Chapter

Singapore

Author(s):
International Monetary Fund
Published Date:
June 1985
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Overview of Singapore

Courtesy World Bank

Financial System of Singapore

Introduction

Modern Singapore was founded in 1819 with the establishment of a trading station for the British East India Company. This marked the beginning of British rule and gave rise to the development of Singapore’s entrepôt trade. In 1959 Singapore was granted full self-government in domestic affairs and in September 1963 it became part of Malaysia. On August 9, 1965, following its separation from Malaysia, Singapore proclaimed itself an independent republic. As a result of its long-standing role as an entrepôt, Singapore has developed a relatively extensive and sophisticated banking system over the years and has become a major financial center of the region.

The financial system in Singapore has undergone significant changes following the establishment of the Asian Currency Market in 1968 and, subsequently, the Monetary Authority of Singapore in 1971. Since then, a number of new financial institutions have been established and their activities have widened with the rapid development of the existing financial markets. These developments, while largely a result of government policy measures, also reflected the expansion of the domestic economy, as well as the rapid growth of the world economy in the early 1970s.

The financial system in Singapore comprises the Currency Board, the Monetary Authority of Singapore, commercial banks, the Central Provident Fund, the Post Office Savings Bank, the Development Bank of Singapore, merchant banks, discount houses, finance companies, and insurance companies. The Monetary Authority of Singapore performs central banking functions, excluding currency issue which is vested in the Board of Commissioners of Currency (the Currency Board). The major financial markets in Singapore are the money market, the capital market, and the Singapore-based Asian Currency Market.

Historically, because of Singapore’s heavy reliance on exporting as a primary vehicle of growth, the role and structure of Singapore’s financial system had been geared toward financing foreign trade. However, reflecting a transition to rapid industrialization and diversification, since the late 1960s marked emphasis has been placed on structuring the financial system toward the development needs of the economy and the growth of a regional financial center.

In its initial stage, the Monetary Authority was largely concerned with the development of a statutory and institutional framework for central banking in Singapore. Consequently, monetary policy was relatively passive, and the development of monetary policy instruments relatively slow. Since 1973, with the emergence of inflation and recession, monetary policy has assumed an active role through the use of moral suasion, changes in requirements on minimum cash balances and on liquidity ratio, special deposit requirements, overall as well as selective credit control, and money market operations.

Structure of Financial System

Official institutions

Board of Commissioners of Currency.—In the early period (1826–1903) when Singapore was part of the Straits Settlements (Penang, Malacca, and Singapore), various silver dollars (such as the Mexican dollar, the British trade dollar, the Hong Kong dollar, the Spanish dollar, and the American trade dollar) were in circulation, each of which was introduced at a different period of time. During that period, the Currency Ordinance of 1899 established a Board of Commissioners of Currency, made the issuance of notes the exclusive responsibility of the Straits Settlements Government, and replaced all banknotes with Currency Board notes. In 1903, the new silver Straits dollar was introduced. Currency Ordinance No. 23 of 1938 established the new Currency Commission with Singapore as the head office, and the currency issue was changed from the Straits Settlements basis to the Pan-Malayan basis. Consequently, the Straits dollar was changed to the Malayan dollar, and Singapore emerged as the political and economic center of the region. The Currency Act of 1950 extended the Malayan currency area to include Sarawak and North Borneo, and led to the issuance of new currency notes in 1954. The advent of Malaysian independence in 1957 and the declaration of self-government by Singapore in 1959 necessitated a revision of the currency agreement and, accordingly, a new agreement was concluded in 1960.

When Singapore left Malaysia (August 1965), the Singapore Government decided to establish its own currency rather than to share a common currency with Malaysia. The Government also decided that the new monetary authority should take the form of a currency board rather than a central bank, as the former was considered better suited to inspire confidence in the new currency. The Board of Commissioners of Currency, Singapore, established by the Currency Act, 1967, assumed the note-issuing function for Singapore, effective June 12, 1967.1

The two most important features of the currency board system in Singapore are that (a) the issunce of notes and coins is entrusted to the Board of Commissioners of Currency, Singapore (Currency Act, sec. 14), and (b) the Board is required to maintain a minimum of 100 per cent external assets cover (valued at current market prices) for currency issued (sec. 23). The currency board system is “automatic” in relation to the issuance of legal tender currency, and this, together with the 100 per cent foreign assets cover, ensures that there is no scope for “fiduciary” or discretionary creation of currency. The currency board system in Singapore has proved to be simple to operate and has prevented any overissue of currency. The system has been able to maintain public confidence in the stability of the value of the Singapore dollar, thus contributing to the steady growth of foreign trade and inflows of foreign investment, which are so essential to the development of the economy. Although the 100 per cent external cover requirement could lead to rigidity in the system, the continuing balance of payments surpluses have provided sufficient external reserves, while budgetary policy and the Government’s debt management have yielded appropriate variations in money supply. The system, however, could cause an unnecessary locking up of external reserves, some of which might otherwise be used for financing domestic investment should the need arise. Moreover, as the system lacked a lender-of-last-resort facility before December 1972, it tended to induce commercial banks, particularly domestic banks, to hold larger liquid and cash reserves than they would otherwise do if there had been a central bank.

Monetary Authority of Singapore.—Before the establishment of of the Monetary Authority of Singapore, the functions of a central bank were divided among the Singapore Board of Commissioners of Currency, which is entrusted with the issuance and management of currency, the Accountant-General, who functioned as the Government’s banker and accountant, and the Office of the Commissioner of Banking, which dealt with the inspection and supervision of commercial banks. The Accountant-General managed the clearinghouse and was authorized to deal in Singapore Government securities as a means of maintaining and developing the securities market, rather than as an instrument of monetary policy. Two other agencies in the Ministry of Finance, which also performed central bank functions, were the Foreign Exchange Control Department and the Commissioner for Finance Companies. The former operated the existing exchange controls and the latter regulated the working of finance companies.

As these units developed separately over time in response to emerging requirements, it became evident that the centralization of them within a single organization was urgently needed to enhance the effectiveness of monetary management and to ensure a coordinated approach to financial policy and development. Apart from administrative tidiness, the amalgamation of these various units into a coherent structure was also expected to give the organization a sense of purpose and direction, which was then lacking. The experience of the past years indicated that a new organization should possess adequate means to moderate the impact of external fluctuations upon the domestic economy. Furthermore, it might be expected more actively to promote economic development in Singapore than the separate agencies had been able to do.

The Monetary Authority, which was established on January 1, 1971 under the Monetary Authority of Singapore Act, 1970, assumed unified control of all central banking functions, except the issue of legal tender currency which continued to be vested with the Currency Board. Although currency issue is a normal function of a central bank, the authorities had concluded, after discussions with the banking and business communities, in view of the historical background and needs of Singapore’s economy, that an autonomous Currency Board would be better suited to the task of maintaining public confidence in the Singapore dollar.

The Monetary Authority was established as a corporation wholly owned and controlled by the Government. The principal objectives of the Authority are (a) to act as a banker for the Government, (b) to promote monetary and exchange conditions that are conducive to the growth of the economy, and (c) to exercise the combined functions of the Commissioner of Banking, the Commissioner for Finance Companies, the Accountant-General, and the Controller of Foreign Exchange, with respect to the monetary and banking matters that are normally performed by a central bank (the Monetary Authority of Singapore Act, secs. 4 and 21). It is authorized to accept reserve deposits from banks, enforce liquid assets and cash reserve ratios, issue and manage public debt, discount treasury bills, underwrite approved loans, promote the development of money and capital markets, and finance economic development in Singapore (sec. 22). It is empowered to invest its funds in gold and foreign exchange (sec. 23) and government and other appropriate securities (sec. 22). An amendment to the Monetary Authority of Singapore Act in November 1972 further strengthened the functions of the Monetary Authority by allowing it to purchase, sell, discount, and rediscount bills of exchange and promissory notes, and to grant advances to banks and other institutions against specified collateral; thus, the amendment explicitly empowered the Monetary Authority to act as a lender of last resort. The Monetary Authority has also been empowered to issue directives to financial institutions. Since April 1, 1977, the Authority is also responsible for the supervision and development of the insurance industry.

Economic Development Board.—The Economic Development Board was established in 1961 (the Economic Development Board Act, August 1, 1961) as an autonomous statutory agency with wide powers to attract and promote new industries in Singapore and to act as an industrial development bank. An initial capital of S$100 million was provided by the Government, but the Board’s resources may be augmented by borrowings from the Government and the public. In its industrial financing, the Development Board was initially authorized to grant long- and short-term loans to industrial enterprises, subscribe to stocks and bonds, underwrite shares and bonds, and guarantee loans raised by industrial enterprises (the Economic Development Board Act, sec. 16, subsec. 1). The Board was also allowed to participate in equity capital of private enterprises. However, the industrial financing function was subsequently transferred to the Development Bank of Singapore, which was established in 1968.

Development Bank of Singapore.—The Development Bank of Singapore was incorporated as a public limited company on July 16, 1968 with an authorized capital of S$200 million, of which S$100 million has been subscribed and paid by the Government (49 per cent), private financial institutions, such as commercial banks and insurance companies (25 per cent), and the general public (26 per cent). The Development Bank is also empowered to raise additional funds from domestic, foreign, and international institutions.

The Development Bank took over the industrial financing function of the Economic Development Board with the primary object of providing long- and medium-term loans, equity participation, and guarantees to manufacturing and processing industries. It also provides financial assistance to approved development projects of the Singapore Government in tourism, shipping, transportation, and other service industries, and the urban renewal program. The Development Bank also functions as a commercial bank and is licensed under the Banking Act.

Central Provident Fund.—The Central Provident Fund absorbs savings from the public, as both employees and employers contribute to pension funds for employees when they retire. Before January 1971, employees had to contribute 8 per cent of their gross monthly wage up to a maximum of S$150 and employers contributed an equal sum. Thereafter, the contributions were progressively increased to 16.5 per cent from July 1978 for both employees and employers, to 20.5 per cent for employers, and to 18.0 per cent for employees from July 1980. Since 1975 the Government has allowed contributors to the Provident Fund to withdraw a part or all of their contributions for hire purchase of public housing or apartments to encourage private ownership of homes. Most of the public savings collected by the Fund have been invested in government securities which are held until maturity. As a result, the Fund has been the largest holder of medium- and long-term government bonds, absorbing the bulk of new issues.

Post Office Savings Bank.—The Post Office Savings Bank was first established in 1877 and became an independent statutory corporation under the Post Office Savings Bank of Singapore Act, 1971. It is the only bank in Singapore which is exempted from all the provisions of the Banking Act and the Finance Companies Act. The basic objectives of the Savings Bank are to mobilize domestic savings for public development projects and to encourage thrift by providing a safe place for funds with an assured rate of return. The Savings Bank operates through 106 post offices and branches throughout the island. It accepts deposits from individuals and public organizations but not from companies. Repayment of deposits is guaranteed by the Government and the interest paid thereon is exempted from income tax. During the 1960s, while the total number of depositors had increased considerably, the amount of deposits remained relatively stagnant and even declined in some years (1964–66). This was in part due to competition from commercial banks. These provided comparable security, liquidity, and rates of interest, and generally better services. The Post Office Savings Bank therefore raised its deposit rate of interest and provided other incentives, such as abolishing the limit on individual accounts and increasing the limits on demand withdrawals. Cumbersome operating procedures were also simplified. As a result of these measures, the amount of deposits increased rapidly during the 1970s. In addition, to enable the Bank to play a more dynamic role as a financial intermediary, a subsidiary company called the Credit Post Office Savings Bank was established in 1974 to extend housing loans to depositors at interest rates lower than prevailing market rates; previously, the Bank had not made loans to individuals. Finally, its investment policy was modified in 1972 to include not only investment in government securities but also in banks and other financial institutions approved by the Ministry of Finance.

Private financial institutions

Commercial banks.2—The driving forces behind the rapid development of commercial banking in Singapore have been foreign trade, foreign investments, and economic development. A commercial bank was first established in Singapore in 1840, with the setting-up of a branch office of the Union Bank of Calcutta. The banks that followed were generally foreign, mostly British, French, Dutch, German, U.S., and Indian. In 1903 the first domestic bank was incorporated with the establishment of a domestic Chinese bank. It was set up to meet the banking requirements of the growing local Chinese business community in connection with the rubber boom that took place just before World War I. The banking system that developed was largely complementary to that of the foreign banks; the Chinese relied on foreign banks for foreign exchange transactions, while the foreign banks in turn received surplus deposits from the domestic banks, collected from the Chinese community.

The number of commercial banks has increased rapidly since 1970, from 37 in that year to 100 at the end of March 1981. Of these, 13 were domestically owned and 87 were foreign owned, primarily by banks in the United States, Japan, Hong Kong, the United Kingdom, and other European countries. This rapid increase in the number of foreign banks reflected the growing realization on the part of foreign banking interests that Singapore would attract business from international companies and could serve as a base for their regional operations, particularly through the Asian Dollar Market. The existence of a large number of foreign banks has also contributed to a high degree of competition among banks and to banking efficiency in general.3

Commercial banking operations in Singapore are governed by the Banking Act, 1970, regulations and guidelines issued from time to time by the Monetary Authority, and other relevant laws of Singapore. The main provisions of the Banking Act include the required minimum capital of banks (sec. 9); the maintenance of reserve funds (sec. 18); prohibited businesses (secs. 25–29); minimum liquid assets and cash reserve requirements (secs. 34–35); purposes and types of loans (sec. 38); inspection of bank books, accounts, and transactions (secs. 39–41); and numbered accounts (secs. 50–52).

The provisions for restrictions on the business of banks include the maximum limit of credit that may be granted to any one customer, the prohibiting of advances against the security of the bank’s own shares, and the prohibition of trading activity. Excessive direct investment in any financial, commercial, agricultural, industrial, or other undertaking is also prohibited, and acquisition of immovable property and loans secured by such security are subject to restrictions. The provision for numbered accounts has not yet been implemented, pending a review of its legal and practical implications.

The Monetary Authority controls the scope and activities of all banks through the terms of its licenses and through its supervisory and regulatory powers over the banks. Pursuant to this control, the Monetary Authority has developed various categories of banks and bank licenses. At present, the commercial banks in Singapore comprise three categories, namely, full-license banks, restricted banks, and offshore banks. The full-license banks, which total 37, may engage in the entire range of domestic and foreign banking transactions. All domestically incorporated banks (13) and older established foreign banks (24) are in this category. The authorities devised the “restricted” bank and “offshore” bank concepts to allow foreign banks access to Singapore, while protecting the domestic market for local or existing foreign banks. Accordingly, in 1971, the Monetary Authority offered restricted licenses to a selected number of international banks whose countries of origin had not been or were not well represented in Singapore. With few exceptions, banks under the restricted category are primarily wholesale rather than retail oriented. The 13 banks that had been granted restricted banking licenses may engage in most of the activities permitted to the full-license banks. They are free to extend loans in the domestic sector and to participate in foreign exchange and Asian dollar activities; however, they may not operate savings accounts, nor accept total deposits of less than S$250,000 per deposit. A restricted bank is generally limited to one branch. The offshore banks (50) deal mainly in the offshore market. These banks are permitted to deal in foreign exchange and offshore lending, but may not accept deposits from or extend loans to Singaporean residents exceeding a limit of S$30 million per offshore bank, except with the approval of the Monetary Authority.

Asian Currency Units.—From 1968 the Government authorized certain banks to establish a separate accounting unit, called the Asian Currency Unit (ACU), the sole function of which would be to accept nonresident currency deposits and to utilize the resources in funding Asian corporate financing activities. The field of operation became known as the Asian Dollar Market. As of March 1981, there were 120 ACUs: 8 operated by local commercial banks, 77 by foreign commercial banks, 34 by merchant banks, and 1 by a foreign-owned investment company (for further details, see subsection on Asian Currency Market).

Merchant banks.—Merchant banks in Singapore are not governed by either the Banking Act or the Finance Companies Act. They are incorporated and regulated under the Companies Act, 1967, but unlike regular companies they come under the supervision of the Monetary Authority. Since 1972, merchant banks have grown rapidly in Singapore in response to the rising demand for industrial finance and the need for new issues and for amalgamation of companies. They deal in corporate finance, investment portfolio management, medium- and long-term finance, new issues of capital, merger and acquisitions of companies, management advice, underwriting and flotation of shares and stocks, and leasing facilities. In their early stages of development, most of the merchant banks in Singapore participated in the discount house or short-term money market businesses. But, since the establishment of discount houses in November 1972, the discount business has been separated from the merchant banks. Merchant banks cannot accept deposits from individuals or institutions other than banks and finance companies; they cannot engage in foreign exchange transactions or operate ACUs without prior approval from the Monetary Authority. The merchant banks are predominantly multinational in ownership, and their activities are supervised by the Monetary Authority through the broad guidelines drawn up for these operations.

Discount houses.—The development of the money market accelerated and the scope of the market considerably widened following the establishment of four discount houses along the lines of the London discount house system. The first three were established in November 1972 and the fourth in 1974. Local banks, foreign banks, other financial institutions, and foreign discount houses were invited to participate in the discount houses. Initially, the discount houses were managed by persons seconded from discount houses in the United Kingdom and Australia. At present they are run by local managers. The four discount houses collectively form the discount market, which is part of the wider money market.

Discount houses operate under guidelines laid down by the Monetary Authority. The size of their borrowings is limited to 30 times their paid-up capital and reserves. Discount houses must also maintain an asset ratio whereby at least 70 per cent of their total assets are in the form of short-term government paper, with the remaining assets comprising private securities. They accept short-term deposits and invest in treasury bills and short-term government and commercial paper. Discount houses have recourse to the Monetary Authority on the collateral of treasury bills and government securities.

Nonbank financial institutions

Finance companies.—The development of finance companies has been closely related to the activities of banks. At the end of March 1981, there were 34 finance companies in operation, of which 16 were affiliated with commercial banks. Finance companies may accept fixed and savings deposits but are prohibited from providing checking facilities. Apart from the provision of hire-purchase finance of motor vehicles and other consumer durable goods, house mortgages and the financing of such sectors as building and construction, manufacturing, shipping, and general commerce, some finance companies also provide equipment leasing and accounts receivable financing.

The operations of finance companies are regulated by the Finance Companies Act (January 10, 1968), which is administered by the Monetary Authority of Singapore. The Act sets out provisions governing the establishment and operations of finance companies. These relate, among other things, to the maximum amount of loans to one customer as a percentage of paid-up share capital (sec. 18), minimum downpayments and maximum maturity periods for different types of loans and the maximum rate of interest for deposits and for loans (sec. 24), the minimum required reserve fund (sec. 13), the minimum holdings of liquid assets as a percentage of deposit liabilities (sec. 25), and the minimum capital requirements (sec. 7). In 1978, the minimum cash reserve ratio was 6 per cent and the minimum liquid assets ratio 10 per cent, with the ratio being varied by the Monetary Authority from time to time in response to monetary and economic conditions. The Finance Companies Act also lays down regulations on loans and advances, trade, investments, and holdings of immovable property by finance companies (secs. 20–22). Dealings in foreign exchange and gold are prohibited (sec. 18). At the end of March 1981, finance companies accepted S$2,399 million in deposits, of which 90 per cent, or S$2,181 million, was in fixed deposits. Their total deposits were about 14 per cent of commercial banks’ deposits.

Insurance companies.—Insurance companies are covered by the Insurance Act, 1966, and supplementary regulations administered by the Insurance Commissioner’s Department of the Monetary Authority of Singapore. The Insurance Act was modified by the Insurance Funds (Life Business) Order 1968 and the Insurance Funds (General Business) Order 1968. Insurance companies accept insurance premiums and use their funds to advance loans to clients for building houses and other purposes, and to invest in real estate, shares, debentures, and government securities. The Insurance Act stipulates that with respect to life insurance business, insurance companies are required to invest not less than 75 per cent of their Singaporean insurance funds in assets specified in the Second Schedule 4 to the Insurance Act, including a minimum of 20 per cent in Singapore Government securities. General insurance companies are required to invest not less than 55 per cent of their Singaporean insurance funds in assets specified in the Second Schedule, of which no less than 15 per cent should be in Singapore Government securities. To increase the overall acceptance capacity of the local insurance market, a reinsurance company, the Singapore Reinsurance Corporation, was incorporated in September 1973. As of March 1981 there were 74 insurance companies in Singapore, of which 9 transact reinsurance business only.

Money brokers.—The first international money broker started operations in Singapore in mid-1972. Until then, the market was very basic, with local brokers performing the simple function of consummating deals between banks in the local Singapore dollar deposit market. As of March 1981, there were seven international money brokers and one local money broker in Singapore, all members of international brokerage groups with a substantial number of branches in the major financial centers abroad. The brokers deal only in currencies and only with banks and approved financial institutions.5

Singapore’s Financial Markets

Since its inception in 1971, the Monetary Authority has developed a modest market for government securities, widened and activated the money market, and generally brought confidence and greater stability to the company share market. The international monetary crisis of 1971–73 (which induced significant flows of foreign funds into Singapore) and the establishment and operation of new merchant banks, discount houses, and money brokers also contributed to the rapid growth of Singapore’s money and capital markets. The liberal banking and exchange regulations, on the other hand, were important factors responsible for making the markets more internationally oriented. These improvements in the scope and structure of the money and capital markets, in turn, increased the volume and range of local financial assets and widened the scope of monetary control, allowing the Monetary Authority to use traditional central banking instruments in the money market to make direct liquidity control more effective.

Money market

The money market in Singapore consists of the Singapore dollar deposit market and the foreign exchange market.

The Singapore dollar deposit market comprises both overnight funds and term deposits. These are mainly for 1-month or 3-month periods, but may extend up to 6 and 12 months. The market is used mainly by the banks to meet their liquidity requirements and commercial loan portfolios. In addition, there is a secondary market, consisting mainly of bills of exchange, treasury bills, and the Singapore dollar negotiable certificate of deposits, which was first issued in May 1975.6 The rapid growth of these financial assets has been due largely to official measures taken to provide banks with short-term earning assets through a substantial expansion in the issue of treasury bills, provision for discounting facilities, and approval for the operation of money dealers and discount houses.7 Generally, local banks are net lenders of interbank funds, while foreign banks are net borrowers, largely for the purpose of maintaining liquidity. The freeing of interest rate quotation by banks in July 1975, which hitherto was determined by the Association of Banks under a cartel arrangement, made interest rates more sensitive to changes in domestic and international market conditions and contributed to the growth of the money market.

The foreign exchange market consists of both Singapore dollar-based foreign exchange, mainly against U.S. dollars, and the “third currency” exchange not involving Singapore dollars. There are 85 authorized banks and 29 merchant banks licensed to deal in foreign exchange and 7 brokers who are allowed to operate only on an agency basis. Market forces determine the foreign exchange rates. The forward market is still small but growing. Commercial banks have been making available, on a daily basis, forward rates for periods up to one year. Most forward transactions are between the Singapore dollar and the U.S. dollar. The non-banking sector is permitted to deal in forward exchange to cover forward transactions, including borrowing for business purposes. The Monetary Authority does not intervene in the forward market, but enters, infrequently, into swap transactions with banks. The “third currency” market is fast becoming important, with deutsche mark, Japanese yen, Swiss francs, and sterling the principal currencies.

The concept of a foreign currency deposit market housed in the banking system in Singapore was in many ways a logical progression from Singapore’s historic role as one of Asia’s key entrepôt trade centers to a regional financial center. Singapore-based banks have been assuming risks for the rest of the region, squaring their own books in the afternoon when London and European markets open. Thus, Singapore provides a vital link with the European market.

Capital market

The Stock Exchange of Singapore 8 is the chief organized capital market, where bonds and shares are issued, purchased, and sold. The securities industry and listed companies are regulated by the Securities Industry Act, 1973. The Act stipulates that stockbrokers and dealers in securities are required to be licensed and to maintain trust accounts subject to audit. In March 1973, the Securities Industry Act was introduced in order to control speculative manipulation of the stock market, takeovers, or mergers. The Securities Industry Council was also formed in February 1973 to act as an advisory council and a watchdog over the market; new issues of shares through public subscription must be approved by the Council.

Various steps have been taken to develop the domestic capital market. Government bonds with varied maturities have been issued at frequent intervals. The brokerage fee was lowered in 1975 in order to stimulate activities in government bonds through the Exchange. The Monetary Authority has relaxed exchange control regulations and nonresidents are now allowed to buy and sell securities listed on the Exchange. There is no restriction on the remittance of money out of Singapore on the sale of securities and no taxation of capital gains. Underwriting facilities have been provided in the capital market by the various commercial and merchant banks. Turnover at the Stock Exchange in 1981 amounted to S$13.5 billion, representing a sharp increase from the generally depressed level at around S$l–2 billion during 1974–77.

Asian Currency Market

The Asian Currency Market, popularly known as the Asian Dollar Market, is an international money and capital market located in Singapore, which began operations in October 1968. The size of the market has expanded rapidly since its inception, both in terms of resources as well as in the number of financial institutions; as measured by the total liabilities of the banks in the market, resources rose from US$31 million in 1968 to almost US$65.1 billion in March 1981.

The rapid growth of the market can be attributed to several factors. First, the accelerated economic growth of the region generated a growing regional demand for an international financial center that could cater to regional needs. The termination of the preferential exchange control arrangements among sterling area countries in June 1972 also contributed to the growth of demand for regional funds. Second, Singapore’s traditional role as the major entrepôt trading center in the region and its overlapping working hours with the major financial centers in Europe provided a distinct advantage over competing regional financial centers. Third, the Singapore Government has introduced a series of measures designed to promote the growth of the market. These included the provision of fiscal incentives such as the removal in 1969 of the 40 per cent withholding tax on interest paid on deposits; the reduction in 1973 of the corporate income tax on interest receipts derived from offshore loans from 40 per cent to 10 per cent; the waiver of the stamp duties on negotiable certificates of deposit, bills of exchange in 1970, and on bond certificates issued in the Asian Currency Market in 1973. Since 1978, the concessionary tax rate of 10 per cent was extended to cover all offshore income derived by the ACU from its offshore operations.

To facilitate operations in the market, an interbank market was inaugurated, and negotiable certificates of deposit denominated in U.S. dollars were issued in 1970. In November 1977 floating rate U.S. dollar negotiable certificates of deposit were introduced, shortly after they were first issued in the Eurocurrency market. To encourage lending operations, the liquidity requirement (20 per cent of deposit liabilities) was eliminated in 1972, thereby making the participants in the market more competitive in their operations vis-à-vis the Eurocurrency market. Initially, participation by Singaporean nonbank residents in the market was subject to various restrictions. Over the years, however, these have been progressively lifted and since June 1978 with the liberalization of exchange control, the restrictions have been completely eliminated. Residents can now invest or borrow from the Asian Dollar Market without any limit or restrictions.

To operate in the market, banks must obtain licenses from the Monetary Authority and are required to maintain a bookkeeping unit called the Asian Currency Unit (ACU) to distinguish between records of transactions in the market and those of domestic banking business. ACUs are authorized to accept deposits in all currencies other than Singapore dollars and to lend to both nonresidents and residents.9 While transactions in the Asian Currency Market can occur in all foreign currencies, in June 1979 about 90 per cent of deposits were in U.S. dollars.

The financial resources of ACUs consist of inter-ACU funds, funds from the Eurocurrency market, and deposits by nonbanking sectors mainly comprising the regional multinational corporations and private individuals. During 1970–81, as a result of the rapid expansion of the regional activities of the international corporations and the transfer of deposits by private individuals from the Eurocurrency market to the Asian Currency Market, primary deposits increased rapidly at an annual rate of over 60 per cent, reaching US$9.5 billion at the end of March 1981. However, the share of these nonbank deposits in total deposits declined during the period as bank deposits grew even more rapidly, due primarily to an expansion of interbank transactions within ACUs and with the Eurocurrency market. Since 1971, there has been a net inflow of funds to the Asian Currency Market from the Eurocurrency market reversing a previous trend of funds flowing from the Asian Currency Market to the Eurocurrency market. This reflects the changing character of the market from a marginal supplier of idle local funds for the Eurocurrency market to a channel for investment finance to the region.10Pari passu with this shift, deposit interest rates have become increasingly competitive vis-à-vis Eurocurrency rates.

In the past, because of the absence of suitable investment outlets in southeast Asia, most ACU funds were invested either in the Eurocurrency market or in companies in Europe. However, the rapid growth of economic activities in this region in the early 1970s generated a need for greater financial resources. As a result, about US$29 billion, or about 73 per cent of the market’s resources at the end of 1979, has been absorbed by Asian countries. It is estimated that the bulk of such loans to Asian countries was accounted for by Hong Kong, Japan, and countries of the Association of South East Asian Nations,11 all of which have been net borrowers from ACUs. Some of these placements have taken the form of large syndicated loans for financing development projects, with maturities ranging from three to ten years. Interest rates on most of these loans were floating rates based on the Singapore Inter-Bank Offered Rate (sibor). The maturity structure of total assets and liabilities of the ACUs, however, indicates that it is still basically a short-term market where the bulk of transactions do not exceed one year.12

The Asian Currency Market has also been active in floating long-term bonds. From 1971, when the first bond was issued, to the early part of 1975, there were only 4 issues totaling US$70 million, the amount of each issue ranging from US$10 million to US$30 million. Since 1976, however, activities in the bond market picked up rapidly owing partly to a number of changes in taxation and exchange control regulations introduced in that year; in 1980, 18 bond issues totaling US$659 million were floated in the market.

The Asian Currency Market has benefited the Singaporean economy directly by providing employment, tax, and other revenues, as well as indirectly by upgrading skills and expertise in offshore banking operations. Rough estimates indicate that income and profits derived from the market amounted to about 3 per cent of national income in 1975. The authorities have introduced a series of measures designed to minimize any adverse effects of the market on domestic monetary management. In 1973, when Singapore experienced unprecedented inflation, the authorities introduced a special reserve requirement against domestic banks’ net foreign interbank liabilities, in order to restrain the expansion of domestic bank credit. This requirement was abolished in March 1974, as the inflow of speculative foreign funds began to slow down following the flotation of the Singapore dollar on June 21, 1973. As a result of these measures, the presence of the market has not so far posed any important difficulties to domestic monetary management.

Monetary Policy Instruments and Their Effectiveness

Prior to the establishment of the Monetary Authority, the authorities preferred to keep official control over banking activities to a minimum. The Singapore Board of Commissioners of Currency had the automatic function of issuing currency against prescribed assets and no policy functions. The Commissioner of Banking had the supervisory function of ensuring that banks observed sound banking practices mainly to protect depositors’ interests.

Since its establishment on January 1, 1971, and until about the latter part of 1972, the Monetary Authority was concerned largely with the development of the statutory and institutional framework of central banking in Singapore. Consequently, monetary policy was relatively passive and the development of monetary policy instruments relatively slow. With emergence of inflationary pressures in 1973, and the development of recessionary tendencies in subsequent years, monetary policy has assumed a more active role. The Monetary Authority is authorized to set the statutory required minimum cash balance and liquidity ratio for commercial banks and finance companies, to engage in money market operations, and to provide general instructions and guidance to the banks regarding the volume and direction of their advances.

Commercial banks in Singapore are required to maintain a minimum cash balance with the Monetary Authority of 6 per cent of their deposit and other liabilities, and a minimum liquid assets ratio of 20 per cent of deposit and other liabilities, out of which a minimum of 10 per cent has to be held in primary liquid assets,13 while finance companies have to maintain 6 per cent of their total deposit liabilities in minimum cash balances and a minimum of 10 per cent in liquid assets. The Monetary Authority has used the statutory required minimum cash balance and the liquidity ratio flexibly in the past, raising them late in 1972 to curb the expansion of bank credit and lowering them in the middle of 1974 to stimulate the growth of bank credit in the light of the recessionary condition in the economy. In January 1973, the Monetary Authority also introduced a special reserve requirement on net foreign interbank liabilities in order to discourage the inflow of short-term capital during the inflationary period. This requirement was gradually reduced to zero in March 1974, when the speculative foreign capital inflow largely subsided, following the floating of the Singapore dollar on June 21, 1973. However, in March 1974, the Monetary Authority imposed a ceiling on total bank credit to limit the expansion of bank credit, and it exercised selective control to restrain the growth of credit for speculative purposes; the credit ceiling was lifted in January 1975.

The money market operations of the Monetary Authority consist primarily of issuing and rediscounting treasury bills, rediscounting trade bills, making overnight loans to the commercial banks, and carrying on operations in the foreign exchange market. The Monetary Authority uses the discount houses as its agents for purchases and sales of commercial and treasury bills. Following the 1972 amendment to the Monetary Authority of Singapore Act, the discount houses were allowed to borrow from the Monetary Authority on the collateral of treasury bills and other government securities; the lender-of-last-resort facility to commercial banks has not been operative. The market for government securities has been relatively narrow and dominated by medium-term securities, which are mostly held to maturity by the Central Provident Fund. The most important operation in terms of the value of paper involved is the export rediscounting facility. Begun in May 1975 in conjunction with the export drive, it was initially confined to certain kinds of export transactions and only to selected types of paper, but its coverage has gradually been extended, so that it embraces most of the important bills of exchange and other documents used in export finance. The duration of this credit facility is limited to 90 days. Overnight loans to banks have been extended only in limited cases to relieve banks of temporary shortages of funds. Foreign exchange operations have also been limited to the extent that they do not disrupt the orderliness of the exchange market; the Monetary Authority engages in swap operations with the commercial banks, but not on a large scale.

In Singapore there have been no official regulations governing commercial banks on interest rates payable on deposits or loans to customers. Even after the establishment of the Monetary Authority, interest rates were controlled by the Association of Banks in consultation with the Monetary Authority. As from July 1975 each bank has been free to quote its own rates, thus allowing more competition among financial institutions in Singapore. This measure reflects the prevailing official thinking that in a small and open economy such as Singapore’s, the effectiveness of an “independent” bank rate would be very limited, for any divergence between domestic interest rates and external rates by more than 1 or 2 percentage points would induce capital flows. The difficulty is further accentuated by the fact that the Monetary Authority cannot engage in effective open market operations to supplement the bank rate policy.

Currency Act 1

An Act to establish the Board of Commissioners of Currency, Singapore, and the national currency of Singapore, and to provide for matters connected therewith.

[7th April, 1967 2]

Part I. Preliminary

Short title.

1. This Act may be cited as the Currency Act.

Interpretation.

2. In this Act, unless the context otherwise requires—

“Board” means the Board of Commissioners of Currency, Singapore, established by section 3 of this Act;

“Commissioners” means the Board of Commissioners of Currency, Malaya and British Borneo, reconstituted in accordance with the terms of the 1960 Currency Agreement;

“foreign” means pertaining to a country other than Singapore;

“foreign exchange” means foreign currencies and claims in and to foreign currencies;

“issue” includes reissue;

“the 1960 Currency Agreement” means the Malaya British Borneo Currency Agreement, 1960.

Part II. Establishment, Constitution and Objectives and Administration of Board

Establishment and purpose of Board.

3. (1) There shall be established a Board to be known as the “Board of Commissioners of Currency, Singapore”.

(2) The Board shall issue currency notes and coins in Singapore in accordance with section 14 of this Act.

Incorporation, etc.

4. (1) The Board shall be a body corporate with perpetual succession and a common seal with power, subject to the provisions of this Act, to acquire and dispose of property, both movable and immovable, and may sue and be sued in its corporate name and perform such other acts as bodies corporate may by law perform.

(2) The Board shall have its head office in Singapore.

(3) The Board may appoint a person or persons or corporation to be its agents or correspondents for the purposes of this Act.

(4) No resolution or decision taken by the Board and no other act or thing made or done by the Board or any officer or servant of the Board in the exercise of any right or power or in the performance of any duty conferred or imposed upon the Board, or upon such officer or servant, under or by virtue of the provisions of this Act shall be invalid by reason only that the same was not taken, made or done within Singapore.

(5) The Board shall not be subject to any tax, fee or levy whatsoever.

Employment of officers, etc.

5. (1) The Board may appoint such officers and employees as it considers to be necessary for the efficient conduct of the business of the Board upon such terms and conditions as may be determined by the Board.

(2) The Board and its officers and servants shall be deemed to be public servants within the meaning of the Penal Code.

Composition of the Board.

6. (1) The Board shall consist of—

  • (a) the Chairman, who shall be the Minister responsible for finance;
  • (b) the Deputy Chairman, who shall be appointed by the President for a specific period and shall vacate his office without prejudice to his eligibility for reappointment at the expiration of that period; and
  • (c) four other members possessing recognised banking, financial or business experience who shall be appointed by the President from time to time for such periods as the President may decide.

(2) The Deputy Chairman shall act for the Chairman whenever he is absent.

(3) If the Deputy Chairman is temporarily absent from Singapore or temporarily incapacitated through illness or any other sufficient reason from the performance of his duties, another person may be appointed by the President during such temporary absence or incapacity.

(4) If a member appointed under paragraph (c) of subsection (1) of this section suffers an incapacity which is likely to be prolonged, the President may appoint a temporary substitute to act with the full powers of that member until such time as the President determines that the incapacity has ceased.

Meetings of the Board.

7. (1) The Board shall meet at least once in each calendar year and at such times or places as may be deemed necessary by the Chairman:

Provided that the Chairman shall call a meeting as soon as practicable after receiving a request from at least two members.

(2) A quorum for any meeting of the Board shall be three members.

(3) No meeting of the Board, as provided for in this section, shall be held unless the Chairman or the Deputy Chairman is present.

(4) The Chairman and the Deputy Chairman shall each have two votes and the members appointed under paragraph (c) of subsection (1) of section 6 of this Act shall each have one vote.

(5) Any question arising at a meeting of the Board shall be decided by a majority of votes.

(6) In the event of an equality of votes the Chairman presiding at the meeting shall have a casting vote.

General disqualifications for Deputy Chairman and other members.

8. (1) The Deputy Chairman or a member shall be relieved of his office if he—

  • (a) becomes bankrupt or insolvent, applies for any benefits under the law for the relief of bankrupt or insolvent debtors, compounds with his creditors or makes any assignment in whole or in part of his income from the Board for the benefit of such creditors;
  • (b) is convicted of an offence involving dishonesty or fraud or moral turpitude;
  • (c) becomes totally or permanently incapable of performing his duties; or
  • (d) is guilty of misbehaviour that would bring his office into disrepute.

(2) The President shall terminate the appointment of a member who absents himself from three consecutive meetings of the Board without leave.

Member’s interest in contract to be made known.

9. (1) A member who is directly or indirectly interested in a contract made, or proposed to be made, by the Board shall disclose the nature of his interest at the first meeting of the Board at which he is present after the relevant facts have come to his knowledge.

(2) A disclosure under subsection (1) of this section shall be recorded in the minutes of the Board and, after the disclosure, such member—

  • (a) shall not take part in any deliberation or decision of the Board with respect to that contract; and
  • (b) shall be disregarded for the purpose of constituting a quorum of the Board for any such deliberation or decision.

(3) No act or proceeding of the Board shall be questioned on the ground of the contravention by a member of the Board of the provisions of this section.

Preservation of secrecy.

10. Except for the purposes of the performance of his duties or the exercise of his functions or when lawfully required to do so by any court or under the provisions of any law, no member, officer or employee of the Board shall disclose to any person any information which he has acquired in the performance of his duties or the exercise of his functions.

Part III. Currency

Currency of Singapore.

11. (1) The unit of currency of Singapore shall be the Singapore dollar, which shall be divided into one hundred cents.

(2) The abbreviated form of the Singapore dollar shall be “S$”.

Par value.

12. The par value of the Singapore dollar shall be 0.290299 grammes of fine gold which shall not be varied except by the President in accordance with the Articles of Agreement of the International Monetary Fund.3

Use of Singapore dollar.

13. All monetary obligations or transactions in Singapore shall be deemed to be expressed and recorded, and shall be settled in the Singapore dollar unless otherwise provided for by law or validly agreed upon between the parties.

Board to have sole right to issue currency legal render.

14. (1) The Board shall have the sole right to issue currency notes and coins in Singapore and, subject to subsection (3) of this section, only such notes and coins issued by the Board shall be legal tender in Singapore.

  • (2) (a) Notes issued by the Board shall be legal tender up to their face value for the payment of any amount.
  • (b) Coins issued by the Board, if the coins have not been illegally dealt with, shall be legal tender up to their face value in Singapore as follows:
    • (i) in the case of coins of a denomination exceeding one dollar—for the payment of any amount;
    • (ii) in the case of coins of the denomination of fifty cents and one dollar—for the payment of an amount not exceeding ten dollars; and
    • (iii) in the case of coins of a denomination lower than fifty cents—for the payment of an amount not exceeding two dollars.

(3) Notwithstanding the provisions of subsection (1) of this section—

  • (a) the notes and coins of any series or denominations issued by the Board of Commissioners of Currency, Malaya and British Borneo, which were legal tender in Singapore immediately prior to the date of the coming into operation of this Act; and
  • (b) coins made available by the Commissioners to the Board under the provisions of paragraph (b) of clause 18 of the 1960 Currency Agreement,

shall continue to be legal tender in Singapore for such time as the President may, on the recommendation of the Board, by notification in the Gazette determine.

  • (4) (a) Notes issued by the Commissioners which were legal tender in Singapore immediately prior to the date of the coming into operation of this Act shall be legal tender in Singapore as follows:
    • (i) currency notes of denominations of one dollar and above—for the payment of any amount; and
    • (ii) currency notes of denominations of less than one dollar—for the payment of any amount not exceeding two dollars.
  • (b) Coins issued by the Commissioners which were legal tender in Singapore immediately prior to the date of the coming into operation of this Act and coins made available by the Commissioners to the Board under the provisions of paragraph (b) of clause 18 of the 1960 Currency Agreement, if the coins have not been illegally dealt with, and if of silver have not become diminished in weight by wear or otherwise, so as to be of less weight than the weight in that behalf specified in the First Schedule to the 1960 Currency Agreement as the least current weight, shall be legal tender in Singapore as follows:
    • (i) up to an amount not exceeding ten dollars in the case of coins of the denomination of fifty cents and above; and
    • (ii) up to an amount not exceeding two dollars in the case of coins of a lower denomination.

(5) For the purposes of this Act, a coin shall be deemed to have been illegally dealt with where the coin has been impaired, diminished, or lightened otherwise than by fair wear and tear, or has been defaced by having any name, word, device, or number stamped or engraved thereon, whether the coin has or has not been thereby diminished or lightened.

(6) In any criminal proceedings in which the genuineness of any currency note or coin may be in question, a certificate signed by the Deputy Chairman of the Board that he is satisfied by personal examination that such note or coin is or is not forged shall be held to be conclusive evidence of the same and neither the Deputy Chairman nor any officer of the Board shall be cross-examined with regard to the contents of such certificate unless the court otherwise orders.

Bills and notes payable to bearer on demand.

15. (1) No person shall draw, accept, make or issue any bill of exchange, promissory note or engagement for the payment of money payable to bearer on demand or borrow, owe or take up any sum or sums of money on bills or notes payable to bearer on demand.

(2) Cheques or drafts payable to bearer on demand may be drawn on bankers or agents by their customers or constituents in respect of moneys in the hands of these bankers or agents held by them at the disposal of the persons drawing such cheques or drafts.

(3) Any person who contravenes the provisions of this section shall, notwithstanding anything to the contrary in the Criminal Procedure Code, on conviction by a Magistrate’s Court be liable to a fine equal to the amount of the bill, note or engagement in respect whereof the offence is committed notwithstanding that the amount of such fine may be in excess of the original jurisdiction of such court.

(4) No prosecution under this section shall be instituted without the sanction of the Public Prosecutor.

Conversion of currency notes and coins into sterling and vice versa.

16. (1) The Board shall issue, on demand by any person at any of its offices, currency notes to the equivalent value of sums in sterling lodged by that person with the Board’s agent in London for its account; and shall pay, on demand by any person, sterling in London to the equivalent value of currency notes lodged with it by that person:

Provided that such notes have been issued by the Board.

(2) The Board may, at its option, issue coins in the same manner and subject to the same conditions as are prescribed in subsection (1) of this section for the issue of currency notes.

(3) Coins issued shall, subject to any regulations made under section 31 of this Act, be redeemed by the Board in the same manner and subject to the same conditions as are prescribed in subsection (1) of this section for the redemption of currency notes.

Conversion of currency notes and coins into gold and other foreign currencies and vice versa.

17. Notwithstanding the provisions of section 16 of this Act, the Board may issue and redeem in its absolute discretion, currency notes and coins against gold and other currencies eligible for inclusion in the reserve of external assets specified under section 24 of this Act.

Exchange rate.

18. (1) All issues and redemptions of currency notes and coins by the Board shall be effected at the parity specified in section 12 of this Act.

(2) The Board shall be entitled—

  • (a) to charge and levy from any person obtaining currency notes and coins or sterling, or gold or other currencies, a commission at such rate or rates as may, from time to time, be determined:
    • Provided that the commission charged shall be consistent with the Articles of Agreement of the International Monetary Fund; 4
  • (b) to determine, from time to time, the minimum sum or sums which a person shall be entitled to lodge with the Board or its agents, as the case may be, for the purpose of obtaining currency notes and coins or sterling or gold or other currencies;
  • (c) to prescribe the hours of the day during which the Board will issue and redeem currency.

(3) The amounts of such rate or rates and minimum sum or sums shall be notified in the Gazette by the Board.

Form and design of currency notes and coins.

19. (1) Currency notes issued by the Board shall be of such denomination and of such form and design and printed from such plates and on such paper and may be authenticated in such manner as the Board may, from time to time, decide.

(2) The plates shall be prepared and kept and the notes printed, issued and cancelled in accordance with any directions of the Board for the prevention of fraud and improper use.

(3) Coins issued by the Board shall be of such denominations and of such weight, form and design, and made of such metal or metals as the Board may, from time to time, decide.

(4) The Board shall publish in the Gazette the denominations and other characteristics of notes and coins issued by it.

Demonetisation of currency notes and coins.

20. (1) The Board may declare by notification published in the Gazette the withdrawal of any particular issue or denomination of notes and coins issued by the Board.

(2) Any such notification shall give holders of the notes and coins to be withdrawn a reasonable period, in any event not less than six months, within which such notes or coins shall be exchanged at their face value for other legal tender issued by the Board.

Imperfect notes or coins.

21. (1) No person shall be entitled to recover from the Board the value of any mutilated or imperfect note or coin or any coin which has been illegally dealt with.

(2) The circumstances in which, and the conditions and limitations subject to which the value of mutilated or imperfect notes or coins, or coins which have been illegally dealt with, may be refunded as an act of grace shall be within the absolute discretion of the Board.

Restriction on the use of photographs, drawing or design of notes in advertisements, etc.

22. Except with the permission of the Board, no person shall, in any size, scale or colour, use any photograph of or any drawing or design resembling any notes or part thereof, in any advertisement or on any merchandise or products which that person manufactures, sells, circulates or otherwise distributes.

Currency Fund.

23. (1) The Board shall establish a Currency Fund (hereinafter in this Act referred to as “the Fund”) which shall be maintained and managed exclusively by the Board in the manner prescribed in this Act.

(2) There shall be paid into the Fund—

  • (a) all gold, sterling and other foreign currencies received in exchange for currency notes or coins; and
  • (b) the proceeds of any transactions under paragraph (c) of subsection (6) of this section, less all expenses incurred in connection therewith.

(3) Save as otherwise provided in this Act the Fund shall be applied for meeting the redemption of currency and for no other purpose.

(4) A portion of the Fund shall be held in liquid form and such portion may be determined and varied from time to time by the Board, except that at no time shall less than thirty per cent of the Fund be so retained without the unanimous approval of all members of the Board.

(5) The liquid portion of the Fund held in accordance with the provisions of subsection (4) of this section shall be held in any or all of the following forms:

  • (a) gold in any form;
  • (b) sterling and other foreign exchange in the form of—
    • (i) demand or time deposits, maturing within two years, with the Board’s agents or correspondents abroad;
    • (ii) bank balances and money at call;
    • (iii) Treasury Bills;
    • (iv) notes or coins;
  • (c) securities, maturing within two years, of or guaranteed by foreign Governments or international financial institutions.

(6) Notwithstanding anything contained in the preceding subsections, the Board may—

  • (a) use any coin held for the account of the Fund for the purpose of having it reminted into current coin;
  • (b) pay from the Fund the cost of the purchase of metal to be minted into current coin; and
  • (c) sell any coin held for the account of the Fund.

(7) The value of the Fund for any of the purposes of this Act shall be the current realisable value of the whole of the assets held in the Fund, investments of the Fund being valued at their current market price at the time of valuation; and for the purposes of valuation, the assets shall be converted into dollars at the rate of exchange specified in section 12 of this Act.

External assets of Fund.

24. The Fund shall consist of all or any of the following external assets:

  • (a) gold in any form;
  • (b) sterling and other foreign exchange in the form of—
    • (i) demand or time deposits with the Board’s agents or correspondents abroad;
    • (ii) documents and instruments customarily used for the making of payments or transfers in international transactions;
    • (iii) bank balances and money at call;
    • (iv) Treasury Bills;
    • (v) notes or coins;
  • (c) securities of or guaranteed by foreign Governments or international financial institutions;
  • (d) any readily available international drawing facility which the Board, after consultation with the International Monetary Fund and with the approval of the President, deems suitable for inclusion; and
  • (e) any other asset which the Board, with the approval of the President, deems suitable for inclusion.

Currency Fund Income Account.

25. (1) All dividends, interest or other revenue derived from investments or from the utilisation in any other manner of the moneys of the Fund and all commissions paid to the Board in connection with the issue or redemption of currency notes or coins shall be paid into an account to be called “the Currency Fund Income Account” (hereinafter in this Act referred to as “the Income Account”).

(2) There shall be charged upon the Income Account—

  • (a) all expenses incurred by or on behalf of the Board in the preparation, transport, issue, redemption and demonetisation of currency notes and coins, and in the transaction of any business relating to such currency authorised by law, other than the expenses referred to in subsection (6) of section 23 of this Act;
  • (b) any expenses incurred by or on behalf of the Board in connection with the protection of the currency against forgery or counterfeiting of currency notes or coins; and
  • (c) all other expenses properly incurred by the Board in the execution of its functions under this Act:

Provided that the Board may charge upon the Fund and not upon the Income Account any expenditure of an exceptional nature.

