;
“transferee” means an approved clearing house or a recognised clearing house, or a corporation which has applied or will be applying for approval or recognition to carry on in Singapore the usual business of an approved clearing house or a recognised clearing house, to which the whole or any part of a transferor’s business is, is to be or is proposed to be transferred under this Division;
“transferor” means an approved clearing house or a recognised clearing house the whole or any part of the business of which is, is to be, or is proposed to be transferred under this Division.
[Act 10 of 2013 wef 02/08/2013]
Voluntary transfer of business
81SD.
—(1)  A transferor may transfer the whole or any part of its business (including any business that is not the usual business of an approved clearing house or a recognised clearing house) to a transferee, if —
(a)
the Authority has consented to the transfer;
(b)
the transfer involves the whole or any part of the business of the transferor that is the usual business of an approved clearing house or a recognised clearing house; and
(c)
the Court has approved the transfer.
(2)  Subsection (1) is without prejudice to the right of an approved clearing house or a recognised clearing house to transfer the whole or any part of its business under any law.
(3)  The Authority may consent to a transfer under subsection (1)(a) if the Authority is satisfied that —
(a)
the transferee is a fit and proper person; and
(b)
the transferee will conduct the business of the transferor prudently and comply with the provisions of this Act.
(4)  The Authority may at any time appoint one or more persons to perform an independent assessment of, and furnish a report on, the proposed transfer of a transferor’s business (or any part thereof) under this Division.
(5)  The remuneration and expenses of any person appointed under subsection (4) shall be paid by the transferor and the transferee jointly and severally.
(6)  The Authority shall serve a copy of any report furnished under subsection (4) on the transferor and the transferee.
(7)  The Authority may require a person to furnish, within the period and in the manner specified by the Authority, any information or document that the Authority may reasonably require for the discharge of its duties or functions, or the exercise of its powers, under this Division.
(8)  Any person who —
(a)
without reasonable excuse, fails to comply with any requirement under subsection (7); or
(b)
in purported compliance with any requirement under subsection (7), knowingly or recklessly furnishes any information or document that is false or misleading in a material particular,
shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $200,000 or to imprisonment for a term not exceeding 3 years or to both and, in the case of a continuing offence, to a further fine not exceeding $20,000 for every day or part thereof during which the offence continues after conviction.
(9)  Where a person claims, before furnishing the Authority with any information or document that he is required to furnish under subsection (7), that the information or document might tend to incriminate him, the information or document shall not be admissible in evidence against him in criminal proceedings other than proceedings under subsection (8).
[Act 10 of 2013 wef 02/08/2013]
Approval of transfer
81SE.
—(1)  A transferor shall apply to the Court for its approval of the transfer of the whole or any part of the business of the transferor to the transferee under this Division.
(2)  Before making an application under subsection (1) —
(a)
the transferor shall lodge with the Authority a report setting out such details of the transfer and furnish such supporting documents as the Authority may specify;
(b)
the transferor shall obtain the consent of the Authority under section 81SD(1)(a);
(c)
the transferor and the transferee shall, if they intend to serve on their respective participants a summary of the transfer, obtain the Authority’s approval of the summary;
(d)
the transferor shall, at least 15 days before the application is made but not earlier than one month after the report referred to in paragraph (a) is lodged with the Authority, publish in the Gazette and in such newspaper or newspapers as the Authority may determine a notice of the transferor’s intention to make the application and containing such other particulars as may be prescribed;
(e)
the transferor and the transferee shall keep at their respective offices in Singapore, for inspection by any person who may be affected by the transfer, a copy of the report referred to in paragraph (a) for a period of 15 days after the publication of the notice referred to in paragraph (d) in the Gazette; and
(f)
unless the Court directs otherwise, the transferor and the transferee shall serve on their respective participants affected by the transfer, at least 15 days before the application is made, a copy of the report referred to in paragraph (a) or a summary of the transfer approved by the Authority under paragraph (c).
(3)  The Authority and any person who, in the opinion of the Court, is likely to be affected by the transfer —
(a)
shall have the right to appear before and be heard by the Court in any proceedings relating to the transfer; and
(b)
may make any application to the Court in relation to the transfer.
(4)  The Court shall not approve the transfer if the Authority has not consented under section 81SD(1)(a) to the transfer.
