Banking Regulations

Banking Act

(Chapter 19, SECTIONS 4A, 4B, 30(1)(d), 32(5), 33(2)(d), 35(1) and (2)(e), 47(10) and 78(1) and (3))

Banking Regulations

Rg 5

G.N. No. S 347/2001

REVISED EDITION 2004

(30th September 2004)

[18th July 2001]

PART I

PRELIMINARY

Citation

1.  These Regulations may be cited as the Banking Regulations.

Definitions

2.  In these Regulations, unless the context otherwise requires —

“Accounting Standards” has the same meaning as in section 4(1) of the Companies Act (Cap. 50);

[S 170/2006 wef 24/03/2006]

[Deleted by S 511/2019 wef 01/08/2019]

“credit derivative” means any swap, option or other financial derivative the purpose of which is to secure a profit or avoid a loss by reference to the performance by a third party of certain specified obligations or to the change in creditworthiness of the third party;

[Deleted by S 473/2021 wef 01/07/2021]

[Deleted by S 473/2021 wef 01/07/2021]

[Deleted by S 473/2021 wef 01/07/2021]

“fund management” has the same meaning as in Part II of the Second Schedule to the Securities and Futures Act (Cap. 289);

[S 170/2006 wef 24/03/2006]

[Deleted by S 473/2021 wef 01/07/2021]

“group”, in relation to a corporation, means a group within the meaning of the Accounting Standards, of which the corporation is a part;

[S 170/2006 wef 24/03/2006]

“liabilities”, in relation to the policies of an insurance fund maintained by an insurer, means such liabilities and expenses of the insurer as are attributable to the business to which the insurance fund relates, but excludes any levy payable by that insurer under section 37 of the Deposit Insurance and Policy Owners’ Protection Schemes Act (Cap. 77B);

[S 473/2021 wef 01/07/2021]

“market day”, in relation to a share traded on a securities exchange, means any day which the securities exchange is open for trading;

[S 473/2021 wef 01/07/2021]

[Deleted by S 511/2019 wef 01/08/2019]

“NCD” means negotiable certificate of deposit;

“overseas bank” means a company incorporated, formed or established outside Singapore which carries on banking business only outside Singapore and is not licensed under the Act;

“place of booking”, in relation to a bond or an NCD issue, means the jurisdiction in which the branch or office of the issuer which is issuing the bond or NCD, as the case may be, is located;

“prohibited business” has the same meaning as in section 32(7) of the Act;

“property corporation” means any body corporate where —

(a) more than 50% of the total turnover of the body corporate is derived from property-related activities; or

(b) more than 50% of the total assets of the body corporate comprises interests in or rights over immovable property situate in Singapore, other than such immovable property or any part thereof which is used —

(i) as premises for the conduct of any business carried on by the body corporate;

(ii) for the business of a hotel, hostel, serviced apartment, boarding house, lodging house or dormitory; or

[S 511/2019 wef 01/08/2019]

(iii) for community, charity or educational purposes;

“property-related activities” means —

(a) the construction of or the causing of the construction of any building on, over or under land in Singapore for the purpose of sale by the person carrying out or causing such construction, of any right or interest in the land which would be appurtenant to such building, other than a building or part thereof constructed for use —

(i) for the business of a hotel, hostel, serviced apartment, boarding house, lodging house or dormitory; or

[S 511/2019 wef 01/08/2019]

(ii) for community, charity or educational purposes;

(b) the acquisition or holding of any interest in or right over immovable property situate in Singapore for the purposes of rental, or for the purposes of securing a profit from its sale, other than such immovable property or part thereof —

(i) used or to be used by the person acquiring or holding the immovable property for occupation by himself or any member of his family or as premises for any business carried on by him;

[S 511/2019 wef 01/08/2019]

(ii) used or to be used for the business of a hotel, hostel, serviced apartment, boarding house, lodging house or dormitory; or

[S 511/2019 wef 01/08/2019]

(iii) used or to be used for community, charity or educational purposes;

(c) the financing of any activity referred to in paragraph (a) or (b);

(d) the making of loans to any property corporation;

(e) the acquisition or holding as beneficial owner of shares or debentures issued by any property corporation; and

(f) the acquisition or holding as beneficial owner of debentures the payment of principal or interest on which is contingent, directly or indirectly, on the turnover, profits or cashflow from any activity under paragraph (a), (b), (c), (d) or (e);

“property sector exposure”, in relation to a bank in Singapore, means the aggregate of —