(3) At the end of each financial year, any surplus in the Income Account shall be paid into the Consolidated Fund but if on the last day in any financial year there is a deficiency in the Income Account, it shall be charged upon and paid out of the Consolidated Fund:

Provided that if on the last day in any financial year, the face value of the Board’s currency notes and coins in circulation exceeds the value of the Fund calculated in accordance with subsection (7) of section 23 of this Act, there shall be paid into the Fund the whole of the said surplus in the Income Account or such part thereof as shall make up the moneys of the Fund as aforesaid to an amount equal to the face value of the currency notes and coins then in circulation; but if the said surplus in the Income Account is insufficient to make up the deficiency in the Fund, the balance of such deficiency shall be charged upon and paid out of the Consolidated Fund.

(4) If on the last day in any financial year, the value of the Fund so calculated exceeds one hundred per cent of the face value of the Board’s currency notes and coins then in circulation, the Board may direct that the whole or part of such excess be transferred from the Fund to the Income Account.

Meeting of deficiencies in the Fund.

26. If the assets of the Fund should at any time prove insufficient to meet legal demands upon the Board, such deficiencies shall be charged upon and paid out of the Consolidated Fund.

Board of Survey.

27. Unissued stocks of currency notes and coins held by the Board shall on the first business day of each year and at such other times as may be decided by the Board, be verified by a Board of Survey to be constituted under regulations made by the Board.

Part IV. Miscellaneous

Board’s financial year.

28. The financial year of the Board shall begin on the 1st day of January and end on the 31st day of December of each year.

Audit.

29. The accounts of the Board shall be audited by the Auditor-General.

Annual accounts and report.

30. (1) The Board shall, as soon as practicable, after the close of its financial year, transmit to the President a copy of its annual accounts and report and the accounts shall then be published in the Gazette.

(2) The annual accounts and report shall be presented to Parliament as soon as may be after such publication.

(3) The Board shall, as soon as may be, after the end of every third month, make up and publish in the Gazette an abstract showing the whole amount of currency notes and coins in circulation on that day.

(4) The Board shall also publish at half yearly intervals in the Gazette an abstract showing—

  • (a) the amount of the liquid portion of the Fund; and
  • (b) the nominal value and price paid for and, where appropriate, the latest known market price, of the securities belonging to the Fund.

Regulations.

31. The Board may make such regulations as may be required from time to time for carrying into effect the provisions of this Act.

Part V. Transitional and Repeal

Preliminary acts and expenses.

32. Upon the coming into operation of this Act, any act done and preliminary expenses incurred by the Government in connection with the establishment of the Board, including the printing of notes and minting of coins to be issued by the Board, shall have the same effect and validity as if such acts had been validly done and such expenses validly incurred by the Board; and the Board may continue any act so commenced but remaining unfinished at the date of the coming into operation of this Act as if such act had been initiated by the Board.

Continued issue of the Commissioners’ coins.

33. Notwithstanding the provisions of section 14 of this Act the Board may for such period or periods as the Board may determine after the day on which the said section comes into operation, abstain from issuing its own coins or particular denominations thereof, and may enter into agreement with the Commissioners for the continued supply in Singapore of coins of the Commissioners in such denominations as may be required.

Rates of exchange between notes and coins of the Commissioners and of the Board.

34. (1) The notes and coins of the Commissioners which continue to be legal tender under subsection (3) of section 14 of this Act shall be exchanged for the notes and coins of the Board at the rates set out in the Schedule 5 to this Act.

(2) The President may, by order published in the Gazette, add to, amend or vary the rates of exchange set out in the Schedule to this Act.

Protection of the Board, the Commissioners and the employees thereof and of the Government and public officers.

35. No action, suit or other proceeding shall be brought or instituted in any court against, and no liability, claim or demand whatsoever shall lie against, the Board or any officer, servant or employee thereof, the Commissioners or any officer, servant or employee thereof, or the Government or any public officer in respect of any matter or thing authorised or permitted by the Currency (Amendment) Act, 1967, or any matter or thing arising under, resulting from or consequent on the passing or operation of the said Act.

Repeal and saving.

36. The Currency Ordinance, 1960, is hereby repealed, save that the provisions of the 1960 Currency Agreement, relating to the establishment of separate currency authorities shall continue to have the force of law in Singapore.

{The Schedule is omitted from this volume.}

Coin Act 1

An Act to regulate the import and export of coin.

[9th October, 1903]

Short title.

1. This Act may be cited as the Coin Act.

Interpretation.

2. In this Act—

“banker” means any corporation carrying on the business of bankers or financial agents in Singapore;

“money-changer” means a person who carries on the business of money-changing as his chief business.

Prohibition by Minister of importation, exportation and circulation of coin.

3. (1) The Minister may by order—

  • (a) prohibit the importation into Singapore of such coins, whether legal tender within Singapore or not, as are in such order specified;
  • (b) prohibit the exportation from Singapore of such coins, being legal tender within Singapore, as are in such order specified.

(2) The Minister may by order—

  • (a) prohibit the circulation in Singapore of such foreign coins, not being legal tender within Singapore, as are in such order specified;
  • (b) exempt any country or state from the operation of any order prohibiting the import into or export from Singapore of such coins as are in such order specified.

Publication of order.

(3) Every order made under this section shall be published in the Gazette, and shall not come into force until so published.

Penalty for importing or exporting coin in contravention of order.

4. (1) Any person who, in contravention of any such order, imports or exports or attempts to import or export any coin in such order specified to the amount of five dollars in nominal value or upwards in the case of copper or bronze coin, or of twenty-five dollars in nominal value or upwards in the case of silver coin, shall be liable to a fine not exceeding two thousand dollars.

(2) Any coin so imported or exported or attempted to be imported or exported in contravention of any such order shall be forfeited.

(3) In any case in which it has been proved, to the satisfaction of a court, that coin has been exported in contravention of any such order, it may impose, in addition to the fine authorized by this section, a further penalty not exceeding the amount or value of the coin so found to have been exported.

(4) This section shall not apply to any coin imported or exported with the permission in writing under the hand of the Minister or of any officer appointed in that behalf by the President; such permission shall specify the terms on which such coin may be imported or exported, as the case may be.

(5) Any person importing or exporting coin in contravention of the terms of such permission shall be liable to a fine not exceeding two thousand dollars, and any coin so imported or exported shall be forfeited. The provision contained in subsection (3) shall apply in the case of any coin exported in contravention of the terms of any such permission.

Penalty for circulating prohibited coin.

(6) Any person who, in contravention of any such order, circulates or attempts to circulate any coin in such order specified shall be liable to a fine not exceeding fifty dollars, and the coin shall be forfeited.

(7) For the purposes of this section, a person is not deemed to circulate coin who gives such coin to a banker or money-changer in exchange for other coins or for notes.

Forfeiture of prohibited coin.

5. Any coin, the circulation of which in Singapore is for the time being prohibited by any such order as aforesaid, found within Singapore otherwise than in the possession of a banker or money-changer, after the expiration of thirty days from the publication in the Gazette of such order, may, if it amounts to the nominal value of five dollars or upwards in the case of copper or bronze coin, or twenty-five dollars or upwards in the case of silver coin, be forfeited, and may be seized without warrant by any police officer and detained pending adjudication.

Search under warrant of Justice of the Peace for coin imported or exported in contravention of order.

6. A Justice of the Peace, if satisfied by sworn information in writing that there is good cause to believe that any coin which has been imported, or is in the act of being imported or exported, in contravention of any such order, is likely to be found in any place to the nominal value of fifty dollars or upwards, may by warrant under his hand direct any police officer, named or specified therein, to enter such place and search the same and seize all coin or coins found therein, the import or export of which is for the time being prohibited, and detain the same pending adjudication.

Police may arrest without warrant.

7. Any person found offending against this Act may be arrested by any police officer without warrant.

Forfeiture of coin by whom declared.

8. Forfeitures of coin may be declared under this Act—

  • (a) by the High Court in proceedings instituted by the Attorney-General under the Government Proceedings Act;
  • (b) by the convicting court in all cases where a person is convicted of an offence under this Act in respect of such coin;
  • (c) by a Magistrate’s Court where no person is convicted and the nominal value of the coin does not exceed five hundred dollars.

Fine paid to informer.

9. The court may direct any fine or portion of a fine imposed and levied under this Act to be paid to the informer.

Monetary Authority of Singapore Act1

An Act to establish a corporation to be known as the Monetary Authority of Singapore and to provide for the transfer to the corporation of certain functions and assets of the Government and for matters incidental thereto and connected therewith.

[Parts I, II, V and VI: 26th December, 1970;

Parts III and IV: 1st January, 1971]

Part I. Preliminary

Short title.

1. This Act may be cited as the Monetary Authority of Singapore Act.

Interpretation.

2. In this Act, unless the context otherwise requires—

“Authority” means the Monetary Authority of Singapore established under section 3 of this Act;

“bank” means a bank licensed under the Banking Act;

“board” means the board of directors of the Authority;

“director” means a director appointed under subsection (1) of section 8 of this Act and the chairman of the board, the deputy chairman and the Accountant-General;

“managing director” means a director appointed under subsection (1) of section 9 of this Act;

“Minister” means the Minister charged with the responsibility for finance.

Part II. Establishment, Capital and Administration of the Authority

Establishment of the Authority.

3.—(1) There shall be established an Authority to be called “the Monetary Authority of Singapore” which shall be a body corporate and shall have perpetual succession and may sue and be sued in its own name.

(2) The Authority shall have a common seal and such seal may, from time to time, be broken, changed, altered and made anew as to the Authority seems fit, and, until a seal is provided under this section, a stamp bearing the inscription “The Monetary Authority of Singapore” may be used as the common seal.

(3) All deeds, documents and other instruments requiring the seal of the Authority shall be sealed with the common seal of the Authority by the authority of the Authority in the presence of the managing director and of some other person duly authorised by the Authority to act in that behalf and shall be signed by the managing director and by such duly authorised person, and such signing shall be sufficient evidence that the common seal of the Authority has been duly and properly affixed and that the said seal is the lawful common seal of the Authority.

(4) The Authority may by resolution or otherwise appoint an officer of the Authority or any other agent either generally or in a particular case to execute or sign on behalf of the Authority any agreement or other instrument not under seal in relation to any matter coming within the powers of the Authority.

Principal objects of the Authority.

4. The principal objects of the Authority shall be—

  • (a) to act as banker to, and financial agent of, the Government;
  • (b) to promote, within the context of the general economic policy of the Government, monetary stability and credit and exchange conditions conducive to the growth of the economy; and
  • (c) to exercise the powers and to perform the duties and functions that are transferred to the Authority under section 21 of this Act.

Authorised capital.

5.—(1) The authorised capital of the Authority shall be one hundred million dollars.

(2) On the establishment of the Authority such portion of the authorised capital as the Government may decide shall be subscribed and paid up by the Government.

(3) The paid-up portion of the authorised capital may be increased from time to time by such amount as the Government may approve.

(4) The payment of such increase in the authorised capital may be made by way of such transfers from the General Reserve Fund as the Government, in consultation with the board, may from time to time approve.

General Reserve Fund.

6.—(1) There shall be a General Reserve Fund of the Authority.

(2) At the end of each financial year, the net profit of the Authority for that year shall be determined after allowing for the expenses of operation and after provision has been made for bad and doubtful debts, depreciation in assets, contributions to staff and pension funds and such other contingencies as are usually provided for by banks.

(3) Subject to subsection (4) of this section, such part of the net profit of the Authority, as the board determines, shall be placed to the credit of the General Reserve Fund and the remainder shall be paid to the Government.

(4) Where at the end of a year the General Reserve Fund is—

  • (a) less than half the paid-up capital of the Authority, the whole of the net profit shall be credited to the General Reserve Fund; and
  • (b) not less than half the paid-up capital of the Authority but less than twice the paid-up capital of the Authority, not less than thirty per cent of the net profit shall be credited to the General Reserve Fund.

Board of directors.

7.—(1) There shall be a board of directors of the Authority which shall be responsible for the policy and general administration of the affairs and business of the Authority.

(2) The board shall, from time to time, inform the Government of the banking and credit policy of the Authority.

(3) The board shall consist of—

  • (a) the Minister responsible for finance who shall be the chairman;
  • (b) the Permanent Secretary (Economic Development), Ministry of Finance who shall be the deputy chairman;
  • (c) the Accountant-General; and
  • (d) four other directors appointed in accordance with sections 8 and 9 of this Act.

Appointment of directors.

8.—(1) The directors referred to in paragraph (d) of subsection (3) of section 7 of this Act shall be appointed by the President.

(2) The directors so appointed—

  • (a) shall not act as delegates on the board from any commercial, financial, agricultural, industrial or other interests with which they may be connected;
  • (b) shall hold office for a term not exceeding three years and shall be eligible for reappointment; and
  • (c) may be paid by the Authority out of the funds of the Authority such remuneration and allowances as may be determined by the President.

(3) The provisions of paragraphs (b) and (c) of subsection (2) of this section do not apply to a director who is appointed managing director under section 9 of this Act.

Appointment of managing director.

9.—(1) The President shall, with the approval of the Public Service Commission, appoint one of the directors appointed under section 8 of this Act to be the managing director.

(2) The managing director shall be an employee of the Authority on such terms and conditions of service as the President may decide.

(3) The managing director shall be entrusted with the day-to-day administration of the Authority, and may, subject to this Act, make decisions and exercise all powers and do all acts which may be exercised or done by the Authority.

(4) The managing director shall be answerable to the board for his acts and decisions.

(5) In the event of the absence or inability to act of the managing director, the Minister may appoint a director to discharge his duties during the period of such absence or inability.

Disqualification of directors.

10.—(1) No person may be appointed as or remain a director of the Authority who is a director or salaried official of any bank licensed under the provisions of the Banking Act.

(2) The disqualification referred to in subsection (1) of this section does not apply to the directors referred to in paragraphs (b) and (c) of subsection (3) of section 7 of this Act.

(3) The President may terminate the appointment of any director appointed under subsection (1) of section 8 of this Act if he—

  • (a) resigns his office;
  • (b) becomes of unsound mind or incapable of carrying out his duties;
  • (c) becomes bankrupt or suspends payment to or compounds with his creditors;
  • (d) is convicted of an offence involving dishonesty or fraud or moral turpitude;
  • (e) is guilty of serious misconduct in relation to his duties;
  • (f) is absent, without leave, from three consecutive meetings of the board; or
  • (g) fails to comply with his obligations under section 13 of this Act.

Vacancies in the office of director.

11. If any director appointed under subsection (1) of section 8 of this Act dies or resigns or otherwise vacates his office before the expiry of the term for which he has been appointed another person may be appointed by the President for the unexpired period of the term of office of the director in whose place he is appointed.

Meetings and decisions of the board.

12.—(1) The chairman of the board shall summon meetings as often as may be required but not less frequently than once in three months.

(2) At every meeting of the board a quorum shall consist of four directors, and decisions shall be adopted by a simple majority of the votes of the directors present and voting except that in the case of an equality of votes the chairman shall have a casting vote.

Director’s interest in contract to be made known.

13.—(1) A director who is directly or indirectly interested in a contract made, or proposed to be made, by the Authority shall disclose the nature of his interest at the first meeting of the board at which he is present after the relevant facts have come to his knowledge.

(2) A disclosure under subsection (1) of this section shall be recorded in the minutes of the board and, after the disclosure, the director—

  • (a) shall not take part in any deliberation or decision of the board with respect to that contract; and
  • (b) shall be disregarded for the purpose of constituting a quorum of the board for any such deliberation or decision.

(3) No act or proceeding of the board shall be questioned on the ground that a director has contravened the provisions of this section.

Preservation of secrecy.

14.—(1) Except for the purpose of the performance of his duties or the exercise of his functions or when lawfully required to do so by any court or under the provisions of any written law, no director, officer or employee of the Authority shall disclose to any person any information relating to the affairs of the Authority or of any person which he has acquired in the performance of his duties or the exercise of his functions.

(2) Any person who contravenes the provisions of subsection (1) of this section shall be guilty of an offence under this Act and shall be liable on conviction to imprisonment for a term not exceeding three years or to a fine not exceeding five thousand dollars or to both such imprisonment and fine.

Remuneration not to be related to profits.

15. No salary, fee, wage or other remuneration or allowance paid by the Authority shall be computed by reference to the profits of the Authority.

Public servants.

16. The directors, including the managing director, and the officers and employees of the Authority of every description shall be deemed to be public servants within the meaning of the Penal Code.

Part III. Provisions Relating to Staff, Transfer of Functions, Employees and Assets, etc.

List of posts and appointment of employees.

17.—(1) The Authority may from time to time approve a list of posts which it thinks necessary for the purposes of this Act and may add to or amend that list. The first such list of posts shall contain posts for all the persons transferred to the service of the Authority under section 18 of this Act.

(2) No person may be employed by the Authority unless he holds a post appearing in the list of posts for the time being in force.

(2A) The Authority may, by notification in the Gazette, declare that appointments and promotions to such posts or classes of posts as it thinks fit, and the termination of appointment, dismissal, and disciplinary control of persons appointed to such posts, shall be vested in the Authority and, upon such notification, the Authority shall exercise such functions on the advice of the Public Service Commission.

(3) Subject to the provisions of this section—

  • (a) appointments and promotions to all posts shall be made by the Authority; and
  • (b) the termination of appointment, dismissal and disciplinary control of the employees of the Authority shall be vested in the Authority.

(4) [Repealed] 2

(5) Notwithstanding the provisions of this section, the Authority may appoint persons temporarily for a period not exceeding two months to posts in the list of posts for the time being in force.

(6) The Authority may make rules, not inconsistent with the provisions of this Act or of any other written law, for the appointment, promotion, disciplinary control and terms and conditions of service of all persons employed by the Authority.

(7) Without prejudice to the generality of subsection (6) of this section, the Authority shall prescribe the rates of remuneration payable to persons employed by the Authority, and no person so employed shall be paid otherwise than in accordance with such rates.

Transfer of employees.

18. Upon the coming into operation of this Act, such persons, as the Minister may decide, who were employed by the Government immediately prior to the date of the coming into operation of this Act and were exercising any of the powers or were discharging any of the functions or duties vested in the Authority by this Act, shall be deemed to be transferred to the service of the Authority on terms not less favourable than those they enjoyed immediately prior to their transfer and such terms (which shall be determined by the Authority) shall take into account the salaries and conditions of service including any accrued rights to leave, enjoyed by them while in the employment of the Government.

Pension schemes, provident fund, etc.

19.—(1) The Authority may, with the approval of the President, make rules for the establishment of a scheme or schemes for the payment of pensions, gratuities, provident fund or other superannuation benefits to such employees or classes of employees of the Authority as it may determine, or to their legal personal representatives or dependants, on the death or retirement of such employees from the service of the Authority or on their otherwise leaving the service of the Authority.

(2) The Authority in making under subsection (1) of this section any pension, provident fund or other superannuation rules which affect any persons transferred to the service of the Authority under section 18 of this Act shall in such rules provide for the payment to such persons or their dependants of benefits not less in value than the amount of any pension, provident fund, gratuity or allowance for which such persons would have been eligible under the Pensions Act had they continued in the service of the Government and any such pension, provident fund or superannuation rules relating to length of service of persons shall provide for the recognition as service under the Authority by persons so transferred of service by them under the Government.

(3) Nothing in the rules to be made under subsection (1) of this section shall adversely affect any conditions that would have been applicable to persons transferred to the service of the Authority from their service with the Government as regards any pension, gratuity or allowance under the Pensions Act.

(4) Where any person in the service of the Authority whose case does not come within the scope and effect of any pension or other schemes established under this section retires or dies in the service of the Authority or is discharged from such service, the Authority may grant to him or to such other person or persons wholly or partly dependent on him, as the Authority may think fit, such allowance or gratuity as the Authority may determine.

No entitlement in respect of abolition or reorganization of office.

20. Notwithstanding the provisions of the Pensions Act, no person who is transferred to the service of the Authority under section 18 of this Act shall be entitled to claim any benefits under this Act on the ground that he has been retired from the service of the Government on account of abolition or reorganization of office.

Transfer of functions, powers, duties, assets and liabilities, etc., to the Authority.

21.—(1) Upon the coming into operation of this Act, there shall be transferred to the Authority—

  • (a) all the functions, duties and powers of the Minister for Finance, the Commissioner of Banking and the Accountant-General under the Banking Act;
  • (b) all the functions, duties and powers of the Minister for Finance, the Commissioner for Finance Companies and the Accountant-General under the Finance Companies Act; and
  • (c) the functions, duties and powers of the Minister for Finance and the Controller of Foreign Exchange under the Exchange Control Act.

(2) After the coming into operation of this Act, there shall be transferred to the Authority such other functions, duties and powers as are conferred by or in pursuance of any written law upon the Minister or any public officer as the President may, from time to time, by notification in the Gazette, specify.

(3) Upon or after the coming into operation of this Act, such movable property, assets, rights, interests and privileges as well as such debts, liabilities and obligations connected therewith or appertaining thereto which are related to finance and are vested in or conferred upon the Minister pursuant to any written law, as the President may by notification in the Gazette specify, shall be deemed to have been transferred to and vested in the Authority without further assurance.

(4) Where in any written law or any document whatsoever there is a reference to the Minister for Finance, the Commissioner of Banking, the Commissioner for Finance Companies, Commissioner of Chit Funds, the Accountant-General or the Controller of Foreign Exchange in connection with or related to the performance of any of the functions, duties and powers that are transferred to the Authority under subsection (1) or (2) of this section the written law or document shall have effect as if the Authority had originally been referred to in the written law or document instead of the Minister for Finance, the Commissioner of Banking, the Commissioner for Finance Companies, Commissioner of Chit Funds, the Accountant-General or the Controller of Foreign Exchange, as the case may be.

(5) The Minister shall have power to do all acts or things that he considers necessary or expedient to give effect to the provisions of subsections (1), (2) and (3) of this section.

(6) If any question arises as to whether—

  • (a) any of the functions, duties and powers; or
  • (b) any movable property, assets, rights, interests, privileges, debts, liabilities and obligations,

have been transferred to or vested in the Authority under subsections (1), (2) and (3) of this section, a certificate under the hand of the President shall be conclusive evidence of such transfer or vesting.

Part IV. Powers, Duties and Functions of the Authority

Powers, duties and functions of the Authority.

22. The Authority may, in addition to the powers, duties and functions transferred to it by virtue of section 21 of this Act, exercise and discharge the following powers, duties and functions, that is to say, it may—

  • (a) accept deposits of money;
  • (b) issue demand drafts and other kinds of remittances made payable at its own office or the offices of agencies or correspondents;
  • (c) purchase, accept on deposit and sell gold coin or bullion;
  • (d) purchase, sell, discount and rediscount Treasury bills of the Government;
  • (e) purchase and sell securities of the Government or of any public authority which have been publicly offered for sale or form part of an issue which is being made to the public at the time of acquisition;
  • (f) purchase, sell, discount and rediscount bills of exchange and promissory notes arising out of bona fide commercial transactions bearing two or more good signatures and maturing within three months (exclusive of days of grace) from the date of acquisition;
  • (g) grant advances to such financial institutions or class of financial institutions as the Authority may from time to time approve for periods not exceeding three months against—
    • (i) Treasury bills of the Government and securities of the Government;
    • (ii) gold coin or bullion;
    • (iii) such bills of exchange and promissory notes as are eligible for purchase, discount or rediscount by the Authority up to seventy-five per cent of their nominal value;
    • (iv) warehouse warrants or their equivalent (securing possession of goods), in respect of goods duly insured and with a letter of hypothecation from the owner:
    Provided that no such advance shall exceed sixty per cent of the current market value of the goods in question;
  • (h) invest in securities of the Government or of any public authority for any amount, and to mature at any time on behalf of staff and pension funds and other internal funds of the Authority;
  • (i) acquire, hold and sell shares of any corporation set up with the approval of, or under the authority of, the Government for the purpose of promoting the development of a money market or securities market in Singapore or for the financing of economic development in Singapore;
  • (j) purchase and sell currency, and purchase, sell, discount and rediscount bills of exchange and Treasury bills drawn in or on places outside Singapore;
  • (k) borrow money, establish credits and give guarantees in any currency, inside and outside Singapore, on such terms and conditions as it may deem fit;
  • (l) maintain accounts with central banks outside Singapore and with other banks inside and outside Singapore;
  • (m) purchase and sell securities of, or guaranteed by, such guarantor, governments or international financial institutions as may be approved by the board, or purchase and sell securities and investments authorised by the President on the recommendation of the board;
  • (n) act as correspondent, banker or agent for any central bank or other monetary authority and for any international bank or international monetary authority established under governmental auspices;
  • (o) open accounts for, and accept deposits from, the Government, public authorities, banks and other credit institutions in Singapore;
  • (p) underwrite loans in which it may invest;
  • (q) undertake the issue and management of loans publicly issued by
  • (r) the Government or by any public authority; and (r) do generally all such things as may be commonly done by bankers and are not inconsistent with the exercise of its powers or the discharge of its duties under this Act.

Investment of funds.

23. The funds of the Authority may be invested in all or any of the following:—

  • (a) gold coin or bullion;
  • (b) notes, coin, bank balances and money at call in such country or countries as may be approved by the board;
  • (c) Treasury bills of such government or governments as may be approved by the board;
  • (d) securities of, or guaranteed by, such government or governments or international financial institutions as may be approved by the board;
  • (e) such securities and investments as may be authorised by the President on the recommendation of the board.

Authority as a banker to, and financial agent of, the Government and manager of its external assets.

24.—(1) The Authority shall act as a banker to, and a financial agent of, the Government.

(2) Whenever the Authority receives and disburses Government moneys it shall keep account thereof and may be paid an agency fee for its services.

(3) The Authority may act generally as agent for the Government on such terms and conditions as may be agreed between the Authority and the Government, where the Authority can do so appropriately and consistently with the provisions of this Act and with its duties and functions as a monetary authority.

(4) The Authority shall, subject to the provisions of the Financial Procedure Act and any other written law, manage the external assets of the Government.

Special loans to banks and financial institutions.

24A. The Authority may, if it thinks such action is necessary to safeguard monetary stability, make a loan or advance to a bank carrying on business under the Banking Act or to such financial institutions or class of financial institutions as the Authority may from time to time approve against such form of security as the Authority may consider sufficient.

Power to issue directions to financial institutions.

24B.—(1) The Authority may, if it thinks it necessary in the public interest, request information from and make recommendations to such financial institutions as the Authority may from time to time approve and may issue directions for the purpose of securing that effect is given to any such request or recommendation.

(2) Before issuing any direction under subsection (1) of this section the financial institution or financial institutions concerned shall, unless the Authority in respect of any particular direction decides that it is not practicable or desirable, be given an opportunity to make representations with regard to the proposed direction within such time as the Authority shall specify.

(3) Upon receipt of any representations referred to in subsection (2) of this section the Authority shall consider them and, may—

  • (a) reject such representations; or
  • (b) amend or modify the proposed direction in accordance with the representations, or otherwise,

and in either event, it shall thereupon issue a direction in writing, to such financial institution or financial institutions, as the case may be, requiring that effect be given to the proposed direction or to the proposed direction as subsequently amended or modified by it within a reasonable time, and the financial institution or financial institutions, as the case may be, shall comply with such direction.

(4) Any financial institution that fails or refuses to comply with a direction given under this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding five thousand dollars.

Agents.

25. In the exercise of its powers and the performance of its functions under this Act the Authority may—

  • (a) establish agencies at such places outside Singapore as it thinks fit;
  • (b) arrange with and authorise a person to act as agent of the Authority outside Singapore;
  • (c) act as agent of a bank carrying on business inside or outside Singapore; and
  • (d) act as agent of any public authority either generally or for a particular purpose inside or outside Singapore.

Part V. Miscellaneous

Statistics.

26.—(1) The Authority may at any time for the purpose of carrying out its functions under this Act request such persons or classes of persons as it may decide to collect and furnish such statistical information as the Authority may specify and those persons or classes of persons shall comply with that request.

(2) Statistical information received from the persons or classes of persons referred to in subsection (1) of this section shall be regarded as secret between them and the Authority.

(3) Any person who fails to comply with a request of the Authority under subsection (1) of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding five hundred dollars.

Authority’s financial year.

27. The financial year of the Authority shall begin on the 1st day of April and end on the 31st day of March of each year, except that for the year 1970 the financial year shall begin on the date of the establishment of the Authority and shall end on the 31st day of March 1971.

Audit.

28. The accounts of the Authority shall be audited by the Auditor-General.

Preparation and publication of annual accounts and annual report.

29.—(1) The Authority shall within six months from the close of its financial year—

  • (a) transmit to the President a copy of the annual accounts certified by the Auditor-General, and those accounts shall then be published in the Gazette; and
  • (b) transmit to the President a report by the board on the working of the Authority throughout the year and that report shall be published by the Authority.

(2) The Authority shall cause the annual accounts and the annual report to be presented as soon as may be to Parliament.

Borrowing from Authority by officers and employees.

30. The Authority shall not lend money to an officer or employee of the Authority, except—

  • (a) for the purchase, erection, alteration, renovation or enlargement of a house in which he resides or intends to reside;
  • (b) to discharge a mortgage or encumbrance on such a house; or
  • (c) for the purchase of a vehicle.

Power to appoint attorney.

31. The Authority may, by instrument under its common seal, appoint a person (whether in Singapore or in a place outside Singapore) to be its attorney, and the person so appointed may, subject to the instrument, do any act or execute any power or function which he is authorised by the instrument to do or execute.

Exemption from taxes, fees and levies.

32. The Authority shall not be subject to any tax, fee or levy whatsoever.

Validity of acts and transactions of Authority.

33. The validity of an act or transaction of the Authority shall not be called in question in any court on the ground that any provision of this Act has not been complied with.

Guarantee by Government.

34. The Government shall be responsible for the payment of all moneys due by the Authority but nothing in this section authorises a creditor or other person claiming against the Authority to sue the Government in respect of his claim.

Fiat of Attorney-General.

35. No prosecution in respect of any offence under this Act shall be instituted without the consent in writing of the Attorney-General.

Jurisdiction.

36. Notwithstanding the provisions of any other written law, a District Court has jurisdiction to try all offences under this Act and to impose the full penalty prescribed therefor.

Power of Authority to make regulations.

37. The Authority may, with the approval of the President, make regulations for the better carrying out of the objects and purposes of this Act.

Preliminary acts and expenses.

38. Notwithstanding the provisions of section 1 of this Act, the Minister may at any time before the date of the coming into operation of Part II of this Act do all such acts and incur all such expenses as he may consider necessary in connection with the establishment of the Authority; and upon that date all such acts and expenses shall be deemed to have been done and incurred by the board.

Operation of Act not to affect the Currency Act.

39. Nothing in this Act affects the operation of the Currency Act.

Part VI. Transitional

Transitional provisions.

40.—(1) Any fund, scheme, contract, document, licence, permission or resolution constituted, prepared, made, granted or approved under the Exchange Control Act, the Finance Companies Act, the Banking Act or any other written law relating to such functions, powers and duties as are transferred to the Authority under this Act, shall, except where otherwise expressly provided in this Act or in any other written law, continue and be deemed to have been constituted, prepared, made, granted or approved, as the case may be, under this Act.

(2) Any legal proceeding or cause of action pending or existing immediately before the commencement of this Act by or against the Government in respect of any functions or assets which under and by virtue of this Act are transferred to, or vested in, the Authority, may be continued and enforced by or against the Authority as it might have been by or against the Government, as the case may be, had this Act not come into operation.

Banking Act1

An Act to provide for the licensing and regulation of the business of banking.

[1st January, 1971]

Part I. Preliminary

Short title.

1. This Act may be cited as the Banking Act.

Interpretation.

2.—(1) In this Act, unless the context otherwise requires—

“the Authority” means the Monetary Authority of Singapore as established under section 3 of the Monetary Authority of Singapore Act; 2

“bank” means any company which carries on banking business and holds a valid licence granted under section 7 or 72 of this Act. All branches and offices in Singapore of such a company shall be deemed to be one bank for the purposes of this Act;

“banking business” means the business of receiving money on current or deposit account, paying and collecting cheques drawn by or paid in by customers, the making of advances to customers, and includes such other business as the Authority may prescribe for the purposes of this Act;

“company” means any company defined in any written law for the time being in force relating to companies, any company formed in pursuance of any Royal Charter or Letters Patent, and any company incorporated or registered under any written law in force in Singapore and includes any company incorporated outside Singapore which has complied with the provisions of any written law for the time being in force relating to companies;

“director” includes any person occupying the position of director of a corporation by whatever name called and includes a person in accordance with whose directions or instructions the directors of a corporation are accustomed to act and an alternate or substitute director;

“licence” means a licence granted under section 7 or 72 of this Act;

“place of business” in relation to a bank includes a mobile branch of the bank and a branch established and maintained for a limited period only;

“published reserves” means reserves which appear in the accounts of the bank but does not include any reserves which are represented by the writing down of the value of assets or by provision for the depreciation of fixed assets or which are maintained for any specific purposes;

“savings account liabilities” in relation to a bank means the total deposits at that bank which normally require the presentation of passbooks for the deposit or withdrawal of moneys;

“sight liabilities” in relation to a bank means the total deposits at that bank which are repayable on demand, but does not include savings account liabilities or the deposits of any other bank at that bank;

“time liabilities” in relation to a bank means the total deposits at that bank which are repayable otherwise than on demand, but does not include savings account liabilities or the deposits of any other bank at that bank.

(2) Without prejudice to any other meaning which the word “insolvent” may have, a bank shall, for the purposes of this Act, be deemed to be insolvent if either it has ceased to pay its debts in the ordinary course of business or is unable to pay its debts as they become due.

(3) For the purposes of sections 10, 25, 27 and 28 of this Act “capital funds” means—

  • (a) in the case of a bank whose head office is situated in Singapore—the paid-up capital and published reserves of that bank; and
  • (b) in the case of a bank whose head office is situated outside Singapore—the net head office funds and such other liabilities as the Authority may decide.

Part II. Appointment of Assistants

Appointment of assistants.

3.—(1) The Authority may authorize or appoint any person to assist it in the exercise of its functions and duties under this Act, either generally or in any particular case.

(2) The members of the Authority and any person appointed by it pursuant to subsection (1) of this section shall be deemed to be public servants within the meaning of the Penal Code.

Part III. Licensing of Banks

Licensing of banks.

4.—(1) No banking business shall be transacted in Singapore except by a company which is in possession of a valid licence granted under this Act by the Authority authorizing it to conduct banking business in Singapore.

(2) Any person who contravenes the provisions of subsection (1) of this section shall be guilty of an offence under this Act and shall be liable on conviction to imprisonment for a term not exceeding three years or to a fine not exceeding five thousand dollars or to both such imprisonment and fine and in the case of a continuing offence to a further fine of one thousand dollars for every day during which the offence continues after conviction.

Use of word “bank”.

5.—(1) No person or body of persons, whether incorporated or not, other than a bank shall, without the written consent of the Authority, use the word “bank” or any of its derivatives in any language, or any other word indicating it transacts banking business, in the name, description or title under which the person or body of persons is transacting business in Singapore or make or continue to make any representation to such effect in any bill head, letter paper, notice, advertisement or in any other manner whatsoever:

Provided that nothing in this section prohibits an association of banks formed for the protection of common interests from using the word “bank” or any of its derivatives in any language as a part of its name or description of its activities.

(2) Any person or body of persons whether incorporated or not who contravenes the provisions of subsection (1) of this section shall be guilty of an offence under this Act and shall be liable on conviction to imprisonment for a term not exceeding one year or to a fine not exceeding one thousand dollars or to both such imprisonment and fine and in the case of a continuing offence to a further fine of two hundred and fifty dollars for every day during which the offence continues after conviction.

Examination of persons suspected of transacting banking business.

6. Whenever the Authority has reason to believe that a person is transacting banking business without a licence, it shall have the power to examine the books, accounts and records of that person in order to ascertain whether or not that person has violated or is violating any provisions of this Act, and any refusal to submit such books, accounts and records shall be prima facie evidence of the fact of operation without a licence.

Application for licence.

7.—(1) A company which desires authority to carry on banking business in Singapore shall apply in writing to the Authority for a licence under this section and shall supply—

  • (a) a copy of the memorandum of association and articles of association or other instrument under which the company is incorporated, duly verified by a statutory declaration made by a senior officer of the company;
  • (b) a copy of the latest balance-sheet of the company; and
  • (c) such other information as may be called for by the Authority.

(2) Upon receiving an application under subsection (1) of this section, the Authority shall consider the application and may, subject to the provisions of section 9 of this Act, grant a licence, with or without conditions, or refuse a licence.

(3) The Authority may at any time vary or revoke any existing conditions of a licence or impose conditions or additional conditions thereto.

(4) The Authority shall, prior to any action under subsection (3) of this section, notify its intention to take such action to the bank concerned and shall give the bank an opportunity to submit reasons why the conditions of its licence should not be so varied or revoked.

(5) Where a licence is subject to conditions the bank shall comply with those conditions.

(6) Any bank which fails to comply with any of the conditions of its licence shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding five thousand dollars and in the case of a continuing offence to a further fine of one thousand dollars for every day during which the offence continues after conviction.

Licence fees.

8.—(1) Every bank in Singapore shall pay such annual licence fee as the Authority may by notification in the Gazette prescribe.

(2) The Authority may prescribe different licence fees in respect of different classes or categories of banks and such fees shall apply uniformly to such classes or categories.

(3) The manner of payment of the licence fee shall be as specified by the Authority.

Minimum capital requirements.

9.—(1) Subject to the provisions of this Act, a bank shall not be granted or hold a licence unless—

  • (a) in the case of a bank whose head office is situated in Singapore, its capital issued and paid up is not less than three million Singapore dollars deduction having been made in respect of a debit balance, if any, appearing in the profit and loss account of the bank; and
  • (b) in the case of a bank whose head office is situated outside Singapore—
    • (i) its capital issued and paid up is not less than the equivalent of six million Singapore dollars deduction having been made in respect of a debit balance, if any, appearing in the profit and loss account of the bank; and
    • (ii) it holds net head office funds of not less than three million Singapore dollars in Singapore in respect of its business in Singapore, at all times, in the form of assets approved by the Authority.

(2) A bank incorporated in Singapore shall not reduce its paid-up capital during the currency of its licence without the approval of the Authority.

Capital funds.

10.—(1) The Authority may require banks to maintain capital funds in Singapore in proportion to their total assets or to every category of assets at such ratio or ratios as may from time to time be prescribed.

(2) Any bank which fails to comply with the requirements of the Authority under the provisions of subsection (1) of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding five thousand dollars and in the case of a continuing offence to a further fine of one thousand dollars for every day during which the offence continues after conviction.

Foreign government-owned banks.

11. A bank shall not be granted or hold a licence if the Authority is satisfied that fifty per cent or more of its capital issued and paid up is owned by or on behalf of the government of any country other than Singapore or of an agency of any such government, or that all or a majority of the persons having the direction, control or management of the bank are appointed by or on behalf of any such government or agency:

Provided that the Authority may, in its absolute discretion, grant a licence to any such bank for such period or periods not exceeding one year at any one time as it may think fit.

Branches.

12.—(1) No bank shall open a new place of business or change the location of an existing place of business in Singapore without submitting a written application in respect thereof to the Authority, which may—

  • (a) give its approval; or
  • (b) without assigning any reason therefor, refuse to give its approval.

(2) No bank incorporated in Singapore shall open a new branch, agency or office in any place outside Singapore without submitting a written application in respect thereof to the Authority, which shall approve or reject the application.

(3) Any bank which contravenes the provisions of subsection (1) or (3) 3 of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding five hundred dollars and in the case of a continuing offence to a further fine of one hundred dollars for every day during which the offence continues after conviction.

Fees to be paid in respect of branches of banks.

13.—(1) The Authority may from time to time by notification in the Gazette specify the annual licence fees which banks in Singapore shall pay for each of their branches.

(2) The manner of payment shall be as specified by the Authority.

Mergers.

14.—(1) A bank incorporated in Singapore shall not after the coming into operation of this Act be merged or consolidated with or be taken over by any other bank or banks or their subsidiaries or related companies as described in section 6 of the Companies Act or acquire an interest exceeding twenty per cent of the voting share capital of any other bank without application to, and approval by, the Authority.

(2) In considering such an application the Authority shall have power to call for such information as it may require.

Amendment of bank’s constitution.

15.—(1) Every bank incorporated in Singapore shall, prior to the making of any amendment or alteration in the memorandum of association and articles of association or other instrument under which it is incorporated, furnish to the Authority particulars in writing of the proposed amendment.

(2) Every bank whether incorporated inside or outside Singapore shall within three months after the making of any alteration in the memorandum of association and articles of association or other instrument under which it is incorporated furnish to the Authority particulars in writing (verified by a statutory declaration made by a senior officer of the bank) of the alteration.

(3) Any bank which contravenes the provisions of subsection (1) or (2) of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding five hundred dollars.

Revocation of licence.

16.—(1) The Authority may by order revoke a licence issued under this Act—

  • (a) if it is satisfied that the bank holding that licence—
    • (i) has ceased to transact banking business in Singapore;
    • (ii) proposes to make, or has made, any composition or arrangement with its creditors or has gone into liquidation or has been wound up or otherwise dissolved;
    • (iii) is carrying on its business in a manner likely to be detrimental to the interests of the depositors of the bank or has insufficient assets to cover its liabilities to its depositors or the public;
    • (iv) is contravening the provisions of this Act; or
    • (v) has been convicted of any offence under this Act or any of its officers holding a managerial or executive position has been convicted of any offence under this Act; or
  • (b) if, upon taking action under subsection (2) of section 44 of this Act, it considers that it is in the public interest to revoke the licence.

(2) The Authority shall before revoking any licence under the provisions of subsection (1) of this section cause to be given to the bank concerned notice in writing of its intention to do so, specifying a date, not less than twenty-one days after the date of the notice, upon which the revocation will take effect and calling upon the bank to show cause to the Authority why the licence should not be revoked.

(3) When the Authority has revoked a licence under the provisions of subsection (1) of this section it shall forthwith inform the bank of the revocation.

(4) Any bank whose licence has been revoked pursuant to the provisions of this section shall have a right of appeal to the High Court against the order of revocation.

(5) An order of revocation made by the Minister shall not take effect until the expiration of a period of twenty-one days after the Commissioner has informed the bank of such order.

(6) If within such period the bank concerned gives due notice of appeal to the High Court such order shall not take effect unless the order is confirmed by the Court or the appeal is for any reason dismissed by that Court.

(7) The making of an appeal by a bank under this section shall in no way affect the exercise of the powers of the Minister and the Commissioner in relation to that bank under sections 44, 45, 46, 47 and 48 of this Act.

Effect of revocation of licence.

17.—(1) Where an order of revocation becomes effective under section 16 of this Act—

  • (a) notice of such revocation shall be published in the Gazette; and
  • (b) the bank shall, as from the date of such notice, cease to transact any banking business in Singapore except as may be approved by the Commissioner for the purpose of winding up its banking business.

(2) The provisions of paragraph (b) of subsection (1) of this section shall not prejudice the enforcement by any person of any right or claim against the bank or by the bank of any right or claim against any person.

Part IV. Reserve Funds, Dividends, Balance-Sheets and Information

18.—(1) Every licensed bank—

Maintenance of reserve fund.

  • (a) shall maintain a reserve fund; and
  • (b) shall transfer to such reserve fund out of the net profits of each year, after due provision has been made for taxation—
    • (i) so long as the amount of the reserve fund is less than fifty per centum of the paid-up capital, a sum not less than fifty per centum of such net profits;
    • (ii) so long as the amount of the reserve fund is fifty per cent but less than one hundred per cent of the paid-up capital, a sum not less than twenty-five per cent of those net profits; and
    • (iii) so long as the amount of the reserve fund is one hundred per cent or more of the paid-up capital, a sum not less than five per cent of those net profits.

(2) If the Authority is satisfied that the aggregate reserve fund of a licensed bank whose head office is situated outside Singapore is adequate for its business, it may, by order in writing, exempt that bank from the provisions of subsection (1) of this section.

(3) Any bank which fails to comply with the provisions of subsection (1) of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding ten thousand dollars.

Maintenance of adequate provision for bad and doubtful debts.

19. Every bank shall make provision for bad and doubtful debts and before any profit or loss is declared ensure that that provision is adequate.

Dividends.

20. A bank shall not pay any dividend on its shares until all its capitalized expenditure (including preliminary expenses, organization expenses, share selling commission, brokerage, amount of losses and any item of expenditure not represented by tangible assets) has been completely written off.

Publication and exhibition of audited balance-sheet.

21.—(1) Every bank shall, within six months after the close of each financial year or within such period as the Authority may approve, publish in at least four local daily newspapers, one each published in the Malay, Chinese, Tamil and English languages, and exhibit thereafter throughout the year in a conspicuous position in each of its offices and branches in Singapore—

  • (a) a copy of its latest audited annual balance-sheet, and a copy of the profit and loss account, together with any notes thereon, and a copy of the report of the auditors:
    • Provided that in the case of a bank incorporated outside Singapore, the abovementioned statements may be made in a manner that complies with the law for the time being applicable in the place of its incorporation or origin;
  • (b) the full and correct names of all persons who are directors for the time being of the bank; and
  • (c) the names of all subsidiary companies for the time being of the bank.

(2) A copy of each of the documents referred to in subsection (1) of this section shall be sent to the Authority by the bank, prior to the first publication thereof under that subsection, together with a copy of the directors’ report.

(3) In addition to the balance-sheet and other documents required to be lodged with the Authority under subsection (2) of this section, every bank shall lodge with the Authority with that balance-sheet and other documents a duly audited balance-sheet showing its assets used in, and liabilities arising out of its operation in, Singapore as at the date to which its balance-sheet was made up and a duly audited profit and loss account which gives a true and fair view of the profit or loss arising out of the bank’s operation in Singapore for the last preceding financial year of the bank:

Provided that the bank shall be entitled to make such apportionments of expenses incurred in connection with operations or administration affecting both Singapore and elsewhere and to add such notes and explanations as in its opinion are necessary or desirable in order to give a true and fair view of the profit or loss of its operations in Singapore.

(4) The Authority may, in its absolute discretion, regard the balance-sheet and profit and loss account as having been duly audited for the purpose of subsection (3) of this section if the balance-sheet and profit and loss account are accompanied by a report by an approved auditor which complies, insofar as it is practicable, with the provisions of section 174 of the Companies Act.

(5) In the case of a bank incorporated in Singapore the annual balance-sheet and profit and loss account of the bank referred to in subsection (1) of this section and the balance-sheet and profit and loss account referred to in subsection (3) of this section shall be in such form as the Authority may approve; in the case of a bank incorporated outside Singapore only the balance-sheet and profit and loss account referred to in subsection (3) of this section shall be in such form as the Authority may approve.

(6) The Authority may require any bank to submit such further or additional information as it may deem necessary either by way of explanation, amplification or otherwise with regard to the balance-sheets and profit and loss accounts sent by that bank under subsections (2) and (3) of this section and that information shall be submitted within such period and in such manner as the Authority may require.

(7) Any bank which fails to comply with the provisions of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding five hundred dollars and in the case of a continuing offence to a further fine of one hundred dollars for every day during which the offence continues after conviction.

Information to be furnished by banks.

22.—(1) Every bank shall furnish to the Authority at such time and in such manner as the Authority may prescribe, all such information as the Authority may reasonably require for the proper discharge of its functions.

(2) Every bank shall send to the Authority and the Chief Statistician—

  • (a) not later than fifteen days after the last day of each month a statement in the form set out in the First Schedule 4 to this Act showing the assets and liabilities of its banking offices and branches in Singapore at the close of business on the last business day of the preceding month;
  • (b) not later than one month after the last day of each quarter of a calendar year, a statement in the form set out in the Second Schedule 4 to this Act giving an analysis of loans and advances of its banking offices and branches in Singapore as at the 31st day of March, 30th day of June, 30th day of September and the 31st day of December, respectively; and
  • (c) not later than six months after the close of its financial year a statement in the form set out in the Third Schedule 4 to this Act showing the income and expenditure in respect of its banking business in Singapore.

(3) The Authority may vary or amend the forms set out in the First, Second and Third Schedules to this Act.

(4) The Authority may require any statement submitted to it pursuant to subsections (1) and (2) of this section to be accompanied by a certificate—

  • (a) of the auditor appointed by the bank pursuant to subsection (1) of section 53 of this Act; or
  • (b) of any other auditor appointed by the Authority pursuant to subsection (2) of section 53 of this Act,

as to whether in the opinion of the auditor, the statement or information is correct.

(5) Any information received from a bank under this section shall be regarded as secret between that bank, the Authority and the Chief Statistician.

(6) Nothing in this section shall prevent the Chief Statistician or the Authority from preparing and publishing consolidated statements aggregating such information as may be furnished under this section.

(7) Any bank which fails or neglects to furnish any information required by the Authority or the Chief Statistician under the provisions of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding five thousand dollars and in the case of a continuing offence to a further fine of one thousand dollars for every day during which the offence continues after conviction.

Action to be taken if advances are against the interests of depositors.

23.—(1) Every bank shall send to the Authority not later than fifteen days after the last day of each month a statement in the form to be prescribed by the Authority showing particulars of all advances, loans or credit facilities granted by it to—

  • (a) any of its directors;
  • (b) any firm in which it or any of its directors is a partner, manager or agent, or to any individual or firm of whom or of which any of its directors is a guarantor;
  • (c) any corporation that is deemed to be related to the bank as described in section 6 of the Companies Act;
  • (d) any of its officers, employees or other persons being persons receiving remuneration from it in excess of one year’s remuneration of the officer, employee or person;
  • (e) any private or public company in which it or any of its directors, officers, employees or other persons who receive remuneration from the company has an interest as a director, manager, agent or guarantor; or
  • (f) any individual in whom, and any firm or company in which, any of its directors has an interest, directly or indirectly, as declared under the provisions of section 24 of this Act other than such advances, loans and credit facilities, particulars of which have already been supplied pursuant to paragraphs (a) to (e) of this subsection.