(5)  The Court may, after taking into consideration the views, if any, of the Authority on the transfer —
(a)
approve the transfer without modification or subject to any modification agreed to by the transferor and the transferee; or
(b)
refuse to approve the transfer.
(6)  If the transferee is not approved as an approved clearing house or recognised as a recognised clearing house by the Authority, the Court may approve the transfer on terms that the transfer shall take effect only in the event of the transferee being approved as an approved clearing house or recognised as a recognised clearing house by the Authority.
(7)  The Court may by the order approving the transfer or by any subsequent order provide for all or any of the following matters:
(a)
the transfer to the transferee of the whole or any part of the business of the transferor;
(b)
the allotment or appropriation by the transferee of any share, debenture, policy or other interest in the transferee which under the transfer is to be allotted or appropriated by the transferee to or for any person;
(c)
the continuation by (or against) the transferee of any legal proceedings pending by (or against) the transferor;
(d)
the dissolution, without winding up, of the transferor;
(e)
the provisions to be made for persons who are affected by the transfer;
(f)
such incidental, consequential and supplementary matters as are, in the opinion of the Court, necessary to secure that the transfer is fully effective.
(8)  Any order under subsection (7) may —
(a)
provide for the transfer of any business, whether or not the transferor otherwise has the capacity to effect the transfer in question;
(b)
make provision in relation to any property which is held by the transferor as trustee; and
(c)
make provision as to any future or contingent right or liability of the transferor, including provision as to the construction of any instrument under which any such right or liability may arise.
(9)  Subject to subsection (10), where an order made under subsection (7) provides for the transfer to the transferee of the whole or any part of the transferor’s business, then by virtue of the order the business (or part thereof) of the transferor specified in the order shall be transferred to and vest in the transferee, free in the case of any particular property (if the order so directs) from any charge which by virtue of the transfer is to cease to have effect.
(10)  No order under subsection (7) shall have any effect or operation in transferring or otherwise vesting land in Singapore until the appropriate entries are made with respect to the transfer or vesting of that land by the appropriate authority.
(11)  If any business specified in an order under subsection (7) is governed by the law of any foreign country or territory, the Court may order the transferor to take all necessary steps for securing that the transfer of the business to the transferee is fully effective under the law of that country or territory.
(12)  Where an order is made under this section, the transferor and the transferee shall each lodge within 7 days after the order is made —
(a)
a copy of the order with the Registrar of Companies and with the Authority; and
(b)
where the order relates to land in Singapore, an office copy of the order with the appropriate authority concerned with the registration or recording of dealings in that land.
(13)  A transferor or transferee which contravenes subsection (12), and every officer of the transferor or transferee (as the case may be) who fails to take all reasonable steps to secure compliance by the transferor or transferee (as the case may be) with that subsection, shall each be guilty of an offence and shall each be liable on conviction to a fine not exceeding $2,000 and, in the case of a continuing offence, to a further fine not exceeding $200 for every day or part thereof during which the offence continues after conviction.
[Act 10 of 2013 wef 02/08/2013]
PART IIIA
APPROVED HOLDING COMPANIES
Objectives of this Part
81T.  The objectives of this Part are —
(a)
to provide a regulatory framework for the establishment and operation of holding companies of —
(i)
approved exchanges;
(ia)
licensed trade repositories;
[Act 34 of 2012 wef 01/08/2013]
(ii)
approved clearing houses; and
[Act 34 of 2012 wef 01/08/2013]
(iii)
corporations that are approved holding companies,
and to ensure that such holding companies are fit and proper to perform their functions; and
(b)
to reduce systemic risk.
[1/2005]
Division 1 — Establishment of Approved Holding Companies
Requirement for approval
81U.
—(1)  No corporation shall be the holding company of any approved exchange, licensed trade repository, approved clearing house or corporation which is an approved holding company, unless the first-mentioned corporation is an approved holding company.
[1/2005]
[Act 34 of 2012 wef 01/08/2013]
(2)  Any corporation which contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $250,000 or to imprisonment for a term not exceeding 3 years or to both and, in the case of a continuing offence, to a further fine not exceeding $25,000 for every day or part thereof during which the offence continues after conviction.
[1/2005]
(3)  Without prejudice to section 337(1), the Authority may, by regulations made under section 81ZK, exempt any corporation or class of corporations from subsection (1), subject to such conditions or restrictions as the Authority may prescribe in those regulations.