(a) amounts outstanding to the bank under credit facilities granted to any property corporation or to any related corporation of a property corporation for use by the property corporation;

(b) amounts outstanding to the bank under credit facilities granted to any person other than a property corporation —

(i) in the case where such person is a corporation, for the purpose of financing or facilitating the property-related activities of that person or its related corporations; and

(ii) in any other case, for the purpose of financing or facilitating the property-related activities of that person;

(c) amounts of debentures beneficially held by the bank and issued by any property corporation;

(d) amounts of debentures beneficially held by the bank and issued by any person other than a property corporation, where the payment of principal or interest is contingent, whether in whole or in part, on the turnover, profits or cashflow from any property-related activity;

(e) amounts paid by the bank for securities transferred to it pursuant to a repurchase transaction between the bank and a property corporation, on terms that require the future transfer of equivalent securities by the bank to the property corporation;

(f) amounts of contingent liabilities incurred by the bank —

(i) in respect of any obligation of a property corporation; or

(ii) in respect of any obligation of any other person, where such obligation is undertaken in connection with property-related activities;

(g) where the bank has entered into any agreement (including a credit derivative agreement) with any other party under which the other party would secure a benefit or avoid a loss where there is —

(i) a failure by a property corporation to perform its obligations;

(ii) a decline in the creditworthiness of a property corporation; or

(iii) a failure by any person other than a property corporation to perform its obligations where such obligations are undertaken in connection with property-related activities,

the highest amount of such benefit or loss as may be secured or avoided, as the case may be, except to the extent that such amount constitutes part of any amounts under paragraph (f); and

(h) amounts payable to the bank by any property corporation under a bill of exchange or promissory note,

but does not include any amounts in respect of —

(A) credit facilities granted to the Government or to any statutory board;

(B) Singapore Government Securities or bonds issued by any statutory board;

(C) debentures held pursuant to an agreement entered into by the bank for the underwriting of an issue of such debentures, for a period not exceeding 8 weeks from the date of the launch of the issue;

(D) loans, debentures or other assets forming the subject matter of a securitisation transaction where the criteria determined by the Authority for effecting a clean sale of assets by the bank have been complied with; or

(E) any instrument or transaction described in paragraphs (a) to (h) to the extent that the bank would be indemnified or otherwise protected from losses that may be incurred by it under that instrument or transaction pursuant to a guarantee issued by any other bank or any credit derivative entered into by the bank with any person other than a property corporation;

“Singapore Government Securities” means securities issued by the Government under any written law;

[Deleted by S 511/2019 wef 01/08/2019]

“total eligible assets”, in relation to a bank in Singapore, means the aggregate of —

(a) amounts outstanding to the bank under credit facilities granted to any person other than a bank or an overseas bank;

(b) amounts of debentures beneficially held by the bank and issued by any other person who is not a bank or an overseas bank;

(c) amounts paid by the bank for securities transferred to it pursuant to a repurchase transaction between the bank and any other party who is not a bank or an overseas bank, on terms that require the future transfer of equivalent securities by the bank to the other party;

(d) amounts of contingent liabilities incurred by the bank —

(i) in respect of any obligation of a property corporation; or

(ii) in respect of any obligation of any other person, where such obligation is undertaken in connection with property-related activities;

(e) where the bank has entered into any agreement (including a credit derivative agreement) with any other party under which the other party would secure a benefit or avoid a loss where there is —

(i) a failure by a property corporation to perform its obligations;

(ii) a decline in the creditworthiness of a property corporation; or

(iii) a failure by any person other than a property corporation to perform its obligations where such obligations are undertaken in connection with property-related activities,

the highest amount of such benefit or loss as may be secured or avoided, as the case may be, except to the extent that such amount constitutes part of any amounts under paragraph (d); and

(f) amounts payable to the bank by any person, other than a bank or an overseas bank, under a bill of exchange or promissory note,

but does not include any amounts in respect of —

(A) in the case of a bank incorporated in Singapore, any instrument or transaction described in paragraphs (a) to (f) not forming part of the bank’s business in Singapore, except to the extent that such instrument or transaction forms part of the property sector exposure of the bank; or

(B) in the case of a bank incorporated outside Singapore, any instrument or transaction described in paragraphs (a) to (f) not forming part of the bank’s business in Singapore.