(2) If on examination of the particulars supplied by a bank under subsection (1) of this section it appears to the Authority that any such advances, loans or credit facilities are being granted to the detriment of the interests of the depositors of that bank, the Authority may by order in writing prohibit that bank from granting any further advances, loans or credit facilities or impose such restrictions on the grant thereof as the Authority thinks fit, and may further direct that bank to secure repayment of any such first-mentioned advances, loans or credit facilities within such time and to such extent as may be specified in the order.

Disclosure of interest by directors.

24.—(1) Every director of a bank who has in any manner whatsoever, whether directly or indirectly, an interest in an advance, loan or credit facility or proposed advance, loan or credit facility from that bank shall as soon as practicable declare the nature of his interest to the board of directors of that bank and the secretary of that bank shall cause such declaration to be circulated forthwith to all the directors.

(2) The requirements of subsection (1) of this section do not apply in any case where the interest of the director consists only of being a member or creditor of a company which is interested in an advance, loan or credit facility or proposed advance, loan or credit facility from that bank if the interest of the director may properly be regarded as of a trivial nature.

(3) For the purposes of subsection (1) of this section, a general notice given to the board of directors of a bank by a director to the effect that he is an officer or member of a specified company or a member of a specified firm and he is to be regarded as having an interest in any advance, loan or credit facility which may, after the date of the notice, be made to that company or firm shall be deemed to be a sufficient declaration of interest in relation to any advance, loan or credit facility so made if—

  • (a) it specifies the nature and extent of his interest in the particular company or firm;
  • (b) his interest is not different in nature or greater in extent than the nature and extent so specified in the notice at the time any advance, loan or credit facility is made; and
  • (c) it is given at the meeting of the directors or the director takes reasonable steps to ensure that it is brought up and read at the next meeting of the directors after it is given.

(4) Every director of a bank who holds any office or possesses any property whereby, whether directly or indirectly, duties or interest might be created in conflict with his duties or interest as director shall declare at a meeting of the directors of that bank the fact and the nature, character and extent of the conflict.

(5) The declaration referred to in subsection (4) of this section shall be made at the first meeting of the directors held—

  • (a) after he becomes a director of the bank; or
  • (b) if already a director, after he commences to hold the office or to possess the property, as the case may be.

(6) The secretary of that bank shall cause to be brought up and read any declaration made under subsection (1) or (4) of this section at the next meeting of the directors after it is given, and shall record any declaration made under this section in the minutes of the meeting at which it was made or at which it was brought up and read.

(7) Any director who acts in contravention of subsection (1) or (4) of this section shall be guilty of an offence under this Act and shall be liable on conviction to imprisonment for a term not exceeding three years or to a fine not exceeding five thousand dollars or to both such imprisonment and fine.

Part V. Prohibited Business

Advances, credits and guarantees.

25.—(1) A bank shall not—

  • (a) grant or permit to be outstanding to any customer any advances, loans or credit facilities or give any financial guarantees or incur any other liabilities on his behalf to an aggregate amount of such advances, loans, facilities, guarantees or liabilities in excess of sixty per cent of the capital funds or, with the approval of the Authority, up to but not in excess of one hundred per cent of the capital funds of the bank:Provided that the provisions of this paragraph do not apply to—
    • (i) transactions with the Government;
    • (ii) transactions between banks;
    • (iii) the purchase of telegraphic transfers or loans or advances made against telegraphic transfers;
    • (iv) any facilities granted against letters of credit or bills or guarantees or documents in respect of imports into or exports from Singapore; or
    • (v) any other type of transactions which the Authority may from time to time approve;
  • (b) grant any advance or credit facility against the security of its own shares;
  • (c) grant unsecured advances, unsecured loans or unsecured credit facilities which in the aggregate and outstanding at any one time exceed the sum of five thousand Singapore dollars—
    • (i) to any of its directors, whether those advances, loans or credit facilities are obtained by its directors jointly or severally;
    • (ii) to a firm in which it or any of its directors has an interest as a partner, manager or agent, or to any individual or firm of whom or of which any of its directors is a guarantor; or
    • (iii) to any corporation, other than a bank, that is deemed to be related to the bank as described in section 6 of the Companies Act; or
  • (d) grant to any of its officers, other than a director, or its employees or other persons, being persons receiving remuneration from a bank (other than public, registered or licensed accountants, advocates and solicitors, architects, estate agents, doctors and any other persons receiving remuneration from a bank in respect of their professional services) unsecured advances, unsecured loans or unsecured credit facilities which in the aggregate and outstanding at any one time exceed one year’s emolument of that officer or employee or person.

(2) In paragraphs (c) and (d) of subsection (1) of this section, the expression “unsecured advances, unsecured loans or unsecured credit facilities” means advances, loans or credit facilities made without security, or in respect of any advance, loan or credit facility made with security, any part thereof which at any time exceeds the market value of the assets constituting that security, or where the Authority is satisfied that there is no established market value, on the basis of a valuation approved by it.

(3) In paragraph (c) of subsection (1) of this section, the expression “director” includes the wife, husband, father, mother, son or daughter of a director.

(4) All the directors of the bank shall be liable jointly and severally to indemnify the bank against any loss arising from the making of any unsecured advance, unsecured loan or unsecured credit facility under sub-paragraphs (i), (ii) and (iii) of paragraph (c) of subsection (1) of this section.

(5) Any bank which contravenes any of the provisions of this section shall be guilty of an offence under this Act.

Trade.

26.—(1) A bank shall not engage, whether on its own account or on a commission basis, and whether alone or with others, in the wholesale or retail trade, including the import or export trade, except in the course of the satisfaction of debts due to it for the purpose of carrying on its banking business.

(2) Any bank which contravenes the provisions of subsection (1) of this section shall be guilty of an offence under this Act.

Investments.

27.—(1) A bank shall not acquire or hold any part of the share capital of, or otherwise have an interest in, any financial, commercial, agricultural, industrial or other undertaking exceeding in the aggregate forty per cent of that bank’s capital funds except such shareholding as the bank may acquire in the course of the satisfaction of debts due to it, which shareholding shall, however, be disposed of at the earliest suitable opportunity.

(2) This section does not apply in respect of—

  • (a) any shareholding approved in writing by the Authority in another bank or in a subsidiary company formed by the bank concerned for the carrying out of nominee, executor or trustee functions or other functions incidental to banking business; or
  • (b) any shareholding approved by the Authority in any corporation set up for the purpose of promoting development in Singapore.

(3) The provisions of subsection (1) of this section do not apply to the Development Bank of Singapore, Limited.

(4) Any bank which contravenes the provisions of subsection (1) of this section shall be guilty of an offence under this Act.

Immovable property.

28.—(1) A bank shall not purchase or acquire any immovable property or any right therein exceeding in the aggregate forty per cent of that bank’s capital funds except as may be reasonably necessary for the purpose of conducting its business or of housing or providing amenities for its staff:

Provided that this does not prevent a bank—

  • (a) from letting part of any building which is used for the purpose of conducting its business; or
  • (b) from securing a debt on any immovable property and, in the event of default in payment of the debt, from holding that immovable property for realisation by sale or auction at the earliest suitable opportunity.

(2) The provisions of this section do not apply to the Development Bank of Singapore, Limited.

(3) Any bank which contravenes the provisions of subsection (1) of this section shall be guilty of an offence under this Act.

Loans secured by immovable property.

29.—(1) A bank shall not make any loans or advances exceeding in the aggregate thirty per cent of the amount of its deposits in Singapore (including the deposits and borrowings from any other bank at that bank) on the security of immovable property for the purpose of purchasing, improving or altering the immovable property:

Provided that any bank whose business is principally in such loans or advances may, with the prior written consent of the Authority, make such loans or advances in an aggregate amount up to, but not in excess of sixty per cent of the amount of its deposits in Singapore (including the deposits and borrowings from any other bank at that bank).

(2) A loan or advance secured solely by a mortgage, deed of trust, or other such instrument upon immovable property or by notes or other obligations which are so secured, is, for the purpose of subsection (1) of this section, a loan or advance secured by immovable property; a loan or advance secured in part by mortgage, deed of trust, or other instrument upon immovable property, or by notes or other obligations which are so secured, or by any other form of security, is, for the purposes of this subsection, a loan or advance secured by immovable property to the extent, but only to the extent, of the value of that immovable property as a security as determined by the Authority.

(3) Nothing in this section shall be construed to prohibit any bank from accepting as security for a loan or advance made in good faith without security or upon security subsequently found to be inadequate, a mortgage, deed of trust, or other instrument upon immovable property, or notes or other obligations which are so secured.

(4) The provisions of this section do not apply to the Development Bank of Singapore, Limited.

(5) Any bank which contravenes the provisions of subsection (1) of this section shall be guilty of an offence under this Act.

Liquidation of prohibited transactions.

30.—(1) Subject to this Act any bank which, before the date of the coming into operation of this Act, has entered into any transaction contrary to any of the provisions of sections 25, 26, 27, 28 and 29 of this Act shall, within six months of that date, submit a statement of the transaction to the Authority and shall furthermore, within that time or such further time as the Authority may specify, liquidate the transaction or come within the limitations prescribed by those sections and dispose of any property or right that may have been acquired thereby.

(2) Any bank which fails to comply with the provisions of subsection (1) of this section shall be guilty of an offence under this Act.

Deductions for purposes of sections 25, 27 and 28.

31. For the purposes of sections 25, 27 and 28 of this Act there shall be deducted from the capital funds of the bank any debit balance appearing in the profit and loss account of the bank.

Proof of compliance with section 25, 27, 28 or 29.

32. Any bank, if at any time called upon in writing by the Authority so to do, shall satisfy the Authority by the production of such evidence or information as it may require, that the bank is not in contravention of any of the provisions of section 25, 27, 28 or 29 of this Act.

Relief from limitations imposed by sections 25, 27 and 28.

33.—(1) Any bank whose head office is situated outside Singapore may apply in writing to the Authority for an order relieving that bank from the restrictions or limitations imposed by sections 25, 27 and 28 of this Act in relation to any transactions referred to in those sections and the Authority may make such an order subject to such conditions as it thinks fit.

(2) The Authority shall make an order under subsection (1) of this section only if it is satisfied that the making of the order is in the interests of the creditors and depositors of the bank.

(3) An order made by the Authority under subsection (1) of this section shall be effective for such period as the Authority may decide and shall cease to have effect on such date as may be specified in the order except that no order may be made which is expressed to have effect for a period longer than two years from the date of the coming into operation of this Act.

(4) The Authority may make an order under subsection (1) of this section in respect of transactions entered into by the bank before or after the commencement of this Act.

Part VI. Minimum Asset Requirements

Minimum liquid assets.

34.—(1) The Authority may, from time to time, prescribe by notice in writing a minimum amount or amounts of liquid assets to be held by banks.

(2) The minimum amount or amounts of the assets so prescribed to be held shall be expressed in the form of a percentage or percentages which those assets shall bear to the sight, savings account, time and other liabilities of each bank, either jointly or separately, and the percentage or percentages may be varied by the Authority by notice in writing.

(3) Whenever the Authority issues a notice under subsection (1) of this section, each bank shall be allowed such uniform period of grace, being not less than one month, as may be specified in the notice, in which to comply with its provisions.

(4) A bank shall not, during any period in which it has failed to comply with any notice under subsection (1) of this section, without the approval of the Authority, grant further advances to any person.

(5) For the purpose of computing the minimum amount or amounts of liquid assets under this section and specified assets under section 36 of this Act, and the sight, savings account, time and other liabilities of a bank carrying on business in Singapore and elsewhere, the offices and branches of the bank in Singapore shall be deemed to constitute a separate bank carrying on business in Singapore.

(6) For the purposes of this section liquid assets are—

  • (a) notes and coin which are legal tender in Singapore;
  • (b) balances with the Authority;
  • (c) balances with banks in Singapore, after deducting therefrom balances held for banks in Singapore;
  • (d) net money at call in Singapore;
  • (e) Treasury bills issued by the Government and maturing within three months (exclusive of days of grace); and
  • (f) such other assets as the Authority may from time to time approve.

(7) The Authority may by notice in writing require each bank to render such returns as the Authority deems necessary for the implementation of this section.

(8) Any bank that fails to comply with any of the provisions of this section shall be liable to pay, on being called upon to do so by the Authority, a penalty interest charge of not more than one-tenth of one per cent of the amount of the deficiency for every day during which the deficiency continues.

(9) Any bank that fails or refuses to pay a penalty interest charge under subsection (8) of this section shall be guilty of an offence under this Act.

Minimum cash balances.

35.—(1) The Authority may from time to time require banks to maintain minimum cash balances, not exceeding thirty per cent of each bank’s deposit and other liabilities, on deposit with the Authority as reserves against their deposit and other liabilities.

(2) Subject to the limit specified in subsection (1) of this section, the Authority may prescribe different ratios for different types of liabilities and may further prescribe the method of computing the amount of the required reserves, but the ratios shall be uniform for all banks.

(3) Any prescription of, or change in, the minimum reserve requirements under subsection (1) or (2) of this section shall take effect only after the expiration of thirty days’ notice to the banks of the Authority’s intention to take such action.

(4) Where a bank (in this section referred to as “the defaulting bank”) has failed to maintain sufficient minimum cash balances required under subsection (1) of this section the Authority may by order in writing direct the defaulting bank to make good the deficiency within the period specified in the order and the defaulting bank shall comply with the requirements of the order.

(5) If the defaulting bank fails to make good the deficiency within the period specified in the order referred to in subsection (4) of this section it shall be lawful, notwithstanding the provisions of any other written law, for the Authority to serve a notice in writing upon any other bank with which the defaulting bank has a credit balance, whether in current or deposit account, directing that bank to transfer to the Authority such amount as is specified in the notice as being equivalent to the amount of the deficiency in the minimum cash balances of the defaulting bank required under subsection (1) of this section and the other bank shall immediately comply with the requirements of that notice.

(6) No action shall lie against, and no liability shall attach to, any bank that complies with the requirements of a notice referred to in subsection (5) of this section for any loss or damage suffered by the defaulting bank as a result of the other bank taking action in compliance with the requirements of that notice.

(7) The Authority may, in addition to any action taken under subsections (4) and (5) of this section, impose on any bank that fails to maintain sufficient minimum cash balances required under subsection (1) of this section a penalty interest charge of not more than one-tenth of one per cent per day of the amount of the deficiency for every day during which the deficiency continues.

(8) Any bank that fails or refuses to pay a penalty interest charge under subsection (7) of this section shall be guilty of an offence under this Act.

Minimum asset requirement.

36.—(1) The Authority may require banks to maintain a minimum amount or amounts of assets specified in subsection (2) of this section to be held by banks in Singapore expressed as a percentage or percentages which such assets shall bear to the sight, savings account, time and other liabilities of each bank either jointly or separately.

(2) For the purposes of subsection (1) of this section, the specified assets are—

  • (a) the assets specified in paragraphs (a) to (f) of subsection (6) of section 34 of this Act;
  • (b) loans or advances made to persons in Singapore;
  • (c) securities issued by the Government, or by any public authority established by any law, and any other securities issued in Singapore and approved for the purposes of this section by the Authority; and
  • (d) other assets in Singapore which may be approved by the Authority for the purposes of this section.

(3) Any bank which fails to comply with any of the requirements of the Authority under the provisions of subsection (1) of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding five thousand dollars and in the case of a continuing offence to a further fine of one thousand dollars for every day during which the offence continues after conviction.

Part VII. Powers of Control over Banks

Regulation of interest rates of banks.

37.—(1) The Authority may from time to time determine and announce the rates of interest payable to or by banks, the rates of discount chargeable by banks, or the rates of commission and other charges payable to banks.

(2) The provisions of subsection (1) of this section do not apply to transactions between banks in Singapore.

Recommendations to banks concerning credits and investments.

38.—(1) The Authority may, in respect of loans and advances or investments of banks, make recommendations to the banks in respect of the following:—

  • (a) the purposes for which they may or may not be granted or made;
  • (b) the maximum maturities or, in the case of loans and advances, the type and minimum amount of security which shall be required and, in the case of letters of credit, the minimum or margin deposit; or
  • (c) the limits for any particular category of loans, advances or investments or for the total amount outstanding in respect of such loans, advances or investments.

(2) Any recommendation made under subsection (1) of this section shall apply uniformly to all banks engaging in the transactions covered by the recommendation.

(3) Where the Authority has made a recommendation under subsection (1) of this section and the banks have accepted it without objections, or have failed to notify the Authority of their objections or have failed to forward their representations to it within the time specified in subsection (4) of this section, it may issue a direction in writing to each bank on any of the matters referred to in subsection (1) of this section requiring that effect be given to the recommendation within a reasonable time, and the banks shall comply with that direction.

(4) Where the Authority has made a recommendation and the banks have, or any bank has, notified the Authority within fourteen days of the receipt of the recommendation that the banks, or any bank, objects to the recommendation, it shall call upon the banks or bank, as the case may be, to make representations in writing within one month of the notification concerning those objections.

(5) Upon receipt of such representations the Authority shall consider them and may—

  • (a) reject the representations; or
  • (b) amend or modify the recommendation in accordance with the representations, or otherwise,

and in either event, it shall thereupon issue a direction in writing to the banks or bank, as the case may be, requiring that effect be given to the original recommendation or to the recommendation as subsequently amended or modified by the Authority within a reasonable time, and the banks or any bank, as the case may be, shall comply with that direction.

(6) The provisions of this section do not apply to the Development Bank of Singapore, Limited.

Inspection of banks.

39. The Authority shall, from time to time, inspect under conditions of secrecy, the books, accounts and transactions of each bank and of any branch, agency or office outside Singapore opened by a bank incorporated in Singapore.

Special investigation of banks.

40.—(1) The Authority may at any time make an investigation, under conditions of secrecy, of the books, accounts and transactions of any bank, if it has reason to believe that any bank is carrying on its business in a manner likely to be detrimental to the interest of its depositors and other creditors, or has insufficient assets to cover its liabilities to the public, or is contravening the provisions of this Act.

(2) The Authority may appoint an auditor, other than the auditor appointed by the bank or the Authority under section 53 of this Act, to exercise the powers of the Authority under section 39 of this Act and subsection (1) of this section.

Production of bank’s books, accounts and documents.

41.—(1) For the purposes of an inspection or investigation under section 39 or 40 of this Act, the bank under inspection or investigation shall afford the Authority access to and shall produce its books, accounts and documents and shall give such information and facilities as may be required to conduct the investigation:

Provided that those books, accounts and documents shall not be required to be produced at such times or at such places as would interfere with the proper conduct of the normal daily business of that bank.

(2) If any book, account or document or information is not produced in accordance with subsection (1) of this section, it shall be presumed subject to satisfactory evidence being furnished by the bank justifying such a refusal to produce that book, account or document or information, that the bank concerned has been carrying on business in contravention of the terms of its licence with effect from that day and shall be liable on conviction to a fine not exceeding five thousand dollars and in the case of a continuing offence to a further fine of one thousand dollars for every day during which the offence continues after conviction.

Banking secrecy.

42.—(1) Except as provided in sections 40 and 41 of this Act, nothing in this Act authorizes the Authority to inquire specifically into the affairs of any individual customer of any bank and any incidental information relating to the affairs of an individual customer obtained by the Authority in the course of an inspection or investigation made by it under the provisions of this Act shall be secret between the Authority and that bank:

Provided that nothing in this section shall be deemed to limit any powers conferred upon the High Court or a Judge thereof by Part IV of the Evidence Act or to prohibit obedience to an order made under that Part.

(2) No official of any bank and no person who by reason of his capacity or office has by any means access to the records of the bank registers or any correspondence or material with regard to the account of any individual customer of that bank shall give, divulge or reveal any information whatsoever regarding the moneys or other relevant particulars of the account of that customer to—

  • (a) any person who, or any bank, corporation or body of persons which, is not resident in Singapore; or
  • (b) any foreign government or organization, unless—
    • (i) the customer or his personal representatives gives or give his or their permission so to do;
    • (ii) the customer is declared bankrupt; or
    • (iii) the information is required to assess the creditworthiness of the customer in connection with or relating to a bona fide commercial transaction or a prospective commercial transaction.

(3) For the purposes of paragraph (a) of subsection (2) of this section a bank, corporation or body of persons shall be regarded as not residing in Singapore if the control and management of the business thereof is exercised outside Singapore.

(4) Any person who contravenes the provisions of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine of ten thousand dollars or to imprisonment for a term not exceeding three years or to both such fine and imprisonment.

Information of insolvency, etc.

43. Any bank which considers that it is, or is likely to become, unable to meet its obligations, or is insolvent, or is about to suspend payments, shall forthwith inform the Authority of that fact.

44.—(1) Where—

Action by Authority if bank is unable to meet obligations, etc., or is conducting business to the detriment of depositors.

  • (a) a bank informs the Authority that it is likely to become unable to meet its obligations, or that it is insolvent, or about to suspend payments;
  • (b) a bank becomes unable to meet its obligations, or is insolvent, or suspends payments;
  • (c) after an inspection or investigation is made under section 39 or 40 of this Act, the Authority is of the opinion that the bank—
    • (i) is carrying on its business in a manner likely to be detrimental to the interest of its depositors or its creditors;
    • (ii) is insolvent or is likely to become unable to meet its obligations or is about to suspend payment;
    • (iii) has contravened or failed to comply with any of the provisions of this Act; or
    • (iv) has contravened or failed to comply with any condition attached to its licence; or
  • (d) the Authority considers it in the public interest to do so,

the Authority may exercise such one or more of the powers specified in subsection (2) of this section as appears to it to be necessary.

(2) Subject to subsection (1) of this section, the Authority may—

  • (a) require the bank concerned forthwith 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 a person to advise that bank in the proper conduct of its business; or
  • (c) assume control of and carry on the business of that bank or direct some other person to assume control of and carry on the business of that bank.

(3) The Authority may, upon representation made to it or on its own motion, modify or cancel any action taken by it under subsection (2) of this section, and in so modifying or cancelling any action may impose such conditions as it thinks fit, subject to which the modification or cancellation shall have effect.

Powers of Authority.

45. Where the Authority has taken action under subsection (2) of section 44 of this Act, it may, without prejudice to the powers conferred by paragraph (b) of subsection (1) of section 16 of this Act, exercise one or more of the following powers, that is to say:—

  • (a) confirm, vary or reverse any requirement, appointment or direction made by it;
  • (b) make such order as it may think fit in relation to the affairs of the bank and exercise any power which it may exercise under subsection (2) of section 44 of this Act;
  • (c) present a petition to the High Court for the winding up of the bank by the High Court.

Duration of control.

46.—(1) Where the Authority has assumed control of the business of a bank in pursuance of section 44 of this Act it shall remain in control of, and continue to carry on, the business of that bank in the name and on behalf of the bank until such time as it is satisfied that the reasons for which it assumed control of the business have ceased to exist, or that it is no longer necessary for the protection of the depositors of the bank that it should remain in control of the business.

(2) Where the Authority has assumed control of the business of a bank in pursuance of section 44 of this Act or ceased to control the business of a bank in pursuance of this section, it shall notify that fact in the Gazette.

Bank under control of Authority to co-operate with Authority.

47.—(1) Where the Authority has assumed control of the business of a bank in pursuance of section 44 of this Act the bank shall submit its business to the control of the Authority and shall provide the Authority with such facilities as it may require to carry on the business of that bank.

(2) Any bank which fails to comply with subsection (1) of this section or with any requirement of the Authority thereunder shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding five thousand dollars and in the case of a continuing offence to a further fine of one thousand dollars for every day during which the offence continues after conviction.

Remuneration and expenses of Authority and others in certain cases.

48.—(1) The Authority may at any time (whether or not the appointment of such person has terminated) fix the remuneration and expenses to be paid by a bank to any person appointed by the Authority under subsection (2) of section 44 or section 45 of this Act to advise the bank in the proper conduct of its business.

(2) Where, under paragraph (c) of subsection (2) of section 44 or paragraph (b) of section 45 of this Act, the Authority has assumed control of the business of a bank or some other person has assumed control of the business of a bank pursuant to a direction or order of the Authority, the Authority may, at any time, whether or not it or that other person has ceased to be in control of the business of the bank, fix the remuneration and expenses to be paid by the bank to the Authority and to any person employed or authorized by it under section 3 of this Act to assist it in the control of and the carrying on of the business of the bank, or to that other person, as the case may be.

Moratorium.

49.—(1) The Authority may, if it considers it to be in the interests of the depositors of a bank make an order prohibiting that bank from carrying on banking business or from doing or performing any act or function connected with banking business or any aspect thereof that may be specified in the order.

(2) The Authority may, if it considers it to be in the interests of the depositors of a bank, apply to the High Court for an order staying the commencement or continuance of any proceedings by or against the bank in regard to any business of the bank. Such an order shall be valid for a period not exceeding six months.

(3) So long as an order under subsection (1) of this section remains in force the licence granted to that bank under this Act shall be suspended.

Part VIII. Numbered Accounts

Banks may with the approval of the Authority open numbered accounts.

50.—(1) For the purposes of this Part, the expression “numbered accounts” means accounts opened with banks in Singapore that are identifiable only by a number or code word or by such other means as the Authority may determine.

(2) No bank in Singapore shall open numbered accounts for its customers except with the prior approval in writing of the Authority which may attach such limitations, conditions, qualifications and exceptions thereto as it thinks fit.

(3) Any bank which contravenes the provisions of subsection (2) of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding ten thousand dollars.

Types of numbered accounts.

51.—(1) Numbered accounts facilities offered by banks to their customers may extend to current accounts, deposit accounts, securities deposit accounts and safes, but shall not extend to credit facilities.

(2) The owners of the numbered accounts shall only be known to such senior officers of the bank as the bank may decide.

Secrecy of numbered accounts.

52.—(1) The officials of any bank operating numbered accounts on behalf of its customers or any person who by reason of his capacity or office has by any means access to the records of the bank, registers, correspondence or any other material with regard to numbered accounts shall keep absolute secrecy thereof in the interests of the bank’s customers.

(2) The officials of any bank and other persons mentioned in subsection (1) of this section shall not give, divulge or reveal any information whatsoever regarding the name or identity of the owner of a numbered account to any individual, corporation, bank, public administration, judicial or military authorities unless—

  • (a) the owner of the numbered account or his personal representatives gives or give his or their permission so to do;
  • (b) the owner is declared bankrupt;
  • (c) a suit arises between the bank and the owner relating to a banking transaction; or
  • (d) the owner is required so to do by order of a Judge of the Supreme Court made for special cause for the purposes of any civil or criminal proceedings.

(3) Part IV of the Evidence Act does not apply to numbered accounts.

(4) Any person who contravenes the provisions of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine of ten thousand dollars or to imprisonment for a term not exceeding three years or to both such fine and imprisonment.

Part IX. Miscellaneous

Auditing.

53.—(1) Notwithstanding the provisions of the Companies Act, every bank shall appoint annually an auditor approved by the Authority.

(2) The Authority may appoint an auditor—

  • (a) if the bank fails to appoint an auditor; or
  • (b) if it considers it desirable that another auditor should act with the auditor appointed under subsection (1) of this section,

and may, at any time, fix the remuneration to be paid by the bank to that auditor.

(3) The duties of an auditor appointed under subsections (1) and (2) of this section shall be—

  • (a) to carry out, for the year in respect of which he is appointed, an audit of the accounts of the bank; and
  • (b) to make a report in accordance with section 174 of the Companies Act—
    • (i) in the case of a bank incorporated in Singapore—upon the annual balance-sheets and profit and loss accounts that are referred to in subsections (1) and (3) of section 21 of this Act; and
    • (ii) in the case of a bank incorporated outside Singapore—upon the annual balance-sheet and profit and loss account that are referred to in subsection (3) of section 21 of this Act.

(4) The auditor’s report shall be attached to the balance-sheet and the profit and loss account and a copy thereof shall be sent to the Authority.

Clearing House and settlement of balances between banks.

54. In order to facilitate the clearing of cheques and other credit instruments for banks carrying on business in Singapore, the Authority shall, in conjunction with banks operating in Singapore, by regulations, establish a Clearing House.

Declaration of holidays.

55.—(1) The Authority may, at any time by notice in the Gazette, declare any day or days to be a bank holiday or holidays.

(2) No bank shall do any business with the public on any day declared a bank holiday under the provisions of subsection (1) of this section.

(3) A bank holiday declared under the provisions of subsection (1) of this section shall not necessarily be a public holiday and nothing in this section shall be deemed to affect the provisions of any written law which may from time to time be in force in Singapore relating to public holidays.

(4) Any reference to a bank holiday in any written law which may from time to time be in force in Singapore shall include any day declared to be a bank holiday under the provisions of this section and any day which is a public holiday within the meaning of any written law which may be in force in Singapore relating to public holidays.

Priority of deposit liabilities.

56. Where a bank becomes unable to meet its obligations or becomes insolvent or suspends payment, the assets of that bank in Singapore shall be available to meet all deposit liabilities of the bank in Singapore; and such deposit liabilities shall have priority over all other liabilities of the bank.

Execution of instruments under seal.

57. Notwithstanding anything contained in the articles of association or regulations of any bank incorporated in Singapore with respect to the execution of instruments under its seal, but without prejudice to anything in such articles or regulations not inconsistent herewith, the seal of the bank shall not be affixed to any instrument except in the presence of a director of the bank and of one other person being either a director or an officer of the bank duly authorized in that behalf, and the director and that other person as aforesaid shall sign every instrument to which the seal of the company is so affixed in their presence.

Disqualification of directors and employees of banks.

58. Notwithstanding the provisions of any other written law, any person—

  • (a) who is or becomes bankrupt, suspends payments or compounds with his creditors; or
  • (b) who is or has been convicted in any country of an offence involving dishonesty or fraud and has not received a free pardon for the offence for which he was convicted; or
  • (c) who has been a director of, or directly concerned in the management of, a bank licensed under this Act or which was licensed under the Banking Ordinance, 1958, (repealed by this Act) which is being or has been wound up by a court or the licence of which has been revoked,

shall not, without the consent in writing of the Authority, act or continue to act as the director, manager, secretary or other officer in any bank.

Offences by directors or managers.

59.—(1) Any person being a director, managing director or manager of a bank who—

  • (a) fails to take all reasonable steps to secure compliance by a bank with the provisions of this Act or any other written law applicable to banks in Singapore; or
  • (b) fails to take all reasonable steps to secure the accuracy and correctness of any statement submitted under this Act or of any other written law applicable to banks in Singapore,

shall be guilty of an offence under this Act and shall, in respect of each offence, be liable on conviction to imprisonment for a term not exceeding two years or to a fine not exceeding three thousand dollars or to both such imprisonment and fine.

(2) In any proceedings against a person under subsection (1) of this section it shall be a defence to prove that he had reasonable grounds for believing that another person was charged with the duty of securing compliance with the requirements of those laws or with the duty of ensuring that those statements were accurate and that that person was competent and in a position to discharge that duty.

(3) A person shall not be sentenced to imprisonment for any offence under subsection (1) of this section unless, in the opinion of the court, he committed the offence wilfully.

Offences by directors, employees and agents.

60. Any director, manager, trustee, auditor, employee or agent of any bank who—

  • (a) wilfully makes or causes to be made, a false entry in any book of record or in any report, slip, document or statement of the business, affairs, transactions, conditions, assets or accounts of that bank;
  • (b) wilfully omits to make an entry in any book of record or in any report, slip, document or statement of the business, affairs, transactions, conditions, assets or accounts of that bank, or wilfully causes any such entry to be omitted; or
  • (c) wilfully alters, abstracts, conceals or destroys an entry in any book of record or in any report, slip, document or statement of the business, affairs, transactions, conditions, assets or accounts of that bank, or wilfully causes any such entry to be altered, abstracted, concealed or destroyed,

shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding ten thousand dollars or to imprisonment for a term not exceeding three years or to both such fine and imprisonment.

Indemnity.

61. No liability is incurred by—

  • (a) any public officer;
  • (b) any person authorized or employed by the Authority under section 3 of this Act;
  • (c) any person appointed under paragraph (b) of subsection (2) of section 44 of this Act to advise a bank in the proper conduct of its business;
  • (d) any person who has assumed control of the business of a bank pursuant to a direction or order of the Authority under paragraph (c) of subsection (2) of section 44 or paragraph (b) of section 45 of this Act; or
  • (e) any person appointed under subsection (2) of section 40 of this Act,

as a result of anything done by him bona fide in the exercise of any power, or the performance of any function or duty, conferred or imposed by or under this Act.

Power to compound.

62. The Authority may, without instituting proceedings against any person for any offence under this Act, or any regulations made thereunder, which is punishable only by a fine or a default penalty, demand and receive the amount of the fine or default penalty or such reduced amount as it thinks fit from that person, whereupon—

  • (a) if the person pays that amount to the Authority within fourteen days after the demand, no proceedings shall be taken against him in relation to the offence; or
  • (b) if the person does not so pay the amount so demanded, the Authority may cause proceedings to be instituted in relation to the offence.

Publication of list of banks.

63. The Authority shall cause to be published in the Gazette in the month of April in each year a list of all banks to which licences have been issued under this Act and if any licence is issued, revoked or surrendered during the interval between the publication of two such lists, notice thereof shall also be caused to be published in the Gazette.

General penalty.

64. Any bank which contravenes or fails to comply with any provisions of this Act for which no penalty is expressly provided shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding fifty thousand dollars.

Offences triable in District Court.

65. Notwithstanding the provisions of any other written law, offences under this Act may be tried in a District Court, which shall have the power to impose the maximum penalty prescribed for any offence under this Act.

Consent of Attorney-General.

66. No prosecution in respect of any offence under this Act shall be instituted except with the consent of the Attorney-General.

Recovery of fees, expenses, etc.

67. There shall be recoverable as a civil debt due to the Authority from the bank concerned—

  • (a) the amount of any fees payable under sections 8 and 13 of this Act;
  • (b) any remuneration and expenses payable by the bank to any person appointed under paragraph (b) of subsection (2) of section 44 of this Act; and
  • (c) any remuneration and expenses payable by the bank to the Authority or to any person employed or authorized by the Authority under section 3 of this Act to assist it in the control of and the carrying on of the business of the bank or to any other person who has assumed control of the business of the bank pursuant to a direction or order of the Authority under paragraph (c) of subsection (2) of section 44 or paragraph (b) of section 45 of this Act or to any person appointed under subsection (2) of section 40 of this Act.

Operation of Act not to affect the Companies Act.

68. Nothing in this Act affects the operation of the Companies Act, and any bank that is liable to be incorporated under that Act continues to be so liable as if this Act had not been passed but in case of conflict between that Act and this Act the provisions of this Act prevail unless otherwise provided in this Act.

Exemption.

69. This Act does not apply to the Post Office Savings Bank established under the Post Office Savings Bank Act or to any co-operative society registered under the Co-operative Societies Act or to any business of pawnbroking carried on by a person licensed under the Pawnbrokers Act or to finance companies licensed under the Finance Companies Act.

Regulations.

70. The Authority may make such regulations from time to time as it may deem necessary for carrying into effect the provisions of this Act.

Saving.

71. All regulations, instructions, orders and decisions made under or in accordance with the Banking Ordinance, 1958, as amended and extended by the Banking (Amendment and Extension) Act, 1965, remain valid and binding and shall be deemed to have been made under the provisions of this Act until they are amended or repealed.

Part X. Transitional

Transitional licensing provisions.

72.—(1) Notwithstanding the provisions of sections 4 and 9 of this Act, any bank specified in the Fourth Schedule5 to this Act which on 1st January 1970 was carrying on banking business in Singapore shall, upon the date of the coming into operation of this Act, be granted a licence under this Act, which may be made subject to such conditions, if any, as are contained in any licence under which the bank was carrying on banking business in Singapore immediately before that date.

(2) Any bank which is granted a licence under the provisions of this section shall comply with the provisions of section 9 of this Act within a period of two years from the date of the coming into operation of this Act.

(3) If any bank licensed under the provisions of this section fails to comply with the provisions of section 9 of this Act in accordance with subsection (2) of this section, the licence granted to it under this section shall become null and void except insofar as may be necessary for the purpose of winding up its banking business.

(4) The Authority may, in any particular case, extend the period provided by subsection (2) of this section and the period of validity of the licence concerned.

{The four Schedules are omitted from this volume.}

Finance Companies Act1

An Act to license and control finance companies and for matters connected therewith.

[10th January, 1968]

Part I. Preliminary

Short title.

1. This Act may be cited as the Finance Companies Act.

Interpretation.

2. In this Act, unless the context otherwise requires—

“auditor” means any person approved by the Authority as a finance company auditor for the purposes of this Act;

“the Authority” means the Monetary Authority of Singapore established under section 3 of the Monetary Authority of Singapore Act2;

“company” means a company incorporated or registered under the Companies Act or pursuant to any corresponding previous written law;

“deposit” means a loan of money at interest or repayable at a premium but does not include a loan to a company or other body corporate upon terms involving the issue of debentures or other securities;

“depositor” means a person entitled, or prospectively entitled, to repayment of a deposit whether made by him or not;

“director” includes any person occupying the position of director of a finance company by whatever name called and includes a person in accordance with whose directions or instructions the directors of a finance company are accustomed to act and an alternate or substitute director;

“finance company” means any company licensed under this Act to carry on financing business, and all branches and offices in Singapore of such a company shall be deemed to be one finance company for the purposes of this Act;

“financing business” means the business of—

  • (a) borrowing money from the public, by acceptance of deposits and issuing certificates or other documents acknowledging or evidencing indebtedness to the public and undertaking to repay the money on call or after an agreed maturity period; and
  • (b) lending money to the public or to a company deemed to be related to the finance company by virtue of section 6 of the Companies Act (in this Act referred to as the “related company”) on the basis that the public or the related company undertakes to repay the money, whether within an agreed period of time or not, or by instalments,

and includes the business of financing hire-purchase transactions arising out of hire-purchase agreements, as defined in the Hire-Purchase Act, where the money used, or to be used, for such business is borrowed from the public;

“public company” means a company incorporated in Singapore other than a private company.

Part II. Licensing of Finance Companies

Licensing of finance companies.

3. (1) No financing business shall be transacted in Singapore except by a public company that is in possession of a valid licence granted by the Authority authorising it to conduct financing business in accordance with the provisions of this Act.

(2) Any person who contravenes the provisions of subsection (1) of this section shall be guilty of an offence under this Act and shall be liable on conviction to imprisonment for a term not exceeding three years or to a fine not exceeding five thousand dollars or to both such imprisonment and fine.

Use of words “finance company”.

4. No person or body of persons, whether incorporated or not, other than a finance company licensed under this Act shall, without the consent of the Authority, use the words “finance company” or any of its derivatives in any language, or any other words indicating that it transacts financing business, in the name, description or title under which such person or body of persons is transacting business in Singapore or make or continue to make any representations to such effect in any bill-head, letter paper, notice, advertisement or in any other manner whatsoever:

Provided that nothing in this section shall prohibit an association of finance companies formed for the protection of common interests from using the words “finance company” or any of its derivatives in any language as part of its name or description of its activities.

Examination of persons suspected of transacting financing business.

5. (1) Whenever the Authority has reason to believe that a person is conducting financing business without a licence, it may call for the books, accounts and records of such person in order to ascertain whether or not such person has violated or is violating any provisions of this Act, and any person wilfully refusing to submit such books, accounts and records shall be guilty of an offence under this Act and shall be liable on conviction to imprisonment for a term not exceeding one year or to a fine not exceeding one thousand dollars or to both such imprisonment and fine.

(2) Upon the conviction of any person under subsection (1) of this section a District Court shall have power to order the production of any books, accounts and records to the Authority and any person failing to comply with such order shall be guilty of an offence under this Act and shall be liable on conviction to imprisonment for a term not exceeding one year or to a fine not exceeding one thousand dollars or to both such imprisonment and fine and, in the case of a continuing offence, to a fine not exceeding one hundred dollars for each day during which the offence continues.

Application for licence.

6. (1) As from the date of the coming into operation of this Act, any public company proposing to conduct financing business in Singapore shall, before commencing any such business, apply in writing to the Authority for a licence under this Act.

(2) In considering any application by a public company for a licence the Authority may require to be satisfied as to—

  • (a) the financial condition of the company;
  • (b) the character of the management of the company;
  • (c) the adequacy of the capital structure and earning prospects of the company;
  • (d) the objects of the company as disclosed in its memorandum of association;
  • (e) the convenience and needs of the community to be served; and
  • (f) whether the public interest will be served by the granting of a licence.

(3) The Authority may grant a licence with or without conditions, or refuse to grant a licence.

(4) The Authority may at any time vary or revoke any existing conditions of a licence or impose additional conditions.

(5) Where a licence is granted subject to conditions the finance company shall comply with those conditions and any finance company that fails to comply with any conditions of its licence shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding five thousand dollars.

Minimum capital requirements of a finance company.

7. Subject to the provisions of this Act, no finance company shall be granted or shall hold a licence unless its capital, issued and paid up in cash, and unimpaired by losses or otherwise, is not less than five hundred thousand dollars.

Restriction on opening of branches of a finance company.

8. (1) No finance company shall open any new branch, agency or office, whether inside or outside Singapore, without submitting an application in writing to the Authority.

(2) In considering such application, the Authority may require to be satisfied by an inspection under section 26 of this Act or otherwise, as to—

  • (a) the financial condition of the company;
  • (b) the general character of the management of the company;
  • (c) the adequacy of the capital structure and earning prospects of the company;
  • (d) the convenience and needs of the community to be served; and
  • (e) whether the public interest will be served by the opening or, as the case may be, change of location of the place of business.

(3) Upon being so satisfied as to the matters referred to in subsection (2) of this section, the Authority may—

  • (a) grant the application; or
  • (b) without assigning any reason therefor, refuse to grant the application,

and its decision there on shall be final.

(4) Any finance company that fails to comply with subsection (1) of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding five hundred dollars for every day during which the default continues.

Mergers, etc., of a finance company.

9. (1) No finance company carrying on business in Singapore shall be merged or consolidated with or acquire a majority interest in any other finance company without the prior approval of the Authority.

(2) In considering such an application, the Authority shall have power to call for such information as it may require.

(3) The Authority may—

  • (a) approve the application; or
  • (b) refuse the application.

Amendment of constitution of a finance company.

10. (1) Every finance company that intends to alter its memorandum of association or articles of association shall, before proposing any resolution in this regard, furnish to the Authority for its approval particulars in writing (verified by a statutory declaration made by the secretary of the finance company) of the proposed alteration.

(2) The Authority may thereupon—

  • (a) approve the proposed alteration without modification;
  • (b) approve the proposed alteration with modification; or
  • (c) refuse to approve the proposed alteration.

(3) If the Authority approves the proposed alteration with modification, the finance company shall adopt the proposed alteration as so modified or not proceed with the proposed alteration and if the Authority refuses to approve the proposed alteration it may request the finance company to withdraw the proposed alteration and the finance company shall comply with the Authority’s request.

(4) Any finance company which fails to comply with the requirements of subsection (1) of this section or with any request by the Authority made under subsection (3) of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding three hundred dollars for every day during which the default continues.

Revocation of licence.

11. (1) The Authority—

  • (a) shall, by order, revoke the licence of a finance company if the company ceases to carry on the business for which it has been licensed in Singapore or goes into liquidation or is wound up or otherwise dissolved;
  • (b) may, in its discretion, by order, revoke the licence of a finance company if, in its opinion, the finance company—
    • (i) is carrying on its business in a manner likely to be detrimental to the interests of its depositors;
    • (ii) has insufficient assets to cover its liabilities to its depositors;
    • (iii) carries on business while its paid-up capital (unimpaired by losses or otherwise) is less than five hundred thousand dollars; or
    • (iv) is contravening or has contravened the provisions of this Act; and
  • (c) may, also in its discretion, by order, revoke the licence of a finance company—
    • (i) if the finance company or any person who is in a managerial or executive position in that finance company has been convicted of any offence under this Act; or
    • (ii) if it considers it in the public interest to do so:

Provided that before revoking any licence, the Authority shall give the finance company notice in writing of its intention to do so, specifying a date, not less than twenty-one days after the date of the notice, upon which such revocation will take effect and calling upon the finance company to show cause to the Authority why such licence should not be revoked.

(2) Where the Authority has revoked a licence under the provisions of subsection (1) of this section, it shall forthwith inform the finance company by notice in writing of such revocation.

Publication of list of finance companies.

12. The Authority shall cause to be published in the Gazette in the month of April in each year a list of all finance companies to which licences have been issued under this Act and if any licence is issued or revoked during the interval between the publication of two such lists, notice thereof shall also be caused to be published in the Gazette.

Part III. Reserve Funds, Dividends, Balance Sheets and Information

Maintenance of reserve fund by finance companies.

13. Every finance company shall—

  • (a) maintain a reserve fund;
  • (b) if the paid-up capital of the finance company is not less than two million dollars, transfer to such reserve fund out of the net profits of each year after due provision has been made for taxation—
    • (i) so long as the amount of the reserve fund is less than fifty per cent of the paid-up capital, a sum equal to not less than thirty per cent of the net profits;
    • (ii) so long as the amount of the reserve fund is not less than fifty per cent but less than one hundred per cent of the paid-up capital, a sum equal to not less than fifteen per cent of the net profits;
    • (iii) so long as the amount of the reserve fund is not less than one hundred per cent of the paid-up capital, a sum equal to not less than five per cent of the net profits; and
  • (c) if the paid-up capital of the finance company is less than two million dollars, transfer to such reserve fund out of the net profits of each year after due provision has been made for taxation—
    • (i) so long as the amount of the reserve fund is less than fifty per cent of the paid-up capital, a sum equal to not less than fifty per cent of the net profits;
    • (ii) so long as the amount of the reserve fund is not less than fifty per cent but less than one hundred per cent of the paid-up capital, a sum equal to not less than twenty-five per cent of the net profits;
    • (iii) so long as the amount of the reserve fund is not less than one hundred per cent of the paid-up capital, a sum equal to not less than ten per cent of the net profits.

Restriction on payment of dividends by finance companies.

14. No finance company shall pay any dividend on its shares until all its capitalized expenditure (including preliminary expenses, organisation expenses, share selling commission, brokerage, amount of losses incurred and any item of expenditure not represented by tangible assets) has been completely written off.

Exhibition of balance-sheet by finance companies.

15. Every finance company shall exhibit throughout the year, in a conspicuous position in every office and branch of that finance company, a copy of its last audited balance-sheet together with the full and correct names of all persons who are directors of the finance company, as soon as such balance-sheet is audited. A copy of such balance-sheet shall be published in at least each of four local daily newspapers, printed in the Malay, Tamil, Chinese and English languages not later than six months after the end of each financial year.

In this section, the expression “financial year” shall have the same meaning as is assigned to that expression in section 4 of the Companies Act, except that for the word “corporation” therein there shall be substituted the words “finance company”.

Information and statistics to be furnished by finance companies.

16. (1) Every finance company shall furnish to the Authority at such time and in such manner as the Authority may prescribe, all such information and data as it may reasonably require for the proper discharge of the Authority’s functions under the provisions of this Act.

(2) Nothing in this Act shall authorise the Authority to enquire specifically into the affairs of an individual depositor of a finance company and any information relating to the affairs of such individual depositor obtained by it in the course of an inspection or investigation made under this Act shall be secret between it and that finance company:

Provided that nothing in this section shall be deemed to limit any powers conferred upon the High Court or a Judge by Part IV of the Evidence Act or to prohibit obedience to an order made under that Part or any such law.

(3) Every finance company that fails or neglects to furnish any information required by the Authority under subsection (1) of this section and within the time specified by the Authority shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding one thousand dollars for every day during which the default continues.

Part IV. Regulation of Business

Acknowledgment of indebtedness.

17. Where a finance company has accepted money from any person as a deposit the company shall within two months after the acceptance of the money issue to that person a document which acknowledges or evidences or constitutes an acknowledgment of the indebtedness of the company in respect of that deposit.

Demand deposits, dealings in foreign exchange, etc., by finance companies.

18. (1) No finance company shall—

  • (a) accept any deposit which is repayable on demand by cheque, draft or order drawn by a depositor on the finance company;
  • (b) deal in gold or foreign exchange of whatever kind;
  • (c) grant unsecured advances, unsecured loans or unsecured credit facilities which in the aggregate and outstanding at any one time exceed ten per cent of the paid-up share capital and published reserves of the finance company and which as regards—
    • (i) any individual director whether borrowing on his own account or jointly with another director;
    • (ii) a firm in which it or any of its directors has an interest as a partner, manager or agent, or any individual or firm of whom or of which any of its directors is a guarantor;
    • (iii) a corporation that is deemed to be related to the finance company as described in section 6 of the Companies Act; or
    • (iv) any other person or body of persons whether incorporated or not,
  • exceed at any time the sum of five thousand dollars; or
  • (d) grant or permit to be outstanding to any customer any advances, loans or credit facilities, or give financial guarantees or incur any other liabilities on his behalf to an aggregate amount of such advances, loans or credit facilities, guarantees or liabilities in excess of sixty per cent of the paid-up share capital and published reserves of the finance company:Provided that, with the approval of the Authority, the percentage referred to in this paragraph may be increased to one hundred per cent of the paid-up share capital and published reserves of the finance company.

(2) In paragraph (c) of subsection (1) of this section, the expressions “unsecured advances”, “unsecured loans” or “unsecured credit facilities” mean advances, loans or credit facilities made without security or, in respect of any advance, loan or credit facility made with security, any part thereof which at any time exceeds the market value of the assets constituting that security, or where the Authority is satisfied that there is no established market value, on the basis of a valuation approved by the Authority.