[Act 34 of 2012 wef 01/08/2013]
(4)  Without prejudice to section 337(3) and (4), the Authority may, by notice in writing, exempt any corporation from subsection (1), subject to such conditions or restrictions as the Authority may specify by notice in writing, if the Authority is satisfied that the exemption will not detract from the objectives specified in section 81T.
[Act 34 of 2012 wef 01/08/2013]
(5)  It shall not be necessary to publish any exemption granted under subsection (4) in the Gazette.
[Act 34 of 2012 wef 01/08/2013]
(6)  The Authority may, at any time, by notice in writing —
(a)
add to the conditions and restrictions referred to in subsection (4); or
(b)
vary or revoke any condition or restriction referred to in that subsection.
[Act 34 of 2012 wef 01/08/2013]
(7)  Every corporation that is granted an exemption under subsection (3) shall satisfy every condition or restriction imposed on it under that subsection.
[Act 34 of 2012 wef 01/08/2013]
(8)  Every corporation that is granted an exemption under subsection (4) shall satisfy every condition or restriction imposed on it under that subsection or subsection (6).
[Act 34 of 2012 wef 01/08/2013]
(9)  Any corporation which contravenes subsection (7) or (8) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.
[Act 34 of 2012 wef 01/08/2013]
Application for approval
81V.
—(1)  A corporation may apply to the Authority to be approved as an approved holding company.
[1/2005]
(2)  An application made under subsection (1) shall be —
(a)
made in such form and manner as the Authority may prescribe; and
(b)
accompanied by a non-refundable prescribed application fee, which shall be paid in the manner specified by the Authority.
[1/2005]
(3)  The Authority may require an applicant to furnish it with such information or documents as the Authority considers necessary in relation to the application.
[1/2005]
Power of Authority to approve holding companies
81W.
—(1)  Where an application is made under section 81V(1), the Authority may approve the corporation as an approved holding company subject to such conditions or restrictions as the Authority may think fit to impose by notice in writing, if the Authority is satisfied that —
(a)
it would not be contrary to the interests of the public or contrary to the objectives specified in section 81T to approve the corporation; and
(b)
the grounds referred to in subsection (5) for refusing such approval do not apply.
[1/2005]
(2)  The Authority may, at any time, by notice in writing to the corporation, vary any condition or restriction or impose such further conditions or restrictions as the Authority may think fit.
[1/2005]
(3)  An approved holding company shall, for the duration of the approval, satisfy all conditions and restrictions that may be imposed on it under subsections (1) and (2).
[1/2005]
(4)  Subject to subsection (5), the Authority shall not refuse to approve a corporation under subsection (1) without giving the corporation an opportunity to be heard.
[1/2005]
(5)  The Authority may refuse to approve a corporation on any of the following grounds without giving the corporation an opportunity to be heard:
(a)
the corporation is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere;
(b)
a receiver, a receiver and manager or an equivalent person has been appointed, whether in Singapore or elsewhere, in relation to or in respect of any property of the corporation;
(c)
the corporation has been convicted, whether in Singapore or elsewhere, of an offence involving fraud or dishonesty or the conviction for which involved a finding that it had acted fraudulently or dishonestly.
[1/2005]
(6)  The Authority shall give notice in the Gazette of any corporation approved under subsection (1).
[1/2005]
(7)  Any applicant that is aggrieved by the refusal of the Authority to grant an approval under subsection (1) may, within 30 days after the applicant is notified of the decision, appeal to the Minister whose decision shall be final.
[1/2005]
(8)  Any corporation which contravenes subsection (3) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.
[1/2005]
Annual fees payable by approved holding company
81X.
—(1)  Every approved holding company shall pay to the Authority such annual fees as may be prescribed and in such manner as may be specified by the Authority.
[1/2005]
(2)  The Authority may, where it considers appropriate, refund or remit the whole or part of any annual fee paid or payable to it.
[1/2005]
Cancellation of approval
81Y.
—(1)  An approved holding company which intends to cease its activities as an approved holding company may apply to the Authority to cancel its approval.
[1/2005]
(2)  The Authority may cancel the approval if it is satisfied that the approved holding company referred to in subsection (1) has ceased its activities as an approved holding company.
[1/2005]
Power of Authority to revoke approval
81Z.