PART II

CONTROL OF DEPOSIT-TAKING ACTIVITIES

Exemption from section 4A(1) of Act

3.—(1)  Section 4A (1) of the Act shall not apply to —

(a) any holder of a capital markets services licence under the Securities and Futures Act (Cap. 289) if, and only if, the acceptance of the deposit is solely incidental to the carrying on of the business for which the licence was granted;

(b) any advocate and solicitor, foreign lawyer who is registered under the Legal Profession Act (Cap. 161), Singapore law practice, Joint Law Venture, Formal Law Alliance, Qualifying Foreign Law Practice or licensed foreign law practice, if, and only if, the acceptance of the deposit is solely incidental to the practice of his or its legal practice; and

[S 444/2016 wef 30/09/2016]

(c) any insurer licensed under the Insurance Act (Cap. 142) if, and only if, the acceptance of the deposit is solely incidental to the carrying on of the business for which the insurer was licensed.

[S 444/2016 wef 30/09/2016]

[S 473/2021 wef 01/07/2021]

(2)  In this regulation, “Formal Law Alliance”, “Joint Law Venture”, “licensed foreign law practice”, “Qualifying Foreign Law Practice” and “Singapore law practice” have the same meanings as in section 2(1) of the Legal Profession Act.

[S 444/2016 wef 30/09/2016]

Exemption from section 4A(1) and (2) of Act

3A.—(1)  Subject to paragraph (3), section 4A(1) of the Act shall not apply to any foreign entity in respect of any deposit accepted in Singapore, on behalf of the foreign entity by its agent bank, from any qualifying depositor in Singapore.

[S 511/2019 wef 01/08/2019]

(2)  Subject to paragraph (3), section 4A(2) of the Act shall not apply to any agent bank of a foreign entity in respect of —

(a) any offer or invitation to make any deposit, or to enter or offer to enter into any agreement to make any deposit, with the foreign entity; or

(b) any advertisement containing such offer or invitation,

where such offer, invitation or advertisement is made or issued to qualifying depositors in Singapore by the agent bank on behalf of the foreign entity.

[S 511/2019 wef 01/08/2019]

(3)  An agent bank which accepts or solicits deposits from a qualifying depositor on behalf of a foreign entity in the circumstances specified in paragraph (1) or (2) shall provide the following information to the qualifying depositor, in writing, when soliciting or accepting any deposit from the qualifying depositor:

(a) the name of the foreign entity;

(b) the jurisdiction where the deposit account would be opened;

(c) the class of licence or registration, or the type of approval or other instrument of regulation, that the foreign entity holds or has obtained in the jurisdiction where the deposit account would be opened;

(d) a statement to the effect that the class of licence or registration, or the type of approval or other instrument of regulation, permits the foreign entity to accept deposits in the jurisdiction where the deposit account would be opened; and

(e) a statement to the effect that the deposit account would not be subject to the supervisory oversight of the Authority but that of the relevant supervisory authority in the jurisdiction where the deposit account would be opened and maintained.

[S 511/2019 wef 01/08/2019]

(4)  In this regulation, unless the context otherwise requires —

“agent bank”, in relation to a foreign entity, means a bank in Singapore or merchant bank which is a branch or subsidiary of the foreign entity;

“foreign entity” means any corporation established or incorporated outside Singapore that is licensed, registered, approved or otherwise regulated to carry on banking business under the laws of the jurisdiction in which it is established or incorporated;

[S 170/2006 wef 24/03/2006]

[S 511/2019 wef 01/08/2019]

“qualifying depositor” means —

(a) an individual, a trustee or a person within the meaning of section 4A(1)(a)(i), (iii) or (iv) (as the case may be) of the Securities and Futures Act (Cap. 289);

(b) a corporation with net assets or net group assets exceeding $10 million in value (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe under section 4A(1)(a)(ii) of the Securities and Futures Act in place of the first amount, as determined by —

(i) the most recent audited balance‑sheet of the corporation (whether on an individual or on a group basis); or

(ii) where the corporation is not required to prepare audited financial statements regularly under the Companies Act (Cap. 50), a balance‑sheet of the corporation (whether on an individual or on a group basis) certified by the corporation as giving a true and fair view of the state of affairs of the corporation and its group (where applicable) as of the date of the balance‑sheet, which date must be within the preceding 12 months; or

(c) a corporation which acts as a trustee for the customers of a person carrying on the business of fund management with total assets under management exceeding $10 million in value (or its equivalent in a foreign currency).