(3) In paragraph (c) of subsection (1) of this section, the word “directors” includes the wife, husband, father, mother, son or daughter of a director.

(4) All the directors of a finance company shall be liable jointly and severally to indemnify a finance company against any loss arising from the making of any unsecured advance, loan or credit facility under subparagraph (i), (ii) or (iii) of paragraph (c) of subsection (1) of this section.

Dealing by a finance company in its own shares, etc.

19. (1) Except as is otherwise expressly provided by this Act, no finance company shall give, whether directly or indirectly and whether by means of a loan guarantee or the provision of security or otherwise, any financial assistance for the purpose of or in connection with a purchase or subscription made or to be made by any person of, or for, any shares in the finance company or, where such company is a subsidiary, in its holding company, or in any way purchase, deal in or lend money on its own shares.

(2) Nothing in subsection (1) of this section shall prohibit—

  • (a) the provision by a finance company, in accordance with any scheme for the time being in force, of money for the purchase of or subscription for fully-paid shares in the finance company or its holding company, being a purchase or subscription by trustees of or for shares to be held by or for the benefit of employees of such company, including any director holding a salaried employment or office in such company; or
  • (b) the giving of financial assistance by a finance company to persons, other than directors, bona fide in the employment of that company or of a subsidiary of that company with a view to enabling those persons to purchase fully-paid shares in the finance company to be held by themselves by way of beneficial ownership.

(3) If there is any contravention of this section, the finance company and every officer of such company who is in default shall be guilty of an offence under this Act and shall be liable on conviction to imprisonment for a term not exceeding one year or to a fine not exceeding two thousand dollars.

(4) Nothing in this section shall operate to prevent the finance company from recovering the amount of any loan made in contravention of this section or any amount for which it becomes liable on account of any financial assistance given in contravention of the provisions of this section.

Restrictions on trade by finance companies.

20. (1) No finance company shall engage, whether on its own account or on a commission basis, and whether alone or with others, in the wholesale or retail trade, including the import or export trade, except for the purpose of carrying on its financing business.

(2) Except as provided in this Act a finance company shall not carry on any kind of business other than financing business.

Restrictions on investments by finance companies.

21. (1) No finance company shall acquire or hold any part of the share capital of, or otherwise have a direct interest in, any financial, commercial, agricultural, industrial or other undertaking exceeding in the aggregate twenty-five per cent of the paid-up share capital and published reserves of that finance company except such shareholding as the finance company may acquire in the course of realising debts due to it, which shareholding shall, however, be disposed of at the earliest suitable moment.

(2) Notwithstanding the provisions of subsection (1) of this section, the percentage holding or interest referred to in that subsection may upon the application of a finance company to the Authority, and with the consent of the Authority, be increased to not more than fifty per cent of the paid-up share capital and published reserves of that finance company.

Restrictions on holding immovable property by finance companies.

22. (1) No finance company shall purchase or acquire any immovable property, or any right, title or interest therein exceeding in the aggregate at any one time twenty-five per cent of the finance company’s paid-up share capital and published reserves, except as may be reasonably necessary for the purpose of conducting its business or of housing or providing amenities for its staff, but this shall not prevent a finance company—

  • (a) from letting part of any building which is used for the purpose of conducting its business; or
  • (b) from securing a debt on any immovable property and in the event of default in payment of such debt, from holding that immovable property for realisation by sale or auction at the earliest suitable moment.

(2) This section shall not apply to such property as may from time to time be approved by the Authority.

(3) The Registrar of Titles in issuing any certificate of title or registering any assurance in the Registry of Titles and Deeds or any purchaser shall be exonerated from enquiring as to any matter or fact relating to the title of a finance company to, or to the power of a finance company in dealing with, any immovable property, or any right, title and interest therein, which has been purchased or acquired in contravention of the prohibition contained in this section and shall be protected from the effect of notice of any such matter or fact.

Liquidation of prohibited transactions by finance companies.

23. Any company which, before the date of the coming into operation of this Act, had entered into any transaction prohibited by the provisions of sections 18, 19, 20, 21 and 22 of this Act shall, if it is licensed under this Act, within six months of that date, submit a statement of those transactions to the Authority and shall, furthermore, within the said time, or such further time as the Authority may specify, liquidate those transactions or failing liquidation of those transactions be subject to the restrictions specified in sections 18, 19, 20, 21 and 22 of this Act and be bound accordingly to dispose of any movable or immovable property, or any right, title or interest therein as may have been acquired as a result of those prohibited transactions.

Orders by the Authority.

24. (1) The Authority may, by order, prescribe—

  • (a) the maximum rates of interest that finance companies shall pay on different types or classes of deposits;
  • (b) the maximum amount or amounts, expressed as a percentage or percentages, of total assets that finance companies may hold in one or more types or classes of loans, or advances;
  • (c) the minimum down payments and maximum maturity periods for different types or classes of loans, or advances granted by finance companies;
  • (d) the maximum rates of interest or commission and other charges and the methods of computing such interest or commission and other charges that finance companies may impose on different types or classes of loans, or advances granted by them;
  • (e) the maximum amount of loans or advances which finance companies may grant to any person or class of persons; and
  • (f) the reserves to be maintained with the Authority.

(2) Any order made under subsection (1) of this section shall apply uniformly to all finance companies, or to any class or classes of finance companies, and shall, together with its effective date, be published in the Gazette.

Part V. Minimum Liquid Assets

Minimum holdings of liquid assets by finance companies.

25. (1) Every finance company shall maintain a minimum holding of liquid assets, as defined in subsection (4) of this section, but a period of six months after the date of the coming into operation of this Act shall be allowed for compliance with this requirement.

(2) The minimum amount of liquid assets to be maintained by finance companies shall be determined from time to time by the Authority and shall be expressed as a percentage of the liabilities of each finance company on account of deposits.

(3) The Authority shall prescribe the method of computing the amount of liquid assets to be held by finance companies.

(4) For the purposes of this section “liquid assets” means all or any of the following:

  • (a) notes and coins that are legal tender in Singapore;
  • (b) net balances at banks in Singapore;
  • (c) net money at call in Singapore;
  • (d) Singapore Treasury bills;
  • (e) other assets that the Authority may prescribe.

(5) Any finance company that fails to comply with any requirement of this section shall be liable, on being called upon to do so by the Authority (in addition to any other penalty that may be imposed under this Act) to pay a penalty interest charge of not less than one-fifteenth of one per cent of the amount of the deficiency for every day during which the default continues and shall not while the default continues accept any deposits or enter into new commitments without the approval of the Authority.

Part VI. Inspection of Finance Companies

Inspection and investigation of finance companies and production of books, etc.

26. (1) The Authority may, from time to time, inspect or cause to be inspected under conditions of secrecy, the books, accounts and transactions of any finance company and of any branch, agency or office outside Singapore opened by a finance company incorporated in Singapore.

(2) The Authority may at any time make an investigation, under conditions of secrecy, of the books, accounts and transactions of a finance company, if the Authority has reason to believe that such finance company is carrying on its business in a manner detrimental to the interests of its depositors and other creditors or has insufficient assets to cover its liabilities to the public, or is contravening the provisions of this Act.

(3) The Authority may appoint any auditor, other than the auditor appointed by the finance company under the provisions of section 172 of the Companies Act, to exercise the powers of the Authority under subsections (1) and (2) of this section.

(4) For the purpose of an inspection or investigation under this section, a finance company shall afford the Authority access to its books, accounts and documents and shall give such information and facilities as may be required to conduct the investigation:

Provided that such books, accounts and documents shall not be required to be produced at such times and at such places as would interfere with the proper conduct of the normal daily business of that finance company.

(5) If any book, account or document or information is not supplied in accordance with subsection (4) of this section, the finance company concerned shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding two thousand dollars and to a further fine of two hundred and fifty dollars in respect of every day during which the default continues after conviction.

Powers of the Authority to issue orders after an inspection.

27. (1) If the Authority finds upon an inspection under section 26 of this Act that the affairs of a finance company are being conducted in a manner likely to be detrimental to the interests of the depositors or prejudicial to the interests of the finance company, the Authority may by order require the finance company to take such corrective action as the Authority considers to be necessary or require the finance company to discontinue such practices or procedures.

(2) No order shall be issued under subsection (1) of this section unless the finance company has been given a reasonable opportunity to present its views to the Authority.

(3) The Authority may, upon representation being made to it, or on its own motion, modify or cancel any order issued under subsection (1) of this section, and, in so modifying or cancelling any order, may impose such conditions as it thinks fit.

Part VII. Submission of Accounts and Auditor’s Report

Directors to submit copy of profit and loss account and auditor to submit copy of his report to Authority.

28. (1) The directors of a finance company shall submit to the Authority a copy of the profit and loss account and balance-sheet made out pursuant to subsections (1) and (3) of section 169 of the Companies Act.

(2) Every auditor of a finance company shall submit to the Authority a copy of his report as to every balance-sheet and profit and loss account (including every consolidated balance-sheet and consolidated profit and loss account) that he is required under section 174 of the Companies Act to make to members of the finance company.

Part VIII. Miscellaneous

The Authority to administer the Act.

29. (1) The Authority shall be charged with the general administration of this Act and the exercise of the functions imposed on it by this Act.

(2) The Authority may authorise or appoint any person to assist it in the exercise of its functions and duties under this Act, either generally or in a particular case.

(3) The members of the Authority shall be deemed to be public servants within the meaning of the Penal Code.

Prohibition against transacting of financing business on public holidays.

30. No finance company shall transact any business with the public on any day that is a public holiday under the provisions of the Holidays Act, or on any day declared to be a bank holiday under any written law relating to banking.

Indemnity.

31. The Authority shall not be subject to any action, claim or demand by or liability to any person in respect of anything done or omitted to be done in good faith in pursuance or in execution or intended execution or in connection with the execution or intended execution of any power conferred upon the Authority by this Act.

Finance company unable to meet obligations to inform Authority.

32. Any finance company that considers that it is likely to become unable to meet its obligations or is about to suspend payments shall forthwith inform the Authority of such fact.

Moratorium.

33. (1) The Authority may, if it considers it to be in the interests of the depositors of a finance company, by order—

  • (a) prohibit a finance company from carrying on its business; and
  • (b) stay the commencement or continuance of any actions or proceedings against a finance company in regard to its business for a specified period of time on such terms and conditions as the Authority deems reasonable, and may from time to time extend the period up to a total period of moratorium of not more than six months.

(2) So long as an order under subsection (1) of this section remains in force, any licence granted to such finance company under this Act shall be suspended.

Memorandum and articles of association of a finance company.

34. (1) Every company that was not carrying on financing business in Singapore before the date of the coming into operation of this Act shall, before it is granted a licence by the Authority to carry on financing business under this Act, include in its memorandum of association or articles of association the restrictions, limitations and prohibitions contained in sections 18, 19, 20, 21 and 22 of this Act.

(2) Every company that—

  • (a) has carried on financing business in Singapore before the date of the coming into operation of this Act; and
  • (b) is licensed under this Act,

but whose memorandum of association or articles of association do not include all or any of the restrictions, limitations or prohibitions contained in sections 18, 19, 20, 21 and 22 of this Act, shall be deemed to have included in its memorandum of association or articles of association all or any of such restrictions, limitations or prohibitions as are not so included.

(3) To the extent that any such restriction, limitation or prohibition so deemed to have been included in those memorandum of association or articles of association under subsection (2) of this section, is inconsistent with any provision already included in the memorandum of association or articles of association that restriction, limitation or prohibition shall prevail over such provision.

Disqualification of directors of a finance company.

35. (1) Without prejudice to anything contained in the Companies Act, any person who is a director, manager or other officer concerned with the management of a finance company shall cease to hold office—

  • (a) if he becomes bankrupt, suspends payments or compounds with his creditors; or
  • (b) if he is convicted of an offence involving dishonesty or fraud.

(2) No person who has been a director of, or directly concerned in the management of, a finance company licensed under this Act which has been wound up by a court shall without the express authority of the Authority, act, or continue to act, as director of, or be directly concerned in, the management of any finance company.

(3) Any person acting in contravention of subsection (1) or (2) of this section shall be guilty of an offence under this Act and shall be liable on conviction to imprisonment for a term not exceeding three years or to a fine not exceeding five thousand dollars or to both such imprisonment and fine.

Penalty for offences not otherwise provided for.

36. (1) Any finance company which, or person who, contravenes or fails to comply with any provisions of this Act or any order made under this Act for which no penalty is expressly provided shall be guilty of an offence under this Act and shall be liable on conviction to imprisonment for a term not exceeding three years or to a fine not exceeding five thousand dollars or to both such imprisonment and fine.

(2) The Authority may, without instituting proceedings against any person for any offence under this Act, or any regulations made thereunder, which is punishable only by a fine or a default penalty, demand and receive the amount of such fine or default penalty or such reduced amount as he thinks fit from such person, whereupon—

  • (a) if such person pays such amount to the Authority within fourteen days after the demand, no proceedings shall be taken against him in relation to the offence; and
  • (b) if such person does not so pay the amount so demanded, the Authority may cause proceedings to be instituted in relation to the offence.

Offences by directors or managers.

37. (1) Any person who, being a director, managing director or manager of a finance company—

  • (a) fails to comply, or to take all reasonable steps to secure compliance by the finance company, with the provisions of this Act or any order made under this Act or any other law relating to finance companies in force in Singapore; or
  • (b) fails to ensure or to take all reasonable steps to ensure the accuracy and correctness of any statement or information submitted under this Act or of any other law relating to finance companies in force in Singapore,

shall be guilty of an offence under this Act and shall be liable on conviction by a District Court to imprisonment for a term not exceeding three years or to a fine not exceeding five thousand dollars or to both such imprisonment and fine.

(2) In any proceedings against a person under subsection (1) of this section it shall be a defence to prove that he had reasonable grounds to believe and did believe that a competent and reliable person was charged with the duty of securing compliance with the provisions of this Act or any order made under this Act or any other written law relating to finance companies in Singapore or with the duty of securing that those statements were accurate and correct and that the person was in a position to discharge that duty.

(3) A person shall not be sentenced to imprisonment for any offence under subsection (1) of this section unless in the opinion of the court the offence was committed wilfully.

Holding out as finance company.

38. Where any public or private company or firm holds itself out to be a licensed finance company when it is not licensed under this Act, such company or firm shall be guilty of an offence under this Act and every director, manager or every officer of such company and the proprietor or every partner or officer of such firm shall, unless he proves that such holding out by the company or firm was made without his knowledge or consent, be guilty of an offence under this Act and shall be liable on conviction to imprisonment for a term not exceeding two years or to a fine not exceeding four thousand dollars or to both such imprisonment and fine.

Fiat of Attorney-General.

39. No prosecution in respect of any offence under this Act shall be instituted except by, or under the direction of, the Attorney-General acting upon a complaint made by the Authority.

Exemptions

40. (1) This Act shall not apply to—

  • (a) any bank licensed under the Banking Act;
  • (b) the Post Office Savings Bank established under the Post Office Savings Bank Act;
  • (c) any co-operative society registered under the Co-operative Societies Act; or
  • (d) any business of pawnbroking carried on by a person licensed under the Pawnbrokers Act.

(2) Notwithstanding any provisions in this Act, the Authority may exempt any finance company from any or all of the provisions of this Act.

Winding up provisions.

41. (1) Without prejudice to the provisions of the Companies Act—

  • (a) a company (whether or not it is being wound up voluntarily) may be wound up under an order of the Court on the petition of the Authority; and
  • (b) the Court may order the winding up of a company if—
    • (i) the company has held a licence under this Act and that licence has expired or has been revoked; or
    • (ii) the company has carried on financing business in Singapore in contravention of the provisions of this Act.

(2) In the winding up of a company that has been carrying on financing business, the depositors shall be deemed to be holders of debentures issued to them by the company and secured by a floating charge over all the property and undertaking of the company.

Redemption of securities held by finance company.

42. (1) As soon as practicable after the making of an order for the winding up of a finance company, the liquidator of the company shall publish in the Gazette a notice requiring every debtor of the finance company to redeem any property he has deposited with the company as security for any loan that he has obtained from the finance company, and shall also send by registered post such notice to every debtor whose security is held by the finance company and whose name is mentioned in the statement of affairs made out under section 234 of the Companies Act.

(2) The notice shall specify the latest date up to which any security may be redeemed, which date shall not be less than three months from the date of the notice.

(3) After the latest date for redeeming any security held by the finance company specified in the notice, the liquidator may proceed to realise any security held by the finance company forthwith, notwithstanding any agreement setting out any other period of redemption previously entered into between the finance company and the debtor.

Operation of Act not to affect the Companies Act.

43. Nothing in this Act shall affect the operation of the Companies Act, and any company that is liable to be incorporated under that Act shall continue to be so liable as if this Act had not been passed but in case of conflict between that Act and this Act the provisions of this Act shall prevail unless otherwise provided in this Act.

Regulations.

44. (1) The Authority may, from time to time, make such regulations for, or in respect of, every purpose which is deemed by it necessary for carrying out the provisions of this Act and for the prescribing of any matter which is authorised or required under this Act to be so prescribed.

(2) Without prejudice to the generality of subsection (1) of this section, the Authority may by such regulations—

  • (a) prescribe fees to be charged under this Act; and
  • (b) regulate advertisements of finance companies.

Part IX. Transitional

Transitional licensing provisions.

45. (1) Notwithstanding the provisions of section 7 of this Act, any company which on 5th December 1967 was carrying on financing business in Singapore may, within one month after the date of the coming into operation of this Act, apply for a licence and shall be granted a licence by the Authority which shall be valid up to and including 30th June 1968.

(2) Thereafter, such licence may be renewed for such further period, or periods, as the Authority may decide and be subject to such conditions as it may impose.

(3) A private company which has been granted a licence under subsection (1) of this section shall not be entitled to claim to be an exempt private company under the Companies Act.

Firms that have been carrying on financing business.

46. (1) Notwithstanding section 7 of this Act, any firm that had been carrying on financing business in Singapore before 5th December 1967 may apply for and may be granted a licence if such firm incorporates itself as a public company within three months of the date of the coming into operation of this Act.

(2) A licence granted under subsection (1) of this section may be valid for such period as the Authority may decide and be subject to such conditions as the Authority may impose.

Money-Changing and Remittance Businesses Act, 19791

An Act to provide for the licensing of persons who carry on money-changing or remittance business and for matters connected therewith.

Be it enacted by the President, with the advice and consent of the Parliament of Singapore, as follows:

[28th September, 1979]

Short title and commencement.

1. This Act may be cited as the Money-changing and Remittance Businesses Act, 1979, and shall come into operation on such date as the Minister may, by notification in the Gazette, appoint.

Interpretation.

2. (1) In this Act, unless the context otherwise requires—

“Authority” means the Monetary Authority of Singapore established under section 3 of the Monetary Authority of Singapore Act;

“licence” means a money-changer’s licence or a remittance licence, as the case may be, issued under this Act;

“money-changer’s licence” means a licence issued under this Act authorising the holder thereof to carry on money-changing business;

“money-changing business” means the business of buying or selling foreign currency notes;

“remittance business” means the business of accepting monies for the purpose of transmitting them to persons resident in another country;

“remittance licence” means a licence issued under this Act authorising the holder thereof to carry on remittance business.

(2) For the purposes of this Act, a person shall be deemed to be carrying on money-changing business if he—

  • (a) advertises that he is ready to buy or sell foreign currency notes; or
  • (b) offers to buy or sell foreign currency notes.

Scope of Act to persons.

3. This Act shall not be construed as requiring any person who accepts foreign currency notes from a customer or client in payment for goods sold or services rendered by him to obtain a money-changer’s licence.

Authority responsible for administration of Act.

4. The Authority shall be responsible for the administration of this Act and may authorise any of its officers to exercise any powers and perform any duties or functions of the Authority under this Act.

Persons carrying on money-changing business to be licensed.

5. (1) No person shall carry on any money-changing business unless he is in possession of a valid money-changer’s licence.

(2) A person who contravenes or fails to comply with the provisions of subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding six months or to both such fine and imprisonment.

Persons carrying on remittance business to be licensed.

6. (1) No person shall carry on any remittance business unless he is in possession of a valid remittance licence.

(2) A person who contravenes or fails to comply with the provisions of subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding six months or to both such fine and imprisonment.

Application for licence.

7. (1) Any person who desires to obtain a licence shall make an application to the Authority in such form as the Authority may require.

(2) Upon receiving an application under subsection (1), the Authority shall consider the application and may grant a licence with or without conditions or refuse to grant a licence without assigning any reason therefor.

(3) In considering any application by a person for a licence the Authority may require to be satisfied as to—

  • (a) the good character of the applicant or, if the applicant is a company, the general character of the management of the company;
  • (b) the financial condition of the applicant; and
  • (c) whether the public interest will be served by the granting of a licence.

(4) The Authority may at any time vary or revoke any of the existing conditions of a licence or impose new conditions.

License fee.

8. Every licensee shall pay such licence fee as may be prescribed.

Period for which licence is in force.

9. A licence shall be in force for such period as the Authority may determine and may be renewed at the discretion of the Authority on its expiry.

Revocation of a licence.

10. (1) The Authority may, by order, revoke a licence if it is satisfied that the licensee—

  • (a) has ceased to carry on the business for which he has been licensed or, if the licensee is a company, goes into liquidation or is wound up or otherwise dissolved; or
  • (b) is contravening or has contravened the provisions of this Act; or
  • (c) has failed to comply with or observe any of the conditions of his licence; or
  • (d) has made a false or incorrect statement in his application for a licence; or
  • (e) has carried on or is carrying on business in a manner likely to be detrimental to the interests of the public or his customers; or
  • (f) has been convicted of any offence involving dishonesty or moral turpitude or, if the licensee is a company, any of its officers holding a managerial or an executive position has been convicted of any offence involving fraud or moral turpitude.

(2) The Authority shall, before revoking any licence under the provisions of subsection (1), give the licensee notice in writing of its intention to do so, specifying a date, not less than thirty days after the date of the notice, upon which such revocation shall take effect and calling upon the person concerned to show cause to the Authority why such licence should not be revoked.

(3) When the Authority has revoked a licence under the provisions of subsection (1), it shall forthwith inform the person concerned by notice in writing of such revocation.

(4) The person whose licence has been revoked may, within twenty-one days of the receipt of the notice referred to in subsection (3), or within such extended period of time as the Minister may allow, appeal in writing against such revocation to the Minister whose decision shall be final.

(5) An order of revocation shall not take effect until the expiration of a period of thirty days after the order has been served on the licensee.

(6) If within that period the licensee concerned gives due notice of appeal to the Minister the order shall not take effect unless the order is confirmed by or is for any reason dismissed by the Minister or the appeal is withdrawn.

Effect of revocation.

11. (1) Where an order of revocation becomes effective under section 10, the licensee concerned shall cease to carry on money-changing or remittance business, as the case may be.

(2) The provisions of subsection (1) shall not prejudice the enforcement by any person of any right or claim against the licensee concerned or by the licensee concerned of any right or claim against any person arising out of or concerning any matter or thing done prior to the revocation of the licence.

Powers to investigate.

12. (1) Any person duly authorised by the Authority to act on its behalf may at any reasonable time enter any premises where a licensee is carrying on business, or any premises where he reasonably suspects any business is being carried on in contravention of this Act, and may inspect the premises and any book or document on those premises which he reasonably requires to inspect for the purpose of ascertaining whether a contravention of this Act or any regulations made thereunder is being or has been committed.

(2) Any person who—

  • (a) fails without reasonable excuse to admit any person who demands admission to the premises in pursuance of subsection (1); or
  • (b) on being required by a person referred to in subsection (1) to do so, fails without reasonable excuse to permit the person to inspect the premises; or
  • (c) on being required by a person referred to in subsection (1) to produce any book or document in his possession or under his control and which that person reasonably requires to inspect for the purpose specified in subsection (1), fails without reasonable excuse to produce it to him and to permit him to take copies of it or of any entry in it,shall be guilty of an offence and shall be liable on conviction to a fine not exceeding two thousand dollars.

(3) A person who is carrying out an investigation for the purpose of ascertaining whether an offence under this Act has been committed may exercise all or any of the powers conferred upon a police officer by the Criminal Procedure Code in relation to the investigation of a seizable offence.

Power to arrest.

13. Any person duly authorised to act on behalf of the Authority may, without warrant, arrest any person reasonably suspected of having committed an offence under this Act, if the accused person refuses to give his name and address or gives a name and address which the first mentioned person has reason to believe is false.

Liability of directors, partners, etc.

14. (1) Where an offence under this Act has been committed by a body corporate, any person, who at the time of the commission of such offence was a director, secretary, manager or other officer of the company or who was purporting to act in any such capacity, shall be liable to be proceeded against and punished accordingly unless he proves that the offence was committed without his consent or connivance and that he exercised such diligence to prevent the commission of the offence as he ought to have exercised having regard to the nature of his function in that capacity and to all the circumstances.

(2) Any person who would have been guilty of an offence if anything had been done or omitted to be done by him personally shall be guilty of such offence and shall be liable to the same penalty if such thing had been done or omitted to be done by his partner, agent or servant in the course of his partnership business or in the course of his employment, as the case may be, unless he proves that the offence was committed without his knowledge or consent and that he took all reasonable precautions to prevent the doing of or omission to do such thing.

(3) Nothing in subsection (2) shall relieve any partner, agent or servant from any liability for an offence.

Service of order, etc.

15. An order or a notice required or authorised by this Act to be given to any person may be—

  • (a) delivered to that person; or
  • (b) left at the place of abode or the place of business of that person; or
  • (c) sent by registered post to the last known address of that person.

Conduct of proceedings.

16. Proceedings in respect of any offence under this Act or any regulations made thereunder may be conducted by any officer of the Authority authorised in writing in that behalf by the Authority.

Indemnity.

17. Neither the Authority nor any person authorised by the Authority shall be subject to any action, claim or demand by or liability to any person in respect of any thing done or omitted to be done in good faith in pursuance or in execution or intended execution or in connection with the execution or intended execution of any power conferred upon the Authority by this Act.

Regulations.

18. (1) The Authority may, from time to time, make such regulations for, or in respect of, every purpose which is deemed necessary for carrying out the provisions of this Act and for the prescribing of any matter which is authorised or required under this Act to be so prescribed.

(2) Without prejudice to the generality of subsection (1), the Authority may by such regulations—

  • (a) prescribe fees to be charged under this Act; and
  • (b) regulate the conduct of money-changing and remittance business by persons holding licences issued under this Act.

Exemptions.

19. (1) This Act shall not apply to any company which has a valid licence granted under the Banking Act authorising it to conduct banking business in Singapore.

(2) The Authority may, by notification published in the Gazette, exempt any person or categories of persons from the provisions of this Act.

Transitional provisions.

20. Notwithstanding the provisions of this Act, a person who, immediately before the commencement of this Act, was carrying on money-changing or remittance business shall be entitled to do the same without a licence for a period of three months beginning from the commencement of this Act, and if before the expiration of that period he applies for a licence then he may continue to do the same until the licence is granted or finally refused or the application for a licence is withdrawn.

Moneylenders Act1

An Act to make provision for the regulation of moneylending.

[11th September, 1959]

Short title.

1. This Act may be cited as the Moneylenders Act.

Interpretation.

2. In this Act unless the context otherwise requires—

“authorized name” and “authorized address” mean respectively the name under which and the address at which a moneylender is authorized by a licence granted under this Act to carry on business as a moneylender;

“company” means any body corporate being a moneylender;

“firm” means an unincorporated body of two or more individuals or one or more individuals and one or more corporations or two or more corporations who have entered into partnership with one another with a view to carrying on business for profit;

“interest” does not include any sum lawfully charged in accordance with the provisions of this Act by a moneylender for or on account of stamp duties, fees payable by law and legal costs but, save as aforesaid, includes any amount by whatsoever name called in excess of the principal paid or payable to a moneylender in consideration of or otherwise in respect of a loan;

“licence” means a moneylender’s licence issued under this Act;

“moneylender” includes every person whose business is that of moneylending or who carries on or advertises or announces himself or holds himself out in any way as carrying on that business whether or not that person also possesses or earns property or money derived from sources other than the lending of money and whether or not that person carries on the business as a principal or as an agent but does not include—

  • (a) any body corporate, incorporated or empowered by a special Act of Parliament or by any other Act to lend money in accordance with that Act;
  • (b) any society registered under the Co-operative Societies Act;
  • (c) any person bona fide carrying on the business of banking or insurance or bona fide carrying on any business not having for its primary object the lending of money in the course of which and for the purposes whereof he lends money;
  • (d) any pawnbroker licensed under the provisions of any written law in force in Singapore relating to the licensing of pawnbrokers;
  • (e) any finance company licensed under the Finance Companies Act.

“principal” means, in relation to a loan, the amount actually lent to and received by the borrower;

“Registrar” means the Registrar of Moneylenders appointed under this Act and includes an Assistant Registrar.

Certain persons and firms presumed to be moneylenders.

3. Save as excepted in paragraphs (a), (b), (c), (d) and (e) of the definition of “moneylender” in section 2 of this Act, any person who lends a sum of money in consideration of a larger sum being repaid shall be presumed until the contrary is proved to be a moneylender.

Appointment of Registrars.

4. The Minister may appoint any public officer to be Registrar of Moneylenders under this Act and may also appoint as many public officers as he may think fit to be Assistant Registrars of Moneylenders.

Licences to be taken out by moneylenders.

5. (1) Every moneylender residing and carrying on the business of moneylending in Singapore whether as principal or as agent, shall take out a licence annually.

(2) A licence shall be taken out in respect of each name under which moneylending business is conducted. No licence shall be issued to a person not ordinarily resident in Singapore or to a firm where the person proposed to be responsible for the management of the firm is not ordinarily resident in Singapore.

(3) A licence taken out by a person as a partner in a firm shall be deemed to be a licence to the firm, and every other partner actively conducting in Singapore the moneylending business of that firm shall be subject to the provisions of this Act in like manner as if he had himself taken out the licence and shall be deemed to hold a licence.

(4) Licences shall be substantially in such form as the Minister may direct and shall be granted, on payment of the prescribed fee, by the Registrar or an Assistant Registrar or by officers authorized by either of them.

(5) Every licence shall come into operation on the date specified therein and shall be valid for a period of twelve months.

Particulars to be shown on licences.

6. (1) Every licence granted to a moneylender shall show his true name and the name under which, and the address at which, he is authorized by the licence to carry on business as such, and in the case of an agent in addition the true name of the principal, whether an individual or a firm, on whose behalf such business is carried on. A licence shall not authorize a moneylender to carry on business at more than one address or under more than one name or under any name which includes the word “bank” or otherwise implies that he carries on the business of banking, and no licence shall authorize a moneylender to carry on business under any name except—

  • (a) his true name or in the case of an agent the true name of the principal on whose behalf the agent carries on business; or
  • (b) the name of a firm in which he is a partner or of which he is an agent; or
  • (c) a business name, whether of an individual or of a firm in which he is a partner or of which he is an agent, under which he or the firm or in the case of an agent his principal has been registered under the Business Names Act.

(2) Any licence taken out in a name other than the moneylender’s true name shall be void.

List to be published.

7. (1) The Registrar shall from time to time cause to be published in the Gazette a list of all persons licensed under this Act, and shall also cause to be so published any addition to or alteration in the list.

(2) Every such printed list purporting to be published as aforesaid shall be evidence in all courts that the persons therein specified are licensed according to the provisions of this Act; and the absence of the name of any person from such printed list shall be evidence, unless the contrary is shown, that that person is not licensed according to the provisions of this Act.

Offences.

8. If any person—

  • (a) takes out a licence in any name other than his true name; or
  • (b) carries on business as a moneylender without holding a licence or, being licensed as a moneylender, carries on business as such in any name other than his authorized name or at any place other than his authorized address or addresses; or
  • (c) in the course of business as a moneylender enters as principal or agent into any agreement with respect to any advance or repayment of money or takes any security for money otherwise than in his authorized name,

he shall be guilty of an offence under this Act and on conviction shall be liable to a fine not exceeding five thousand dollars and for a second or subsequent offence shall be liable to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding twelve months or to both such fine and imprisonment and an offender being a company shall for a second or subsequent offence be liable to a fine not exceeding ten thousand dollars:

Provided that a moneylender who is not, or in the case of a firm none of the partners of which are, ordinarily resident in Singapore may without being guilty thereby of an offence carry on business in Singapore without holding a licence if he carries on such business solely through an agent duly licensed under this Act to carry on such business in Singapore under the name of that moneylender.

Grounds for refusing licence.

9. (1) A licence shall not be refused except on one or more of the following grounds:

  • (a) that satisfactory evidence has not been produced of the good character of the applicant and, in the case of a company or of a firm, of the persons responsible for the management thereof;
  • (b) that satisfactory evidence has been produced that the applicant or any person responsible or proposed to be responsible for the management of his business as a moneylender is not a fit and proper person to hold a licence;
  • (c) that the applicant or any person responsible or proposed to be responsible for the management of his business as a moneylender is by order of a court disqualified from holding a licence;
  • (d) that the applicant has not complied with the provisions of section 5 of this Act with respect to applications for licences;
  • (e) that the applicant or his firm has after the coming into operation of this Act knowingly lent money to a person under the age of twenty-one years;
  • (f) that the applicant, or any partner, director or other person who is or will be responsible for the management of the firm, is below the age of twenty-one years:

Provided that where an application is made by any person for a licence to carry on business as an agent for a principal such licence may also be refused on one or more of the following grounds:

  • (i) that satisfactory evidence has not been produced of the good character of the principal and, where the principal is a firm, of the persons responsible for the management thereof;
  • (ii) that satisfactory evidence has been produced that the principal is not a fit and proper person to carry on the business of moneylending;
  • (iii) that the principal or any present or former agent of the principal is by an order of a court disqualified from holding a licence;
  • (iv) that the principal or any present or former agent of the principal has after the coming into operation of this Act knowingly lent money to a person under the age of twenty-one years.

(2) Any person aggrieved by the refusal of a licensing officer to grant a licence may appeal to the Minister in such manner as the Minister may, by rules, prescribe and the decision of the Minister shall be final.

Revocation of licence.

10. (1) The Registrar may by order revoke a licence if he is satisfied—

  • (a) that the holder of the licence—
    • (i) has ceased to carry on the business of a moneylender or, if the licensee being a company, goes into liquidation or is wound up or otherwise dissolved; or
    • (ii) is no longer a fit and proper person to continue to hold the licence; or
  • (b) that the holder of the licence, or if he is a partner of a firm or is a company, any person responsible for the management of the firm or company—
    • (i) has been convicted of any offence involving dishonesty or moral turpitude; or
    • (ii) is carrying on or has carried on the business of a moneylender in such a manner as renders him unfit to continue to hold the licence; or
    • (iii) is contravening or has contravened the provisions of this Act; or
    • (iv) has been convicted of any offence under this Act or the rules made thereunder.

(2) The Registrar shall, before revoking any licence under the provisions of subsection (1) of this section, give the person concerned notice in writing of his intention to do so, specifying a date, not less than twenty-one days after the date of the notice, upon which such revocation shall take effect and calling upon the person concerned to show cause to the Registrar why such licence should not be revoked.

(3) When the Registrar has revoked a licence under the provisions of subsection (1) of this section he shall forthwith inform the person concerned by notice in writing of such revocation.

(4) The person whose licence has been revoked may, within fourteen days after the date of the notice referred to in subsection (3) of this section, or such extended period of time as the Minister may allow, appeal in writing against such revocation to the Minister whose decision thereon shall be final.

(5) An order of revocation shall not take effect until the expiration of a period of fourteen days after the Registrar has informed the licensee concerned of the order.

(6) If within that period the licensee concerned gives due notice of appeal to the Minister the order shall not take effect unless the order is confirmed by the Minister or the appeal is for any reason dismissed by the Minister or is withdrawn.

(7) An order of revocation made under this section shall not affect any moneylending transaction entered into before the order is made.

Names to be stated on documents issued by moneylenders.

11. A moneylender shall not for the purpose of the business carried on by him as such issue or publish or cause to be issued or published any advertisement, circular, business letter or other document which does not show in such manner as to be not less conspicuous than any other name, the authorized name of the moneylender, and any moneylender who acts in contravention of this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding five hundred dollars in respect of the offence.

No circular implying a banking business to be issued.

12. If a moneylender for the purpose of the business carried on by him as such issues or publishes or causes to be issued or published any advertisement, circular or document of any kind whatsoever containing expressions which might reasonably be held to imply that he carries on the business of banking he shall on conviction be liable to a fine not exceeding one thousand dollars and on a second or subsequent offence shall be liable to a fine not exceeding one thousand dollars or to imprisonment for a term not exceeding twelve months or to both such fine and imprisonment and an offender being a company shall for a second or subsequent offence be liable to a fine not exceeding five thousand dollars.

Restriction on moneylenders’ advertisements.

13. (1) No person shall knowingly send or deliver or cause to be sent or delivered, to any person, except in response to his written request any circular or other document advertising the name, address or telephone number of a moneylender or containing an invitation—

  • (a) to borrow money from a moneylender;
  • (b) to enter into any transaction involving the borrowing of money from a moneylender; or
  • (c) to apply to any place with a view to obtaining information or advice as to borrowing any money from a moneylender.

(2) Subject as hereunder provided, no person shall publish, or cause to be published, in any newspaper or other printed paper issued periodically for public circulation or by means of any poster or placard, an advertisement advertising any such particulars or containing any such invitation as aforesaid:

Provided that an advertisement in conformity with the requirements of this Act relating to the use of names on moneylenders’ documents may be published by or on behalf of a moneylender in any newspaper or in any such paper as aforesaid or by means of a poster or placard exhibited at any authorized address of the moneylender if it contains no addition to the particulars necessary to comply with the said requirements except any of the following particulars, that is to say—

  • (a) any authorized address at which he carries on business as a moneylender and the telegraphic address and telephone number thereof;
  • (b) any address at which he formerly carried on business;
  • (c) a statement that he lends money with or without security and of the highest and lowest sums that he is prepared to lend; and
  • (d) a statement of the date on which the business carried on by him was first established.

(3) No moneylender or any person on his behalf shall employ any agent or canvasser for the purpose of inviting any person to borrow money or to enter into any transaction involving the borrowing of money from a moneylender and no person shall act as such agent or canvasser or demand or receive, directly or indirectly, any sum or other valuable consideration by way of commission or otherwise for introducing or undertaking to introduce to a moneylender any person desiring to borrow money.

(4) Where any document issued or published by or on behalf of a moneylender purports to indicate the terms of interest upon which he is willing to make loans or any particular loan, the document shall either express the interest proposed in terms of a rate per cent per annum or per month.

(5) Any person acting in contravention of any of the provisions of this section shall be guilty of an offence against this Act and shall in respect of each offence be liable on conviction to imprisonment for a term not exceeding six months or to a fine not exceeding five hundred dollars or to both such imprisonment and fine.

Boards to be affixed at place of business of moneylenders.

14. (1) Every person licensed as a moneylender under the provisions of this Act shall affix in a conspicuous position outside his authorized address a board bearing the authorized name and the authorized address of the business and the words “Licensed Moneylender” in Malay, English, Chinese and Tamil distinctly printed in letters not less than two inches high.

(2) Any person who fails to comply with the provisions of subsection (1) of this section shall be liable on conviction to a fine not exceeding fifty dollars.

Contract by unlicensed moneylender unenforceable.

15. No contract for the repayment of money lent after the coming into operation of this Act by an unlicensed moneylender shall be enforceable:

Provided that money lent on behalf of a principal through an agent who is licensed under the provisions of this Act to carry on the business of moneylending on behalf of that principal shall be deemed to have been lent by a licensed moneylender.

Note or memorandum of moneylender’s contract to be given to the borrower.

16. (1) No contract for the repayment by a borrower or his agent of money lent to him or to any agent on his behalf by a moneylender or his agent after the coming into operation of this Act or for the payment by him of interest on money so lent, and no security given by the borrower or by any such agent as aforesaid in respect of any such contract, shall be enforceable unless a note or memorandum in writing of the contract in the English language and in the prescribed form is signed by the parties to the contract or their respective agents or, in the case of a loan to a partnership firm, by a partner in or agent of the firm, and unless a copy thereof authenticated by the lender or his agent is delivered to the borrower or his agent or, in the case of a loan to a partnership firm, to a partner in or agent of the firm, before the money is lent, and no such contract or security shall be enforceable if it is proved that the note or memorandum aforesaid was not so signed before the money was lent or before the security was given, as the case may be:

Provided always that where a security is given to secure an immediate loan and subsequent loans, the security shall be enforceable in respect of any subsequent loan thereby secured if the note or memorandum in respect of the subsequent loan is signed and delivered to the borrower before the money is lent.

(2) No contract made after the date of the coming into operation of the Moneylenders (Amendment) Act, 1975 for the repayment by a borrower or his agent of money lent to him or to any agent on his behalf by a moneylender or his agent, or for the payment by him of interest on the money so lent, and no security given by the borrower or any such agent as aforesaid in respect of any such contract shall be enforceable unless the money lent was given to the borrower or his agent in the form of an account payee crossed cheque with the words “licensed moneylender” endorsed legibly below the signature of the moneylender or his agent on the cheque made payable to the borrower or his agent;2

(3) No moneylender or his agent shall present to any bank any crossed cheque drawn by another moneylender or his agent and made payable to a borrower or his agent and any moneylender or his agent who acts in contravention of this subsection shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding two thousand dollars or to imprisonment for a term not exceeding twelve months or to both such fine and imprisonment.

(4) Any person, not being a moneylender, who presents to any bank more than two crossed cheques in any one month drawn by any moneylender or his agent and made payable to a borrower or his agent shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding two thousand dollars or to imprisonment for a term not exceeding twelve months or to both such fine and imprisonment.

(5) In the course of any investigation or proceedings into or relating to an offence by any person under subsection (3) or (4) of this section, the Public Prosecutor may, notwithstanding anything in any other written law to the contrary, by notice in writing, require the manager of any bank to furnish him with such information as he may require to enable him to identify any person having an account at that bank and the manager of any bank who wilfully neglects or fails to comply with the terms of that notice and within such time as may be specified in that notice shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding one thousand dollars or to imprisonment for a term not exceeding six months or to both such fine and imprisonment.

(6) In this section the expression “borrower” includes a surety.

(7) Any moneylender or his agent who makes a loan in the form other than that prescribed by subsection (2) of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding two thousand dollars or to imprisonment for a term not exceeding six months or to both such fine and imprisonment.

(8) The provisions of subsections (1) and (2) of this section shall not apply to loans or advances by a moneylender on current account where interest is payable on the daily balances with monthly or more extended rests at a rate not exceeding fifteen per cent per annum.

Stamping of note or memorandum.

17. Notwithstanding the provisions of the Stamp Act, any note or memorandum, including a promissory note, setting out the contract for the repayment by a borrower of money lent to him by a registered moneylender, shall not be stamped unless—

  • (a) the licence number of the moneylender is stated in the note or memorandum;
  • (b) a copy of the note or memorandum is handed to the Commissioner of Stamps who shall forward such copy to the Comptroller of Income Tax; and
  • (c) the note or memorandum is presented for stamping within seven days after its execution.

Prohibition of compound interest.

18. (1) Any contract made whether before or after the coming into operation of this Act, for the loan of money by a moneylender shall be illegal in so far as it provides, directly or indirectly, for the payment of compound interest, or for the rate or amount of interest to be increased by reason of any default in the payment of sums due under the contract:

Provided that provision may be made by any such contract that if default is made in the payment upon the due date of any sum payable to the moneylender under the contract, whether in respect of principal or interest, the moneylender shall be entitled to charge simple interest on that sum from the date of the default until the sum is paid, at a rate not exceeding the rate payable in respect of the principal apart from any default and any interest so charged shall not be reckoned for the purposes of this Act as part of the interest charged in respect of the loan.

(2) The provisions of subsection (1) of this section shall not apply to transactions known as thavannai transactions, between one moneylender and another moneylender, provided that any such transaction is evidenced by a written document duly stamped.

(3) The provisions of subsection (1) of this section shall not apply to loans or advances by a moneylender on current account where interest is payable on the daily balances with monthly or more extended rests at a rate not exceeding fifteen per cent per annum.

Accounts to be kept in permanent books.

19. (1) Every moneylender shall keep or cause to be kept a regular account of each loan made whether before or after the coming into operation of this Act clearly stating in plain words and in English numerals with or without the numerals of the script otherwise used the terms and transactions incidental to the account entered in a book paged and bound in such manner as not to facilitate the elimination of pages or the interpolation or substitution of pages.

(2) Every moneylender shall keep or cause to be kept such books of accounts relating to his business as are prescribed so as to exhibit and explain the financial position in his business, including a book or books containing entries from day to day in sufficient detail of all cash received and paid.

(3) Every moneylender shall submit to the Registrar a statement in such form as the Registrar may require showing his cash and loan position for each quarter of the year not later than the end of the second week of the next ensuing quarter.

(3A) Every moneylender shall, when so required by the Registrar, account for or explain any item or particulars appearing in the statement submitted to the Registrar under subsection (3) of this section.

(4) The Registrar may from time to time inspect, under conditions of secrecy, the books of accounts of a moneylender and a moneylender shall, when so required by the Registrar afford the Registrar access to his books of accounts and to any cheque drawn by the moneylender or his agent that has been cleared by any bank and to any note or memorandum setting out a contract for the repayment of money lent in which he is or has been concerned.

(5) If any person subject to the obligations of this section fails to comply with any of the requirements of subsection (1) of this section, he shall not be entitled to enforce any claim in respect of any transaction in relation to which default has been made.

(6) Any person who fails to comply with the requirements of this section or any requisition made by the Registrar under subsection (3a) of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding one thousand dollars and in the case of a continuing offence to a further fine not exceeding one hundred dollars for each day or part thereof during which the offence is continued after conviction.

Obligation to supply information as to state of loan and copies of documents relating thereto.

20. (1) In respect of every contract for the repayment of money lent by a moneylender whether made before or after the coming into operation of this Act the moneylender shall, on any reasonable demand in writing being made by the borrower at any time during the continuance of the contract and on tender by the borrower of the sum of fifty cents for expenses, supply to the borrower or, if the borrower so requires, to any person specified in that behalf in the demand, a statement of account in English figures signed by the moneylender or his agent showing—

  • (a) the date on which the loan was made, the amount of the principal of the loan and the rate per cent per annum or the amount of interest charged; and
  • (b) the amount of any payment already received by the moneylender in respect of the loan and the date on which it was made; and
  • (c) the amount of all sums due to the moneylender for principal but unpaid and the dates upon which they became due and the amount of interest due and unpaid in respect of each such sum; and
  • (d) the amount of every sum not yet due which remains outstanding and the date upon which it will become due.

A statement of account given in the form in the First Schedule3 to this Act shall be deemed to comply with the requirements of this subsection.

(2) A moneylender shall, on any reasonable demand in writing by the borrower and on tender of the sum of one dollar, supply a copy of any document relating to a loan made by him or any security therefor to the borrower or, if the borrower so requires, to any person specified in that behalf in the demand.

(3) If a moneylender to whom a demand has been made under this section fails without reasonable excuse to comply therewith within one month after the demand has been made he shall not, so long as the default continues, be entitled to sue for or recover any sum due under the contract on account either of principal or interest, and interest shall not be chargeable in respect of the period of the default and, if such default is made or continued after proceedings have ceased to lie in respect of the loan, the moneylender shall be liable on conviction to a fine not exceeding fifty dollars for every day on which the default continues.

(4) A moneylender, receiving any payment of money under a contract for the repayment of money lent, shall immediately thereafter endorse on the stamped note or memorandum setting out that contract the amount of money received and the date it was received by him and shall forthwith issue to the payer a duly stamped receipt therefor and any moneylender who contravenes the provisions of this subsection shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding two thousand dollars.

(5) Where a moneylender has been convicted of an offence under subsection (4) of this section and the borrower has not repaid in full the amount due and payable under the contract for repayment of money lent, the contract shall not be enforceable in respect of any moneys still unpaid under that contract.

(6) If a moneylender is convicted of an offence under subsection (4) of this section the court shall cause particulars of the conviction to be endorsed on the note or memorandum of the contract for repayment of money lent.

Provisions as to bankruptcy proceedings for moneylenders’ loans.

21. (1) Where a debt due to a moneylender in respect of a loan made by him whether before or after the coming into operation of this Act includes interest, that interest shall, for the purposes of the provisions of the Bankruptcy Act, be calculated at a rate not exceeding four per cent per annum, but nothing in the foregoing provision shall prejudice the right of the moneylender to receive out of the estate, after all the debts proved in the estate have been paid in full, any higher rate of interest to which he may be entitled.

(2) No proof of a debt due to a moneylender in respect of a loan made by him shall be admitted for any of the purposes of the Bankruptcy Act unless the affidavit verifying the debt has exhibited thereto a statement which complies with the provisions of section 20 of this Act and shows, where the amount of interest included in the unpaid balance represents a rate per cent per annum exceeding four per cent, the amount of interest which would be so included if it were calculated at the rate of eight per cent per annum.

(3) Where on the date of the coming into operation of this Act property is vested in the Official Assignee by reason of any adjudication or vesting order or other order having the like effect, made under the provisions of the Bankruptcy Act or which is the subject of a composition or scheme of arrangement approved thereunder, but where no dividend has been declared or payment by way of dividend has been made, the provisions of subsections (1) and (2) of this section shall apply notwithstanding that the order vesting the property or a receiving order made in respect of it was made or the composition or scheme of arrangement was approved or any debt provable or payable in respect of it was incurred before the date of the coming into operation of this Act.

(4) General rules may be made under the Bankruptcy Act for the purpose of carrying into effect the objects of this section.

Accounts under section 20 to be produced when suing in court.

22. (1) Where proceedings are taken in any court by a moneylender for the recovery of any money lent whether before or after the coming into operation of this Act or the enforcement of any agreement or security made or taken in respect of money lent either before or after the coming into operation of this Act, he shall produce a statement of his account as prescribed in section 20 of this Act.