—(1)  The Authority may revoke any approval of a corporation as an approved holding company under section 81W(1) if —
(a)
the corporation ceases to be the holding company of any approved exchange, licensed trade repository, approved clearing house or corporation which is an approved holding company;
[Act 34 of 2012 wef 01/08/2013]
(b)
the corporation is being wound up or otherwise dissolved, whether in Singapore or elsewhere;
(c)
the corporation contravenes —
(i)
any condition or restriction applicable in respect of its approval;
(ii)
any direction issued to it by the Authority under this Act; or
(iii)
any provision in this Act;
(d)
the corporation operates in a manner that is, in the opinion of the Authority, contrary to the interests of the public;
(da)
upon the Authority exercising any power under section 81ZGC(2) or the Minister exercising any power under Division 2, 3 or 4 of Part IVB of the Monetary Authority of Singapore Act (Cap. 186) in relation to the corporation, the Authority considers that it is in the public interest to revoke the approval;
(e)
a receiver, a receiver and manager or an equivalent person has been appointed, whether in Singapore or elsewhere, in relation to or in respect of any property of the corporation;
(f)
the corporation has been convicted, whether in Singapore or elsewhere, of an offence involving fraud or dishonesty or the conviction for which involved a finding that it had acted fraudulently or dishonestly; or
(g)
any information or document provided by the corporation to the Authority is false or misleading.
[1/2005]
(2)  Subject to subsection (3), the Authority shall not revoke under subsection (1) any approval under section 81W(1) that was granted to a corporation without giving the corporation an opportunity to be heard.
[1/2005]
(3)  The Authority may revoke an approval under section 81W(1) that was granted to a corporation on any of the following circumstances without giving the corporation an opportunity to be heard:
(a)
the corporation is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere;
(b)
a receiver, a receiver and manager or an equivalent person has been appointed, whether in Singapore or elsewhere, in relation to or in respect of any property of the corporation;
(c)
the corporation has been convicted, whether in Singapore or elsewhere, of an offence involving fraud or dishonesty or the conviction for which involved a finding that it had acted fraudulently or dishonestly.
[1/2005]
(4)  Any corporation which is aggrieved by a decision of the Authority made in relation to the corporation under subsection (1) may, within 30 days after the corporation is notified of the decision, appeal to the Minister whose decision shall be final.
[1/2005]
(5)  Notwithstanding the lodging of an appeal under subsection (4), any action taken by the Authority under this section shall continue to have effect pending the decision of the Minister.
[1/2005]
(6)  The Minister may, when deciding an appeal under subsection (4), make such modification as he considers necessary to any action taken by the Authority under this section, and such modified action shall have effect from the date of the decision of the Minister.
[1/2005]
(7)  The Authority shall give notice in the Gazette of any revocation of approval referred to in subsection (1).
[1/2005]
Division 2 — Regulation of Approved Holding Companies
Obligation to notify Authority of certain matters
81ZA.
—(1)  An approved holding company shall, as soon as practicable after the occurrence of any of the following circumstances, notify the Authority of the circumstance:
(a)
any material change to the information provided by the approved holding company in its application under section 81V(1);
(b)
the carrying on of any activity by the approved holding company other than —
(i)
the activities of a holding company of any approved exchange, licensed trade repository, approved clearing house or corporation that is an approved holding company;
[Act 34 of 2012 wef 01/08/2013]
(ii)
an activity incidental to being a holding company of any approved exchange, licensed trade repository, approved clearing house or corporation that is an approved holding company; or
[Act 34 of 2012 wef 01/08/2013]
(iii)
such activity or class of activities as the Authority may prescribe;
(c)
the acquisition by the approved holding company of a substantial shareholding in a corporation which does not carry on —
(i)
any activity of a holding company of any approved exchange, licensed trade repository, approved clearing house or corporation that is an approved holding company;
[Act 34 of 2012 wef 01/08/2013]
(ii)
any activity incidental to being a holding company of any approved exchange, licensed trade repository, approved clearing house or corporation that is an approved holding company; or
[Act 34 of 2012 wef 01/08/2013]
(iii)
such activity or class of activities as the Authority may prescribe;
(d)
any other matter that the Authority may prescribe by regulations made under section 81ZK for the purposes of this paragraph or specify by notice in writing to the approved holding company.