[S 511/2019 wef 01/08/2019]

Application of section 4A(2) of Act

4.  For the purposes of section 4A(2) of the Act, in determining whether an offer, invitation or advertisement is made or issued to the public or any section of the public in Singapore, regard shall be had to the following considerations:

(a) whether the offer, invitation or advertisement contains any information specifically relevant to Singapore;

(b) whether the offer, invitation or advertisement is published in any newspaper, magazine, journal or other periodical publication, or in any broadcast media, which is principally for circulation or reception in Singapore;

(c) whether the offer, invitation or advertisement contains a prominent notice that no deposit shall be accepted from persons in Singapore, and whether such notice is viewed with or before the advertisement;

(d) whether reasonable steps are taken to guard against acceptance of deposits from persons in Singapore; or

(e) whether the offer, invitation or advertisement, directly or indirectly, states that deposits in Singapore currency shall be accepted.

Prescribed deposit

4A.  For the purposes of section 4B(4)(b) of the Act, a sum of money paid by a person (“A”) to another person (“B”) or any other person as an agent of A is prescribed as a deposit made by A with B, if it is paid for the purpose of making funds of A available to B and under the following arrangement:

(a) the payment is made to enable B or the agent to purchase an asset on behalf of A, being an asset that exists at the time of the purchase;

(b) B purchases the asset from A at a price (the marked-up price) that is greater than the sum of money paid by A, and sells the asset;

(c) A and B, respectively, do not derive any gain or suffer any loss from any movement in the market value of the asset other than the difference between the marked-up price and the sum of money paid by A (which represents the return to A for making funds available to B); and

(d) no part of the marked-up price is required to be paid by B to A until after the date of sale of the asset by B.

[S 238/2007 wef 11/06/2007]

Application of section 4B(6)( e ) of Act

5.—(1)  Subject to regulation 6, for the purposes of section 4B(4) of the Act, “deposit” does not include —

(a) a sum paid by or on behalf of any person in consideration for the issue to him by the recipient of —

(i) bonds or NCDs denominated in any foreign currency;

(ii) bonds or NCDs denominated in Singapore dollars with an original maturity period of not less than 12 months; or

(iii) bonds or NCDs denominated in Singapore dollars with an original maturity period of less than 12 months and issued with a denomination of not less than $200,000;

(b) a sum paid by or on behalf of any person whose total net personal assets exceed in value $2 million (or its equivalent in foreign currency) at the time of the payment, whose financial assets (net of any related liabilities) exceed in value $1 million (or its equivalent in foreign currency) at the time of payment, or whose income in the preceding 12 months is not less than $300,000 (or its equivalent in foreign currency) at the time of the payment, in consideration for the issue to him by the recipient of bonds or NCDs denominated in Singapore dollars with an original maturity period of less than 12 months;

[S 511/2019 wef 01/08/2019]

(c) a sum paid by or on behalf of a company whose total net assets exceed $10 million in value or its equivalent in foreign currency as determined by the last audited balance-sheet of the company in consideration for the issue to the company, by the recipient, of bonds or NCDs denominated in Singapore dollars with an original maturity period of less than 12 months;

(d) a sum paid by or on behalf of an officer of the recipient, a close relative of an officer of the recipient or a close relative of the recipient (if the recipient is a natural person), in consideration for the issue to the payer by the recipient, of bonds or NCDs denominated in Singapore dollars with an original maturity of less than 12 months;

(e) a sum paid by or on behalf of any person in consideration of the issue to him of Singapore Government Securities; or

(f) a sum paid by or on behalf of any person in consideration of the issue to him of bonds issued by any statutory board.

[S 511/2019 wef 01/08/2019]

(2)  In determining the value of a person’s total net personal assets for the purposes of paragraph (1)(b), the value of the person’s primary residence is taken to be the lower of the following:

(a) the value calculated by deducting any outstanding amounts in respect of any credit facility that is secured by the residence from the estimated fair market value of the residence;

(b) $1 million.

[S 511/2019 wef 01/08/2019]

Prescribed international financial institution

5A.  The following institutions are prescribed as international financial institutions for the purposes of section 5(2)(g) of the Act:

(a) African Development Bank;

(b) Asian Development Bank;

(ba) Asian Infrastructure Investment Bank;

[S 511/2019 wef 01/08/2019]

(c) Bank for International Settlements;

(d) Caribbean Development Bank;

(e) Council of Europe Development Bank;

(f) European Bank for Reconstruction and Development;

(g) European Central Bank;

(h) European Investment Bank;

(i) Inter-American Development Bank;

(j) Islamic Development Bank;

(ja) New Development Bank;

[S 511/2019 wef 01/08/2019]

(k) Nordic Investment Bank; and

(l) World Bank Group.