(2) Where there is evidence which satisfies the court that the interest charged in respect of the sum actually lent is excessive and that the transaction is harsh and unconscionable or substantially unfair, the court shall reopen the transaction and take an account between the moneylender and the person sued and shall, notwithstanding any statement or settlement of account or any agreement purporting to close previous dealings and create a new obligation, reopen any account already taken between them and relieve the person sued from payment of any sum in excess of the sum adjudged by the court to be fairly due in respect of such principal, interest and legal costs as the court, having regard to the risk and all the facts and circumstances (including facts and circumstances arising or coming to the knowledge of the parties after the date of the transaction) may adjudge to be reasonable, and, if any such excess has been paid or allowed in account by the borrower or other person sued may order the moneylender to repay it and may set aside either wholly or in part or revise or alter any security given or agreement made in respect of money lent by the moneylender and, if the moneylender has parted with the security, may order him to indemnify the borrower or other person sued:

Provided that nothing in this subsection shall prevent any further or other relief being given in circumstances in which a court of equity would give such relief.

(3) Any court in which proceedings might be taken for the recovery of money lent by a moneylender shall have and may, at the instance of the borrower or surety or other person liable or of the trustee in bankruptcy, exercise the like powers as may be exercised under this section where proceedings are taken for the recovery of money lent, and the court shall have power, notwithstanding any provision or agreement to the contrary, to entertain any application under this Act by the borrower or surety or other person liable notwithstanding that the time for repayment of the loan or any instalment thereof may not have arrived.

(4) On any application relating to the admission or amount of a proof by a moneylender in any bankruptcy proceedings the Official Assignee shall exercise the like powers as may be exercised by the court under this section when proceedings are taken for the recovery of money:

Provided that if the moneylender is dissatisfied with the decision of the Official Assignee the court may, on the application of the moneylender made under the Bankruptcy Act reverse or vary that decision.

(5) The foregoing provisions of this section shall apply to any transaction whatever its form may be that is substantially one of moneylending by a moneylender.

(6) Nothing in the foregoing provisions of this section shall affect the rights of any bona fide assignee or holder for value without notice.

(7) Nothing in this section shall be construed as derogating from the existing powers or jurisdiction of any court.

Interest above 12 per cent per annum for a secured loan or 18 per cent per annum for an unsecured loan presumed excessive.

23. (1) Where in any proceedings taken in any court by a moneylender in respect of any money lent whether before or after the coming into operation of this Act or in respect of any agreement or security in respect of money lent either before or after the coming into operation of this Act it is found that the interest charged exceeds the prescribed maximum rate of interest for such loan, the court shall, unless the contrary is proved, presume for the purposes of section 22 of this Act that the interest charged is excessive and that the transaction is harsh and unconscionable or substantially unfair, but this provision shall be without prejudice to the powers of the court under that section where the court is satisfied that the interest charged, although not exceeding twelve per cent per annum, or eighteen per cent per annum as the case may be is excessive or that the transaction is harsh or unconscionable or substantially unfair.

(2) Where a court reopens a transaction of a moneylender under section 22 of this Act the court may require the moneylender to produce any licence granted to him in accordance with the provisions of this Act and may cause such particulars as the court thinks desirable to be endorsed on any such licence and a copy of the particulars to be sent to the Registrar.

(3) The powers of a court under subsection (3) of section 22 of this Act may be exercised notwithstanding that the moneylender’s right of action for the recovery of the money lent is barred.

(4) In no case shall interest at any time be recoverable by a moneylender of an amount in excess of the sum then due as principal unless a court, having regard to all circumstances, otherwise decrees.

(5) No person who is neither a moneylender nor one of the persons referred to in paragraphs (a) to (e) inclusive of the definition of “moneylender” contained in section 2 of this Act shall, in respect of money lent by him, in any case recover in excess of the money actually lent by him (whether the excess is claimed by way of interest or otherwise) any sum greater than an amount equal to simple interest at the rate of twenty per cent per annum on the money actually lent by him.

(6) A moneylender who charges interest for a loan at a rate exceeding the maximum rate of interest prescribed for such a loan shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding two thousand dollars and for a second or subsequent offence—

  • (a) to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding one year or to both such fine and imprisonment; or
  • (b) where the moneylender is a company, to a fine not exceeding ten thousand dollars.

Burden of proof of amount lent.

24. (1) Where in any proceedings taken in any court by a moneylender for the recovery of any money lent whether before or after the coming into operation of this Act or the enforcement of any agreement or security made or taken in respect of money lent either before or after the coming into operation of this Act any dispute arises as to the amount of the money lent to and received by the borrower the burden of proving such amount shall be on the moneylender.

(2) The fact that the borrower has signed a note or memorandum which complies with the provisions of section 16 of this Act and in which the amount of the money lent to and received by the borrower is set out shall not of itself raise any presumption that the amount of money so set out was actually lent to or received by the borrower.

Repayment of loan.

25. (1) The borrower shall be entitled to repay any money lent or interest thereon by cheque, money order or postal order and where in any proceedings taken in any court by a moneylender for the recovery of any money lent whether before or after the coming into operation of this Act or the enforcement of any agreement or security made or taken in respect of money lent either before or after the coming into operation of this Act, the borrower gives evidence that he has posted a cheque, money order or postal order to the moneylender at his authorized address in payment of the money lent or any part thereof or of interest thereon, it shall be presumed that the amount stated in the cheque, money order or postal order has been paid to the moneylender towards payment of the money lent or interest thereon, as the case may be.

(2) A moneylender shall not accept in repayment of an amount exceeding ten dollars from a borrower in respect of the principal sum of or interest due for any loan given unless such repayment is made by cheque, money order or postal order.

(3) A moneylender who contravenes the provisions of subsection (2) of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding five hundred dollars.

Prohibition of charge for expenses on loans by moneylender.

26. Any agreement between a moneylender and a borrower or intending borrower for the payment by the borrower or intending borrower to the moneylender of any sum on account of costs, charges or expenses other than stamp duties, fees payable by law and legal costs incidental to or relating to the negotiations for or the granting of the loan or proposed loan shall be illegal, and if any sum is paid to a moneylender by a borrower or intending borrower as, for or on account of any such costs, charges or expenses other than as aforesaid, that sum shall be recoverable as a debt due to the borrower or intending borrower, or in the event of the loan being completed, shall, if not so recovered, be set off against the amount actually lent and that amount shall be deemed to be reduced accordingly.

Calculation of interest.

27. Where the interest charged on a loan is not expressed in terms of a rate per cent per annum, the rate of interest per cent per annum charged on the loan shall be calculated in accordance with the Second Schedule4 to this Act or, where the contract provides for the payment of equal instalments of principal and interest at equal intervals of time, in accordance with the formula given in the Third Schedule5 to this Act.

Notice and information to be given on assignment of moneylender’s debts.

28. (1) Where any debt in respect of money lent by a moneylender, whether before or after the coming into operation of this Act, or in respect of interest on any such debt, or the benefit of any agreement made or security taken in respect of any such debt or interest, is assigned to any assignee, the assignor (whether he is the moneylender by whom the money was lent or any person to whom the debt has been previously assigned) shall, before the assignment is made—

  • (a) give to the assignee notice in writing that the debt, agreement or security is affected by the operation of this Act; and
  • (b) supply to the assignee all information necessary to enable him to comply with the provisions of this Act relating to the obligation to supply information as to the state of loans and copies of documents relating thereto,

and any person acting in contravention of any of the provisions of this section shall be liable to indemnify any other person who is prejudiced by the contravention and shall also be guilty of an offence against this Act and shall in respect of each offence be liable on conviction to imprisonment for a term not exceeding one year or to a fine not exceeding one thousand dollars or to both such imprisonment and fine:

Provided that an offender being a company shall be liable to a fine of five thousand dollars.

(2) In this section the expression “assigned” means assigned by any assignment inter vivos other than an assignment by operation of law, and the expressions “assignee” and “assignor” have corresponding meanings.

Application of Act as respects assignees.

29. (1) Subject as hereinafter provided the provisions of this Act shall continue to apply as respects any debt to a moneylender in respect of money lent by him whether before or after the coming into operation of this Act or in respect of interest on money so lent or of the benefit of any agreement made or security taken in respect of any such debt or interest notwithstanding that the debts or the benefit of the agreement or security may have been assigned to any assignee and, except where the context otherwise requires, references in this Act to a moneylender shall accordingly be construed as including any such assignee as aforesaid.

(2) No assignment of any debt in respect of money lent by a moneylender whether before or after the coming into operation of this Act shall be valid unless the moneylender is licensed under this Act.

(3) Notwithstanding anything in this Act—

  • (a) any agreement with or security taken by a licensed moneylender in respect of money lent by him after the coming into operation of this Act shall be valid in favour of any bona fide assignee or holder for value without notice of any defect due to the operation of this Act and of any person deriving title under him; and
  • (b) any payment or transfer of money or property made bona fide by any person, whether acting in a fiduciary capacity or otherwise, on the faith of the validity of any such agreement or security without notice of any such defect shall, in favour of that person, be as valid as it would have been if the agreement or security had been valid:

Provided that in every such case the moneylender shall be liable to indemnify the borrower or any other person who is prejudiced by virtue of this section and nothing in this subsection shall render valid an agreement or security in favour of or apply to proceedings commenced by an assignee or holder for value who is himself a moneylender.

(4) Notwithstanding anything contained in this Act, for the purposes of this section an assignee or holder for value or person making any such payment or transfer as aforesaid shall not be prejudicially affected by notice of any such defect as aforesaid unless—

  • (a) it is within his own knowledge, or would have come to his knowledge if such inquiries and inspections had been made as ought reasonably to have been made by him; or
  • (b) in the same transaction, with respect to which a question of notice to such assignee, holder for value or person arises, it has come to the knowledge of his counsel as such or of his solicitor or other agent as such, or would have come to the knowledge of his solicitor or other agent as such if such inquiries and inspections had been made as ought reasonably to have been made by the solicitor or other agent.

(5) Nothing in this section shall render valid for any purpose any agreement, security or other transaction which would, apart from the provisions of this Act, have been void or unenforceable.

Attestation of certain promissory notes.

30. (1) Whenever a promissory note is taken as security for any loan and the borrower is a person who does not understand the written language on the note the note shall be attested by an advocate and solicitor, a Magistrate, Justice of the Peace, commissioner for oaths or such other person as may be appointed by the Minister generally for that purpose. The attestor shall explain the terms of the promissory note to the borrower, and shall certify thereon that the borrower appeared to understand the meaning of the note. The money borrowed shall be paid over by the lender to the borrower in the presence of the attestor who shall certify the fact upon the promissory note.

(2) Any promissory note required to be attested under this section and not so attested shall be void and the lender shall not be entitled to recover any loan for which the note is taken as security.

Penalty for taking promissory note in which amount left blank or not truly stated.

31. Any moneylender who makes any note or memorandum under section 16 of this Act or who takes as security for any loan a promissory note or other contract for the repayment of money lent in which the principal or rate of interest is, to the knowledge of the moneylender, not truly stated or is left blank shall be guilty of an offence and shall be liable on conviction to a fine not exceeding two thousand dollars or. in the event of a second or subsequent offence, to imprisonment for a term not exceeding six months or to a fine not exceeding five thousand dollars or to both such imprisonment and fine.

False statements or representations to induce borrowing an offence.

32. If any moneylender or any manager, agent or clerk of a moneylender or if any person being a director, manager or other officer of any company, by any false, misleading or deceptive statement, representation or promise or by any dishonest concealment of material facts fraudulently induces or attempts to induce any person to borrow money or to agree to the terms on which money is or is to be borrowed, he shall be guilty of an offence and shall be liable on conviction to imprisonment for a term not exceeding two years or to a fine not exceeding five thousand dollars or to both such imprisonment and fine.

Harassing debtor, besetting his residence, etc.

33. (1) Any moneylender, who, either personally or by any person acting on his behalf, harasses or intimidates his debtor or any member of the debtor’s family at, or watches or besets, the residence or place of business or employment of the debtor, or any place at which the debtor receives his wages or any other sum periodically due to him, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding two thousand dollars, or to imprisonment for a term not exceeding three months or to both such fine and imprisonment:

Provided that an offender being a company shall be liable to a fine of five thousand dollars.

(2) Any person reasonably suspected of having committed an offence under subsection (1) of this section who refuses or fails to accompany a police officer when required to do so for the purposes of any investigation under this Act may be arrested without warrant.

Special provisions relating to nonresident principal.

34. (1) When any fine is imposed on an agent who is or has been licensed under this Act to carry on a moneylending business on behalf of a principal not resident in Singapore, the fine, if it has been imposed in respect of an offence under this Act committed by the agent in the course of carrying on such business shall, unless the court imposing the fine otherwise directs, be recoverable out of the property situate in Singapore belonging to the principal as well as out of the property belonging to the agent and any such property of the principal may be taken in execution and sold under any warrant issued against the agent for the levy of the amount of the fine.

(2) When it is made to appear to any court by any person entitled to make an application under section 22 of this Act that any transaction entered into with a moneylender not resident in Singapore prima facie ought to be reopened the court may—

  • (a) issue an order of attachment attaching any property of the moneylender situate within Singapore until such time as the moneylender submits to the jurisdiction of the court and gives security to the satisfaction of the court that any order made against him for repayment of any sum or for an indemnity will be duly satisfied; and
  • (b) authorize the service out of the jurisdiction of any summons or other process applying for the reopening of the transaction under section 22 of this Act.

Powers of police officer.

34A. Any police officer not below the rank of sergeant who is authorized in writing by the Registrar, or by a police officer not below the rank of Assistant Superintendent of Police, may at all times enter into the premises of any licensed moneylender or any person who is suspected of carrying on the business of moneylending to inspect or seize any book or document relating to any moneylending transaction without a warrant being issued by a Magistrate for that purpose.

Power of Minister to grant exemptions.

35. (1) The Minister may, upon payment of the prescribed fee, exempt, with or without conditions, any body corporate or society from all or any of the provisions of this Act, and may revoke any exemption granted by him at any time by the service of a notice of revocation in writing on the body corporate or society.

(2) Every exemption under subsection (1) of this section shall in the first instance be valid for a period of three years or less from the date of the granting thereof but may, upon payment of the prescribed fee, be extended thereafter, with or without additional conditions, for further periods not exceeding three years at a time.

(3) Any body corporate or society which immediately before 1st December 1967 had been previously exempted from the provisions of this Act by the Minister, by notification published in the Gazette, shall be deemed to have been exempted under this section from that date until 31st December 1967.

Rules.

36. The Minister may make rules generally to give effect to the provisions of this Act and, in particular, may by such rules provide for—

  • (a) the forms to be used for the purposes of this Act;
  • (b) the fees to be charged under this Act;
  • (c) the books of account to be kept by a moneylender;
  • (d) the manner in which accounts and files relating to loans by moneylenders are to be kept and the particulars to be entered therein; and
  • (e) the maximum rate of interest to be charged for any loan or class of loans.

{The three Schedules are omitted from this volume.}

Pawnbrokers Act1

An Act to consolidate the law relating to pawnbrokers.

[1st January, 1899]

Short title.

1. This Act may be cited as the Pawnbrokers Act.

Interpretation.

2. In this Act—

“pawnbroker” includes every person who carries on the business of taking goods and chattels in pawn;

“pawner” means a person delivering an article for pawn to a pawnbroker;

“pledge” means an article pawned with a pawnbroker;

“Registrar” means the Registrar of Pawnbrokers appointed under the provisions of section 7 of this Act;

“shop” includes a dwelling-house and warehouse or other place of business or place where business is transacted;

“unfinished goods or materials” includes any goods of any manufacture or of any part or branch of any manufacture, either mixed or separate, or any materials whatever plainly intended for the composing or manufacturing of any goods, after such goods or materials are put into a state or course of manufacture or into a state for any process or operation to be performed thereupon or therewith, and before the same are completed or finished for the purpose of wear or consumption.

Pawnbrokers

Persons to be deemed pawnbrokers.

3. (1) Any person who—

  • (a) receives or takes of or from any person whomsoever any goods or chattels by way of security for the repayment of any sum or sums of money, not exceeding one thousand dollars advanced, thereon; or
  • (b) purchases or receives or takes in goods or chattels and pays or advances or lends thereon any sum or sums of money, not exceeding one thousand dollars, with or under an agreement or understanding expressed or implied or to be from the nature and character of the dealing reasonably inferred that those goods or chattels may be afterwards redeemed or repurchased on any terms,

shall be deemed to be a person carrying on the business of taking goods and chattels in pawn, and every such transaction, article, payment, advance and loan shall be deemed a pawning, pledge or loan respectively within this Act.

(2) Nothing in this Act shall extend to any loan of money exceeding one hundred dollars and secured by a pawn or pledge, if the rate of interest does not exceed ten per cent per annum and if no further or other profit or advantage is taken or agreed for on the loan, or shall extend to prevent a pawnbroker under this Act from taking in pawn goods or chattels exceeding in value the sum of one thousand dollars or lending thereon a sum exceeding that amount.

Application of the Act to executors, etc., of pawnbrokers.

4. The provisions of this Act relating to pawnbrokers shall extend to and include the executors or administrators of deceased pawnbrokers, except that an executor or administrator shall not be answerable for any penalty or forfeiture personally or out of his own estate, unless the same is incurred by his own act or neglect.

Act done by servant to be deemed the act of the pawnbroker.

5. (1) For the purposes of this Act anything done or omitted to be done by the servant or agent of a pawnbroker, in the course of or in relation to the business of the pawnbroker, shall be deemed to be done or omitted, as the case may be, by the pawnbroker.

(2) Anything by this Act authorized to be done by a pawnbroker may be done by his servant or agent.

Extension of rights, etc., of pawners to their assigns, executors, etc.

6. The rights, powers and benefits by this Act reserved to and conferred on pawners shall extend to, and be deemed to be reserved to, and conferred on, the assignees of pawners, and to and on the executors or administrators of deceased pawners; but any person representing himself to a pawnbroker to be the assign, executor or administrator of a pawner shall, if required by the pawnbroker, produce to the pawnbroker the assignment, probate, letters of administration or other instrument under which he claims.

Licences

Appointment of Registrar and Assistant Registrars.

7. (1) The Minister may appoint a Registrar of Pawnbrokers and such number of Assistant Registrars of Pawnbrokers and other officers as he may consider necessary or expedient for the purposes of this Act.

(2) An Assistant Registrar shall have and may exercise all the powers conferred on the Registrar by this Act subject to such limitations as the Registrar sees fit to impose.

Issue of licences by the Board.

8. (1) Every pawnbroker shall annually take out from the Registrar a licence for carrying on his business for which there shall be charged and paid before the issue of the licence such fee as the Minister may prescribe. Application for such a licence shall be made in accordance with such rules as may be made under the provisions of section 45 of this Act.

(2) Licences shall be subject to such conditions, if any, as may be imposed by the Registrar in addition to those prescribed in section 9 of this Act.

(3) A separate licence shall be taken out and paid for by a pawnbroker for each pawnbroker’s shop kept by him.

(4) Every licence shall be dated on the day on which it is issued and shall determine on the thirty-first day of December.

(5) Any person who acts as a pawnbroker without having in force a valid licence issued by the Registrar shall be guilty of an offence and shall be liable on conviction to a fine not exceeding two thousand dollars and in the case of a second or subsequent conviction shall in addition be liable to imprisonment for a term not exceeding six months.

Conditions subject to which licences may be issued.

9. (1) No licence shall be issued by the Registrar to a pawnbroker in respect of any premises unless the Registrar is satisfied—

  • (a) that the applicant is of good character and is a fit and proper person to carry on the business of pawnbroking;
  • (b) that the premises to be licensed are structurally adapted for use as a pawnbroker’s shop and are in all other respects suitable for that purpose;
  • (c) that the premises will not be used for the conduct or transaction of any business other than that of pawnbroking; and
  • (d) that the applicant has deposited with the Accountant-General a sum of five thousand dollars as security for the proper conduct of his business under the licence.

(2) The Registrar may in his discretion refuse to issue or renew a license in respect of any applicant or any premises without assigning any reason therefor.

Power of Registrar to cancel licence.

9A. (1) The Registrar may cancel a licence and forfeit the whole or such part of the money deposited with the Accountant-General under paragraph (d) of subsection (1) of section 9 of this Act as the Registrar may think fit if he is satisfied that—

  • (a) the licensed pawnbroker’s shop is being conducted in an improper or unsatisfactory manner; or
  • (b) the licensee has been convicted of an offence under this Act; or
  • (c) the licensee has failed to comply with any of the conditions upon which the licence was issued; or
  • (d) since the issue of the licence, the licensee or the premises has ceased to comply with any of the requirements set out in subsection (1) of section 9 of this Act.

(2) The Registrar shall, before cancelling a licence and forfeiting any money under the provisions of subsection (1) of this section, give the licensee concerned notice in writing of his intention to do so specifying a date, not less than fourteen days after the date of the notice, upon which such cancellation and forfeiture shall be made and calling upon the licensee to show cause to the Registrar why his licence should not be cancelled and why his money should not be forfeited.

(3) The Registrar, on receiving any representation from a licensee, may, instead of cancelling a licence and forfeiting any money under the provisions of subsection (1) of this section, impose a penalty not exceeding five thousand dollars on the licensee and may recover the penalty from any cash deposit or other form of security given by the licensee to the Registrar.

(4) Any cancellation of a licence shall not affect the duties and liabilities of the licensee as a pawnbroker under this Act.

Appeal to the Minister.

9B. Any person aggrieved by the refusal of the Registrar to issue or renew a licence or the decision of the Registrar to cancel a licence and forfeit any money belonging to the licensee or to impose a penalty may, within ten days of the written notification to him of the refusal, cancellation, forfeiture or imposition of the penalty, appeal in writing to the Minister whose decision thereon shall be final and conclusive.

Pawnshop to keep open after expiration of licence for redemption of articles.

10. Upon the expiration or sooner determination of any licence the pawnbroker shall keep open the licensed premises daily from 8 a.m. to 6 p.m. for the redemption of articles pawned with him; and, for all purposes of this Act, except the receiving of articles in pawn, shall continue to exercise the rights and privileges and be subject to the duties and liabilities of a licensed pawnbroker until the whole of the articles held by him in pawn have been redeemed or the latest period of redemption for any of such articles has expired.

General Obligations of Pawnbroker

11. (1) Every pawnbroker shall—

  • Description of articles pawned, etc., to be entered in a book.
  • (a) keep and use in his business such books and documents as are prescribed, and shall enter therein in a clear and legible hand, in such style of character, language or dialect as the Minister directs, the particulars required by rules, and shall make all inquiries necessary for that purpose;
  • Signboards.
  • (b) keep always exhibited at or over the outer door of his shop a signboard of such size and in such position as the Registrar directs having printed thereon, in the English, Malay, Chinese and Tamil languages, the words “Pawnbroker’s Shop”; and
  • Copy of rates to be exposed.
  • (c) keep exposed in some convenient place in the shop, so as to be near to and visible to all comers, a legible copy of the rates of profit he may lawfully take under this Act, and also the same information in the English, Malay, Chinese and Tamil languages as is by rules required to be printed on pawn tickets.

(2) Every pawnbroker shall make such monthly returns as may be prescribed by rules made under the provisions of section 45 of this Act.

Penalty.

(3) Any pawnbroker who fails in any respect to comply with this section shall be guilty of an offence under this Act.

Pawning, Redemption and Sale

Pawnbroker to grant a pawn ticket.

12. A pawnbroker shall on taking a pledge in pawn give to the pawner a pawn ticket, and shall not take a pledge in pawn unless the pawner takes the pawn ticket.

Profit and charges allowed to pawnbroker.

13. (1) A pawnbroker may take profit on a loan on a pledge at a rate not exceeding that specified in Schedule B.2

(2) A pawnbroker may demand and take the charges specified in the said Schedule.

(3) A pawnbroker shall not in respect of a loan on a pledge take any profit or demand or take any charge or sum whatever other than those specified in the Schedule.

(4) A pawnbroker shall, if required at the time of redemption, give a receipt for the amount of loan and profit paid to him.

(5) The Minister may by order amend the rate of profits and charges specified in Schedule B to this Act.

(6) All orders made under subsection (5) of this section shall be published in the Gazette and shall be presented to Parliament as soon as may be after publication and if a resolution is passed pursuant to a motion notice whereof has been given for a sitting day not later than the first available sitting day of Parliament next after the expiry of three months from the date when orders are so presented annulling the orders or any part thereof as from a specified date, the orders or that part thereof as the case may be shall thereupon become void as from that date but without prejudice to the validity of anything previously done thereunder or to the making of new orders.

Period of redemption of pledge.

14. Every pledge shall be redeemable within six months from the day of pawning, exclusive of that day, or in the case of a pledge for a sum exceeding fifty dollars within such longer term as may have been specially agreed upon at the time of pawning.

Forfeiture of pledge for $50 and under if not redeemed.

15. A pledge pawned for fifty dollars or under, if not redeemed within the time allowed by this Act, shall at the end of the time of redemption become and be the pawnbroker’s absolute property.

Pledges exceeding $50 redeemable until sale.

16. A pledge pawned for any sum exceeding fifty dollars shall further continue redeemable until it is disposed of as in this Act provided, although the time of redemption has expired.

Sale by auction of pledge for a sum exceeding $50.

17. (1) A pledge pawned for any sum exceeding fifty dollars shall, when disposed of by the pawnbroker, be disposed of by sale by an auctioneer licensed in that behalf and not otherwise.

(2) The regulations contained in Schedule C shall be observed with reference to the sale.

(3) A pawnbroker may bid for and purchase at a sale by auction made under this Act a pledge pawned with him; and on such purchase he shall be deemed the absolute owner of the pledge purchased.

(4) The Minister may, by writing under his hand, license fit persons to conduct sales of forfeited pledges for such periods as in the licence are specified, and may revoke any such licence without assigning any reason.

Offences by auctioneer.

18. Any auctioneer who does anything in contravention of this Act relating to auctioneers, or fails to do anything which he is required by this Act to do, shall be guilty of an offence under this Act.

Right of holder of pawn ticket to inspect sale book.

19. At any time within four months after the auction at which a pledge pawned for above fifty dollars is sold, the holder of the pawn ticket may inspect the entry of the sale in the pawnbroker’s book and in the filled-up catalogue of the auction, authenticated by the signature of the auctioneer, or in either of them.

Obligation on pawnbroker to account for surplus within four months subject to set-off.

20. (1) Where a pledge pawned for above fifty dollars is sold, and appears from the pawnbroker’s book to have been sold for more than the amount of the loan and profit due at the time of sale, the pawnbroker shall on demand pay the surplus to the holder of the pawn ticket in case the demand is made within four months after the sale, the necessary costs and charges of the sale being first deducted.

(2) The pawnbroker shall send to the Registrar, on the first day of every calendar month, a list, written in the English language, showing the result of the sales of such pledges during the preceding calendar month, in Form 3 in Schedule A3 or in such other form as is prescribed, and the Registrar shall keep such list for three months in a place easily accessible to the public.

(3) If on the demand mentioned in subsection (1) it appears from the pawnbroker’s book that the sale of a pledge or pledges has resulted in a surplus and that, within four months before or after sale, the sale of another pledge or other pledges of the same person has resulted in a deficit, the pawnbroker may set off the deficit against the surplus, and shall be liable to pay the balance only after the set-off.

Offences as to a pledge for a sum exceeding $50.

21. Any pawnbroker who with respect to pledges for loans of above fifty dollars—

  • (a) does not bona fide, according to the directions of this Act, sell a pledge pawned with him; or
  • (b) enters in his book a pledge as sold for less than the sum for which it was sold, or fails duly to enter the same; or
  • (c) refuses to permit any person entitled under this Act to inspection of an entry of sale in the pawnbroker’s book or of a filled-up catalogue of the auction, authenticated by the auctioneer’s signature, to inspect the same; or
  • (d) fails without lawful excuse, the proof whereof shall lie on him, to produce such a catalogue on lawful demand; or
  • (e) refuses to pay on demand the surplus to the person entitled to receive the same,

shall in every such case be guilty of an offence under this Act.

Delivery Up of Pledge

Right of holder of pawn ticket to redeem pledge.

22. The holder for the time being of a pawn ticket shall be presumed to be the person entitled to redeem the pledge, and, subject to this Act, the pawnbroker shall accordingly, on payment of the loan and profit, deliver the pledge to the person producing the pawn ticket, and he is hereby indemnified for so doing.

Production of pawn ticket on redemption.

23. A pawnbroker shall not, except as in this Act provided, be bound to deliver back a pledge unless the pawn ticket for it is delivered to him.

Liability of pawnbroker in case of fire or loss.

24. (1) Where a pledge is destroyed or damaged by or in consequence of fire or lost, the pawnbroker shall nevertheless be liable, on application within the period during which the pledge would have been redeemable, to pay the value of the pledge after deducting the amount of the loan and profit, such value to be assumed to be one quarter more than the amount of the loan.

(2) A pawnbroker shall be entitled to insure to the extent of the value so estimated.

Compensation for loss or depreciation of pledge.

25. (1) If a person entitled and offering to redeem a pledge shows, to the satisfaction of a Magistrate’s Court, that the pledge has become or has been rendered of less value than it was at the time of the pawning thereof by or through the default or neglect or wilful misbehaviour of the pawnbroker, the Court may, if it thinks fit, award a reasonable compensation to the owner of the pledge in respect of the damage, and the amount awarded shall be deducted from the amount payable to the pawnbroker or shall be paid by the pawnbroker, as the case may require, in such manner as the Court directs, provided that no suit shall thereafter be brought by the owner in any civil court in respect of the same matter.

(2) When a pawnbroker has been directed to pay a sum of money to the owner of a pledge under this section, the sum so directed to be paid shall be recoverable as a fine.

Protection of owner and of pawner not having pawn ticket.

26. (1) The following provisions shall have effect for the protection of owners of articles pawned and of pawners not having their pawn tickets to produce.

(2) Any person claiming to be the owner of a pledge but not holding the pawn ticket, or any person claiming to be entitled to hold a pawn ticket but alleging that the same has been lost, mislaid, destroyed or stolen or fraudulently obtained from him, may apply to the pawnbroker for a printed form of declaration, which the pawnbroker shall deliver to him.

(3) If the applicant delivers back to the pawnbroker the declaration duly made before a Magistrate or a notary public by the applicant and by a person identifying him, the applicant shall thereupon have as between him and the pawnbroker all the same rights and remedies as if he produced the pawn ticket:

Provided that such a declaration shall not be effectual for that purpose unless it is duly made and delivered back to the pawnbroker not later than on the third day after the day on which the form is delivered to the applicant by the pawnbroker.

(4) The pawnbroker is hereby indemnified for not delivering the pledge to any person until the expiration of the period aforesaid.

(5) The pawnbroker is hereby further indemnified for delivering the pledge or otherwise acting in conformity with the declaration, unless he has actual or constructive notice that the declaration is fraudulent or is false in any material particular.

(6) Declarations under this section may be in Form 1 or 2 of Schedule A,4 as the nature of the case requires.

(7) Every declaration under this section shall be deemed to be a declaration within the meaning of sections 199 and 200 of the Penal Code.

Delivery to owner of property unlawfully pawned.

27. (1) In each of the following cases:

  • (a) if any person is convicted under this Act before a Magistrate’s Court of knowingly and designedly pawning with a pawnbroker anything being the property of another person, the pawner not being employed or authorized by the owner thereof to pawn the same;
  • (b) if any person is convicted in any court of any offence against property which offence is defined or dealt with by any provision of sections 378 to 420 both inclusive of the Penal Code, and it appears to the Magistrate’s Court or other court that such property has been pawned with a pawnbroker; or
  • (c) if in any proceedings before a Magistrate’s Court or other court it appears to the court that any goods and chattels brought before the court have been unlawfully pawned with a pawnbroker,

the court, on proof of the ownership of the goods and chattels, may, if it thinks fit, order the delivery thereof to the owner, either on payment to the pawnbroker of the amount of the loan or any part thereof, or without payment thereof or of any part thereof, as to the court, according to the conduct of the owner and the other circumstances of the case, seems just and fitting.

Liability of pawnbroker for taking stolen goods in pawn without due care.

(2) The court may also adjourn the proceedings for the attendance of the pawnbroker, and may summon the pawnbroker to attend at the adjourned hearing, and if, after hearing the pawnbroker, the court is of opinion that the pawnbroker has not exercised due care in taking in pawn any stolen property, the court may order the pawnbroker to pay a fine not exceeding two thousand dollars.

Summary order for delivery of pledge to person entitled.

28. Any pawnbroker who without reasonable excuse, the proof whereof shall lie on him, refuses or neglects to deliver a pledge to the person entitled to have delivery thereof under this Act shall be liable to a fine not exceeding five thousand dollars, and the court may, with or without imposing a fine, order the delivery of the pledge on payment of the amount of the loan and profit.

General Restrictions on Pawnbroker

Prohibition as to taking or purchasing of pledge in certain circumstances.

29. Any pawnbroker who—

  • (a) takes an article in pawn from any person who appears to be intoxicated, or from a person apparently under the age of sixteen years;
  • (b) purchases or takes in pawn or exchanges a pawn ticket issued by another pawnbroker;
  • (c) employs any servant or other person under the age of sixteen years to take pledges in pawn;
  • (d) under any pretence purchases, except at public auction, any pledge while in pawn or with him;
  • (e) suffers any pledge while in pawn with him to be redeemed with a view to his purchasing it;
  • (f) makes any contract or agreement with any person pawning or offering to pawn any article or with the owner thereof for the purchase, sale or disposition thereof within the time of redemption;
  • (g) sells, pawns or otherwise disposes of any pledge pawned with him, except at such time and in such manner as are authorized by this Act;
  • (h) makes an advance upon any article pledged with him otherwise than in money which is legal tender in Singapore; or
  • (i) takes any goods or chattels in pawn from any person before 8 a.m. or after 8 p.m.,

shall be liable to a fine not exceeding five thousand dollars.

Unlawful Pawning and Taking in Pawn

Penalty for wrongfully pawning the property of another.

30. (1) Any person who knowingly and designedly pawns with a pawnbroker anything being the property of another person, the pawner not being employed or authorized by the owner thereof to pawn the same, shall be liable to a fine not exceeding two thousand dollars.

(2) In addition to any fine imposed under subsection (1), the court may order the accused to pay by way of compensation to the owner any sum not exceeding the full value of the pledge as ascertained by the court, such sum to be levied and taken in the same manner as a fine.

Proceedings where person offering article in pawn does not give a good account of himself;

31. (1) Any person who—

  • (a) offers to a pawnbroker an article by way of pawn, being unable or refusing to give a satisfactory account of the means by which he became possessed of the article; oror gives false information;
  • (b) wilfully gives false information to a pawnbroker as to whether an article offered by him in pawn to the pawnbroker is his own property or not, or as to his name and address or as to the name and address of the owner of the article; oror attempts without title to redeem a pledge.
  • (c) not being entitled to redeem and not having any colour of title by law to redeem a pledge, attempts or endeavours to redeem the same,

shall be guilty of an offence under this Act.

(2) In every such case, and also in any case where, on an article being offered in pawn to a pawnbroker he reasonably suspects that it has been stolen or otherwise illegally or clandestinely obtained, the pawnbroker may seize and detain the person and the article, or either of them, and shall deliver the person and the article or either of them (as the case may be) as soon as may be into the custody of a police officer, who shall as soon as may be convey the person, if so detained, before a magistrate, to be dealt with according to law.

Person in possession of pawn ticket presumed to have been in possession of the article pawned.

32. Any person found in possession of a pawn ticket shall, until he satisfies the court to the contrary, be presumed to have been in possession of the pawned article to which the pawn ticket refers.

Duty of pawnbroker on offer of pledges or redemption under suspicious circumstances.

33. (1) If any person, under suspicious circumstances, offers any articles in pawn to a pawnbroker, or, without having any colour of title by law to redeem a pledge, attempts to redeem it, and the pawnbroker has reason to suspect such want of title, the pawnbroker shall inquire of the person how he came by the articles or the pawn ticket, as the case may be.

(2) If the person is not able or refuses to give a satisfactory account of himself or of the means by which he became possessed of the articles or pawn ticket, or wilfully gives any false information concerning the articles or pawn ticket, or as to his name or address, or as to the name or place of abode of the owner of the articles, or if there is any other reason to suspect that the articles or pawn ticket have been stolen or otherwise illegally or clandestinely obtained, the pawnbroker may seize and detain the person offering the articles or pawn ticket, and shall deliver him with the articles or pawn ticket into the custody of a police officer.

Prohibition as to taking in pawn linen, apparel, unfinished goods, etc., in certain cases.

34. Any pawnbroker who knowingly takes in pawn any linen or apparel or unfinished goods or materials entrusted to any person to wash, scour, iron, mend, manufacture, work up, finish or make up, shall be liable to a fine not exceeding two thousand dollars; and shall likewise restore the pledge to the owner thereof in the presence of the court or as the court directs.

Search warrant for linen, etc., unlawfully pawned.

35. (1) If the owner of any linen or apparel or unfinished goods or materials entrusted to any person as aforesaid and unlawfully pawned with a pawnbroker, or the owner of any other article unlawfully pawned with the pawnbroker, the last-mentioned owner having on oath satisfied a Magistrate’s Court that his goods have been unlawfully obtained, taken or withheld from him, makes out on oath before a Magistrate’s Court that there is a good cause to suspect that a pawnbroker has taken in pawn the linen, apparel, goods, materials or articles aforesaid without the privity or authority of the owner, and makes appear to the satisfaction of the Magistrate’s Court probable grounds for such suspicion, the Magistrate’s Court may issue a warrant for searching, within the hours of business, the shop of the pawnbroker.

(2) If the pawnbroker, on request by a police officer authorized by the warrant to make the search, refuses to open the shop or permit it to be searched, a police officer may break it open within the hours of business and search as he thinks fit therein for the linen, apparel, goods, materials or articles aforesaid, doing no wilful damage, and if any pawnbroker or other person oppose or hinders the search he shall be guilty of an offence under this Act.

(3) If on the search any linen, apparel, goods, materials or articles aforesaid is or are found and the property of the owner thereof is made out to the satisfaction of a Magistrate’s Court, the Court shall cause the same forthwith to be restored to the owner thereof.

Penalties and Police Regulations

General penalty.

36. Any pawnbroker or other person who is guilty of an offence under this Act, in respect whereof a specific forfeiture or penalty is not prescribed by this Act, or of any breach of this Act, shall be liable to a penalty not exceeding two thousand dollars.

Application of penalty.

37. Any penalty recovered under this Act, not directed to be otherwise applied, may be applied under the direction of the Magistrate’s Court in which it is recovered as follows:

  • (a) where the complainant is the party aggrieved, a sum not exceeding one-half of the penalty may be paid to him;
  • (b) where the complainant is not the party aggrieved, there shall be paid to him no part or such part only of the penalty as the Court thinks fit.

Penalty on common informer compounding information.

38. Any person who lays an information for an offence alleged to have been committed under this Act by which he was not personally aggrieved, and afterwards, directly or indirectly, receives, without the permission of the court, any sum of money or other reward for compounding, delaying or withdrawing the information, shall be guilty of an offence under this Act.

Detention of person offering forged pawn ticket, etc.

39. If any person utters, produces, shows or offers to a pawnbroker a pawn ticket which the pawnbroker reasonably suspects to have been counterfeited, forged or altered, the pawnbroker may seize and detain the person and the ticket or either of them, and shall deliver the person and the ticket or either of them, as the case may be, into the custody of a police officer.

Pawnbroker’s books subject to examination by police.

40. (1) The books required by this Act to be kept by a pawnbroker shall be produced by him for examination at any time during business hours on demand by any Justice of the Peace or by any police officer not under the rank of corporal, who are hereby severally authorized to enter at any time during business hours any pawnbroker’s shop without warrant to search for and examine the said books and to take extracts and copies therefrom.

(2) Any pawnbroker who fails to comply with this section shall be guilty of an offence under this Act.

Information to be given by police to pawnbrokers of lost and stolen property.

41. (1) Information as to property lost, stolen or otherwise fraudulently disposed of shall be given by the police, as soon as possible after such loss or fraud, to all pawnbrokers, with lists and descriptions of the same.

(2) If any property answering such lists and descriptions is in the possession of any pawnbroker or is thereafter offered to or shown to any pawnbroker he shall, without unnecessary delay, give information to that effect at the nearest police station or to any police officer, with the name, address and identity card number of the person in whose possession the property was seen, and in default thereof he shall be liable to a fine not exceeding two thousand dollars.

(3) The pawnbroker in such a case may also detain the person offering or showing the property until the arrival of the police.

Police officers may enter pawnshops, etc.

42. Any police officer not under the rank of corporal may enter any pawnbroker’s shop at any time during business hours, and may search without warrant the house, shop or premises of the pawnbroker for any articles that he may have reason to suspect to be therein and to have been dishonestly obtained or dishonestly placed there.

Police officers may arrest persons loitering about pawnshops under suspicious circumstances.

43. (1) Any police officer having reason to believe that a person in or loitering about a pawnbroker’s shop under suspicious circumstances has with him any article dishonestly obtained may detain that person and require him to produce any articles he may have with him.

(2) If any articles are produced which the police officer has reason to suspect to have been unlawfully obtained, he may take or cause to be taken the person and the articles to the nearest police station.

(3) If any person so required to produce such articles refuses to be searched, the police officer may take him or cause him to be taken before a Justice of the Peace, who if he sees fit may search the person or order him to be searched, and if any such articles are found may detain him with the articles so found to be dealt with according to law.

44. All offences under this Act or any rules made thereunder shall Jurisdiction. be tried before a Magistrate’s Court or District Court.

Rules

Rules

45. (1) The Minister may make rules prescribing—

  • (a) the form of the books to be kept by pawnbrokers and the particulars to be entered therein;
  • (b) the form of the note or pawn ticket to be issued by pawnbrokers and the particulars to be entered therein;
  • (c) generally the manner and conditions in and under which the business of pawnbroking shall be conducted;
  • (d) the fees to be paid for licences by pawnbrokers and by auctioneers under this Act, and the manner in which sales under this Act shall be held;
  • (e) the procedure to be followed by applicants for licences as pawnbrokers and the procedure and proceedings of the Board;5
  • (f) the form of the monthly returns to be made by pawnbrokers;
  • (g) all matters stated or required in this Act to be prescribed; and
  • (h) generally to give effect to the provisions of this Act.

(2) Any person contravening any rule made under this Act shall be liable to a fine not exceeding one thousand dollars.

{Schedules A and B are omitted from this volume.}

Schedule C regulations as to auction of pledges above fifty dollars

1. Auctions shall be held within the first seven days of each month at times and places approved by the Registrar. At least seven days’ notice in writing of all sales shall be given by the auctioneer to the Registrar, and to the public by means of an advertisement in a public newspaper and by notices, in the various vernacular languages and in English, to be posted in sufficient number and in conspicuous places to the satisfaction of the Registrar, stating—

  • (a) the pawnbroker’s name and place of business;
  • (b) the month in which the pledges were pawned; and
  • (c) the place where the auction is to be held.

2. The advertisement shall be inserted on two several days in the same newspaper, and the second insertion shall be at least three clear days before the first day of sale.

3. Pawnbrokers shall send all forfeited pledges to a licensed auctioneer at least three days before the sale, duly ticketed and numbered, and they shall be fully exposed for sale to public view by the auctioneer for at least two days before the day of sale.

4. All sales shall be held in places quite open to the general public and large enough for the accommodation of intending purchasers.

5. The auctioneer shall publish in English catalogues of the pledges, stating—

  • (a) the pawnbroker’s name and place of business;
  • (b) the month in which each pledge was pawned; and
  • (c) the number of each pledge as entered at the time of pawning in the pledge book.

6. The pledges of each pawnbroker in the catalogue shall be separate from any pledges of any other pawnbroker.

7. Where a pawnbroker bids at a sale, the auctioneer shall not take the bidding in any other form than that in which he takes the biddings of other persons at the same sale; and the auctioneer, on knocking down any article to a pawnbroker, shall forthwith declare audibly the name of the pawnbroker as purchaser.

8. The auctioneer shall, within fourteen days after the sale, deliver to the pawnbroker a copy of the catalogue or of so much thereof as relates to the pledges of that pawnbroker, filled up with the amounts for which the several pledges of that pawnbroker were sold and authenticated by the signature of the auctioneer.

9. The pawnbroker shall preserve a copy of every such catalogue for three years at least after the auction.

Chit Funds Act, 19711

An Act to provide for the licensing and regulation of chit funds.

Be it enacted by the President with the advice and consent of the Parliament of Singapore, as follows:

[21st December, 1971]

Part I. Preliminary

Short title and commencement.

1. (1) This Act may be cited as the Chit Funds Act, 1971, and shall come into operation on such date as the Minister may, by notification in the Gazette, appoint.

(2) The Minister may appoint different dates for the coming into operation of the different Parts or provisions of this Act.

Interpretation.

2. In this Act, unless the context otherwise requires—

“agreement” means the document which contains the terms and conditions agreed to and adopted by the subscribers and the chit fund company;

“chit fund” means a scheme or arrangement based wholly on the terms and conditions set out in section 24 of this Act or the regulations made thereunder or any scheme or arrangement that is deemed to be a chit fund under section 19 of this Act but does not include any scheme or arrangement which only partakes of the nature of a chit fund within the meaning of section 20 of this Act;

“chit fund amount” means the pool or the aggregate of the contributions payable on any specified day or in respect of any specified interval;

“chit fund business” means the business of carrying on chit funds;

“chit fund company” means a company which carries on chit fund business and holds a valid licence granted under section 7 of this Act. All branches and offices in Singapore of such company shall be deemed to be one chit fund company for the purposes of this Act;

“Commissioner” means the person appointed under section 3 of this Act to hold office of Commissioner of Chit Funds;

“contribution” means the sum of money payable periodically by each subscriber under the agreement;

“essential terms and conditions” means the terms and conditions specified in section 24 of this Act;

“interest” means that amount of money which the subscriber agrees to forego in order to purchase the chit fund amount;

“Minister” means the Minister charged with the responsibility for finance;

“prize” or “prize amount” means the difference between the chit fund amount and the interest;

“public company” means a company limited by shares incorporated in Singapore other than a private company;

“rebate” means the share of the interest payable to each subscriber;

“subscriber” includes any person who has agreed to participate in a chit fund or has signed the agreement in token thereof.

Part II. Appointment of Commissioner of Chit Funds

Commissioner of Chit Funds.

3. (1) For the purposes of this Act there shall be a Commissioner of Chit Funds who shall be appointed by the Minister.2

(2) The Commissioner shall be charged with the general administration of this Act and the exercise of the functions imposed upon him by this Act.

(3) The Commissioner may authorise or appoint any person to assist him in the exercise of his functions and duties under this Act, either generally or in any particular way.

(4) The Commissioner and any person authorised or appointed by him pursuant to subsection (3) of this section shall be deemed to be public servants within the meaning of the Penal Code.

Part III. Licensing of Chit Fund Companies

Licensing of Chit Funds.

4. (1) No chit fund business shall be transacted in Singapore except by a public company which is in possession of a valid licence granted under this Act by the Commissioner with the approval of the Minister authorising it to conduct chit fund business in accordance with the provisions of this Act.

(2) Any person who contravenes the provisions of subsection (1) of this section shall be guilty of an offence under this Act and shall be liable on conviction to imprisonment for a term not exceeding three years or to a fine not exceeding five thousand dollars or to both such imprisonment and fine and in the case of a continuing offence to a further fine of one thousand dollars for every day during which the offence continues after conviction.

Use of words “chit” and “chit fund”.

5. (1) No person or body of persons, whether incorporated or not, other than a chit fund company licensed under this Act shall, without the written consent of the Commissioner, use the word “chit” or the words “chit fund” or any of its or their derivatives in any language, or any other word indicating it transacts chit fund business, in the name, description or title under which such person or body of persons is transacting business in Singapore or make or continue to make any representation to such effect in any bill head, letter paper, notice, advertisement or in any other manner whatsoever.

(2) For the purposes of subsection (1) of this section the words “hwei”, “kutu” and “tontine” or any other word in any other language having the same meaning or being to the like intent shall be deemed to be derivatives of the word “chit”.

(3) Nothing in this section shall prohibit an association of chit fund companies formed for the protection of common interests from using the word “chit” or the words “chit fund” or any of its or their derivatives in any language as a part of its name or description of its activities.

(4) Any person who contravenes the provisions of subsection (1) of this section shall be guilty of an offence under this Act and shall be liable on conviction to imprisonment for a term not exceeding one year or to a fine not exceeding one thousand dollars or to both such imprisonment and fine and in the case of a continuing offence to a further fine not exceeding one hundred dollars for every day during which the offence continues after conviction.

Examination of persons suspected of transacting chit fund business.

6. Whenever the Commissioner has reason to believe that a person is transacting chit fund business without a licence, he shall have the power to examine the books, accounts and records of such person in order to ascertain whether or not such person has violated or is violating any provisions of this Act, and any refusal to submit such books, accounts and records shall be prima facie evidence of the fact of operation without a licence.

Application for licence.

7. (1) A public company which desires authority to carry on chit fund business in Singapore shall apply in writing to the Commissioner for a licence under this section and shall supply—

  • (a) a copy of the memorandum of association and articles of association or other instrument under which the company is incorporated, duly verified by a statutory declaration made by a senior officer of the company;
  • (b) a copy of the latest balance-sheet of the company; and
  • (c) such other information as may be called for by the Commissioner.

(2) In considering any application by a public company for a licence the Commissioner may require to be satisfied as to—

  • (a) the financial character of the company;
  • (b) the character of the management of the company;
  • (c) the adequacy of the capital structure of the company and earning prospects of the company;
  • (d) the objects of the company as disclosed in its memorandum of association;
  • (e) the convenience and needs of the community to be served;
  • (f) whether the public interest will be served by granting of a licence.

(3) The Commissioner, with the approval of the Minister, may grant a licence with or without conditions, or refuse to grant a licence.