[1/2005]
[Act 34 of 2012 wef 01/08/2013]
(2)  Without prejudice to the generality of section 81ZL(1), the Authority may, at any time after receiving a notification referred to in subsection (1), issue directions to the approved holding company —
(a)
where the notification relates to a matter referred to in subsection (1)(b) —
(i)
to cease carrying on the first-mentioned activity referred to in subsection (1)(b); or
(ii)
to carry on the first-mentioned activity referred to in subsection (1)(b) subject to such conditions or restrictions as the Authority may impose, if the Authority is of the opinion that this is necessary for any purpose referred to in section 81ZL(1); or
(b)
where the notification relates to a matter referred to in subsection (1)(c) —
(i)
to dispose of the shareholding referred to in subsection (1)(c); or
(ii)
to exercise its rights relating to such shareholding subject to such conditions or restrictions as the Authority may impose, if the Authority is of the opinion that this is necessary for any purpose referred to in section 81ZL(1),
and the approved holding company shall comply with such directions.
[1/2005]
(3)  Any approved holding company which contravenes subsection (1) or (2) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $200,000 and, in the case of a continuing offence, to a further fine not exceeding $20,000 for every day or part thereof during which the offence continues after conviction.
[1/2005]
Obligation to submit periodic reports
81ZB.
—(1)  An approved holding company shall submit to the Authority such reports in such form, manner and frequency as the Authority may prescribe.
[1/2005]
(2)  Any approved holding company which contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $200,000 and, in the case of a continuing offence, to a further fine not exceeding $20,000 for every day or part thereof during which the offence continues after conviction.
[1/2005]
Obligation to assist Authority
81ZC.
—(1)  An approved holding company shall provide such assistance to the Authority as the Authority may require for the performance of the functions and duties of the Authority, including the furnishing of such returns and the provision of —
(a)
such books and other information relating to the activities of the approved holding company; and
(b)
such other information,
as the Authority may require for the proper administration of this Act.
[1/2005]
(2)  Any approved holding company which contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $200,000 and, in the case of a continuing offence, to a further fine not exceeding $20,000 for every day or part thereof during which the offence continues after conviction.
[1/2005]
Obligation to maintain confidentiality
81ZD.
—(1)  Subject to subsection (2), an approved holding company and its officers and employees shall maintain, and aid in maintaining, the confidentiality of all user information that —
(a)
comes to the knowledge of the approved holding company or any of its officers or employees; or
(b)
is in the possession of the approved holding company or any of its officers or employees.
[1/2005]
(2)  Subsection (1) shall not apply to —
(a)
the disclosure of user information for such purposes, or in such circumstances, as the Authority may prescribe;
(b)
any disclosure of user information which is authorised by the Authority to be disclosed or furnished; or
(c)
the disclosure of user information pursuant to any requirement imposed under any written law or order of court in Singapore.
[1/2005]
(3)  Any person who contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $200,000 and, in the case of a continuing offence, to a further fine not exceeding $20,000 for every day or part thereof during which the offence continues after conviction.
[1/2005]
(4)  For the avoidance of doubt, nothing in this section shall be construed as preventing an approved holding company from entering into a written agreement with a user which obliges the approved holding company to maintain a higher degree of confidentiality than that specified in this section.
[1/2005]
Control of substantial shareholding in approved holding companies
81ZE.
—(1)  No person shall enter into any agreement to acquire shares in an approved holding company by virtue of which he would, if the agreement had been carried out, become a substantial shareholder of the approved holding company without first obtaining the approval of the Authority to enter into the agreement.
[1/2005]
(2)  No person shall become —
(a)
a 12% controller; or
(b)
a 20% controller,
of an approved holding company without first obtaining the approval of the Authority.
[1/2005]
(3)  In subsection (2) —
“12% controller” means a person, not being a 20% controller, who alone or together with his associates —
(a)
holds not less than 12% of the shares in the approved holding company; or
(b)
is in a position to control not less than 12% of the votes in the approved holding company;
“20% controller” means a person who, alone or together with his associates —
(a)
holds not less than 20% of the shares in the approved holding company; or
(b)
is in a position to control not less than 20% of the votes in the approved holding company.
[1/2005]
(4)  In this section —
(a)
a person holds a share if —
(i)
he is deemed to have an interest in that share under section 7(6) to (10) of the Companies Act (Cap. 50); or
(ii)
he otherwise has a legal or an equitable interest in that share, except such interest as is to be disregarded under section 7(6) to (10) of the Companies Act;
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