[S 238/2007 wef 11/06/2007]

Additional disclosure requirements for exemption under regulation 5

6.—(1)  Without prejudice to any disclosure requirements under any other written law, for the purposes of qualifying for the exemption under regulation 5, bonds or NCDs denominated in Singapore dollars which are issued with a denomination of less than $200,000, shall have contained —

(a) in any prospectus and any profile statement in respect of its issue; or

(b) where such documents are not required in respect of its issue, in an information memorandum to be issued, circulated or distributed in respect of its issue,

the additional information set out in paragraph (2).

(2)  The additional information required to be disclosed under paragraph (1) are —

(a) a statement of the place of booking of the issue;

(b) where the name of the issuer contains the word “bank”, “finance” or any of its derivatives in any language and —

(i) the place of booking of the issue is not Singapore; or

(ii) the issuer is not regulated or authorised by the Authority under any written law,

a statement that the branch or office of the issuer at which the issue is booked is not subject to regulation or supervision in Singapore;

(c) where repayment under the bond or NCD is secured (whether by mortgage, charge, guarantee or other means), a statement of the nature of the security, the name of the mortgagor, chargor or guarantor, as the case may be, and whether such person is regulated or authorised by the Authority under any written law; and

(d) where repayment under the bond or NCD is not secured (whether by mortgage, charge, guarantee or other means), a statement that repayment is not secured by any means.

PART IIAA

USE OF BANK NAME, LOGO OR TRADE MARK

[S 473/2021 wef 01/07/2021]

Exemptions from section 5A of Act

6AA.—(1)  A person who, in the course of any profession, vocation, trade or business, uses the name, logo or trade mark of a bank incorporated in Singapore (other than a foreign-owned bank incorporated in Singapore) is exempt from section 5A(1) of the Act if —

(a) the person uses the bank’s name, logo or trade mark in connection with an event that is —

(i) organised by the person; and

(ii) sponsored by the bank; and

(b) the bank permits the person to use the bank’s name, logo or trade mark in connection with the event.

(2)  A bank incorporated in Singapore (other than a foreign-owned bank incorporated in Singapore) that causes or knowingly permits a person to use the bank’s name, logo or trade mark in the course of the person’s profession, vocation, trade or business is exempt from section 5A(2) of the Act if —

(a) the bank causes or permits the person to use the bank’s name, logo or trade mark only in connection with an event that is —

(i) organised by the person; and

(ii) sponsored by the bank; and

(b) the board of directors of the bank approves the person’s use of the bank’s name, logo or trade mark in connection with the event.

(3)  A person who, in the course of any profession, vocation, trade or business, uses the name, logo or trade mark of a foreign-owned bank incorporated in Singapore is exempt from section 5A(1) of the Act if —

(a) the bank permits the person to use the bank’s name, logo or trade mark;

(b) the bank has not entered into any partnership, joint venture or other arrangement with the person to carry on any business prescribed by regulation 23G or 23I; and

(c) the person is not an entity in which the bank acquired or holds a major stake for which the bank is exempt from section 32 of the Act under regulation 7B.

(4)  A foreign-owned bank incorporated in Singapore that causes or knowingly permits a person to use the bank’s name, logo or trade mark in the course of the person’s profession, vocation, trade or business is exempt from section 5A(2) of the Act if —

(a) the bank has not entered into any partnership, joint venture or other arrangement with the person to carry on any business prescribed by regulation 23G or 23I; and

(b) the person is not an entity in which the bank acquired or holds a major stake for which the bank is exempt from section 32 of the Act under regulation 7B.

[S 473/2021 wef 01/07/2021]

PART IIA

MINIMUM CAPITAL REQUIREMENTS

Minimum capital requirements for wholesale banks

6A.—(1)  For the purposes of section 9(1)(a) of the Act, a company that intends to carry on banking business in Singapore as a bank incorporated in Singapore must not be granted a wholesale banking licence unless its paid-up capital is not less than $100 million.

[S 810/2020 wef 01/10/2020]

(2)  In this regulation, “wholesale banking licence” means a licence to transact banking business, the conditions of which require the holder of that licence to comply with such guidelines as may be issued by the Authority in relation to the operation of wholesale banks; and includes a “restricted banking licence” granted by the Authority before 29th June 2001.