(4) The Commissioner may at any time vary or revoke any existing conditions of a licence or impose conditions or additional conditions thereto.

(5) Where a licence is subject to conditions the chit fund company shall comply with those conditions.

(6) Any chit fund company which fails to comply with any of the conditions of its licence shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding five thousand dollars and, in the case of a continuing offence, to a further fine of one thousand dollars for every day during which the offence continues after conviction.

Licence fees.

8. (1) Every chit fund company in Singapore shall pay such annual licence fee as the Commissioner may by notification in the Gazette prescribe.

(2) The Commissioner may prescribe different licence fees in respect of different classes or categories of chit fund companies and such fees shall apply uniformly to such classes or categories.

(3) The manner of payment of the licence fee shall be as specified by the Commissioner.

Minimum capital requirements.

9. (1) Subject to the provisions of this Act, no chit fund company shall be granted or shall hold a licence unless its capital, issued and paid up in cash, and unimpaired by losses or otherwise, is not less than two hundred thousand dollars.

(2) The Commissioner may require such percentage of the issued and paid-up capital as may be prescribed in regulations made under this Act to be deposited in such manner as may be prescribed.

(3) No chit fund company incorporated in Singapore shall reduce its paid-up capital during the currency of its licence without the approval of the Commissioner.

Restriction of opening of branches of chit fund companies.

10. (1) No chit fund company shall open a new place of business or change the location of an existing place of business in Singapore without submitting a written application in respect thereof to the Commissioner.

(2) Upon receipt of an application under subsection (1) of this section, the Commissioner may—

  • (a) give his approval; or
  • (b) without assigning any reason therefor, refuse to give his approval, and his decision thereon shall be final.

(3) No chit fund company incorporated in Singapore shall open a new branch, agency or office in any place outside Singapore.

(4) Any chit fund company which contravenes the provisions of subsection (1) or (3) of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding five hundred dollars and in the case of a continuing offence to a further fine of one hundred dollars for every day during which the offence continues after conviction.

Fees to be paid in respect of branches of chit fund companies.

11. (1) The Commissioner may from time to time by notification in the Gazette specify the annual licence fees which chit fund companies in Singapore shall pay for each of their branches.

(2) The manner of payment shall be as specified by the Commissioner.

Limitation on mergers, etc., of a chit fund company.

12. (1) No chit fund company incorporated in Singapore shall be merged or consolidated with or be taken over by another company or companies or their subsidiaries or related companies as described in section 6 of the Companies Act (whether such company is or companies are incorporated in Singapore or outside Singapore) nor shall such company or companies acquire an interest exceeding twenty per cent of the voting share capital of a chit fund company without application to, and approval by, the Commissioner.

(2) In considering such an application, the Commissioner shall have power to call for such information as he may require.

(3) The Commissioner may—

  • (a) approve the application; or
  • (b) refuse the application.

(4) Any chit fund company whose application has been refused by the Commissioner may within one month of being notified of the refusal by the Commissioner appeal against his refusal to the Minister whose decision thereon shall be final.

Amendment of constitution of a chit fund company.

13. (1) Every chit fund company in Singapore shall, prior to the making of any amendment or alteration in its memorandum of association or articles of association, or other instrument under which it is incorporated, furnish to the Commissioner for his approval particulars in writing (verified by a statutory declaration made by a senior officer of the chit fund company) of such proposed amendment or alteration.

(2) The Commissioner may thereupon—

  • (a) approve the proposed alteration without modification;
  • (b) approve the proposed alteration with modification; or
  • (c) refuse to approve the proposed alteration.

(3) If the Commissioner approves the proposed alteration with modification, the chit fund company shall adopt the proposed alteration as so modified or not proceed with the proposed alteration and if the Commissioner refuses to approve the proposed alteration he may request the chit fund company to withdraw the proposed alteration and the chit fund company shall comply with the Commissioner’s request.

(4) Any chit fund company which fails to comply with the requirements of subsection (1) of this section or with any request by the Commissioner made under subsection (3) of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding three hundred dollars for every day during which the default continues.

Revocation of licence.

14. (1) The Commissioner may by order revoke a licence issued under this Act—

  • (a) if he is satisfied that the chit fund company holding that licence—
    • (i) has ceased to transact chit fund business in Singapore or is carrying on any other business other than chit fund business;
    • (ii) proposes to make, or has made, any composition or arrangement with its creditors or has gone into liquidation or has been wound up, whether voluntary or involuntary, or otherwise dissolved;
    • (iii) is carrying on its business in a manner likely to be detrimental to the interests of the subscribers of its chit funds or has insufficient assets to cover its liabilities to its subscribers or the public;
    • (iv) is contravening the provisions of this Act or the regulations made thereunder; or
    • (v) has been convicted of any offence under this Act or the regulations made thereunder or if any of its officers holding a managerial or executive position has been convicted of any offence under this Act or the regulations made thereunder; or
  • (b) if he considers it in the public interest to do so.

(2) The Commissioner shall, before revoking any licence under the provisions of subsection (1) of this section, give the chit fund company concerned notice in writing of his intention to do so, specifying a date, not less than twenty-one days after the date of the notice upon which such revocation shall take effect and calling upon the chit fund company to show cause to the Commissioner why such licence should not be revoked.

(3) When the Commissioner has revoked a licence under the provisions of subsection (1) of this section, he shall forthwith inform the chit fund company by notice in writing of such revocation.

(4) The chit fund company may, within fourteen days of the receipt of the notice referred to in subsection (3) of this section, or such extended period of time as the Minister may allow, appeal in writing against such revocation to the Minister whose decision thereon shall be final.

Effect of revocation of licence.

15. (1) Where an order of revocation becomes effective under section 14 of this Act—

  • (a) notice of such revocation shall be published in the Gazette; and
  • (b) the chit fund company shall, as from the date of such notice, cease to transact any chit fund business in Singapore except as may be approved by the Commissioner for the purpose of winding up its chit fund business.

(2) The provisions of paragraph (b) of subsection (1) of this section shall not prejudice the enforcement by any person of any right or claim against the chit fund company or by the chit fund company of any right or claim against any person.

Exhibition of licence.

16. (1) The licence issued under subsection (3) of section 7 of this Act, or a certified copy thereof, shall, so long as it remains valid, be exhibited in a conspicuous position at the principal place of business of the chit fund company and in the event of revocation under section 14 of this Act, the licence and all certified copies thereof shall be surrendered forthwith to the Commissioner.

Publication of list of companies.

17. The Commissioner shall cause to be published in the Gazette in the month of April in each year a list of all chit fund companies to which licences have been issued under this Act.

Part IV chit funds—general provisions

Prohibition of chit funds conducted in contravention of this Act.

18. Any person who promotes or conducts, or aids, assists, or takes any part in the promotion or conduct of any chit fund otherwise than in accordance with the provisions of this Act shall be guilty of an offence under this Act and shall be liable on conviction to imprisonment for a term not exceeding three years or to a fine not exceeding five thousand dollars or to both such imprisonment and fine.

When scheme or arrangement deemed to be a chit fund.

19. Any scheme or arrangement which is based wholly on the essential terms and conditions set out in section 24 of this Act or has all the attributes and incidents of a chit fund within the scope and intent of that section shall, notwithstanding that it is called by any other name, be deemed to be a chit fund for the purposes of this Act.

A scheme or arrangement which is deemed only to partake of the nature of a chit fund prohibited.

20. (1) Every scheme or arrangement by whatever name called which is not based wholly on the essential terms and conditions set out in section 24 of this Act or which is based on terms and conditions inconsistent wholly or in part with those essential terms and conditions, shall for the purposes of this Act be deemed only to partake of the nature of a chit fund.

(2) Regulations made under this Act may describe or define what schemes or arrangements shall be deemed only to partake of the nature of a chit fund for the purposes of this section.

(3) Any person who promotes or conducts, or aids, assists, or takes any part in the promotion or conduct of any scheme or arrangement which only partakes of the nature of a chit fund within the meaning of this Act shall be guilty of an offence under this Act and shall be liable on conviction to imprisonment for a term not exceeding three years or to a fine not exceeding five thousand dollars or to both such imprisonment and fine.

(4) No right or claim under any scheme or arrangement which only partakes of the nature of a chit fund within the meaning of this Act or regulations made thereunder shall, without prejudice to the provisions of subsection (1) of this section, be enforceable by action in any court.

Security.

21. The licensing of any company under this Act shall not be regarded as authorising the promotion or formation of any chit fund or the acceptance by that company of any instalment or interest from any subscriber until such security as is provided in regulations made under this Act in respect of that chit fund has been deposited by the chit fund company in accordance with those regulations.

Receipt of contributions.

22. A chit fund company may receive contributions due from intending subscribers at the time of the signing of the agreement pursuant to subsection (3) of section 24 of this Act but if within fourteen days after the expiration of one month of the signing of the agreement the chit fund does not commence, the contributions received shall be returned to the subscribers.

formation and essential terms and conditions

Formation of chit funds.

23. Every chit fund shall be formed by the execution of a written agreement between the chit fund company on the one part and the intending subscribers severally on the other part.

Essential terms and conditions of a chit fund.

24. (1) Every agreement made under section 23 of this Act shall contain all the following terms and conditions with the actual amounts, dates and other particulars necessary in each case, namely—

  • (a) that the chit fund is to be for a specific amount and for a specified number of subscribers only;
  • (b) that the subscribers are to contribute equal portions of the amount;
  • (c) that the contribution of each subscriber is to be paid to the chit fund company in money in equal amounts of a specified value during a specified period;
  • (d) that each contribution is to be payable on a date specified therefor or within such number of days of grace after that date as may be specified;
  • (e) that on or after each date on which the contributions are payable, the chit fund amount is to be put up for sale by the chit fund company among the subscribers either by auction or by way of sealed tenders;
  • (f) that each of the subscribers is to be entitled to purchase the chit fund amount once and not oftener during the period of that chit fund, and that no subscriber who has been declared the purchaser at any such sale is to be entitled or permitted to bid or tender at any subsequent sale;
  • (g) that every bid or tender of a subscriber at a sale is to indicate the sum which he is willing to forego as interest for the privilege of obtaining the prize on that occasion;
  • (h) that of the subscribers entitled to bid at any sale, the subscriber who offers the highest interest is to be declared the purchaser;
  • (i) that the purchaser is to be entitled to receive the prize consisting of the chit fund amount less the interest offered by him, on producing guarantors to stand surety for the due payment of his future contributions in respect of that chit fund;
  • (j) that the chit fund company is to deduct for commission and working expenses a specified sum or a sum bearing a specified proportion to the prize amount or to the chit fund amount;
  • (k) that the interest is to be distributed in equal proportion among all the subscribers;
  • (l) that a subscriber, who has not yet purchased a chit fund amount and who defaults in either the payment of a contribution or the production of guarantors shall be entitled to a refund of actual contributions already paid by him in accordance with subsection (2) of section 31 of this Act or subsection (1) of section 32 of this Act, as the case may be.

(2) The agreement mentioned in subsection (1) of this section shall also contain—

  • (a) the full name and address of the chit fund company and of each of the subscribers;
  • (b) the business address of the chit fund company or the exact location of the place where the records of the chit fund are to be kept and where its business is to be transacted;
  • (c) the number of the subscriber’s identity card issued by the Government of Singapore or in the case of a subscriber who has not been issued with a Singapore identity card such other record of identification as may be prescribed; and
  • (d) such other terms and conditions not inconsistent with this Act, or with the essential terms and conditions referred to in subsection (1) of this section, as are considered necessary for the better management and control of the chit fund.

(3) In respect of every chit fund, the agreement shall be signed in original and duplicate by the chit fund company and each intending subscriber, either in person or by duly authorised agent, and each signature shall be attested by a witness present at the time of signing.

Duty of chit fund company to acknowledge subscriber’s rights.

25. As soon as may be after the agreement has been signed by each intending subscriber, the chit fund company shall give him a written acknowledgement that the subscriber is entitled to participate in the chit fund.

conduct of a chit fund

Meetings of subscribers.

26. (1) Where the provisions of this Act or the regulations made thereunder or the terms and conditions of the agreement require any matter to be decided by a meeting of the subscribers, the chit fund company shall convene a meeting for the purpose within seven days of its becoming aware of the event requiring a meeting and shall serve written notice on each of the subscribers not less than five days before the date selected by the chit fund company for the meeting.

(2) Every such notice shall state the time, date and place at which the meeting is to be held, and the business to be transacted at the meeting.

(3) The notice may either be served personally on each subscriber or sent to him by registered or certified post; and any notice sent to a subscriber by registered post shall be deemed to have been duly served if it was addressed to the registered address of that subscriber or to any other address notified by him in writing to the chit fund company.

Minutes of meeting.

27. The chit fund company shall enter in a book to be kept for that purpose the minutes of the proceedings of every meeting of the subscribers. The minutes shall in every case contain the following particulars—

  • (a) the place, date, time, and duration of the meeting;
  • (b) the names of the subscribers who were present;
  • (c) the items of business transacted at the meeting,

and in the case of a meeting at which a chit fund amount is auctioned, the following additional particulars:

  • (d) the serial number of the auction;
  • (e) the name of each bidder and the amount of each bid;
  • (f) the name of the purchaser; and
  • (g) the amount of the interest.

Alteration of the agreement.

28. Subject to the provisions of this Act and the regulations made thereunder and subject also to any terms or conditions contained in the agreement as to the matters or the mode in which alterations of the agreement may be made, any alteration of the figures, amounts, dates or other particulars which are not likely to affect the intention or the legal effect of the essential terms and conditions, or any alteration of the additional terms and conditions contained in any agreement, shall be made only at any meeting of the subscribers, duly convened for the purpose, by the votes of a majority, the aggregate of whose contributions is not less than three-fourths of the chit fund amount.

Receipts for contributions paid and entry of payments in pass-book.

29. (1) Every subscriber shall receive a receipt issued by or on behalf of the chit fund company for each contribution paid by him.

(2) Every subscriber shall be issued with a pass-book into which each payment made by him shall be entered by the chit fund company.

Production of guarantors by purchaser of chit fund amount.

30. Every subscriber who is declared the purchaser of a chit fund amount shall, as a condition precedent to the payment of the prize amount to him by the chit fund company, produce at least two guarantors to stand surety for the payment of the contributions due from him for the remainder of the chit fund period.

Effect of failing to produce guarantors.

31. (1) If a subscriber purchasing the chit fund amount fails to produce the guarantors required under section 30 of this Act within two weeks of the auction, the chit fund company shall either—

  • (a) within seven days of the expiration of the said two weeks declare the next highest bidder, who has not purchased the chit fund amount, to be purchaser of the chit fund amount according to his bid on his producing the guarantors as required under section 30 of this Act; or
  • (b) within two weeks after the expiration of the said two weeks conduct a fresh sale of that chit fund amount and give not less than seven days’ notice of the date to each of the subscribers then entitled to bid at the sale.

(2) Where a subscriber is unable to produce the guarantors as required under section 30 of this Act, the subscriber shall have the right to a refund of the actual amount of the earlier contributions paid by him to the chit fund company, without any deduction whatsoever. The refund shall be paid by the chit fund company within three weeks from the date of the auction.

(3) In the event of a refund to a subscriber under subsection (2) of this section by a chit fund company, the chit fund company shall be entitled to remove the name of that subscriber from the register of subscribers kept under section 37 of this Act and to substitute therefor the name of the new subscriber.

Substitution of new subscriber for defaulting subscriber who has not purchased any chit fund amount.

32. (1) Where default in the payment of any contribution is made by any subscriber who has not purchased a chit fund amount, the chit fund company shall be entitled to remove the name of the defaulting subscriber from the register of subscribers kept under section 37 of this Act and to substitute therein the name of a new subscriber except that the removal of his name from the register shall not be deemed to prejudice the right of the defaulting subscriber to a refund of the actual amount of any earlier contributions paid to him, at such time and with such deductions by way of penalty as may be prescribed by regulations made under this Act.

(2) All the rights and liabilities that would under the agreement have accrued to or been incurred by the defaulting subscriber after the date of such substitution if he had not made default, shall be deemed to be transferred to the new subscriber.

(3) No collateral undertaking, as to mutual rights and obligations entered into by the chit fund company and the new subscriber for the purposes of the substitution of the new subscriber, shall be deemed to affect in any respect the duties and liabilities of the new subscriber under the terms and conditions of the agreement.

Voluntary reduction of membership in lieu of substitution of new subscriber.

33. (1) In any case referred to in section 32 of this Act the chit fund company may, before substituting a new subscriber in place of the defaulting subscriber whose name is removed from the register under that section, convene a meeting of the remaining subscribers for the purpose of obtaining their consent to a reduction of the number of subscribers and of the chit fund amount by refraining from substituting a new subscriber in place of the defaulting subscriber.

(2) If at the meeting so convened, the subscribers by a majority representing not less than two-thirds of the chit fund amount consent to such reduction and to the necessary alteration of the agreement, the chit fund company shall record the same in the minute book kept under section 27 of this Act.

(3) Upon the recording of the alteration made for the purposes of a voluntary reduction under this section, every subscriber who was the purchaser of a chit fund amount sold at any auction prior to the date of the reduction, shall be liable to continue the payment of the contributions specified in the agreement until the aggregate amount so contributed by him becomes equal to the chit fund amount at the time of the sale at which he was declared the purchaser.

Liability of defaulting subscriber who has already purchased chit fund amount.

34. (1) Where default in the payment of any contribution is made by a subscriber who has already purchased a chit fund amount, that subscriber and his guarantors shall be liable to make immediate payment to the chit fund company of the aggregate of all the contributions payable by him to the end of the chit fund period.

(2) Upon receiving the contributions pursuant to subsection (1) of this section, the chit fund company shall immediately deposit those contributions in any bank that is approved by the Commissioner.

(3) Any money received under subsection (1) of this section exceeding the amount required to cover the contribution of the defaulting subscriber shall be returned forthwith by the chit fund company to the defaulting subscriber or his guarantors, as the case may be.

(4) A chit fund company may charge interest on any money due under subsection (1) of this section at the rate and by the method prescribed in regulations made under this Act.

Transfer of subscriber’s rights.

35. (1) Any subscriber who has not purchased a chit fund amount may make over his rights in the chit fund by a transfer in writing to any person approved by the chit fund company.

(2) Notice of every transfer made under subsection (1) of this section shall be given forthwith to the chit fund company, in writing signed by the transferor and the transferee.

(3) On receipt of the notice of any transfer made under subsection (1) of this section, the chit fund company shall make the appropriate entries in the register of subscribers kept under section 37 of this Act.

(4) Where the transfer of the rights of any subscriber under subsection (1) of this section is proved to have been made to any person who was insolvent at the time of the transfer or to have been made with the intention of defeating the provisions of any written law in force in Singapore, the transfer shall not be deemed to operate as a discharge to that subscriber from his duties and liabilities under the terms and conditions of the agreement.

(5) Notwithstanding anything contained in any other written law to the contrary, the stamp duty payable on any transfer under this section shall be in accordance with the provisions of the Stamp Act.

Transfer of right of chit fund company to recover contributions to be voidable.

36. Any transfer made by the chit fund company of its right to recover the contributions payable by subscribers, who have purchased chit fund amounts, shall not defeat or delay the rights of any subscriber who has not purchased a chit fund amount and shall be voidable at the instance of such subscriber if such transfer is likely to defeat or delay the rights of that subscriber under the terms and conditions of the agreement.

Books to be kept by chit fund company.

37. The chit fund company shall keep and from day to day regularly post up the following books:

  • (a) a register of subscribers containing—
    • (i) the names and full addresses of all subscribers with the respective dates on which the subscribers signed the agreement, and the date on which any subscriber ceased to be a subscriber by reason of a transfer of rights or of a substitution in case of default;
    • (ii) in the case of any transfer of rights by a subscriber, the name and full address of the person to whom the rights are transferred with the date of such transfer and the date on which notice thereof is given to the chit fund company; and
    • (iii) the name and full address of any person substituted in place of a defaulting subscriber, with the date on which he is so substituted;
  • (b) the minute book required under section 27 of this Act;
  • (c) an account book containing separate accounts of the following:
    • (i) the contributions paid by each subscriber and the respective dates of such payments;
    • (ii) the prize amounts paid to purchasers of the chit fund amount and the respective dates of such payments;
    • (iii) the amount of the commission or remuneration received by the chit fund company and the registration fees paid by it; and
    • (iv) the amount of the rebate paid to each subscriber on each occasion and the date of such payment.

Liability of chit fund company to subscribers.

38. (1) The chit fund company shall be liable to each subscriber for any amount due to that subscriber in respect of the chit fund.

(2) The chit fund company shall not be entitled to withdraw from the management of the chit fund without the written consent of all the subscribers.

(3) Where the chit fund company is in liquidation or is being wound up, whether voluntarily or otherwise, any debt owing by the company to any subscriber under the terms and conditions of the agreement relating to the chit fund shall, notwithstanding anything contained in any other written law to the contrary, be a first charge upon any property acquired or held by it for the purposes of that chit fund, including property held by the Commissioner as security pursuant to regulations made under this Act.

Prohibition of bid or tender by chit fund company.

39. (1) No chit fund company licensed under section 7 of this Act shall be entitled to bid or submit a tender or shall bid or submit a tender either directly or indirectly, at any sale of a chit fund amount held by auction or by tenders in connection with any chit fund formed or conducted by that company.

(2) Any chit fund company licensed under section 7 of this Act may, in lieu of substituting a new subscriber in the place of each defaulting subscriber, take up the share of one or more defaulting subscribers, and in every such case the chit fund company shall be entitled to take, without an auction or other sale and without any interest, the successive chit fund amounts available after the last of the continuing eligible subscribers has purchased his prize amount.

Termination of a chit fund.

40. (1) A chit fund shall be deemed to terminate upon the occurrence of any of the following events:

  • (a) on the expiry of the chit fund period as specified in the agreement or where it is curtailed by reason of any voluntary reduction of membership duly effected under section 33 of this Act;
  • (b) on the failure of the chit fund company to conduct the chit fund in accordance with the provisions of this Act, the regulations made thereunder or the terms and conditions of the agreement;
  • (c) on the chit fund company going into liquidation or being wound up, whether voluntarily or involuntarily, or otherwise being dissolved;
  • (d) on steps being taken for the winding up of the company either voluntarily or by order of the Commissioner or the Minister;
  • (e) on the licence being revoked by the Commissioner under section 14 of this Act.

(2) Upon the termination of a chit fund otherwise than by the expiry of the chit fund period as specified in the agreement or by a voluntary reduction of a chit fund under section 33 of this Act every subscriber who has not purchased a chit fund amount shall be entitled either—

  • (a) to recover from the chit fund company the aggregate of the actual amounts contributed by each subscriber as contributions under the agreement prior to the termination of the chit fund; or
  • (b) to apply to a court of competent jurisdiction for an order—
    • (i) directing each subscriber who has drawn a prize amount in that chit fund to deposit in court upon the due dates the several contributions, which, if the chit fund had not terminated, would have been payable by such subscriber to the chit fund company, until the aggregate of the amounts paid to the chit fund company by that subscriber before the termination of the chit fund and of the amounts so deposited in court become equal to the chit fund amount at the time of the sale at which that subscriber was declared the purchaser; and
    • (ii) declaring that all amounts so deposited in court shall be divided rateably among the subscribers who have not drawn a prize amount in that chit fund, and setting out for that purpose any scheme of distribution that may be necessary.

(3) Where any action is instituted by a subscriber for the enforcement of a claim under paragraph (a) of subsection (2) of this section, the chit fund company may apply for an order of court under paragraph (b) of subsection (2) of this section in like manner as a subscriber and any sum of money that may be received under such an order by such subscriber instituting the action, shall be set off against the amount claimed in the action.

Sale by sealed tender as alternative to auction.

41. The sale of the chit fund amounts may, if the terms and conditions of the agreement provided therefor, be effected by way of sealed tenders as an alternative to an auction if, at a duly convened meeting of the subscribers held before the sale of the first chit fund amount, the subscribers by a majority representing three-fourths of the chit fund amount resolve to adopt the method of sealed tenders; and the method adopted for the sale of the first chit fund amount shall be followed at each subsequent sale in connection with that chit fund:

Provided that in every case where the tenders of two or more subscribers are of the same value, the chit fund amount shall be put up for sale by auction among those subscribers, and the initial bid at every such auction shall be the amount set out in the tenders of those subscribers.

Financial limits to be observed by chit funds.

42. (1) The total value of the chit fund to be conducted at any one time by a chit fund company shall be as prescribed by regulations made under this Act.

(2) For the purposes of this section, the “total value of the chit fund” means the aggregate of the chit fund amounts that are to be collected and put up for sale during the period of that chit fund.

Limits on lending powers of chit fund company.

43. (1) No chit fund company shall lend to any person other than to a subscriber who has not purchased the chit fund amount.

(2) A chit fund company may lend to a subscriber who has not purchased the chit fund amount but the amount so lent shall not exceed seventy-five per cent of the aggregate contributions already paid by that subscriber or such other percentage as may be specified in regulations made under this Act.

(3) A chit fund company that lends to a subscriber under subsection (2) of this section shall not be deemed to be a moneylender under the Moneylenders Act and that Act shall not accordingly apply to any transaction under this section.

Part V. Reserve Fund, Dividends, Balance Sheet, Information and Regulation of Business

Maintenance of reserve funds.

44. (1) Every chit fund company shall maintain a reserve fund.

(2) At the end of each financial year the net profit of each chit fund company shall be determined after allowing for taxation, and after making provision for bad or doubtful debts.

(3) Such part of the net profits as is specified in this subsection shall be transferred to the reserve fund at the end of each financial year, as follows:

  • (a) where the reserve fund is two hundred per centum or more of the paid-up capital, a sum of not less than five per centum of such net profits;
  • (b) where the reserve fund is not less than one hundred per centum but less than two hundred per centum of the paid-up capital, a sum of not less than fifteen per centum of such net profits;
  • (c) where the reserve fund is less than one hundred per centum of the paid-up capital, a sum of not less than thirty per centum of such net profits.

Bad and doubtful debts.

45. Every chit fund company shall, before the profit and loss account and balance sheet are made out, take steps to ensure that all bad debts have been written off and make adequate provision for doubtful debts.

Restriction on payment of dividends by chit fund companies.

46. No chit fund company shall pay any dividend on shares, until all its capitalized expenditure (including preliminary expenses, organisation expenses, share selling, commission, brokerage, amount of losses incurred and any item of expenditure not represented by tangible assets) has been completely written off.

Exhibition of audited balance-sheet.

47. Every chit fund company shall exhibit throughout the year in a conspicuous position in every office and branch of that chit fund company, a copy of its last audited balance-sheet and profit and loss account together with the full and correct names of all persons who are directors of the chit fund company, as soon as such balance-sheet is audited.

Information and statistics to be furnished by chit fund companies.

48. (1) Every chit fund company shall furnish to the Commissioner, at such time and in such manner as the Commissioner may prescribe, all such information and data as he may reasonably require for the proper discharge of his functions under the provisions of this Act.

(2) Every chit fund company that fails or neglects to furnish any information required by the Commissioner under subsection (1) of this section, and within the time specified by the Commissioner, shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding one thousand dollars for every day during which the default continues.

Part VI. Inspection of Chit Fund Companies

Inspection and investigation of chit fund companies and production of books, etc.

49. (1) The Commissioner may, from time to time, inspect or cause to be inspected under conditions of secrecy, the books, accounts and transactions of any chit fund company.

(2) The Minister may at any time direct the Commissioner to make an investigation, under conditions of secrecy, of the books, accounts and transactions of a chit fund company, if he has reason to believe that such chit fund company is carrying on its business in a manner detrimental to the interests of its subscribers and other creditors or has insufficient assets to cover its liabilities to the public, or is contravening the provisions of this Act or the regulations made thereunder.

(3) The Commissioner may appoint any auditor, other than the auditor appointed by the chit fund company under the provisions of section 172 of the Companies Act, to exercise the powers of the Commissioner under subsections (1) and (2) of this section.

(4) For the purpose of an inspection or investigation under this section, a chit fund company shall afford the Commissioner access to its books, accounts and documents and shall give such information and facilities as may be required to conduct the investigation:

Provided that such books, accounts and documents shall not be required to be produced at such times and at such places as shall interfere with the proper conduct of the normal daily business of that chit fund company.

(5) If any book, account or document or information is not supplied in accordance with subsection (4) of this section, the chit fund company concerned shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding two thousand dollars and to a further fine of two hundred and fifty dollars for every day during which the default continues after conviction.

Powers of the Commissioner to issue orders after an inspection.

50. (1) If the Commissioner finds upon an inspection under section 49 of this Act that the affairs of a chit fund company are being conducted in a manner likely to be detrimental to the interests of the subscribers or prejudicial to the interests of the chit fund company, the Commissioner may by order require the chit fund company to take such corrective action as the Commissioner considers to be necessary or require the chit fund company to discontinue such practices or procedures.

(2) No order shall be issued under subsection (1) of this section unless the chit fund company has been given a reasonable opportunity to present its views to the Commissioner.

(3) The Commissioner may, upon representation being made to him, or on his own motion, modify or cancel any order issued under subsection (1) of this section and, in so modifying or cancelling any order, may impose such conditions as he thinks fit.

Part VII. Miscellaneous Provisions

Recovery of fees, expenses, etc.

51. There shall be recoverable as a civil debt due to the Government from the chit fund company concerned the amount of any fees payable under this Act or any regulations made thereunder.

Exemption.

52. Notwithstanding any of the provisions of this Act, the Commissioner may, with the approval of the Minister, exempt any chit fund company from any or all of the provisions of this Act.

Winding up provisions.

53. (1) Without prejudice to the provisions of the Companies Act—

  • (a) a chit fund company (whether or not it is being wound up voluntarily) may be wound up under an order of the court on the petition of the Minister; and
  • (b) the court may order the winding up of a chit fund company if—
    • (i) that company has held a licence under this Act and that licence has expired or has been revoked;
    • (ii) that company has been declared insolvent;
    • (iii) that company has carried on chit fund business in Singapore in contravention of the provisions of this Act.

(2) In the winding up of a chit fund company that has been carrying on chit fund business, every subscriber who has not purchased a chit fund amount shall be entitled to recover his contribution in the manner set out in subsection (2) of section 40 of this Act.

Redemption of securities held by chit fund company.

54. (1) As soon as practicable after the making of an order for the winding up of a chit fund company, the liquidator of such company shall publish in the Gazette a notice requiring every debtor of the chit fund company to redeem any property he has deposited with the company as security for any loan that he has obtained from the chit fund company, and shall also send by registered post such notice to every debtor whose security is held by the chit fund company and whose name is mentioned in the statement of affairs made out under section 234 of the Companies Act.

(2) The notice shall specify the latest date up to which any security may be redeemed, which date shall not be less than three months from the date of the notice.

(3) After the latest date for redeeming any security held by the chit fund company specified in the notice, the liquidator may proceed to realise any security held by the chit fund company forthwith, notwithstanding any agreement setting out any other period of redemption previously entered into between the chit fund company and the debtor.

Operation of Act not to affect certain Acts.

55. (1) Nothing in this Act shall affect the operation of the Companies Act, and any company that is liable to be incorporated under that Act shall continue to be so liable as if this Act had not been passed but in case of conflict between that Act and this Act the provisions of this Act shall prevail, unless otherwise provided in this Act.

(2) Nothing in this Act shall, unless it is expressly provided to the contrary, affect the operation of any written law relating to moneylending, finance companies, banking or insurance or the liability of any chit fund company under any such law.

General penalty.

56. Any chit fund company which, or any person who being a director, officer, employee or agent of a chit fund company, contravenes or fails to comply with any of the provisions of this Act for which no penalty is expressly provided shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding five thousand dollars.

Offences triable in District Court.

57. Notwithstanding the provisions of any other written law, offences under this Act or any regulations made thereunder may be tried in a District Court which shall have the power to impose the maximum penalty prescribed for any offence under this Act.

Consent of the Attorney-General.

58. No prosecution in respect of any offence under this Act or the regulations made thereunder shall be instituted except with the consent of the Attorney-General.

Offences by directors, managing directors or managers.

59. (1) Any person who, being a director, managing director or manager of a chit fund company—

  • (a) fails to comply or take all reasonable steps to secure compliance by the chit fund company with the provisions of this Act or any other written law relating to chit fund companies in Singapore; or
  • (b) fails to ensure or to take all reasonable steps to ensure the accuracy and correctness of any statement or information submitted under this Act or of any other written law relating to chit fund companies in force in Singapore,

shall be guilty of an offence under this Act and shall, in respect of each offence, be liable on conviction to imprisonment for a term not exceeding three years or to a fine not exceeding five thousand dollars or to both such imprisonment and fine.

(2) In any proceedings against a person under subsection (1) of this section it shall be a defence to prove that he had reasonable grounds to believe and did in fact believe that a competent and reliable person was charged with the duty of securing compliance with the provisions of those laws or with the duty of ensuring that those statements were accurate and that that person was in a position to discharge that duty.

(3) A person shall not be sentenced to imprisonment for any offence under subsection (1) of this section unless, in the opinion of the court, he committed the offence wilfully.

Holding out as chit fund company.

60. Where any public or private company or firm holds itself out to be a licensed chit fund company when it is not licensed under this Act, such company or firm shall be guilty of an offence under this Act, and every director, manager or every officer of such company or the proprietor, partner or officer of such firm shall, unless he proves that such holding out by the company or firm was made without his knowledge or consent, be guilty of an offence under this Act and shall be liable on conviction to imprisonment for a term not exceeding two years or to a fine not exceeding four thousand dollars or to both such imprisonment and fine.

Regulations.

61. (1) The Commissioner may, with the approval of the Minister, from time to time make all such regulations for, or in respect of, every purpose which is deemed to him necessary for carrying out the provisions of this Act and for the prescribing of any matter which is authorised or required under this Act to be so prescribed.

(2) In particular and without prejudice to the generality of the powers conferred by subsection (1) of this section, the Commissioner may, with the approval of the Minister, by such regulations—

  • (a) prescribe fees to be charged under this Act;
  • (b) prescribe the procedure to be adopted in registering the agreement or any other document or filing any document;
  • (c) prescribe the accounts or books to be kept and the forms to be used by the chit fund company in any case where express provision is not made by this Act; and for providing for the periodical inspection of such accounts or books by the Commissioner or by an officer authorised by the Commissioner;
  • (d) prescribe the periods during which the several documents registered or filed in the office of the Commissioner shall be preserved, and the method of disposal of such documents at the end of those periods;
  • (e) prescribe in the agreement the duration of a chit fund, the highest rebate to be offered, the latest date on which contributions are to be paid and the nature of the security to be given to the chit fund company by the purchaser of the prize and the amount of the commission that may be charged by a chit fund company;
  • (f) prescribe the security to be given by the chit fund company for the discharge of its liabilities under the agreement and the place where such security shall be lodged;
  • (g) prescribe the total value of chit funds to be conducted at any one time by a chit fund company in relation to the paid-up capital of that company;
  • (h) prescribe additional essential terms and conditions or modify or amend existing terms and conditions under section 24 of this Act;
  • (i) regulate advertisements of chit fund companies;
  • (j) vary the security to be furnished by the chit fund company or the subscriber, as the case may be;
  • (k) prescribe the rights, obligations, duties and liabilities of subscribers and the chit fund company.

(3) Every chit fund company which contravenes the regulations made pursuant to subsection (1) of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding two thousand dollars.

Part VIII. Transitional Provisions

Transitional licensing provisions.

62. (1) Notwithstanding the provisions of section 4 of this Act, any public or private company which on the 1st day of October, 1971, was carrying on chit fund business in Singapore may, within one month after the date of the coming into operation of this Act, apply for a licence and shall be granted a licence by the Commissioner which shall be valid up to and including the 30th day of June, 1972.

(2) Thereafter, such licence may be renewed for such further period, or periods, as the Commissioner may decide and be subject to such conditions as he may impose.

(3) A private company which has been granted a licence under subsection (1) of this section shall not be entitled to claim to be an exempt private company under the Companies Act.

Firms or associations that have been carrying on chit fund business.

63. (1) Notwithstanding section 4 of this Act, any firm, association or body of persons that has been carrying on chit fund business in Singapore before the 1st day of October, 1971, may apply for and may be granted a licence if such firm, association or body of persons, as the case may be, incorporates itself as a public company within three months of the date of the coming into operation of this Act.

(2) A licence granted under subsection (1) of this section shall be valid for such period as the Commissioner may decide and be subject to such conditions as the Commissioner may impose.

Economic Development Board Act1

An Act to establish the Economic Development Board Act.

[1st August, 1961]

Short title.

1. This Act may be cited as the Economic Development Board Act.

Interpretation.

2. In this Act, unless the context otherwise requires—

“Board” means the Economic Development Board established under section 3 of this Act;

“goods, materials or things” includes capital or consumer goods of every description, including aircraft, ships, machinery, food and drugs;

“industrial enterprise” means any sole proprietorship, partnership, company or co-operative society wherever registered or incorporated under any law for the time being in force relating to companies, co-operative societies or businesses and engaged in or proposing to engage in any one or more of the following purposes or functions:

  • (a) manufacture and sale of goods, materials or things or the subjection of goods, materials or things to any process, including that of repairs, breaking-up, reconditioning or maintenance;
  • (b) the exploration for, and exploitation of, natural resources, including—
    • (i) the working of a mine, quarry or any other source of mineral deposits; or
    • (ii) the treatment or preparation for sale, consumption or use, and the storage or removal, of any substance from any mine, quarry or other source of mineral deposits;
  • (c) transport, dock, water or electricity undertaking, including the business of wharfingers and stevedores;
  • (d) the storage of goods, materials or things;
  • (e) the working of a plantation;
  • (f) fishing;
  • (g) the business of a tourist enterprise as defined in the Tourist Promotion Board Act;

“underwrite” means to contract, with or without conditions, to subscribe for stocks, shares, bonds or debentures of an industrial enterprise with a view to the resale of the whole or part of it.

Establishment of Economic Development Board.

3. (1) There shall be established in accordance with the provisions of this Act a body to be called the “Economic Development Board”.

(2) The Board when established shall be a body corporate with perpetual succession and a common seal with power, subject to the provisions of this Act, to acquire and dispose of property, both movable and immovable, and may sue and be sued in its corporate name and perform such other acts as bodies corporate may by law perform.

Chairman of the Board.

4. The Minister shall appoint a Chairman of the Board who shall, subject to the provisions of this Act, hold office for such period and on such terms as the Minister may determine.

Constitution of the Board.

5. (1) The Board shall consist of—

  • (a) the Chairman of the Board appointed under section 4 of this Act;
  • (b) the Director of the Board appointed under section 7 of this Act; and
  • (c) not less than four and not more than ten other members who shall be appointed by the Minister.

(2) The quorum of the Board shall be four.

(3) The Board shall meet together once at least in every month.

(4) The members of the Board appointed by the Minister under the provisions of paragraph (c) of subsection (1) of this section shall, unless their appointment is revoked by the Minister under the provisions of subsection (9) of this section, or unless they resign during their period of office, hold office for a term of three years or for such shorter period as the Minister may in any case determine.

(5) The Minister may appoint not more than two members of the Board to be Deputy Chairmen of the Board.

(6) The Chairman or the person lawfully acting as Chairman at any meeting of the Board shall have an original as well as a casting vote.

(7) A member of the Board shall not, in any meeting of the Board, participate in any discussion relating to, and shall not vote in respect of, any application to the Board for a loan in which he is interested or in respect of any business or management in which he is interested, and if he does so his vote shall not be counted, nor shall he be counted in the quorum present at that meeting.

(8) The members of the Board shall be paid out of the funds of the Board such salaries, fees or allowances as the President may determine.

(9) The Minister may at any time revoke the appointment of the Chairman or of any other member of the Board.

5A. At any time when the Chairman is absent or otherwise incapable of acting, or there is a vacancy in the office of Chairman—

  • (a) such one of the Deputy Chairmen as the Minister may direct, or in default of any such direction such one of them as they may agree; or
  • (b) if there is only one Deputy Chairman, that Deputy Chairman, may exercise any of the functions of the Chairman.

5B. At any time when every person who is Chairman or Deputy Chairman is absent or otherwise incapable of acting, or there is no such person, such member of the Board as the Minister may direct, or in default of any such direction such member as the Board may agree, may perform any of the functions of the Chairman.

Directions by the Minister.

6. (1) The Minister may, after consultation with the Board or otherwise, give to the Board such directions, not inconsistent with the provisions of this Act, as he deems fit, as to the exercise and performance by the Board of its powers, duties and functions under this Act, and the Board shall give effect to all such directions.

(2) The Board shall furnish the Minister with such information with respect to its property and activities as he may from time to time require.

Director of the Board.

7. (1) The Board shall, with the approval of the Minister, appoint a Director of the Economic Development Board who shall perform such duties as the Board may entrust or delegate to him:

Provided that the first Director of the Board shall be appointed by the Minister.

(2) If the Director of the Board is temporarily absent from Singapore or temporarily incapacitated through illness or for any other sufficient reason from the performance of his duties, another person may be appointed in the manner provided by subsection (1) of this section to be the Director of the Board during such temporary absence or other incapacity.

Appointment of officers and servants.

8. (1) The Board may from time to time appoint and employ such officers and servants as may be necessary for the purposes of this Act and may from time to time dismiss them.

(2) All officers and servants of the Board shall be under the administrative control of the Board.

Ineligibility for employment as officers of the Board.

9. (1) No person shall be eligible for employment as an officer or servant of the Board who has, directly or indirectly, by himself or his partner, any share or interest in any contract with, for or on behalf of the Board.

(2) Any officer or servant of the Board who has or acquires any such share or interest shall be liable in the discretion of the Board to summary dismissal without notice.

(3) No officer or servant shall be deemed to have or acquire any such share or interest by reason only that—

  • (a) he is or becomes a member of an incorporated company which owns land situated in Singapore or has a contract with or executes work for the Board, unless he has a beneficial interest in shares of that company and the total nominal value of these shares exceeds ten thousand dollars or one-tenth of the total nominal value of the issued share capital of the company whichever is the less; or
  • (b) he has or acquires a share in any loan issued by the Board or in any security for the same.

Rules for establishment of pension or provident fund scheme.

10. (1) Subject to the approval of the Minister, the Board may make rules for the establishment of a scheme or schemes for the payment of pensions, gratuities, provident fund or other superannuation benefits to such officers or classes of officers of the Board, as it may determine, on their death or retirement from the service of the Board or on their otherwise leaving the service of the Board.

(2) The following provisions shall apply to any scheme established under this section:

  • (a) no assurance on the life of any contributor under any such scheme, and no moneys or other benefits payable under any such assurance, and no payment made under any such scheme to any person who has been employed by the Board, shall be assignable or transferable, or liable to be garnished, attached, sequestered or levied upon for or in respect of any debt or claim whatsoever other than a debt due to the Board or to the Government;
  • (b) no donation by the Board or contribution by its officers made under any such scheme and no interest thereon shall be assignable or transferable or liable to be garnished, attached, sequestered or levied upon for or in respect of any debt or claim whatsoever other than a debt due to the Board or to the Government;
  • (c) no such donation, contribution or interest shall be subject to the debts of the contributor, nor shall such donation, contribution or interest pass to the Official Assignee on the bankruptcy of such contributor, but, if such contributor is adjudicated a bankrupt or is declared insolvent by a court, such donation, contribution or interest shall, subject to the provisions of this Act, be deemed to be subject to a trust in favour of the persons entitled thereto on the death of the contributor;
  • (d) the bankruptcy of a contributor shall not affect the making of deductions from the salary of the contributor in accordance with any such scheme, but such deductions shall continue to be made notwithstanding the provisions of any written law, and the portion of salary so deducted shall not be deemed to form part of his after-acquired property;
  • (e) subject to the provisions of any such scheme, all moneys paid or payable under any such scheme on the death of a contributor shall be deemed to be subject to a trust in favour of the persons entitled thereto under the will or intestacy of such deceased contributor, or under a nomination in such form as may be prescribed in such scheme, and shall not be deemed to form part of his estate or be subject to the payment of his debts but shall be deemed to be property passing on his death for the purposes of the Estate Duty Act;
  • (f) any contributor may, by a memorandum under his hand, appoint a trustee or trustees of the moneys payable on his death out of any such scheme and may make provision for the appointment of a new trustee or new trustees of such moneys and for the investment thereof: such memorandum shall be in the form prescribed in such scheme and shall be deposited with the Board;
  • (g) if at the time of the death of any contributor or at any time afterwards, there is no trustee of such moneys or it is expedient to appoint a new trustee or new trustees, then and in any such case a trustee or trustees or a new trustee or trustees may be appointed by the High Court or a Judge thereof; and
  • (h) the receipt of a trustee or trustees duly appointed, or in default of any such appointment and of written notice thereof to the Board, the receipt of the legal personal representative of a deceased contributor shall be a discharge to the Board for any moneys payable on his death out of any such scheme.

Appointment of committees and delegation of powers.

11. (1) The Board may, in its discretion, appoint from among its own members or other persons who are not members of the Board such number of committees consisting of members or other persons or members and other persons for purposes which, in the opinion of the Board, would be better regulated and managed by means of such committees.

(2) The Board may, subject to such conditions or restrictions as it thinks fit, delegate to any such committee or the Chairman or the Director all or any of the powers, functions and duties by this Act vested in the Board, except the power to borrow money or to raise loans by the issue of bonds and debentures; and any power, function or duty so delegated may be exercised or performed by such committee or the Chairman or the Director, as the case may be, in the name and on behalf of the Board.

(3) The Board may, subject to such conditions or restrictions as it thinks fit, delegate to any employee thereof all or any of the Board’s functions and duties by this Act vested in the Board, except the power to borrow money or to raise or grant loans or advances to or subscribe to or underwrite the issue of stocks, shares, bonds or debentures of industrial enterprises; and any power, function or duty so delegated may be exercised or performed by such employee in the name and on behalf of the Board.

(4) The Board may continue to exercise any power conferred upon it, or perform any function or duty under this Act, notwithstanding the delegation of such power, function or duty under the provisions of this section.

Appointment of member to act on behalf of Chairman outside Singapore.

11A. The Chairman of the Board may, with the approval of the Minister, appoint a member of the Board to perform the functions of the Chairman outside Singapore in relation to such matters or class of matters as the Chairman may specify.

Protection from personal liability.

12. (1) No matter or thing done and no contract of any kind entered into by the Board and no matter or thing done by any member of the Board or by any employee thereof or any other person whomsoever acting under the direction of the Board shall, if the matter or thing was done or the contract was entered into bona fide for the purpose of executing the provisions of this Act, subject any such member or employee or any person acting under the direction of the Board personally to any action, liability, claim or demand whatsoever in respect thereof.

(2) Any expense incurred by the Board or any member, employee or other person so acting under the direction of the Board shall be borne by and repaid out of the funds of the Board.

Members and officers of the Board deemed to be public servants.

13. The members of the Board and the employees thereof, of every description, shall be deemed to be public servants within the meaning of the Penal Code.

Provision of working capital.

14. For the purpose of enabling the Board to carry out its objects and to defray expenditure properly chargeable to capital account, including defraying initial expenses, and for the provision of working capital, the Minister may authorize payment to the Board of such sums as he may determine.

Borrowing powers.

15. (1) The Board may, from time to time, for the purposes of this Act raise loans—

  • (a) from the Government; or
  • (b) with the consent of the Minister and subject to the provisions of any written law, within or otherwise than within Singapore, by the creation and issue of debentures, stocks or bonds or otherwise.

(2) The Board shall pay interest on such loans at such rate and at such times, and shall make such provision for the mode and time or times of repayment of principal, as may be approved by the Minister:

Provided that approval of the Minister shall not be required, under the provisions of this subsection, for the rate of interest to be paid on a loan by means of a financial agreement whereby credit facilities are granted for the purchase of goods, materials or things.

(3) The Board may, from time to time, borrow by way of temporary loan or overdraft from a bank or otherwise, any sum which it may temporarily require—

  • (a) for the purpose of defraying expenses pending the receipt of revenues receivable by it in respect of the period of account in which those expenses are chargeable; or
  • (b) for the purpose of defraying, pending the receipt of money due in respect of any loan authorised to be raised under the provisions of subsection (1) of this section, expenses intended to be defrayed by any such loan.

(4) Bonds and debentures of the Board shall be guaranteed by the Government as to the repayment of principal and the payment of interest at such rate as may be approved by the Minister under the provisions of subsection (2) of this section.

(5) For the purposes of subsection (1) of this section, the power to raise loans shall include the power to make any financial agreement whereby credit facilities are granted to the Board for the purchase of goods, materials or things.

Powers of the Board.

16. (1) The Board shall have power—

  • (a) with the written approval of the Minister, to underwrite the issue of stocks, shares, bonds or debentures by industrial enterprises;
  • (b) with the written approval of the Minister, to guarantee on such terms and conditions as may be agreed upon, loans raised by industrial enterprises which—
    • (i) are repayable within a period not exceeding twenty-five years; or
    • (ii) are floated in the public market;
  • (c) to grant loans or advances to, or subscribe to stocks, shares, bonds or debentures of industrial enterprises;
  • (d) to manage, control or supervise industrial enterprises by nominating directors or advisers or otherwise collaborating with them or entering into partnerships or any other arrangement for jointly working with them;
  • (e) with the written approval of the Minister, to establish, sell shares of, invest in and manage industrial enterprises;
  • (f) to act as agent for the Government or, with its approval, for any other person in the transaction of any business with an industrial enterprise in respect of loans or advances granted or debentures subscribed by the Government or such other person;
  • (g) to acquire, sell or lease land for the purposes of industrial sites, for the housing of employees or for general economic development;
  • (h) to lay out industrial estates for sale or lease;
  • (i) to provide technical advice and assistance to industrial enterprises and to build up a corps of engineering and managerial staff to provide such assistance;
  • (j) to exercise all functions and powers and perform all duties which, under or by virtue of any other written law, are or may be or become vested or delegated to it;
  • (k) to receive in consideration of the services rendered by it such commission as may be agreed upon;
  • (l) to provide and maintain, either within Singapore or otherwise, housing accommodation, including convalescent or holiday houses for employees of the Board; to provide and maintain for such employees clubs and playing fields and to provide educational facilities for them; to grant loans to such employees, or to act as guarantor for loans taken by them, to enable them to purchase their own houses and vehicles; and to award scholarships or to give loans to such employees to obtain professional, technical or other training;
  • (m) with the written approval of the Minister, to award compensation to any person sustaining any damage by reason of the exercise of any of the powers, under this Act, by the Board or by any employee thereof;
  • (n) to act as agents for any industrial enterprise;
  • (o) to carry out experimental work and to conduct, promote and encourage the study of, and research in, matters connected with any of the Board’s purposes and functions;
  • (p) from time to time to invest any of the funds of the Board in securities authorised for the investment of trust funds by any written law for the time being in force, and, with the approval of the Minister, in other securities, within or otherwise than within Singapore;
  • (q) with the concurrence of the Housing and Development Board, to finance or carry out or assist in carrying out any scheme in connection with urban redevelopment; and
  • (r) generally to do all such matters and things as may be incidental to or consequential upon the exercise of its powers or the discharge of its duties under this Act.