[S 360/2009 wef 03/08/2009]

PART IIB

EXCLUSION OF LIMITS ON EQUITY INVESTMENTS

Exclusion from operation of section 31 of Act for stabilising action during offer

6B.—(1)  Section 31 of the Act shall not apply, during the specified period, in respect of any equity investment in a single company acquired or held by any bank incorporated in Singapore or bank incorporated outside Singapore when acting as a stabilising bank in relation to an offer of securities issued by the company, where —

(a) an over-allotment option has been made giving the bank the right to purchase a number of securities equivalent to the number of securities over-allotted —

(i) in a case where more than one tranche of securities is offered at different prices, at or below the issue price for each tranche; or

(ii) in any other case, at or below the issue price; and

(b) the total number of securities subscribed for or purchased by the bank as a result of its stabilising action does not exceed the number of securities over-allotted.

[S 360/2009 wef 03/08/2009]

[S 473/2021 wef 01/07/2021]

(2)  In this regulation, unless the context otherwise requires —

“approved exchange”, “overseas exchange” and “securities” have the meanings given by section 2(1) of the Securities and Futures Act (Cap. 289);

[S 473/2021 wef 01/07/2021]

“closing date” has the same meaning as in regulation 2 of the Securities and Futures (Market Conduct) (Exemptions) Regulations 2006 (G.N. No. S 148/2006);

“dealer” means a person who is the holder of a capital markets services licence under the Securities and Futures Act (Cap. 289) to deal in securities, and includes a person who is licensed, approved, authorised or otherwise regulated under the laws, codes or other requirements of any foreign jurisdiction in respect of dealing in securities;

“issue price”, in relation to securities being offered under an offer, means the price at which the securities are being offered for subscription or purchase;

“issuer” has the same meaning as in regulation 2 of the Securities and Futures (Market Conduct) (Exemptions) Regulations 2006;

“offer” has the same meaning as in regulation 2 of the Securities and Futures (Market Conduct) (Exemptions) Regulations 2006;

“over-allotment” has the same meaning as in regulation 2 of the Securities and Futures (Market Conduct) (Exemptions) Regulations 2006;

[Deleted by S 473/2021 wef 01/07/2021]

[Deleted by S 473/2021 wef 01/07/2021]

[Deleted by S 473/2021 wef 01/07/2021]

“relevant specified products” has the meaning given by regulation 2 of the Securities and Futures (Market Conduct) (Exemptions) Regulations 2006;

[S 473/2021 wef 01/07/2021]

“specified period” means a period of 30 calendar days —

(a) from the date of commencement of dealing in the stabilised securities on an approved exchange; or

[S 473/2021 wef 01/07/2021]

(b) where the stabilised securities are listed on both an approved exchange and an overseas exchange, from the earlier of the dates of commencement of dealing in the stabilised securities on these exchanges;

[S 473/2021 wef 01/07/2021]

“stabilised securities”, in relation to any stabilising action, means the securities in respect of which the stabilising action has been, is being or will be taken, as the case may be;

“stabilising action”, in relation to an offer, means the action taken in Singapore or elsewhere by a stabilising bank, or by a dealer on behalf of the stabilising bank, to buy, or to offer or agree to buy, any relevant specified products on the securities market, in order to stabilise or maintain the market price of such securities in Singapore or elsewhere;

[S 473/2021 wef 01/07/2021]

“stabilising bank”, in relation to an offer, means a bank in Singapore —

(a) which is appointed in writing by the issuer of an offer to take any stabilising action in respect of the offer; and

(b) whose appointment under paragraph (a) is notified to the approved exchange on which the relevant specified products are or are intended to be listed before the closing date of the offer.

[S 360/2009 wef 03/08/2009]

[S 401/2008 wef 11/08/2008]

[S 473/2021 wef 01/07/2021]

Exclusion from operation of section 31 of Act for investment in certain businesses

6C.  Section 31 of the Act does not apply in respect of any equity investment in a single company acquired or held, by a bank incorporated in Singapore or a bank incorporated outside Singapore, for the purposes of carrying on any business prescribed in regulation 23G(1).

[S 473/2021 wef 01/07/2021]

PART III

EXCLUSION OF CERTAIN INVESTMENTS AND WHOLLY-OWNED SUBSIDIARIES

Exclusion of certain entities from operation of section 32 of Act

7.—(1)  The Authority hereby excludes, from the operation of section 32 of the Act —

(a) any entity which carries on a business prescribed in regulation 23F(1) (whether as its principal business or otherwise); or

[S 473/2021 wef 01/07/2021]

(b) any other entity whose principal business is that of investing in any entity referred to in sub-paragraph (a).