(2) The Board may, in addition to the powers vested in it by subsection (1) of this section, exercise such other powers as the Minister may authorise the Board in writing to exercise.

(3) The Board shall, when it is exercising powers authorised by the Minister under subsection (2) of this section, be deemed to be exercising powers vested in it by subsection (1) of this section.

Rights of the Board in case of default.

17. (1) Where any industrial enterprise which is under a liability to the Board under an agreement makes any default in repayment or otherwise fails to comply with the terms of its agreement with the Board, the Board shall, without prejudice to any other rights or remedies which it may possess under the law, have the right to take over the management of such industrial enterprise, as well as the right to sell and realise the property pledged, mortgaged, hypothecated or assigned to the Board.

(2) Any transfer of property made by the Board in exercise of its powers of sale and realisation under subsection (1) of this section shall vest in the transferee all rights in or to the property transferred as if the sale had been made by the owner of the property.

(3) The Board shall have the same rights and powers with respect to goods manufactured or produced wholly or partly from goods forming part of security held by it, as it had with respect to the original goods.

(4) Where the Board takes over the management of an industrial enterprise under the provisions of subsection (1) of this section, it shall be deemed to be the owner of such industrial enterprise for purposes of suits by or against such industrial enterprise and shall sue and be sued in the name of the owner of such industrial enterprise.

Power to call for repayment before agreed period.

18. Notwithstanding any agreement to the contrary, and without prejudice to any other rights or remedies which it may possess under the law, the Board may by notice require any industrial enterprise, to which it has granted any loan or advance, forthwith to discharge in full its liabilities to the Board—

  • (a) if it appears to the Board that false or misleading information in any material particular was given in the application for the loan or advance; or
  • (b) if the industrial enterprise has failed to comply with the terms of its contract with the Board in the matter of the loan or advance; or
  • (c) if there is a reasonable apprehension that the industrial enterprise is unable to pay its debts or that proceedings for liquidation may be commenced in respect thereof; or
  • (d) if the property pledged, mortgaged, hypothecated or assigned to the Board as security for the loan or advance is not insured and kept insured by the industrial enterprise to the satisfaction of the Board, or depreciates in value, in the opinion of the Board, by more than twenty per cent and further security to the satisfaction of the Board is not given; or
  • (e) if, without the permission of the Board, machinery and other equipment, whether forming part of the security or otherwise, is removed from the premises of the industrial enterprise without being replaced; or
  • (f) if for any reason it is necessary in the opinion of the Board to protect the interests of the Board.

Special provisions for enforcement of claims by the Board.

19. (1) Where by reason of the breach of any condition of an agreement between the Board and an industrial enterprise, the Board becomes entitled to call for the immediate payment of any loan or advance granted by it before the due date or where the due date has expired, and the industrial enterprise fails to repay such loan or advance, any officer of the Board generally or especially authorised by the Board in that behalf may apply to the High Court for one or more of the following reliefs, namely:

  • (a) for an order for the sale of the property pledged, mortgaged, hypothecated or assigned to the Board as security for the loan or advance; or
  • (b) for transferring the management of the industrial enterprise to the Board; or
  • (c) for an interim injunction where there is apprehension of the machinery or the equipment being removed from the premises of the industrial enterprise without the permission of the Board.

(2) An application under subsection (1) of this section shall state the nature and extent of the liability of the industrial enterprise to the Board, the ground on which it is made and such other particulars as may be prescribed.

(3) Where the application is for the reliefs mentioned in paragraphs (a) and (c) of subsection (1) of this section, the judge shall make an interim order attaching the security or so much of the property of the industrial enterprise as would on being sold realise in his estimation an amount equivalent in value to the outstanding liability of the industrial enterprise to the Board, together with the costs of the proceedings taken under this section with or without an interim injunction restraining the industrial enterprise from transferring or removing its machinery or equipment.

(4) Where the application is for the relief mentioned in paragraph (b) of subsection (1) of this section, the judge shall grant an interim injunction restraining the industrial enterprise from transferring or removing its machinery or equipment and issue a notice calling upon the industrial enterprise to show cause on a date to be specified in the notice as to why the management of the industrial enterprise should not be transferred to the Board.

(5) Before making any order under subsection (3) or subsection (4) of this section, the judge may, if he thinks fit, examine the officer making the application.

(6) At the same time as he makes an order under subsection (3) of this section, the judge shall issue to the industrial enterprise a notice accompanied by copies of the order, the application and the evidence, if any, recorded by him, calling upon it to show cause on a date to be specified in the notice as to why the interim order of attachment should not be made absolute or the injunction confirmed.

(7) If no cause is shown on or before the date specified in the notice under subsections (4) and (6) of this section, the judge shall forthwith make the interim order absolute and direct the sale of the attached property or transfer the management of the industrial enterprise to the Board or confirm the injunction.

(8) If cause is shown, the judge shall proceed to investigate the claim of the Board and the provisions of the Rules of the Supreme Court, 1934, shall as far as practicable apply to such proceedings.

(9) On an investigation made under subsection (8) of this section, the judge shall make an order—

  • (a) confirming the order of attachment and directing the sale of the attached property; or
  • (b) varying the order of attachment so as to release a portion of the property from attachment and directing the sale of the remainder of the attached property; or
  • (c) releasing the property from attachment, if he is satisfied that it is not necessary in the interests of the Board; or
  • (d) confirming or dissolving the injunction; or
  • (e) transferring the management of the industrial enterprise to the Board or rejecting the claim made in this behalf:

Provided that when making any order under paragraph (c) of this subsection, the judge may make such further orders as he thinks necessary to protect the interests of the Board, and may apportion the costs of the proceedings in such manner as he thinks fit:

Provided further that unless the Board intimates to the judge that it will not appeal against any order releasing any property from attachment, such order shall not be given effect to until the expiry of the period fixed under subsection (11) of this section within which an appeal may be lodged, or if an appeal is lodged unless the Court of Appeal otherwise directs, until the appeal is disposed of.

(10) An order of attachment or sale of property under this section shall be carried into effect as far as may be practicable in the manner provided in the Rules of the Supreme Court, 1934, for the seizure and sale of property in execution of a judgment or order, as if the Board were the judgment creditor.

(11) Any party aggrieved by an order under subsection (7) or subsection (9) of this section may, within thirty days from the date of the order, appeal to the Court of Appeal, and upon the appeal, that Court may after hearing the parties make such orders as it thinks proper.

Compulsory acquisition of land.

20. Where any immovable property, not being State land, is needed for the purposes of the Board and cannot be acquired by agreement, the Board may request and the President may, if he thinks fit, direct the acquisition of that property and in that case, the property may be acquired in accordance with the provisions of any written law relating to the acquisition of land for a public purpose and any declaration required under any such law that the land is so needed may be made notwithstanding that compensation is to be paid out of the funds of the Board, and the declaration shall have effect as if it were a declaration that the land is needed for a public purpose made in accordance with that written law.

Accounts of the Board.

21. (1) The Board shall prepare in respect of each financial year ending on the 31st day of March a statement of account in a form approved by the Minister.

(2) For the purposes of this Act, “financial year” means a period of twelve months ending on the 31st day of March in any year:

Provided that for the year 1969 the financial year shall be deemed to mean the period of fifteen months commencing on the 1st day of January, 1969 and ending on the 31st day of March, 1970.

(3) The statement of account referred to in subsection (1) of this section shall be audited by a qualified auditor to be appointed in respect of each financial year by the Minister, and the auditor shall make a report on the accounts examined by him.

(4) The remuneration of the auditor appointed by the Minister under subsection (3) of this section shall be fixed by the Minister and shall be paid out of the funds of the Board.

(5) So soon as the accounts have been audited, the Board shall send the Minister a copy of the statement of account and the report thereon by the auditor referred to in subsection (3) of this section, and the Minister shall present a copy of every such statement and report to Parliament.

Annual report.

22. So soon as may be after the 1st day of April in each year but not later than the 30th day of September in each year unless expressly authorised in writing by the Minister, the Board shall prepare a report of its operations in the preceding financial year and shall send a copy of such report to the Minister who shall present a copy of every such report to Parliament.

Annual estimates.

23. The Board shall obtain in advance the approval of the Minister for its annual estimates of expenditure in respect of office administration and for any supplementary estimates of such expenditure.

Special provisions as to sale or purchase by the Board of land, etc.

24. For the purpose of the registration of any assurance pertaining to the sale or the purchase by the Board of any land, the mortgage of such land or the reconveyance or discharge of such mortgage—

  • (a) in the case of land registered under the provisions of the Registration of Deeds Act, the provisions of section 12 of that Act shall not apply; and
  • (b) in the case of land registered under the provisions of the Land Titles Act, where a solicitor is not employed by the Board, a certificate of an officer of the Board shall be sufficient for the purposes of subsection (4) of section 50 of the Land Titles Act.

24A. (1) The fixing of the common seal of the Board shall be authenticated by the signature of—

  • (a) the Chairman or a Deputy Chairman; and
  • (b) an officer of the Board authorised by the Board, either generally or specially, to act for that purpose.

(2) Any document purporting to be a document duly executed under the seal of the Board shall be admissible in evidence and shall, unless the contrary is proved, be deemed to be a document so executed.

Regulations.

25. (1) The Minister may, after consulting with the Board, make such regulations as he may consider necessary or desirable for the proper conduct of the business of the Board including, without prejudice to the generality of the foregoing, regulations with regard to any of the following matters:

  • (a) the convening of meetings of the Board and the procedure to be followed thereat;
  • (b) the appointment or establishment of committees of the members of the Board, and the co-opting of persons other than members of the Board to such committees;
  • (c) the provision of a common seal and the custody and use thereof;
  • (d) the manner in which documents, cheques and instruments of any description shall be signed or executed on behalf of the Board;
  • (e) the manner and terms of issue and redemption of bonds and debentures by the Board; and
  • (f) generally for the exercise of the Board’s powers under the provisions of this Act.

(2) All regulations made under this Act shall be published in the Gazette and shall be presented to Parliament as soon as may be after publication and, if a resolution is passed pursuant to a motion notice whereof has been given for a sitting day not later than the first available sitting day of Parliament next after the expiry of three months from the date when such regulations are so presented annulling the regulations or any part thereof as from a specified date, the regulations or that part thereof, as the case may be, shall thereupon become void as from that date but without prejudice to the validity of anything previously done thereunder or to the making of new regulations.

Winding up.

26. The Board shall not be wound up except by or under the authority of an Act.

Vesting of the Singapore Industrial Promotion Board’s assets and liabilities in the Board.

27. Upon the coming into operation of this Act—

  • (a) the Singapore Industrial Promotion Board shall cease to exist as a body corporate;
  • (b) all the assets and movable and immovable property of every description and all the powers, rights and privileges in connection therewith or appertaining thereto which immediately before the coming into operation of this Act were vested in the Singapore Industrial Promotion Board shall forthwith vest in the Board freed and discharged from any trust whatsoever, but subject nevertheless to the provisions of this Act; and
  • (c) all liabilities and obligations of the Singapore Industrial Promotion Board which may have existed immediately before the coming into operation of this Act shall be transferred to and vest in the Board.

Post Office Savings Bank of Singapore Act, 19711

An Act to establish a corporation to be known as the Post Office Savings Bank of Singapore and to provide for the transfer to, and for the vesting in, the corporation of the functions, assets and liabilities of the Post Office Savings Bank established under the Post Office Savings Bank Act (Chapter 198 of the 1970 Revised Edition) and to repeal the said Act.

Be it enacted by the President with the advice and consent of the Parliament of Singapore, as follows:

[10th November, 1971]

Part I. Preliminary

Short title and commencement

1. This Act may be cited as the Post Office Savings Bank of Short title Singapore Act, 1971, and shall come into operation on such date as the Minister may, by notification in the Gazette, appoint.

Interpretation.

2. In this Act, unless the context otherwise requires—

“Bank” means the Post Office Savings Bank of Singapore established under section 3 of this Act;

“Board” means the Board of Directors referred to in section 7 of this Act;

“Chairman” means the Chairman appointed by the Minister under section 8 of this Act;

“director” means a director appointed under subsection (1) of section 7 of this Act and includes the Chairman;

“General Manager” means the General Manager appointed under section 17 of this Act and includes any person appointed to act as General Manager;

“guardian” means the father of a minor, or if the father is dead, the mother, or if both parents are dead or absent from Singapore or are incapable of acting owing to disability or other cause and no guardian of the minor has been appointed by will or deed or under any other written law for the time being in force or by any competent court, any adult person with whom the minor is residing and by whom he is being maintained;

“minor” means a person who has not attained the age of eighteen years.

Part II. Establishment, Incorporation, Function, Powers and Constitution of the Bank

Establishment and incorporation of the Bank.

3. There is hereby established a body to be known as the “Post Office Savings Bank of Singapore” which shall be a body corporate with perpetual succession, and with power to sue and be sued in its corporate name and to perform such other acts as bodies corporate may by law perform, and to exercise such other powers as are conferred under or by virtue of this Act.

Objects of the Bank.

4. The principal objects of the Bank shall be—

  • (a) to provide means for the deposit of savings and to encourage thrift;
  • (b) to mobilise domestic savings for the purpose of public development; and
  • (c) to take over the functions and duties of the Post Office Savings Bank established under the Post Office Savings Bank Act and to continue to carry on its business in Singapore and elsewhere.

Powers of the Bank.

5. For the purpose of carrying out the objects set out in section 4 of this Act, the Bank may—

  • (a) receive deposits that are repayable either on demand or otherwise;
  • (b) advance and lend money to, or give a guarantee for the benefit of, any person having an account with the Bank;
  • (c) construct, manufacture, produce, purchase, take on hire or hire-purchase, install, maintain and repair anything required for the purposes of its business;
  • (d) enter into and carry out agreements with any person (including the Government) for the carrying on by him, whether as agent or otherwise, of any of the activities which the Bank may carry on or for the carrying on jointly by him and the Bank of any of those activities;
  • (e) acquire land which is required by it for, or in connection with, the exercise of its powers or as to which it can reasonably be foreseen that it will be so required;
  • (f) dispose (whether absolutely or for a term of years) of any part of its undertaking or any property which in its opinion is not required by it for or in connection with the exercise of its powers, and in particular, to dispose of an interest in, or right over, any property which, subject to that interest or right, is retained by it;
  • (g) for the purposes of its business subscribe for or acquire any of the securities of an incorporated company or other body corporate, procure its admission to membership of an incorporated company limited by guarantee and not having a share capital, promote the formation of an incorporated company or participate in the promotion of such a company or acquire in2 an undertaking or part of an undertaking;
  • (h) do anything for the purpose of advancing the skill of persons employed by it or that of persons who, though not so employed are engaging themselves, or have it in contemplation to engage themselves, in work of a kind in the case of which it has or may have a direct or indirect concern in the products thereof;
  • (i) provide houses, hostels and other like accommodation for persons engaged in its business;
  • (j) make loans to persons employed by it (including, in particular, loans to assist them to acquire housing accommodation), and guarantee loans made to persons so employed (including, in particular, loans made by building societies and other bodies for housing purposes);
  • (k) promote recreational activities for, and activities conducive to the welfare of, persons who are, or have been, engaged in its business and the families of such persons and assist the promotion by others of such activities; and
  • (l) do all such other things as are incidental or conducive to the attainment of its object.

Common seal.

6. (1) The Bank shall have a common seal and such seal may, from time to time, be broken, changed, altered and made anew as to the Bank seems fit,3 and, until a seal is provided under this section, a stamp bearing the inscription “Post Office Savings Bank of Singapore” may be used as the common seal.

(2) All deeds, documents and other instruments requiring the seal of the Bank shall be sealed with the common seal of the Bank by authority of the directors in the presence of the General Manager and of some other person duly authorised by the directors to act in that behalf and shall be signed by the General Manager and by such duly authorised person, and such signing shall be sufficient evidence that the common seal of the Bank has been duly and properly affixed and that the said seal is the lawful common seal of the Bank.

(3) The directors may by resolution or otherwise appoint an officer of the Bank or any other agent either generally or in a particular case to execute or sign on behalf of the Bank any agreement or other instrument not under seal in relation to any matter coming within the powers of the Bank.

(4) The provisions of section 12 of the Registration of Deeds Act shall not apply to any instrument purporting to have been executed under the provisions of subsection (2) of this section.

Board of Directors.

7. (1) The management of the Bank and of its properties and its business shall be vested in a Board of Directors consisting of not less than five and not more than eight directors who shall be appointed by the Minister.

(2) The directors shall hold office for a term not exceeding three years and shall be eligible for re-appointment.

(3) The Minister may at any time revoke the appointment of any director.

(4) Any director may, with the approval of the Minister, resign from his office.

Chairman.

8. (1) The Minister shall appoint one of the directors to be Chairman of the Board.

(2) The Minister may appoint any director to act as temporary Chairman during the temporary absence from Singapore, or during the temporary incapacity owing to illness or otherwise, of the Chairman.

Salaries, fees and allowances payable to directors.

9. There shall be paid to the Chairman and other directors, out of the funds of the Bank, such salaries, fees and allowances as the Minister may, from time to time, determine.

Vacation of office of director.

10. The office of director shall be vacated if the director—

  • (a) becomes of unsound mind;
  • (b) becomes a bankrupt or suspends payment to, or makes any arrangement or composition with, his creditors;
  • (c) has been absent for more than three consecutive meetings of the directors without permission of the directors;
  • (d) resigns from his office; or
  • (e) is convicted of an offence involving dishonesty or fraud or moral turpitude.

Filling of vacancies in the office of director.

11. If any director dies or has his appointment revoked or otherwise vacates his office before the expiry of the term for which he has been appointed, another person may be appointed by the Minister for the unexpired period of the term of office of the director in whose place he is appointed.

Meetings of directors.

12. (1) The Chairman shall summon meetings as often as may be required but not less frequently than once in three months.

(2) At every meeting of the Board, a quorum shall consist of four directors, and decisions shall be adopted by a simple majority of the votes of the directors present and voting except in the case of an equality of votes the Chairman shall have a casting vote.4

(3) The Chairman, or in his absence such director as the directors present shall select, shall preside at meetings of the Board.

(4) Subject to the provisions of subsection (2) of this section, the Board shall not be precluded from holding any meeting or acting in any matter merely by reason of any vacancy in its membership.

(5) Subject to the provisions of this Act, the Board may make standing orders to regulate its own procedure, and in particular, the holding of meetings, the notice to be given of such meetings, the proceedings thereat, the keeping of minutes and the custody, production and inspection of such minutes.

Director’s interest in contract to be made known.

13. (1) A director who is directly or indirectly interested in a contract made, or proposed to be made, by the Bank shall disclose the nature of his interest at the first meeting of the Board at which he is present after the relevant facts have come to his knowledge.

(2) A disclosure under subsection (1) of this section shall be recorded in the minutes of the Board and, after the disclosure, the director—

  • (a) shall not take part in any deliberation or decision of the Board with respect to that contract; and
  • (b) shall be disregarded for the purpose of constituting a quorum of the Board for any such deliberation or decision.

(3) No act or proceeding of the Board shall be questioned on the ground that a director has contravened the provisions of this section.

Validity of acts of directors.

14. The acts of a director shall be valid notwithstanding any defect that may afterwards be discovered in his appointment or qualifications.

Secrecy.

15. (1) No director, officer, employee or agent of the Bank shall disclose to any person any information relating to the affairs of the Bank or of any person or customer of the Bank which he has acquired in the performance of his duties or the exercise of his functions:

Provided that nothing in this section shall be deemed to limit any power conferred upon the Supreme Court or a Judge thereof by the Evidence Act or to prohibit obedience to an order made under that Act or any such law.

(2) Any person who contravenes the provisions of subsection (1) of this section shall be guilty of an offence under this Act and shall be liable on conviction to imprisonment for a term not exceeding three years or to a fine not exceeding five thousand dollars, or to both such imprisonment and fine.

Directions by the Minister.

16. (1) The Minister may, after consultation with the Bank, give such general directions, not inconsistent with the provisions of this Act, as to the policy to be followed by the Bank in the exercise and performance of its powers, functions and duties under this Act as appear to the Minister to be necessary and the Bank shall, as soon as possible, give effect to any such direction.

(2) The Bank shall furnish the Minister with information with respect to its properties and activities in such manner and at such times as he may require.

Part III. Provisions Relating to Staff, Transfer of Employees, etc.

Appointment of General Manager.

17. (1) The Bank shall, with the approval of the Minister, appoint a General Manager on such terms and conditions as the Bank may think fit.

(2) The General Manager shall—

  • (a) be the chief executive officer of the Bank;
  • (b) be responsible to the Board for the proper administration and management of the Bank in accordance with the policy laid down by the Board; and
  • (c) not be removed from office without the consent of the Minister.

(3) The Minister shall consult the Public Service Commission before granting his approval under subsection (1) of this section or before giving his consent under paragraph (c) of subsection (2) of this section.

(4) If the General Manager is temporarily absent from Singapore or temporarily incapacitated by reason of illness or for other reasons temporarily unable to perform his duties, another person may be appointed by the Bank to act in the place of the General Manager during any such period of absence from duty.

List of posts and appointment of employees.

18. (1) The Bank may from time to time approve a list of posts which it thinks necessary for the purposes of this Act and may add to or amend that list. The first such list of posts shall contain posts for all the persons transferred to the service of the Bank under section 19 of this Act.

(2) No person may be employed by the Bank unless he holds a post appearing in the list of posts for the time being in force.

(3) Subject to the provisions of this section—

  • (a) appointments and promotions to all posts shall be made by the Bank; and
  • (b) the termination of appointment, dismissal, and disciplinary control of the employees of the Bank shall be vested in the Bank.

(4) Notwithstanding the provisions of this section, the Bank may appoint persons temporarily to posts in the list of posts for the time being in force.

(5) The Bank may make rules, not inconsistent with the provisions of this Act or of any other written law, for the appointment, promotion, disciplinary control and terms and conditions of service of all persons employed by the Bank.

(6) Without prejudice to the generality of subsection (5) of this section, the Bank shall prescribe the rates of remuneration payable to persons employed by the Bank, and no person so employed shall be paid otherwise than in accordance with such rates.

Transfer of employees.

19. (1) Upon the date of the coming into operation of this Act, such persons as the Minister may decide who were employed by the Government immediately prior to the date of the coming into operation of this Act and were exercising any of the powers or were discharging any of the functions or duties vested in the Bank by this Act, shall be deemed to be transferred to the service of the Bank on terms not less favourable than those they enjoyed immediately prior to their transfer and such terms (which shall be determined by the Bank) shall take into account the salaries and conditions of service including accrued rights to leave, enjoyed by them while in the employment of the Government.

(2) Notwithstanding the provisions of subsection (1) of this section, the persons who are to be transferred to the service of the Bank, with the exception of persons holding such grades as the Minister may determine, shall as soon as practicable be given the option of remaining in the service of the Government.

Pension schemes, provident fund, etc.

20. (1) The Bank may, with the approval of the Minister, make rules for the establishment of a scheme or schemes for the payment of pensions, gratuities, provident fund or other superannuation benefits to such employees or classes of employees of the Bank as it may determine, or to their legal personal representatives or dependents, on the death or retirement of such employees from the service of the Bank or on their otherwise leaving the service of the Bank.

(2) The following provisions shall apply to any scheme established under subsection (1) of this section:

  • (a) no assurance on the life of any contributor under any such scheme, and no moneys or other benefits payable under any such assurance, and no payment made under any such scheme to any person who has been employed by the Bank, shall be assignable or transferable, or liable to be garnished, attached, sequestered or levied upon for or in respect of any debt or claim whatsoever, other than a debt due to the Bank or to the Government;
  • (b) no donation by the Bank or contribution by its officers made under any such scheme and no interest thereon shall be assignable or transferable or liable to be attached, sequestered or levied upon for or in respect of any debt or claim whatsoever other than a debt due to the Bank or to the Government;
  • (c) no such donation, contribution or interest shall be subject to the debts of the contributor, nor shall such donation, contribution or interest pass to the Official Assignee on the bankruptcy of such contributor, but, if such contributor is adjudicated a bankrupt or is declared insolvent by a court, such donation, contribution or interest shall, subject to the provisions of this Act, be deemed to be subject to a trust in favour of the persons entitled thereto on the death of the contributor;
  • (d) the bankruptcy of a contributor shall not affect the making of deductions from the salary of the contributor in accordance with any such scheme, but such deductions shall continue to be made notwithstanding the provisions of any written law, and the portion of salary so deducted shall not be deemed to form part of his after-acquired property;
  • (e) subject to the provisions of any such scheme, all moneys paid or payable under any such scheme on the death of a contributor shall be deemed to be subject to a trust in favour of the persons entitled thereto under the will or intestacy of such deceased contributor, or under a nomination in such form as may be prescribed in such scheme, and shall not be deemed to form part of his estate or be subject to the payment of his debts but shall be deemed to be property passing on his death for the purposes of the Estate Duty Act;
  • (f) any contributor may by a memorandum under his hand appoint a trustee or trustees of the moneys payable on his death out of any such scheme and may make provision for the appointment of a new trustee or new trustees of such moneys and for the investment thereof; such memorandum shall be in the form prescribed in such scheme and shall be deposited with the Bank;
  • (g) if at the time of the death of any contributor or at any time afterwards, there is no trustee of such moneys or it is expedient to appoint a new trustee or new trustees, then and in any such case a trustee or trustees or a new trustee or trustees may be appointed by the Supreme Court or a Judge thereof; and
  • (h) the receipt of a trustee or trustees duly appointed, or in default of any such appointment and of written notice thereof to the Bank, the receipt of the legal personal representative of a deceased contributor shall be a discharge to the Bank for any moneys payable on his death out of any such scheme.

(3) The Bank in making rules under subsection (1) of this section relating to any pension, provident fund or other superannuation benefits which affect any person transferred to the service of the Bank under section 19 of this Act shall in such rules provide for the payment to such persons or their dependants of benefits not less in value than the amount of any pension, provident fund, gratuity or allowance for which such persons would have been eligible under the Pensions Act, had they continued in the service of the Government and any such rule relating to length of service of persons shall provide for the recognition as service under the Bank by persons so transferred of service by them under the Government.

(4) Nothing in the rules to be made under subsection (1) of this section shall adversely affect the conditions that would have been applicable to persons transferred to the service of the Bank from their service with the Government as regards any pension, gratuity or allowance payable under the Pensions Act.

(5) Where any person in the service of the Bank, who does not come within the scope and effect of any pension or other schemes established under this section, retires or dies in the service of the Bank or is discharged from such service, the Bank may grant to him or to such other person or persons wholly or partly dependent on him, as the Bank may think fit, such allowance or gratuity as the Bank may determine.

No entitlement in respect of abolition or re-organisation of office.

21. Notwithstanding the provisions of the Pensions Act, no person who is transferred to the service of the Bank under section 19 of this Act shall be entitled to claim any benefit under this Act on the ground that he has been retired from the service of the Government on account of abolition or re-organisation of office.

Remuneration not to be related to profits.

22. No salary, fee, wage or other remuneration or allowance paid by the Bank to any director, officer, employee or agent shall be computed by reference to the profits of the Bank.

Public servants.

23. The directors and the officers and employees of the Bank of every description shall be deemed to be public servants within the meaning of the Penal Code.

Part IV. Provisions Relating to the Carrying On of the Business of the Bank

Transfer of the business, etc., of the Post Office Savings Bank.

24. Upon the date of the coming into operation of this Act, all movable properties, assets, privileges, debts, liabilities and obligations vested in or belonging to, and all other business transacted by, the Post Office Savings Bank established under the Post Office Savings Bank Act shall be transferred to and vest in the Bank without further assurance and its business shall be carried on by the Bank.

Deposits and repayment.

25. Deposits of money to be paid into the Bank shall be received and repaid under such conditions as may be prescribed by the Bank.

Security of Government.

26. The repayment of all moneys deposited in the Bank together with interest thereon is guaranteed by the Government and accordingly, if at any time the assets of the Bank shall be insufficient to pay the lawful claims of every depositor, such deficiency shall be charged and paid out of the Consolidated Fund and the Minister for Finance shall certify such deficiency to Parliament without delay.

Interest rates.

27. Interest on savings and time deposit accounts shall be payable at such rate or rates as may from time to time be prescribed by the Bank with the approval of the Minister.

Service charge.

28. The Bank may levy a charge for any service rendered to its customers.

Interest on loans.

29. The Bank may charge interest on loans given to persons having an account at the Bank at such rate or rates as may from time to time be prescribed by the Bank with the approval of the Minister.

Attachment of deposits.

30. No deposit in the Bank, and no interest on any such deposit, shall be attached, sequestered or levied upon for or in respect of any debt or claim whatsoever:

Provided that—

  • (a) upon notice of a claim under a judgment of any court, it shall be lawful for the General Manager in his discretion to retain in the account a sum sufficient to answer such claim and to pay into the court on its order the amount of such claim or the total amount of the deposits and interest in the account if the claim be for a greater sum; and
  • (b) a court shall only make an order under this section if it is satisfied that the judgment debtor has an account for his own sole benefit with the Bank.

Power to administer oath.

31. (1) For the purpose of obtaining proof of the death of a customer of the Bank or of ascertaining the proper person to receive moneys standing in the name of a minor, person of unsound mind or deceased person, the General Manager, or such other officer as the General Manager shall appoint for that purpose, may take evidence on oath or affirmation according to law.

(2) Any person who upon such oath or affirmation makes any statement that is false, and which he either knows or believes to be false, or does not know to be true, shall be deemed to be guilty of an offence under section 193 of the Penal Code.

Power to appoint attorney.

32. The Bank may, by instrument under its common seal, appoint a person (whether in Singapore or in a place outside Singapore) to be its attorney, and the person so appointed may, subject to the provisions of the instrument, do any act or execute any power or function which he is authorised by the instrument to do or execute.

Settlement of disputes.

33. (1) If a dispute arises between the Bank and—

  • (a) any customer of the Bank;
  • (b) a person who claims to be the legal personal representative or next of kin or creditor of a customer of the Bank, or the assignee of a customer who is bankrupt or insolvent; or
  • (c) a person who claims to be entitled to money deposited in the Bank,

the matter shall be referred to an arbitrator to be appointed by the Minister, and whatever award, order or determination made by such arbitrator shall be binding and conclusive on all parties and shall be final to all intents and purposes without any appeal.

(2) Upon a reference under this section, an arbitrator may inspect any book belonging to the Bank, relating to the matter in dispute, and may administer an oath or affirmation to any witness appearing before him.

Part V. Financial Provisions

Bank’s financial year.

34. The financial year of the Bank shall begin on the 1st day of January and end on the 31st day of December of each year:

Provided that for the years 1971 and 1972 the financial year shall begin on the date of the establishment of the Bank and shall end on the 31st day of December, 1972.

Expenses.

35. All expenses incurred for carrying out the purposes of this Act shall be met from the funds of the Bank.

Estimates.

36. (1) The Bank shall in every year cause to be prepared and adopt annual estimates of income and expenditure of the Bank for the ensuing year.

(2) Supplementary estimates may be adopted by the Bank.

(3) A copy of all annual and supplementary estimates shall, upon their adoption by the Bank, be sent forthwith to the Minister who may approve or disallow any item or portion of any item shown in the estimates, and shall return the estimates as amended by him to the Bank and the Bank shall be bound thereby.

(4) The estimates as approved by the Minister shall be published in the Gazette.

General reserve fund.

37. The balance of the revenue of the Bank in any financial year after deducting the expenses incurred for carrying out the purposes of this Act and such sums as the Bank may think fit in respect of bad debts, depreciation of assets and other contingencies shall be applied for the creation of a general reserve fund or such other reserves or other capital fund as the Bank may deem appropriate.

Loans.

38. The Bank may, from time to time, for the purposes of this Act, raise loans from the Government or with the consent of the Minister, from any source either by the creation and issue of debentures, stocks or bonds, or otherwise, as the Minister may direct.

Investment of funds

39. (1) Subject to the provisions of this Act, moneys in the Bank shall, as far as practicable and except for such sums as may be assigned to be kept in hand for the general purposes of the Bank, be invested in such stocks, funds and securities or such other investments as the Minister for Finance may from time to time approve.

(2) Any sum of money that may from time to time be required for the repayment of deposits in the Bank or for the payment of interest thereon or expenses incurred in the execution of this Act, may be raised by the sale of the whole or a part of such securities:

Provided that any sum of money which may be required for the purposes aforesaid may, with the approval of the Minister for Finance, be advanced to the Bank by the Accountant-General out of the Consolidated Fund until they can be raised by the sale of such securities, and the Bank shall pay all interest due on such advances.

Accounts.

40. (1) The Bank shall cause proper accounts and other records in relation thereto to be kept, and an annual statement of accounts to be prepared in respect of each financial year.

(2) The annual statement of accounts of the Bank shall present a true and fair view of the financial position of the Bank and of the results, for the year to which it relates, and the operations of the Bank.

(3) All such accounts shall be submitted for audit not later than the 30th day of April in every year.

Audit.

41. (1) The Minister shall nominate in each year the Auditor-General or a company auditor (hereinafter in this Act referred to as “the Auditor”) to audit the accounts of the Bank.

(2) The Auditor shall be paid out of the revenue of the Bank such remuneration, expenses or fees as the Minister, after consultation with the Bank, shall direct.

(3) For the purpose of any audit of accounts under this Act, the Auditor may by notice in writing require the production before him of any book, deed, contract, account, voucher or other document which he may deem necessary, and may require any person holding or accountable for any such document to appear before him and make and sign a declaration with respect thereto and may require from any person such information or explanation as he deems necessary.

(4) Any person who, being required by the Auditor under subsection (3) of this section to produce any document or to appear before him and make and sign a declaration or to furnish information or explanation, fails without reasonable excuse to comply with such requisition, shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding two hundred dollars, and in the case of continuing failure to a fine not exceeding one hundred dollars for each day after the first day during which such failure continues.

Auditor’s report.

42. The Auditor shall, as soon as practicable and not later than three months after the accounts have been submitted for audit, send an annual report of his audit to the Bank. He shall also submit such periodical and special reports to the Minister and to the Bank as may appear to him to be necessary.

Annual statement of accounts.

43. (1) The Bank shall, within two months of the Auditor’s annual report, send to the Minister a statement of accounts and the balance-sheet in respect of the year for which the accounts were audited, signed by the Chairman and certified by the Auditor, together with a copy of the Auditor’s report of such annual accounts.

(2) The Minister shall cause a copy of the annual statement of accounts, balance-sheet and the Auditor’s annual report referred to in subsection (1) of this section to be presented to Parliament.

Annual report.

44. (1) The Bank shall, as soon as practicable after the end of each year, cause to be prepared and transmitted to the Minister a report dealing generally with the activities of the Bank during the preceding year and containing such information relating to the proceedings and policy of the Bank as the Minister may, from time to time, direct.

(2) The Minister shall cause a copy of every such report to be presented to Parliament.

Publication of annual report, etc.

45. The annual report, the annual statement of accounts and balance-sheet, together with the Auditor’s annual report, of the Bank shall be published in the Gazette.

Part VI. Miscellaneous

Exemption from stamp duty.

46. No power or letter of attorney or other such document given by a customer of the Bank authorising any person to make deposits in the Bank on behalf of the customer, or to sign any agreement or instrument required by the rules made under this Act to be signed on making such deposit, or to receive back any sum of money deposited in the Bank, or the interest arising therefrom, nor any bond, statutory declaration, or other instrument or document whatsoever required or authorised to be given, signed, made or produced in pursuance of this Act or the rules made thereunder, shall be subjected to or be charged with any stamp duty whatsoever.

Exemption.

47. The Bank shall be exempted from the provisions of the Banking Act and the Finance Companies Act.

Validity of acts and transactions of Bank.

48. The validity of an act or transaction of the Bank shall not be called in question in any court on the ground that any provision of this Act has not been complied with.

Power to make rules.

49. (1) The Bank may, with the approval of the Minister, make rules for the management and regulation of its business.

(2) In particular and without prejudice to the generality of the foregoing powers such rules may—

  • (a) prescribe limits of deposits;
  • (b) prescribe the modes of making deposits;
  • (c) prescribe the modes of withdrawing deposits;
  • (d) prescribe the amount of interest payable, and modes of calculating interest, on deposits;
  • (e) prescribe the times at which deposit books shall be returned to the Bank by customers;
  • (f) regulate deposits by minors, guardians, trustees, societies, bodies corporate, firms and bodies of persons acting collectively;
  • (g) prescribe conditions for the withdrawal of moneys by minors, guardians, trustees, societies, bodies corporate, firms and bodies of persons acting collectively;
  • (h) prescribe the modes of dealing with the accounts of deceased persons or of persons of unsound mind;
  • (i) prescribe the conditions governing the sale of and repayment of gift vouchers;
  • (j) prescribe the conditions upon which gift vouchers may be used for making deposits of money in the Bank;
  • (k) prescribe the conditions governing the acceptance or rejection of gift vouchers for the purpose of making deposits in the Bank;
  • (l) prescribe the conditions governing the operation of time deposit accounts;
  • (m) prescribe the conditions upon which loans may be made to customers; and
  • (n) prescribe the mode of calculating interest payable in respect of loans.

Repeal.

50. The Post Office Savings Bank Act is hereby repealed.

Transitional provisions.

51. (1) Any scheme, contract, document or arrangement constituted, prepared, made, granted or approved under the Post Office Savings Bank Act shall, except where otherwise expressly provided in this Act or in any other written law, continue and be deemed to have been constituted, prepared, made, granted or approved, as the case may be, under this Act.

(2) Any subsidiary legislation made under the Post Office Savings Bank Act, so far as such subsidiary legislation relates to matters falling within the scope of this Act, shall remain in force and have the force of rules made under this Act until it has been revoked or replaced by subsidiary legislation issued or made under this Act.

(3) Any proceeding, matter or cause of action pending or existing immediately prior to the date of the coming into operation of this Act by or against the Government in respect of any of the functions, assets, privileges, rights, obligations and liabilities transferred to, or vested in, the Bank under this Act, may be continued and enforced by or against the Bank in the name of the Government in accordance with the provisions of any written law and the practice and procedure in force relating to proceedings by or against the Government.

Securities Industry Act, 19731

An Act to consolidate and amend the law with respect to the securities industry and trading in securities and for purposes connected therewith and to repeal the Securities Industry Act, 1970 (No. 61 of 1970).

Be it enacted by the President with the advice and consent of the Parliament of Singapore, as follows:

[28th March, 1973]

Part I. Preliminary

Short title and commencement.

1. (1) This Act may be cited as the Securities Industry Act, 1973, and shall come into operation on such date as the Minister may, by notification in the Gazette, appoint.

(2) The Minister may appoint different dates for the coming into operation of the different Parts or provisions of this Act.

Interpretation.

2. (1) In this Act, unless the context otherwise requires—

“agent”, in relation to a dealer, includes a person who is or has at any time been a banker of the dealer;

“auditor” means an approved company auditor within the meaning of the Companies Act;

“business”, in relation to a dealer, means a business of dealing in securities;

“committee”, in relation to a stock exchange, means the persons for the time being in whom the management of the stock exchange is vested;

“company” has the same meaning as is assigned to that expression in the Companies Act;

“corporation” has the same meaning as is assigned to that expression in the Companies Act;

“dealer” means a person who carries on a business of dealing in securities as a corporation whether or not he carries on any other business, but does not include an exempt dealer;

“dealer’s representative” means a person, by whatever name described, in the direct employment of, or acting for, or by arrangement with, a dealer, not being an exempt dealer, who performs for that dealer any of the functions of a dealer (other than work ordinarily performed by accountants, clerks or cashiers) whether his remuneration is by way of salary, wages, commission or otherwise; and includes any director or officer of a corporation who performs for the corporation any of the said functions (whether or not his remuneration is as aforesaid);

“dealing in securities” means (whether as principal or agent) making or offering to make with any person, or inducing or attempting to induce any person to enter into or to offer to enter into—

  • (a) any agreement for or with a view to acquiring, disposing of, subscribing for, or underwriting securities; or
  • (b) any agreement the purpose or pretended purposes of which is to secure a profit to any of the parties from the yield of securities or by reference to fluctuations in the price of securities;

“director” has the same meaning as is assigned to that expression in the Companies Act;

“exempt dealer” means—

  • (a) a person who carries on a business of dealing in securities only through the holder of a dealer’s licence for his own account;
  • (b) any person acting in the capacity of manager or trustee under a unit trust scheme a deed in respect of which is approved by the Registrar or the Minister under Division 5 of Part IV of the Companies Act;
  • (c) a corporation that is authorised under any written law to be a dealer in the short term money market;
  • (d) any public statutory corporation constituted under any written law in Singapore; or
  • (e) such other person or class of persons as the Minister may by order declare to be an exempt dealer if the main business carried on by such person or class of persons is a business other than the dealing in securities, and if the dealing in securities is by way of—
    • (i) making or offering to make with any person an agreement for or with a view to the underwriting of securities;
    • (ii) making an invitation to persons to subscribe for securities or to purchase securities on the first sale thereof;
    • (iii) issuing any document which is or is deemed to be a prospectus within the meaning of the Companies Act; or
    • (iv) acquiring or disposing of securities only through the holder of a dealer’s licence;

“investment adviser” means a person who carries on a business of advising others concerning securities or who as part of a regular business issues or promulgates analyses or reports concerning securities but that expression does not include—

  • (a) a bank as defined in section 2 of the Banking Act;
  • (b) a company or society registered under the Insurance Act;
  • (c) an advocate and solicitor or accountant in practice whose carrying on of that business is solely incidental to the practice of his profession;
  • (d) a company registered under the Trust Companies Act;
  • (e) a dealer or his employee or a dealer’s representative or exempt dealer whose carrying on of that business is solely incidental to the conduct of his business of dealing in securities; or
  • (f) a person who is the proprietor of a newspaper and holder of a permit issued under the Printing Presses Act where—
    • (i) insofar as the newspaper is distributed generally to the public it is distributed only to subscribers to, and purchasers of, the newspaper for value;
    • (ii) the advice is given or the analyses or reports are issued or promulgated only through that newspaper;
    • (iii) that person receives no commission or other consideration for giving the advice or for issuing or promulgating the analyses or reports; and
    • (iv) the advice is given and the analyses and reports are issued or promulgated solely as incidental to the conduct of that person’s business as a newspaper proprietor.

“investment representative” means a person in the direct employment of or acting for or by arrangement with an investment adviser who performs for such investment adviser any of the functions of an investment adviser (other than work ordinarily performed by accountants, clerks or cashiers) whether his remuneration is by way of salary, wages, commission or otherwise; and includes any director or officer of a corporation who performs for such corporation any of the said functions (whether or not his remuneration is as aforesaid);

“licence” means—

  • (a) a dealer s licence;
  • (b) an investment adviser’s licence; or
  • (c) a representative’s licence,

under Part IV;

“member company” means a company which carries on a business of dealing in securities and is recognized as a member company by a stock exchange;

“Minister” means the Minister for Finance;

“Registrar” means the Registrar of Companies under the Companies Act, and includes any Deputy or Assistant Registrar of Companies;

“relevant authority” means—

  • (a)2
  • (b) in relation to a member company, the stock exchange by which the company is recognized; and
  • (c) in relation to any other person, the Registrar;

“representative” means a dealer’s representative or an investment adviser’s representative;

“rules”, in relation to a stock exchange, means the rules governing the conduct of the stock exchange or the members thereof by whatever name called and wherever contained and includes rules contained in the memorandum of association and the articles of association of the stock exchange;

“securities” means debentures, stocks and shares in a public company or corporation, funds or bonds of any government or of any body, corporate or unincorporate, and includes any right or option in respect thereof and any interest as defined in section 84 of the Companies Act;

“stockbroker” means a person who is a member of a stock exchange and a director of a member company;

“stock exchange” means any body corporate which has been approved by the Minister under subsection (2) of section 6;

“stock market” means a market, exchange or other place at which securities are regularly offered for sale, purchase or exchange;

“trust account” means a trust account established under section 37;

“unit trust scheme” means any arrangement made for the purpose, or having the effect of providing facilities for the participation by persons as beneficiaries under a trust, or profits or income arising from the acquisition, holding, management or disposal of securities or any other property.

(2) Regulations may provide that, subject to any terms and conditions prescribed, all or any of the provisions of this Act—

  • (a) shall not have effect in relation to any specified person or to any person who is a member of a specified class of persons—
    • (i) who is or may be a dealer or investment adviser by reason only of his doing anything which is merely incidental to another business;
    • (ii) who does not deal in securities for or on behalf of any other person; or
    • (iii) who is a dealer or investment adviser by reason only of the entering into by him of any specified transaction or class of transactions; or
  • (b) shall not have effect in relation to the representative of any person referred to in paragraph (a); or
  • (c) shall have effect in relation to any person referred to in paragraph (a) or (b) to such extent as is prescribed.

Part II. Administration

Consultative or advisory body.

3. (1) The Minister may establish from time to time such consultative or advisory body, as he thinks fit, consisting of such representatives of business, government and the Monetary Authority of Singapore as he may appoint, to advise him on matters relating to the securities industry.

(2) Any consultative or advisory body established under subsection (1) shall have the power in the exercise of its functions to enquire into any matter or thing related to the securities industry and for this purpose may summon any person to give evidence on oath or affirmation or produce any document or material necessary for the purpose of the enquiry.

Registrar may consult advisory body.

4. The Registrar may from time to time and shall, if so directed by the Minister, consult the opinion of the body referred to in section 3 for the proper and effective implementation of this Act.

Part III. Stock Exchanges

Establishment, etc., of stock markets.

5. (1) No person shall establish or maintain or assist in establishing or maintaining or hold himself out as providing or maintaining a stock market that is not the stock market of a stock exchange.

(2) Any person who contravenes the provisions of subsection (1) shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding three thousand dollars and in the case of a second or subsequent conviction to a fine not exceeding fifteen thousand dollars.

Power of Minister to approve a stock exchange.

6. (1) Application for approval as a stock exchange may be made to the Minister in the prescribed form and manner.

(2) The Minister may in writing approve a body corporate as a stock exchange if he is satisfied—

  • (a) that at least ten members of the body will carry on business dealing in securities independently of and in competition with each other;
  • (b) that the rules of the body make satisfactory provision—
    • (i) for the exclusion from membership of persons who are not of good character and high business integrity;
    • (ii) for the expulsion, suspension or disciplining of members for conduct inconsistent with just and equitable principles in the transaction of business or for a contravention of or failure to comply with the rules of the stock exchange or the provisions of this Act;
    • (iii) with respect to the conditions under which securities may be listed for trading in the market proposed to be conducted by the body;
    • (iv) with respect to the conditions governing dealings in securities by members;
    • (v) with respect to the class or classes of securities that may be dealt in by members; and
    • (vi) generally for the carrying on of the business of the stock exchange with due regard to the interests of the public; and
  • (c) that the interests of the public will be served by the granting of his approval.

Minister to approve amendments to rules.

7. (1) Where an amendment is made, whether by way of rescission, alteration or addition, to the rules of a stock exchange the committee of the stock exchange shall forward a written notice thereof to the Minister for approval.

(2) 3

(3) The Minister may give notice to the stock exchange concerned that he approves the amendment or that he disapproves the whole or any specified part of the amendment in question and until such notice is given the amendment shall not have force and effect.

(4) Any notice under this section may be served personally or by post.

Part IV. Licences

Application of this Part.

8. Where a person would, but for this section, be liable to a penalty for not being the holder of a particular type of licence, he shall not be so liable—

  • (a) until the expiration of the period of six months (or such further period as the Minister may specify) next succeeding the date of the coming into operation of this Part; or
  • (b) where, before the expiration of that period, he applies for that type of licence, until—
    • (i) he is issued with such a licence; or
    • (ii) his application is refused.

Dealer’s licence.

9. (1) No person shall carry on a business of dealing in securities or hold himself out as carrying on such a business unless he is the holder of a dealer’s licence under this Part.

(2) Subsection (1) shall not apply to an exempt dealer.

Dealer’s representative’s licence.

10. No person shall act as a dealer’s representative unless he is the holder of a dealer’s representative’s licence under this Part.

Investment adviser’s licence.

11. (1) A person shall not act as an investment adviser or hold himself out to be an investment adviser unless he is the holder of an investment adviser’s licence under this Part.

(2) 4

Investment representative’s licence.

12. A person shall not act as an investment representative unless he is the holder of an investment representative’s licence under this Part.

Applications for licence or renewal.

13. (1) An application for a licence or for the renewal of a licence shall be made to the Registrar in the prescribed form and manner and shall be accompanied by the prescribed fee and, in the case of an application for renewal of a licence, shall be made within one month before the expiry of the licence.

(2) The Registrar may require an applicant to supply him with such further information as he considers necessary in relation to the application.

(3) The Registrar shall not refuse to grant or renew a licence without first giving the applicant an opportunity of being heard.