[S 56/2011 wef 14/02/2011]

[S 370/2010 wef 05/07/2010]

[S 473/2021 wef 01/07/2021]

(2)  The exclusion in paragraph (1) shall not apply to an entity which is —

(a) not carrying on any substantial business or not in operation;

(b) carrying on the business of engaging in property-related activities;

(c) carrying on the business of factoring, leasing equipment or otherwise purchasing debt obligations from others; or

(d) an entity, or an entity within a class of entities, specified by the Authority by notice in writing by reference to a bank or a class of banks.

[S 473/2021 wef 01/07/2021]

[S 473/2021 wef 01/07/2021]

[S 473/2021 wef 01/07/2021]

Exclusion of wholly-owned subsidiaries of bank held primarily for segregating risks arising from carrying on business prescribed in regulation 23G

7A.—(1)  Subject to paragraph (2), the Authority hereby excludes from the operation of section 32 of the Act any wholly-owned subsidiary of a bank in Singapore acquired or held primarily for the purpose of segregating risks that arises from the carrying on of any business prescribed in regulation 23G(1) so as to prevent such risks from affecting the financial soundness and stability of the bank.

(2)  The exclusion under paragraph (1) of any wholly-owned subsidiary of a bank in Singapore from the operation of section 32 of the Act applies if, and only if —

(a) the bank has an agreement with the wholly-owned subsidiary to allow the Authority and any person appointed by the Authority, at any time, to obtain any information from the wholly-owned subsidiary and to inspect the books of the wholly-owned subsidiary;

(b) where the wholly-owned subsidiary is a financial institution regulated by an overseas regulatory authority, the bank is satisfied, from its own due diligence or from having taken professional advice, that the Authority and any person appointed by the Authority are not prohibited from obtaining any information from, or inspecting the books of, the wholly-owned subsidiary; and

(c) the bank ensures that the wholly-owned subsidiary of the bank carries on its business in a manner that satisfies such conditions relating to the operations or activities of the wholly-owned subsidiary as the Authority may impose, from time to time, by notice in writing.

(3)  For the purpose of this regulation, a company is a wholly-owned subsidiary of a bank if none of the members of the company, or none of the persons holding any ownership interest in the company, is a person other than the bank.

[S 56/2011 wef 14/02/2011]

Exclusion of entity carrying on business under section 30(1)( a ), ( b ) or ( c ) of Act, etc., from section 32 of Act

7B.—(1)  Subject to paragraphs (2), (3) and (4), section 32 of the Act does not apply to an entity that carries on —

(a) a business prescribed in regulation 23G(1) or 23H(1); or

(b) a business of investing in any entity that carries on a business prescribed in regulation 23G(1) or 23H(1).

(2)  In each case mentioned in the following sub-paragraphs, paragraph (1) applies only if the corresponding condition is satisfied:

(a) in a case where the entity carries on a business mentioned in paragraph (1)(a) and other businesses — each of such other businesses is a business mentioned in section 30(1)(a), (b) or (c) of the Act, or a business prescribed for the purposes of section 30(1)(d) of the Act that is similar in economic substance and risk to a business mentioned in section 30(1)(a), (b) or (c) of the Act;

(b) in a case where the entity carries on a business mentioned in paragraph (1)(b) and other businesses —

(i) at least one of such other businesses is a business prescribed in regulation 23G(1) or 23H(1); and

(ii) each of such other businesses is a business mentioned in sub-paragraph (a).

(3)  In addition to the condition mentioned in paragraph (2), paragraph (1) applies only if —

(a) the aggregate non-financial business size of the bank concerned, after acquiring or holding a major stake in the entity, does not exceed —

(i) in the case of a bank incorporated in Singapore —

(A) 10% of its capital funds; and

(B) 10% of the capital funds of its bank group; or

(ii) in the case of the branches and offices located within Singapore of a bank incorporated outside Singapore — 1.5% of the assets that are reflected as assets in the balance sheet of those branches and offices (less net inter-bank lending);

(b) the bank puts in place risk management and governance policies and procedures that are commensurate with the risks posed by all the businesses carried on by the entity;

(c) the policies and procedures mentioned in sub-paragraph (b) have been approved by —

(i) in the case of a bank incorporated in Singapore — the board of directors of the bank;

(ii) in the case of the branches and offices located within Singapore of a bank incorporated outside Singapore, the head office of which has never carried on a materially similar business before — the board of directors of the bank; or

(iii) in the case of the branches and offices located within Singapore of a bank incorporated outside Singapore, the head office of which has carried on or is carrying on a materially similar business — by an authorised person of the bank;

(d) the bank notifies the Authority of the following matters:

(i) a description of all the businesses carried on by the entity;

(ii) any regulation or licensing requirement that the entity is or will be subject to, whether in Singapore or elsewhere;

(iii) the nature and extent of the major stake in the entity acquired or held by the bank;

(iv) the date on which the major stake in the entity is acquired by the bank, or (if applicable) the date on which the entity is incorporated, formed or established by the bank,

at least 14 days before the earliest of the following:

(v) any public announcement that the bank intends to acquire the major stake in the entity, or (if applicable) incorporate, form or establish the entity;

(vi) the entry of the bank into any agreement to acquire the major stake in the entity, or (if applicable) incorporate, form or establish the entity;

(vii) the date on which the major stake in the entity is acquired by the bank, or (if applicable) the date on which the entity is incorporated, formed or established by the bank;

(e) the bank notifies the Authority of any change to the matters in relation to which information had been provided in the notification mentioned in sub-paragraph (d), before making the change or as soon as the bank becomes aware of the change;

(f) the bank obtains prior approval from the Authority for the issuance by the bank of any guarantee, indemnity, letter of comfort or any other letter that imposes similar obligations on the bank as a guarantee or indemnity, or similar expectations on the bank as a letter of comfort, in respect of any business carried on by the entity;

(g) where the entity is or is to be a subsidiary of the bank —

(i) the bank has an agreement with the entity to allow the Authority and any person appointed by the Authority, at any time, to obtain any information from the entity and to inspect the books of the entity; and

(ii) where the entity is regulated by a regulatory authority in a foreign country or territory, the bank is satisfied, from its own due diligence or based on professional advice, that the Authority and any person appointed by the Authority are not prohibited from obtaining any information from, or inspecting the books of, the entity; and

(h) where the entity is a related corporation of the bank, the entity does not use the bank’s name, logo or trade mark in the course of the business.

(4)  A bank in Singapore must, starting on the date of its acquisition of a major stake in any entity and during the period in which it holds such major stake —

(a) submit a report to the Authority within 30 days after the last day of every quarter, or a later date approved by the Authority in writing, containing the information specified in the Second Schedule; and

(b) provide any other information that the Authority may require, in relation to any entity in which the bank acquired or holds a major stake under this regulation.

(5)  The Authority may —

(a) having regard to the specific circumstances of a bank in Singapore, including whether the risk management and governance policies and procedures of the bank in Singapore are sufficiently robust to effectively monitor and manage the risks of the entity; or

(b) if any condition or requirement imposed on a bank in Singapore is not satisfied by the bank at any time,

issue to the bank a written declaration that paragraph (1) does not apply to the bank in relation to any entity specified in the declaration on or after a specified date.

(6)  Where a written declaration is issued under paragraph (5), paragraph (1) does not apply to the bank in Singapore on or after the specified date with respect to the specified entity.

(7)  In this regulation —

“aggregate non-financial business size”, “authorised person”, “capital funds”, “net inter-bank lending” and “quarter” have the meanings given to those terms by regulation 23G(7);

“regulatory authority”, in relation to a foreign country or territory, means an authority of the foreign country or territory exercising any function that corresponds to a regulatory function of the Authority under the Act, the Monetary Authority of Singapore Act (Cap. 186) or any of the written laws set out in the Schedule to that Act.

[S 473/2021 wef 01/07/2021]

PART IV

PROPERTY SECTOR EXPOSURE

Property sector exposure limit

8.—(1)  The property sector exposure of a bank in Singapore shall not exceed 35% of the total eligible assets of that bank.

(2)  Notwithstanding paragraph (1), the Authority may, if it considers appropriate in the particular circumstances of a bank in Singapore, require the property sector exposure of that bank not to exceed such other percentage as it may determine, for such period and subject to such conditions as it may determine.

(3)  Any bank which contravenes this regulation 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 of $10,000 for every day or part thereof during which the offence continues after conviction.

Submission of returns

9.—(1)  Every bank in Singapore shall, within 14 days from 31st March, 30th June, 30th September and 31st December of each year, submit a return to the Authority on its property sector exposure in the form set out in the First Schedule.

[S 473/2021 wef 01/07/2021]

(2)  If the last day for submission under paragraph (1) is not a business day, the bank may submit the return on the next following business day.

[S 473/2021 wef 01/07/2021]

 

[G N. Nos. S 347/2001; S 256/2004]