Registrar to grant or renew dealer’s licence to a corporation or investment adviser’s licence to an individual or corporation in certain circumstances.

14. (1) A dealer’s licence shall only be granted to a corporation.

(2) The Registrar shall grant or renew a dealer’s licence if—

  • (a) after consideration of the character of the directors and secretary of the corporation and of the corporation’s financial position; and
  • (b) after consideration of the interests of the public,

he is of the opinion that the applicant corporation is a fit and proper person to hold the licence applied for.

(3) The Registrar shall grant or renew an investment adviser’s licence if—

  • (a) after consideration—
    • (i) where the applicant is an individual—of the character and financial position of the applicant;
    • (ii) where the applicant is a corporation—of the character of the directors and secretary of the corporation and of the corporation’s financial position; and
  • (b) after consideration of the interests of the public,

he is of the opinion that the applicant is a fit and proper person to hold the licence applied for.

Registrar to grant or renew representative’s licence in certain circumstances.

15. The Registrar shall grant or renew a representative’s licence if after consideration of the application he is of the opinion that the applicant is a fit and proper person to hold the licence applied for.

False statements.

16. A person who in connection with an application for a licence or for the renewal of a licence wilfully makes a statement false or misleading in a material particular knowing it to be false or misleading or wilfully omits to state any matter or thing without which the application is misleading in a material respect shall be guilty of an offence under this Act and shall be liable on conviction to a fine of three thousand dollars or to imprisonment for a term of one year or to both such fine and imprisonment.

Power of the Registrar to enquire into share transactions.

17. (1) In deciding whether a dealer or his representative or an investment adviser or his representative is a fit and proper person to hold a licence under this Act the Registrar may enquire into any transactions involving the purchase or sale of securities entered into by that person, whether directly or indirectly, during any period of twelve months preceding the application for a licence or renewal of a licence, as the case may be (referred to in this section as “the relevant period”) to ascertain if that person has in such transaction or series of transactions used dishonest, unfair or unethical devices or trading practices, whether such devices or trading practices constitute an offence under this Act or otherwise.

(2) For the purposes of subsection (1) the Registrar may, in such form and within such time as he may specify by notice in writing, require a dealer or his representative or an investment adviser or his representative to submit detailed information of all or any transactions involving the purchase or sale of securities, whether such transactions were completed—during the relevant period—before or after the date of the coming into operation of this Act.

(3) Any person who fails or refuses to submit information to the Registrar within the time specified in the notice referred to in subsection (2) or who gives false or misleading information shall, in addition to any other penalty that may be imposed under this Act, be liable in the case of an application for renewal of a licence to have his licence cancelled under section 23 and in the case of first application for a licence to have his application rejected.

Power of Registrar to impose conditions or restrictions.

18. (1) The Registrar may grant or renew a licence subject to such conditions or restrictions as he thinks fit.

(2) A person who contravenes or fails to comply with any condition of, or restriction in, his licence shall be guilty of an offence under this Act.

Security to be lodged in respect of dealer’s licence.

19. (1) Except in the case of a dealer who is a member company, the Registrar shall not grant or renew a dealer’s licence unless there is lodged with the Accountant-General a security in the sum of one hundred thousand dollars (or such greater sum as the Minister may by order determine) in respect of the licence.

(2) A security required by subsection (1) shall be by cash deposit or by such other method as the Accountant-General may in any particular case allow.

(3) A security lodged under subsection (1) shall be applied by the Accountant-General subject to and in accordance with the regulations made under this Act.

Period of licence.

20. (1) Subject to subsection (2), a licence shall expire one year after the date of issue thereof.

(2) A licence that has been renewed in accordance with the provisions of this Part shall continue in force for a period of twelve months next succeeding the date upon which but for its renewal it would have expired.

Change of address.

21. (1) The holder of a dealer’s licence or investment adviser’s licence shall, upon any change in the address of the principal place of business at which he carries on the business in respect of which the licence is held, forthwith notify the Registrar of the new address in the prescribed form and, upon ceasing to carry on that business, shall forthwith so notify the Registrar in writing.

(2) The holder of a representative’s licence who ceases to be a representative of the dealer or investment adviser in relation to whom the representative’s licence was issued shall forthwith so notify the Registrar in writing.

(3) No holder of a representative’s licence shall work for or have an arrangement with a dealer or investment adviser who is not the dealer or investment adviser in relation to which his licence was issued unless he has lodged a notice in the prescribed form with the Registrar.

Register of licence holders.

22. (1) The Registrar shall keep in such form as he thinks fit a register of the holders of current licences, specifying—

  • (a) in relation to each holder of a dealer’s or investment adviser’s licence—
    • (i) his name;
    • (ii) the address of the principal place of business at which he carries on the business in respect of which the licence is held; and
    • (iii) where the business is carried on under a name or style other than the name of the holder of the licence, the name or style under which the business is carried on; and
  • (b) in relation to each holder of a representative’s licence—
    • (i) his name;
    • (ii) the name of the dealer or investment adviser in relation to whom the licence was issued; and
    • (iii) where the business of that dealer or investment adviser is carried on under a name or style other than the name of the dealer or investment adviser, the name or style under which that business is carried on.

(2) Any person may, upon payment of the prescribed fee, inspect and take extracts from the register kept under subsection (1).

(3) Except as provided in subsection (2), the power of inspection conferred by paragraph (a) of subsection (2) of section 11 of the Companies Act, shall not apply in respect of a document filed or lodged with the Registrar under this Act.

Power of Registrar to cancel licence, etc.

23. (1) The holder of a licence may be required to appear before the Registrar to show cause why his licence should not be cancelled and why he should not be disqualified either permanently or temporarily from holding such a licence—

  • (a) in the case of an individual—on the ground that he is not a fit and proper person to hold the licence; or
  • (b) in the case of a corporation—on the ground that the corporation is not a fit and proper person to hold the licence or that any director or secretary of the corporation is not a fit and proper person to be a director or secretary (as the case may be) of a corporation holding such a licence.

(2) On being satisfied that the relevant ground referred to in subsection (1) has been established the Registrar may order that the licence of the person concerned be cancelled and that that person be disqualified, either permanently or for such period as the Registrar may specify, from holding another such licence.

Appeals.

24. (1) Any person who is aggrieved by any decision of the Registrar under this Part, other than a decision under section 23, may appeal to the Minister and any person who is aggrieved by the decision of the Registrar under section 23 may appeal to the High Court so long as the appeal in each case is made within thirty days of the decision of the Registrar.

(2) In any appeal under this section the decision of the Minister or the Court, as the case may be, shall be final and shall be given effect to by the Registrar.

Part V. Records

Application of this Part.

25. (1) This Part applies to a person who is—

  • (a) a dealer;
  • (b) a dealer’s representative;
  • (c) an investment adviser;
  • (d) an investment representative; or
  • (e)5
  • (f) a financial journalist.

(2) In this Part “financial journalist” means a person who contributes advice concerning securities or prepares analyses or reports concerning securities for publication in a bona fide newspaper or periodical.

(3) In this Part a reference to securities is a reference to securities which are quoted on a stock exchange in Singapore.

Register of securities.

26. (1) A person to whom this Part applies shall maintain a register in the prescribed form of the securities in which he has an interest.

(2) 6

(3) Particulars of the securities in which a person to whom this Part applies has an interest and particulars of his interest in those securities shall be entered in the register within seven days of the acquisition of the interest or of the date of the coming into operation of this Act.

(4) For the purposes of this section—

  • (a) where a person has an interest under a trust and the property subject to the trust consists of or includes securities and a person knows or has reasonable grounds for believing that he has an interest under the trust and that the property subject to the trust consists of or includes those securities that person shall be deemed to have an interest in those securities;
  • (b) where a body corporate has an interest in securities and—
    • (i) the body corporate 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 in relation to those securities; or
    • (ii) a person has, the associates of a person have, or a person and his associate have, a controlling interest in the body corporate,
    • that person shall be deemed to have an interest in those securities; and
  • (c) where a body corporate that has not more than twenty members has an interest in securities a person who is a member of the body corporate and an associate of such a person shall be deemed to have an interest in those securities.

(5) (a) Where there is a change (not being a prescribed change) in the interest or interests of a person to whom this Part applies in securities he shall enter in the register full particulars of the change including the date of the change and the circumstances by reason of which that change has occurred.

  • (b) The entry shall be made within seven days after the date of the change.
  • (c) For the purposes of this subsection where a person acquires or disposes of securities there shall be deemed to be a change in the interest or interests of that person.

(6) For the purposes of paragraphs (b) and (c) of subsection (4) a person is an associate of another person if the first-mentioned person would be an associate of another person for the purposes of paragraph (c) of subsection (4) of section 6A of the Companies Act.

(7) In determining for the purposes of this section whether a person has an interest in a security the provisions of subsection (3) and subsections (6) to (10) both inclusive of section 6A of the Companies Act shall have effect and in applying those provisions a reference to a share shall be read as a reference to a security.

Notice of particulars to Registrar.

27. (1) A person to whom this Part applies shall give notice to the Registrar in the prescribed form containing such particulars as are prescribed including the place at which he will keep the register of his interests in securities.

(2) The notice shall be given—

  • (a) in the case of a person who is required by this Act to hold a licence—as part of his application for the licence; or
  • (b) in the case of any other person—
    • (i) if the person is a person to whom this Part applies at the commencement of this Act—within one month after that date; or
    • (ii) if the person becomes a person to whom this Part applies after that date—within fourteen days after becoming such a person.

(3) The notice shall be so given notwithstanding that the person has ceased to be a person to whom this Part applies before the expiration of the period referred to in subsection (2).

(4) A person who ceases to be a person to whom this Part applies shall, within fourteen days of his so ceasing, give notice of the fact in the prescribed form to the Registrar.

(5) A person who fails or neglects to give notice as required by this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine of one thousand dollars.

Reference to prosecution.

28. (1) It is a defence to a prosecution for failing to comply with section 26 or 27 if the defendant proves that his failure was due to his not being aware of a fact or occurrence the existence of which was necessary to constitute the offence and that—

  • (a) he was not so aware on the date of the summons;
  • (b) he became so aware less than fourteen days before the date of the summons; or
  • (c) he became so aware not less than fourteen days before the date of the summons and complied with the relevant section within fourteen days after becoming so aware.

(2) For the purposes of subsection (1), a person shall conclusively be presumed to have been aware of a fact or occurrence at a particular time of which a servant or agent of the person being a servant or agent having duties or acting in relation to his master’s or principal’s interest or interests in the securities concerned, was aware at that time.

Production of register.

29. (1) The Registrar or any person authorised by him in that behalf may require any person to whom this Part applies to produce for inspection the register required to be kept pursuant to section 26 and the Registrar or any person so authorised may make extracts from the register.

(2) Any person who fails to produce a register for inspection or fails to allow any person authorised by or under subsection (1) to make a copy of or make extracts from the register shall be guilty of an offence under this Act.

Particulars of financial journalists.

30. (1) The Registrar or any person authorised by him in that behalf may by notice in writing require the proprietor or publisher of a newspaper or periodical to supply him with the name and address of the financial journalist who has contributed any advice or prepared any analysis or report that has been published in a newspaper or periodical owned or published by that proprietor or publisher or with the names and addresses of all the financial journalists who have contributed any such advice or prepared any such analysis or report within a period specified in the notice.

(2) A proprietor or publisher of a newspaper or periodical who wilfully fails to comply with a notice under subsection (1) shall be guilty of an offence under this Act.

Extract of register.

31. The Registrar may supply a copy of the extract of a register obtained pursuant to section 29 to any person who in the opinion of the Registrar should in the public interest be informed of the dealing in securities disclosed in the register.

Part VI. Conduct of Securities Business

Certain representations prohibited.

32. (1) No person who is the holder of a licence shall represent or imply or knowingly permit to be represented or implied in any manner to any person that his abilities or qualifications have in any respect been approved by the Registrar.

(2) The statement that a person is the holder of a licence under this Act is not a contravention of this section.

Disclosure of certain interest.

33. Where, in a letter, circular or other communication issued by any person [that person] 7 refers to any securities issued by a corporation or other person, he shall cause to be included in the letter, circular or other communication, in type not less legible than that used in the body thereof, a concise statement of the nature and extent of his interest, if any, in the securities.

Dealings as principal.

34. (1) A dealer shall not, as principal, deal in any securities with a person who is not the holder of a dealer’s licence unless he first informs the person with whom he is dealing that he is acting in the transaction as principal and not as agent.

(2) For the purposes of subsection (1) dealings as principal include dealings on behalf of a corporation in which the dealer or its directors have a controlling interest.

(3) Where a dealer has failed to comply with subsection (1) in respect of a contract for the sale of securities by him, the purchaser of the securities may, if he has not disposed of them, rescind the contract by a notice of rescission, in writing, given to the dealer within seven days after the receipt of the contract note and, where a dealer has failed to comply with that subsection in respect of a contract for the purchase of securities by him, the vendor of the securities may, in the like manner, rescind the contract.

Part VII. Accounts and Audit

Application of this Part.

35. This Part applies to and in relation to the business of a dealer within the meaning of this Act, whether that business is carried on in Singapore or elsewhere.

Accounts to be kept by dealers.

36. (1) A dealer shall keep or cause to be kept in the English language such accounting and other records as will sufficiently explain the transactions and financial position of his business and enable true and fair profit and loss accounts and balance-sheets to be prepared from time to time and shall cause those records to be kept in such a manner as to enable them to be conveniently and properly audited.

(2) If accounting and other records are kept by a dealer at a place outside Singapore the dealer shall cause to be sent to and kept at a place in Singapore such statements and returns with respect to the business dealt with in those records as will enable to be prepared true and fair profit and loss accounts and balance-sheets.

(3) Without affecting the generality of subsection (1) a dealer shall keep or cause to be kept the following accounts and records:

  • (a) a Bought and Sold Book recording the name of the buyer and the seller respectively of every security bought or sold by the dealer in the course of his business;
  • (b) a Scrip Receipt Book containing copies of acknowledgments of receipt of securities received by the dealer from clients for sale or safe custody and clearly showing the name or names in which the particular securities are registered;
  • (c) a Cash Book containing entries of all amounts paid or received by the dealer in the course of his business;
  • (d) a Journal;
  • (e) a Ledger or Ledgers showing all transactions—
    • (i) with clients of the dealer;
    • (ii) with other dealers; and
    • (iii) in respect of nominal or private accounts;
  • (f) a General Scrip Register recording the receipt and disposal by the dealer of all securities other than those dealt with in the Safe Custody Scrip Register;
  • (g) a Safe Custody Scrip Register recording all securities held by the dealer for safe custody; and
  • (h) an Underwriting Register recording all underwriting and sub-underwriting transactions entered into by the dealer.

(4) Every entry in a Safe Custody Scrip Register and in an Underwriting Register kept by a dealer shall be dated and initialled by the person making the entry.

(5) For the purposes of this section any account or record required to be kept by a dealer may be kept either by making entries in a bound book or by recording the matters in question in any other manner, as approved by the Registrar.

(6) Where any account or record required by this section to be kept is not kept by making entries in a bound book but by some other means the dealer concerned shall take reasonable precautions for guarding against falsification and for facilitating discovery of any falsification.

Certain moneys received by dealers to be paid into a trust account.

37. (1) A dealer shall establish and keep in a bank or banks in Singapore one or more trust accounts designated or evidenced as such into which he shall pay—

  • (a) all amounts (less any brokerage and other proper charges) that are received from or on account of any person (other than a dealer) for the purchase of securities and that are not attributable to securities delivered to the dealer before or within five bank trading days after receipt of those amounts; and
  • (b) all amounts (less any brokerage and other proper charges) that are received for or on account of any person (other than a dealer) from the sale of securities and that are not paid to that person or as that person directs within five bank trading days after receipt of such amounts.

(2) A person who—

  • (a) contravenes or fails to comply with any provision of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding two thousand dollars; or
  • (b) with intent to defraud contravenes or fails to comply with any provision of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding three thousand dollars or to imprisonment for a term not exceeding two years or to both such fine and imprisonment.

Purposes for which money may be withdrawn from trust account.

38. A dealer shall not withdraw any moneys from a trust account except for the purpose of making a payment—

  • (a) to the person entitled thereto; or
  • (b)8
  • (c) that is otherwise authorized by law.

Moneys in trust accounts not available for payment of debts, etc.

39. Save as otherwise provided in this Part, moneys held in a trust account shall not be available for payment of the debts of a dealer or be liable to be paid or taken in execution under an order or process of any court.

Claims and liens not affected.

40. Nothing in this Part shall be construed as taking away or affecting any lawful claim or lien which any person has against or upon any moneys held in a trust account or against or upon any moneys received for the purchase of securities or from the sale of securities before such moneys are paid into a trust account.

Dealer to appoint auditor.

41. A dealer shall appoint an auditor to audit his accounts and where for any reason the auditor ceases to hold that office the dealer shall within fourteen days appoint another auditor.

Dealer to lodge auditor’s report.

42. (1) A dealer shall within six months of the end of the financial year lodge with the relevant authority an auditor’s report containing information on such matters as are prescribed.

(2) If a dealer fails to comply with the provisions of subsection (1) the relevant authority shall forthwith report the matter to the Minister.

(3) For the purposes of subsection (1) “financial year” has the meaning assigned to that expression in the Companies Act.

Auditor to send report to relevant authority in certain cases.

43. Where in the performance of his duties as auditor for a dealer an auditor becomes aware of any matter which in his opinion may adversely affect the financial position of the dealer to a material extent or may constitute a breach of section 36, 37 or 38 he shall within seven days send a report in writing on such matter to the relevant authority and a copy thereof to the dealer.

Report of Auditor to be forworded to Minister in certain cases.

44. (1) If after consideration of an auditor’s report furnished under section 43 the relevant authority is not satisfied—

  • (a) that the financial position of the dealer in respect of whom the report is made is such as to enable him to meet all his commitments as a dealer; and
  • (b) that the dealer has complied with the requirements of this Act,

the relevant authority shall, and for any other reason which it thinks proper, the relevant authority may, forward the said report to the Minister with any further report thereon which it thinks proper to make.

(2) It shall be a defence to any proceedings in defamation in respect of any statement made in any such report of an auditor or in any such further report of the relevant authority if the defendant satisfies the court that the statement was made bona fide and without malice.

Power of Minister to appoint independent auditor, etc.

45. (1) Where the Minister has received—

  • (a) a report under subsection (2) of section 42 from the relevant authority; or
  • (b) an auditor’s report forwarded to him pursuant to section 44 by a relevant authority,

he may, if he is satisfied that it is in the interests of the dealer concerned, the dealer’s clients or the public generally to do so, appoint in writing an independent auditor or such other person or body of persons as he may decide to examine, audit and report either generally or in relation to any particular matter upon the books, accounts and records of and securities held by the dealer.

(2) Where the Minister is of opinion that the whole or any part of the costs and expenses of an auditor appointed by him under this section and section 46 should be borne by the dealer or relevant authority concerned, he may, by order in writing, direct such dealer or relevant authority to pay a specified amount, being the whole or part of such costs and expenses, within the time and in the manner specified.

(3) Where a dealer or relevant authority has failed to comply with an order of the Minister under subsection (2) proceedings may be taken by the Minister in any court of competent jurisdiction to recover the amount in question as a civil debt recoverable summarily.

Power of Minister to appoint independent auditor, etc., upon application of client.

46. (1) Upon receipt of an application in writing from a person who alleges that a dealer has failed to account to him in respect of any moneys or securities held or received by that dealer for or on his behalf, the Minister may appoint in writing an independent auditor or such other person or body of persons as he may decide to examine, audit and report either generally or in relation to any particular matter upon the books, accounts and records of and securities held by that dealer.

(2) Every application under subsection (1) shall state—

  • (a) the particulars of the circumstances under which the dealer received the moneys or securities in respect of which he is alleged to have failed to account;
  • (b) the particulars of those moneys or securities and of the transactions of the applicant and the dealer relating thereto; and
  • (c) such other particulars as are prescribed.

(3) Every statement in any such application shall be verified by a statutory declaration made by the applicant and shall, if made bona fide and without malice, be privileged.

(4) The Minister shall not appoint an independent auditor, person or body of persons under subsection (1) unless he is satisfied—

  • (a) that the applicant has good reason for making the application; and
  • (b) that it is expedient in the interests of the dealer or the applicant or the public generally that the books, accounts and records of and securities held by the dealer should be examined, audited and reported upon.

Auditor, etc., to report to Minister.

47. An independent auditor, a person or body of persons, as the case may be, appointed by the Minister under section 45 or 46 shall, upon the conclusion of the examination and audit in respect of which he was appointed, make a report thereon to the Minister.

Powers of auditor, etc.

48. An independent auditor, a person or body of persons, as the case may be, appointed by the Minister to examine and audit the books, accounts and records of and securities held by a dealer may for the purpose of carrying out such examination and audit—

  • (a) examine on oath any director, manager or secretary of that dealer and any of the dealer’s servants and agents and any other auditor appointed under this Act in relation to those books, accounts, records and securities;
  • (b) employ such persons as he considers necessary; and
  • (c) by instrument in writing under his hand authorize any person employed by him to do, in relation to such examination and audit, any act or thing that he could himself do in his capacity as auditor, except to examine any person on oath or to exercise the powers conferred by this paragraph.

Prohibition against communication of certain matters by auditor, etc., and employees.

49. Except for the purpose of carrying into effect the provisions of this Act, or so far as may be required for the purpose of any proceedings, civil or criminal, an independent auditor, a person or body of persons, as the case may be, appointed by the Minister under section 45 or 46 and an employee of any such auditor shall not communicate any matter which may come to his knowledge in the performance of his duties as such auditor or employee, to any person other than the Minister, or to the relevant authority in relation to the dealer concerned, or to any other person specified by the Minister or such relevant authority or, in the case of an employee, to any person other than the auditor by whom he is employed.

Books, accounts and records to be produced upon demand.

50. (1) Upon request by an independent auditor, a person or body of persons, as the case may be, appointed by the Minister under section 45 or 46 or by a person who produces a written authority in that behalf given under paragraph (c) of section 48—

  • (a) a director, manager or secretary of a dealer and the dealer’s servants and agents shall produce any books, accounts, records and securities held by the dealer relating to his business; and
  • (b) an auditor appointed by a dealer shall produce any books, accounts and records held by him relating to the business of the dealer.

(2) A director, manager or secretary of a dealer and the dealer’s servants and agents and any auditor appointed by the dealer, shall answer all questions relevant to an examination and audit which are put to him by an independent auditor, a person or body of persons, as the case may be, appointed by the Minister under section 45 or 46 or by a person who produces a written authority in that behalf given under paragraph (c) of section 48.

(3) Any person who contravenes or fails to comply with the provisions of subsection (1) or (2) shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding three thousand dollars or to imprisonment for a term not exceeding two years or to both such fine and imprisonment.

Penalty for destroying, concealing or altering records or sending records or other property out of Singapore.

51. (1) A person who, with intent to defeat the purposes of this Part or with intent to prevent, delay or obstruct the carrying out of any examination and audit under this Part—

  • (a) destroys, conceals or alters any book, account, record or document relating to the business of a dealer; or
  • (b) sends or attempts to send or conspires with any other person to send out of Singapore any such book, account, record or document or any property of any description belonging to or in the disposition of or under the control of a dealer,

shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding three thousand dollars or to imprisonment for a term not exceeding two years or to both such fine and imprisonment.

(2) If in a prosecution for an offence under subsection (1) it is proved that the person charged—

  • (a) destroyed, concealed or altered any book, account, record or document referred to in subsection (1); or
  • (b) sent or attempted to send or conspired to send out of Singapore any such book, account, record or document or any property referred to in subsection (1),

the onus of proving that in so doing he did not act with intent to defeat the purposes of this Part or with intent to prevent delay or obstruct the carrying out of an examination and audit under this Part shall lie on him.

Right of committee to impose obligations, etc., on member companies not affected by this Part.

52. Nothing contained in this Part shall prevent the committee of a stock exchange from imposing on the member companies any further obligations or requirements which the committee thinks fit with respect to—

  • (a) the audit of accounts;
  • (b) the information to be furnished in reports from auditors; or
  • (c) the keeping of accounts, books and records.

Part VIII9

Part IX. Fidelity Funds

Interpretation.

60. In this Part, unless inconsistent with the context or subject-matter—

“committee”, in relation to a fidelity fund of a stock exchange, means the committee of that stock exchange;

“Court” means the High Court;

“fidelity fund” or “fund” means a fidelity fund established under section 61;

“stock exchange” means, in relation to a fidelity fund, the stock exchange which established the fidelity fund.

Establishment of fidelity funds.

61. (1) A stock exchange shall establish and keep a fidelity fund which shall be administered by the committee on behalf of the stock exchange.

(2) The assets of a fidelity fund shall be the property of the stock exchange but shall be kept separate from all other property and shall be held in trust for the purposes set out in this Part.

Moneys constituting fidelity fund.

62. The fidelity fund of a stock exchange shall consist of—

  • (a) all moneys paid to the stock exchange by member companies in accordance with the provisions of this Part;
  • (b)10
  • (c) the interest and profits from time to time accruing from the investment of the fund;
  • (d) all moneys paid to the fund by the stock exchange;
  • (e) all moneys recovered by or on behalf of the stock exchange in the exercise of any right of action conferred by this Part;
  • (f) all moneys paid by an insurer pursuant to a contract of insurance or indemnity entered into by the committee of the stock exchange under section 82; and
  • (g) all other moneys lawfully paid into the fund.

Fund to be kept in separate bank account.

63. All moneys forming part of a fidelity fund shall, pending the investment or application thereof in accordance with this Part, be paid or transferred into a bank in Singapore.

Payments out of fund.

64. Subject to this Part, there shall from time to time be paid out of the fidelity fund of a stock exchange as required and in such order as the committee deems proper—

  • (a) the amount of all claims, including costs, allowed by the committee or established against the stock exchange under this Part;
  • (b) all legal and other expenses incurred in investigating or defending claims made under this Part or incurred in relation to the fund or in the exercise by the committee of the rights, powers and authorities vested in it by this Part in relation to the fund;
  • (c) all premiums payable in respect of contracts of insurance or indemnity entered into by the committee under section 82;
  • (d) the expenses incurred or involved in the administration of the fund including the salaries and wages of persons employed by the committee in relation thereto; and
  • (e) all other moneys payable out of the fund in accordance with the provisions of this Act.

Accounts of fund.

65. (1) A stock exchange shall establish and keep proper accounts of its fidelity fund and shall before the 31st day of March in each year cause a balance-sheet in respect of such accounts to be made out as at the preceding 30th day of June.

(2) The committee of the stock exchange shall appoint an auditor to audit the accounts of the fidelity fund.

(3) The auditor appointed by the committee shall regularly and fully audit the accounts of the fidelity fund and shall audit each balance-sheet and cause it to be laid before the committee not later than three months after the balance-sheet was made out.

Management sub-committee.

66. (1) The committee of a stock exchange may appoint a management sub-committee of not less than three and not more than five persons being members of the stock exchange, at least one of whom is also a member of the committee.

(2) The committee of a stock exchange may by resolution delegate to a sub-committee appointed by it under this section all or any of its powers, authorities and discretions under this Part (other than those under this section, section 69, subsections (3), (4) and (5) of section 72).

(3) Any power, authority or discretion so delegated may be exercised by members forming a majority of the sub-committee as if by this Part that power, authority or discretion had been conferred on a majority of the members of the sub-committee.

(4) Any such delegation may at any time in like manner be rescinded or varied.

(5) The committee of a stock exchange may at any time remove any member of a sub-committee appointed by it under this section and may fill any vacancy in the sub-committee howsoever arising.

Fidelity fund to consist of an amount of two million dollars.

67. (1) The fidelity fund of a stock exchange shall consist of an amount of not less than two million dollars, or such other sum as may by order be determined by the Minister from time to time, to be paid to the credit of the fund on the establishment of a stock exchange under this Act.

(2) The fidelity fund shall be increased by an annual payment into the fund of a sum that is equal to ten per cent or more of the net income of a stock exchange for any one financial year.

Provisions if fund is reduced below two million dollars.

68. If the fidelity fund is reduced below the sum of two million dollars or such other sum as the Minister may, by order, determine, the committee shall take steps to make up the deficiency—

  • (a) by transferring an amount that is equal to the deficiency from other funds of a stock exchange to the fidelity fund; or
  • (b) in the event that there are insufficient funds to transfer under paragraph (a), by determining the amount which each member company shall contribute to the fund.

Levy to meet liabilities.

69. (1) If at any time a fidelity fund is not sufficient to satisfy the liabilities that are then ascertained of the stock exchange in relation thereto, the committee may impose on every member company a levy of such amount as it thinks fit.

(2) The amount of such levy shall be paid within the time and in the manner specified by the committee either generally or in relation to any particular case.

(3) No member company shall be required to pay by way of levy under this section more than one hundred thousand dollars in the aggregate.

Power of stock exchange to make advances to fund.

70. (1) A stock exchange may from time to time from its general funds give or advance on such terms as the committee thinks fit any sums of money to its fidelity fund.

(2) Any moneys advanced under subsection (1) may from time to time be repaid from the fidelity fund to the general funds of the stock exchange.

Investment of fund.

71. Any moneys in a fidelity fund that are not immediately required for its purposes may be invested by the committee in any manner in which trustees are for the time being authorized by law to invest trust funds.

Application of fund.

72. (1) Subject to this Part, a fidelity fund shall be held and applied for the purpose of compensating persons who suffer pecuniary loss from any defalcation committed by a member company or any of its directors or by any of the clerks or servants of such a member company in relation to any money or other property which, whether before or after the date of the coming into operation of this Act, in the course of or in connection with the business of that company—

  • (a) was entrusted to or received by a member company or any of its directors or any of the company’s clerks or servants for or on behalf of any other person; or
  • (b) (the member company being in respect of the money or other property either the sole trustee or trustees or trustee or trustees with any other person or persons) was entrusted to or received by the member company or any of its directors or any of the company’s clerks or servants as trustee or trustees or for or on behalf of the trustees of that money or property.

(2) Save as otherwise provided in this section, the total amount that may be paid under this Part to all persons who suffer loss through defalcations by a member company or any of its directors or through defalcations by any of the company’s clerks or servants shall not, in any event, exceed in respect of that member company the sum of one hundred thousand dollars, but for the purposes of this subsection any amount paid from a fidelity fund shall to the extent to which the fund is subsequently reimbursed therefor be disregarded.

(3) (a) If, after taking into account all ascertained or contingent liabilities of a fidelity fund, the committee considers that the assets of the fund so permit, the committee may decide to increase the total amount which may be applied from that fund pursuant to the provisions of subsection (2) and shall inform the Registrar accordingly who shall then cause notice of such decision to be published in the Gazette.

  • (b) From the date of the publication until the notice is revoked or varied the amount specified in the notice shall be the total amount which may be applied as aforesaid.

(4) Where the committee decides to revoke or vary the notice under subsection (3), the committee shall inform the Registrar accordingly, who shall then cause notice of such revocation or variation to be published in the Gazette; and a notice which is so varied shall have effect accordingly.

(5) If, in any particular case after taking into account all ascertained or contingent liabilities of a fidelity fund, the committee considers that the assets of the fund so permit the committee may apply out of the fund such sum in excess of the total amount limited by or under this section as the committee in its absolute discretion thinks fit in or towards the compensation of persons who have suffered pecuniary loss as provided in subsection (1).

(6) For the purposes of this section “director of a member company” includes a person who has been, but at the time of any defalcation in question has ceased to be a director of a member company if, at the time of the defalcation, the person claiming compensation has reasonable grounds for believing that person to be a director of a member company.

As to claims against fund.

73. (1) Subject to this Part, every person who suffers pecuniary loss as provided in subsection (1) of section 72 shall be entitled to claim compensation from the fidelity fund and to take proceedings in the Court as provided in this Act against the stock exchange to establish such claim.

(2) Subject to subsection (3), a person shall in no case have any claim against the fidelity fund in respect of—

  • (a) a defalcation committed before the date of the coming into operation of this Act; or
  • (b) a defalcation in respect of money or other property which prior to the commission of the defalcation had in the due course of the administration of a trust ceased to be under the sole control of the director or directors of the member company concerned.

(3) Upon the dissolution of the Stock Exchange of Malaysia Members’ Fidelity Guarantee Fund (in this section referred to as “the Fund”) maintained pursuant to the articles of association of a stock exchange, known as the Stock Exchange of Malaysia and Singapore, the amount in the Fund that, under the terms of the dissolution, is paid to the Singapore members of the Fund shall be transferred to and become part of the fidelity fund of a stock exchange established under section 61.

(4) Nothing in this section shall affect the liability of the Fund to meet, in the manner and to the extent provided by the articles of association of the Stock Exchange of Malaysia and Singapore, claims against the Fund arising before the date of dissolution.

(5) Subject to this Part, the amount which any claimant shall be entitled to claim as compensation from a fidelity fund shall be the amount of the actual pecuniary loss suffered by him (including the reasonable costs of and disbursements incidental to the making and proof of his claim) less the amount or value of all moneys or other benefits received or receivable by him from any source other than the fund in reduction of the loss.

(6) In addition to any compensation payable under this Part interest shall be payable out of the fidelity fund concerned on the amount of the compensation, less any amount attributable to costs and disbursements, at the rate of five per centum per annum calculated from the day upon which the defalcation was committed and continuing until the day upon which the claim is satisfied.

Rights of innocent partner in relation to fund.

74.11

Notice calling for claims against fund.

75. (1) The committee of a stock exchange may cause to be published in a daily newspaper published and circulating generally in Singapore a notice, in or to the effect of the form prescribed, specifying a date, not being earlier than three months after the said publication, on or before which claims for compensation from the fidelity fund, in relation to the person specified in the notice, may be made.

(2) A claim for compensation from a fidelity fund in respect of a defalcation shall be made in writing to the committee—

  • (a) where a notice under subsection (1) has been published on or before the date specified in the said notice; or
  • (b) where no such notice has been published within six months after the claimant became aware of the defalcation,

and any claim which is not so made shall be barred unless the committee otherwise determines.

(3) No action for damages shall lie against a stock exchange or against any member or employee of a stock exchange or of a committee or management sub-committee by reason of any notice published in good faith and without malice for the purposes of this section.

Power of committee to settle claims.

76. (1) The committee may, subject to this Part, allow and settle any proper claim for compensation from a fidelity fund at any time after the commission of the defalcation in respect of which the claim arose.

(2) Subject to subsection (3), a person shall not commence proceedings under this Part against a stock exchange without leave of the committee unless—

  • (a) the committee has disallowed his claim; and
  • (b) the claimant has exhausted all relevant rights of action and other legal remedies for recovery of the money or other property in respect of which the defalcation was committed available against the member company in relation to whom or to which the claim arose and all other persons liable in respect of the loss suffered by the claimant.

(3) A person who has been refused leave by a committee may apply for leave to a judge of the Court in chambers who may make such order in the matter as he thinks fit.

(4) The committee after disallowing (whether wholly or partly) any claim for compensation from a fidelity fund shall serve notice of such disallowance in the prescribed form on the claimant or his solicitor.

(5) No proceedings against a stock exchange in respect of a claim which has been disallowed by the committee shall be commenced after the expiration of three months after service of notice of disallowance under subsection (4).

(6) In any proceedings brought to establish a claim evidence of any admission or confession by or other evidence which would be admissible against the member company or other person by whom it is alleged a defalcation was committed shall be admissible to prove the commission of the defalcation notwithstanding that the member company or other person is not the defendant in or a party to those proceedings, and all defences which would have been available to that member company or person shall be available to the stock exchange.

(7) The committee or, where proceedings are brought to establish a claim, the Court, if satisfied that the defalcation on which the claim is founded was actually committed, may allow the claim and act accordingly, notwithstanding that the person who committed the defalcation has not been convicted or prosecuted therefor or that the evidence on which the committee or Court (as the case may be) acts would not be sufficient to establish the guilt of that person upon a criminal trial in respect of the defalcation.

Form of order of Court establishing claim.

77. (1) Where in any proceedings brought to establish a claim the Court is satisfied that the defalcation on which the claim is founded was actually committed and that otherwise the claimant has a valid claim the Court shall by order—

  • (a) declare the fact and the date of the defalcation and the amount of the claim; and
  • (b) direct that the committee concerned allow the claim as so declared and deal with the same in accordance with the provisions of this Part.

(2) The Rules Committee may make rules for or with respect to practice and procedure generally upon proceedings under this Part.

(3) In any such proceedings all questions of costs shall be in the discretion of the Court.

Power of committee to require production of securities, etc.

78. The committee may at any time and from time to time require any person to produce and deliver any securities, documents or statements of evidence necessary to support any claim made or necessary for the purpose either of exercising its rights against a member company or the directors thereof or any other person concerned or of enabling criminal proceedings to be taken against any person in respect of a defalcation, and in default of delivery of any such securities, documents or statements of evidence by such first-mentioned person, the committee may disallow any claim by him under this Part.

Subrogation of stock exchange to rights, etc., of claimant upon payment from fund.

79. On payment out of a fidelity fund of any moneys in respect of any claim under this Part the stock exchange shall be subrogated to the extent of such payment to all the rights and remedies of the claimant in relation to the loss suffered by him from the defalcation.

Payment of claims only from fund.

80. No moneys or other property belonging to a stock exchange other than the fidelity fund shall be available for the payment of any claim under this Part whether the claim is allowed by the committee or is made the subject of an order of the Court.

Provision where fund insufficient to meet claims or where claims exceed total amount payable.

81. (1) Where the amount at credit in a fidelity fund is insufficient to pay the whole amount of all claims against it which have been allowed or in respect of which orders of the Court have been made as aforesaid, then the amount at credit in the fund shall, subject to the provisions of subsection (2) be apportioned between the claimants in such manner as the committee thinks equitable, and any such claim so far as it then remains unpaid shall be charged against future receipts of the fund and paid out of the fund when moneys are available therein.

(2) Where the aggregate of all claims which have been allowed or in respect of which orders of the Court have been made (as aforesaid) in relation to defalcations by or in connection with a member company exceeds the total amount which may pursuant to subsection (2) of section 72 be paid under this Part in respect of that member company then the said total amount shall be apportioned between the claimants in such manner as the committee thinks equitable, and upon payment out of the fund of the said total amount in accordance with such apportionment of all such claims and any orders relating thereto and all other claims against the fund which may thereafter arise or be made in respect of defalcations by or in connection with the said company shall be absolutely discharged.

Power of committee to enter into contracts of insurance.

82. (1) A stock exchange may in its discretion enter into any contract with any person or body of persons, corporate or unincorporate, carrying on fidelity insurance business in Singapore whereby the stock exchange will be insured or indemnified to the extent and in the manner provided by such contract against liability in respect of claims under this Part.

(2) Any such contract may be entered into in relation to member companies generally, or in relation to any particular member company or member companies named therein, or in relation to member companies generally with the exclusion of any particular member company or member companies named therein.

(3) No action shall lie against a stock exchange or against any member or servant of a stock exchange or the committee or against any member of a management sub-committee for injury alleged to have been suffered by any member company by reason of the publication in good faith of a statement that any contract entered into under this section does or does not apply with respect to it.

Application of insurance moneys.

83. No claimant against a fidelity fund shall have any right of action against any person or body of persons with whom a contract of insurance or indemnity is made under this Part in respect of such contract, or have any right or claim with respect to any moneys paid by the insurer in accordance with any such contract.

Part X. Trading in Securities

False trading and markets.

84. (1) It shall be unlawful for any person directly or indirectly for the purpose of creating a false or misleading appearance of active trading in any securities on any stock market in Singapore or a false or misleading appearance with respect to the market for any such securities—

  • (a) to effect any transaction in such securities which involves no change in the beneficial ownership thereof;
  • (b) to enter an order or orders for the purchase of such securities with the knowledge that an order or orders of substantially the same size, at substantially the same time and at substantially the same price, for the sale of any securities, has or have been or will be entered by or for the same or different parties; or
  • (c) to enter any order or orders for the sale of such securities with the knowledge that an order or orders of substantially the same size, at substantially the same time and at substantially the same price, for the purchase of such securities, has or have been or will be entered by or for the same or different parties.

(2) A transaction in securities involves no change in the beneficial ownership thereof within the meaning of paragraph (a) of subsection (1) if a person who held an interest in the securities before the transaction or a person associated with the first-mentioned person in relation to the securities holds an interest in the securities after the transaction.

(3) In determining whether a person held or holds an interest within the meaning of subsection (2), the provisions of section 6A of the Companies Act shall have effect and in applying those provisions any reference to shares shall be read as a reference to securities.

(4) For the purposes of subsection (2) a person is associated with another person in relation to securities if the first-mentioned person is—

  • (a) a corporation that by virtue of section 6 of the Companies Act is deemed to be related to that other person;
  • (b) a person in accordance with whose directions, instructions or wishes that other person is accustomed or likely to act in relation to the securities;
  • (c) a person who is accustomed or likely to act in accordance with the directions, instructions or wishes of that other person in relation to the securities;
  • (d) a body corporate that is or the directors of which are accustomed or likely to act in accordance with the directions, instructions or wishes of that other person in relation to the securities; or
  • (e) a body corporate in accordance with the directions, instructions or wishes of which or of the directors of which that other person is accustomed or likely to act in relation to the securities.

Market rigging transactions.

85. (1) It shall be unlawful for any person directly or indirectly to effect a series of transactions in any securities on a stock market in Singapore creating actual or apparent active trading in such securities for the purpose of inducing the purchase or sale of such securities by others.

(2) It shall be a defence to a prosecution under subsection (1) if the defendant satisfies the Court that he acted without malice and solely to further or protect his own lawful interests.

Inducement to purchase or sell securities by dissemination of information.

86. It shall be unlawful for a dealer, stockbroker or other person who is selling or offering for sale, or purchasing or offering to purchase any securities, whether in consideration or anticipation of a reward or benefit, or otherwise to induce a purchase or sale of such securities on a stock market in Singapore by the circulation or dissemination in the ordinary course of business of information to the effect that the price of any such securities will or is likely to rise or fall because of market operations by any one or more persons, conducted for the purpose of raising or depressing the price of such securities.

Employment of manipulative and deceptive devices.

87. It shall be unlawful for any person directly or indirectly in connection with the purchase or sale of any securities—

  • (a) to employ any device, scheme or artifice to defraud;
  • (b) to engage in any act, practice or course of business which operates or would operate as a fraud or deceit upon any person; or
  • (c) to make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made in the light of the circumstances under which they were made, not misleading.

Penalty.

88. Any person who contravenes any provision of this Part shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding thirty thousand dollars or to imprisonment for a term not exceeding five years or to both such fine and imprisonment.

Part XI. General

Restrictions on use of title “stockbroker”.

89. A person who is not a stockbroker within the meaning of this Act shall not take or use or, by inference, adopt the name or title of stockbroker or take or use or have attached to or exhibited at any place any name, title or description implying or tending to the belief that he is a stockbroker.

Inspection of books and records of licence holder and others.

90. (1) For the purpose of ascertaining whether the holder of a licence has complied with the provisions of this Act applicable to him in that capacity, and any conditions or restrictions subject to which the licence was granted or renewed, the Registrar may inspect and make copies of or take extracts from—

  • (a) any document, record or matter required by or under this Act or the conditions of the licence to be kept by the holder of that licence; and
  • (b) the books of a person, in so far as they relate to the business of the holder of that licence.

(2) The Registrar may, where he considers it necessary for the protection of investors, require any person to disclose to him in relation to any purchase or sale of securities the name of the person from or to or through whom the securities were bought or sold and the nature of the instructions given to the person in respect of that purchase or sale.

(3) The holder of a licence under this Act, and the servants and agents of that person shall, on being required by the Registrar so to do, produce any document, record or matter referred to in subsection (1) or disclose the information required under subsection (2).

(4) No person shall obstruct or hinder the Registrar in the exercise of any of his powers under this section or obstruct any person in the exercise of any of those powers that he is duly authorised to exercise.

(5) Where the Registrar has reason to suspect that any person has contravened any of the provisions of this Act or has been guilty of any fraud or offence under this or any other Act or law with respect to trading or dealing in securities, the Registrar may make such investigation as he thinks expedient for the due administration of this Act.

(6) Notwithstanding anything in this section, the Minister may, where it appears to him in the public interest so to do, appoint any person as an inspector to investigate any matter concerning trading or dealing in securities.

(7) Except where otherwise expressly provided by or under this or any other Act, any power, authority, duty or function conferred or imposed by or under this or any other Act on the Registrar may be exercised or performed by any person authorised by the Registrar to exercise or perform that power, authority, duty or function.

Court may make certain orders.

91. (1) Where, on the application of the Registrar, it appears to the High Court that a person has contravened this Act or any conditions of a licence he holds or is about to do an act with respect to dealing or trading in securities that, if done, would be such a contravention, the Court may, without prejudice to any orders it would be entitled to make otherwise than pursuant to this section, make one or more of the following orders:

  • (a) in the case of persistent or continuing breaches of this Act or of the conditions of a licence he holds, an order restraining a person from carrying on a business as a dealer in securities, or as a dealer’s representative or from holding himself out as so carrying on business or acting;
  • (b) an order restraining a person from acquiring, disposing of or otherwise dealing with any securities specified in the order;
  • (c) an order appointing a receiver of the property of a dealer;
  • (d) an order declaring a contract relating to securities to be void or voidable;
  • (e) for the purpose of securing compliance with any other order under this section, an order directing a person to do or refrain from doing a specified act; or
  • (f) any ancillary order deemed to be desirable in consequence of the making of an order under paragraph (a), (b), (c), (d) or (e).

(2) The Court shall, before making an order under subsection (1), satisfy itself, so far as it can reasonably do so, that the order would not unfairly prejudice any person.

(3) The Court may, before making an order under subsection (1), direct that notice of the application be given to such persons as it thinks fit or direct that notice of the application be published in such manner as it thinks fit, or both.

(4) Any person who contravenes or fails to comply with an order under subsection (1) that is applicable to him shall be guilty of an offence under this Act and shall be liable on conviction to a fine of three thousand dollars or to imprisonment for a term not exceeding one year or to both such fine and imprisonment.

(5) Subsection (4) does not affect the powers of the Court in relation to the punishment of contempts of the Court.

(6) The Court may rescind, vary or discharge an order made by it under this section or suspend the operation of such an order.

Production and inspection of books where offence suspected.

92. (1) If, on an application made to a judge of the High Court in chambers by the Registrar, there is shown to be reasonable cause to believe that any person has committed an offence in connection with trading or dealing in securities and that evidence of the commission of the offence is to be found in any books or papers of or under the control of a dealer an order may be made—

  • (a) authorizing the Registrar to inspect those books or papers or any of them and make copies thereof or take extracts therefrom for the purpose of investigating and obtaining evidence of the offence; or
  • (b) requiring the dealer or such other person as is named in the order to produce those books or papers or any of them to a person named in the order at a place so named.

(2) An order under this section shall not require books or papers to be produced at a place other than the place of business of the person named in the order unless the Court is satisfied that the books or papers are not required in the conduct of the business or that there are special reasons requiring the books or papers to be produced at some other place.

General penalty.

93. (1) A person who contravenes or fails to comply with any provision of this Act shall be guilty of an offence under this Act and, where no penalty is expressly provided, shall be liable on conviction to a fine not exceeding two thousand dollars.

(2) Where a person, being a corporation, is guilty of an offence under this Act any director, manager, secretary or other officer of the corporation who was knowingly a party to the offence shall also be guilty of that offence.

Convicted persons liable to pay compensation.

94. A person who is convicted of an offence under Part X shall be liable to pay compensation to any person who has purchased or sold any securities at a price affected by the act or transaction, the subject of the offence, for the damage suffered by him as a result of that purchase or sale.

Proceedings by whom and when to be taken.

95. (1) Proceedings for an offence—

  • (a) against any provision of Part X may be taken only with the consent of the Attorney-General; and
  • (b) against any other provision of this Act may be taken by the Registrar or, with the consent of the Attorney-General, by any other person.

(2) The Registrar may, without instituting proceedings against any person for an offence under this Act or the regulations made thereunder which is punishable only by a fine, demand and receive the amount of such fine or such reduced amount as he thinks fit from such person, whereupon—

  • (a) if such person pays such amount to the Registrar within fourteen days after the demand no proceedings shall be taken against him in relation to the offence;
  • (b) if such person does not pay the amount so demanded, the Registrar may cause proceedings to be instituted in relation to the offence.

Regulations.

96. (1) The Minister may make regulations for or with respect to—

  • (a) prescribing forms for the purposes of this Act;
  • (b) prescribing fees to be paid in respect of any matter or thing required for the purposes of this Act;
  • (c) the issue of and contents of contract notes;
  • (d) the preparation by dealers of balance-sheets and profit and loss accounts and the form and contents thereof;
  • (e) the specification of manipulative and deceptive devices and contrivances in connection with the purchase or sale of securities that are prohibited;
  • (f) the regulation or prohibition of the sale of securities by a person who is not and is not entitled to become the holder of those securities;
  • (g) the regulation or prohibition of trading on the floor of a stock exchange by stockbrokers or their representatives directly or indirectly for their own accounts or for discretionary accounts and the prevention of such excessive trading on a stock exchange but off the floor of a stock exchange by stockbrokers or their representatives directly or indirectly for their own accounts as the Minister may consider is detrimental to the maintenance of a fair and orderly market. Regulations under this paragraph may provide for the exemption of such transactions as the Minister may decide to be necessary in the public interest or for the protection of investors;
  • (h) the regulation of borrowing in the ordinary course of business by dealers and stockbrokers as the Minister may consider necessary or appropriate in the public interest or for the protection of investors;
  • (i) regulating the publication of advertisements offering the services of dealers or offering securities for purchase or sale and the form and content of such advertisements; and
  • (j) all matters or things which by this Act are required or permitted to be prescribed or which are necessary or expedient to be prescribed to give effect to this Act.

(2) Save as otherwise expressly provided in this Act, the regulations—

  • (a) may be of general or specifically limited application; and
  • (b) may impose a fine of not more than two thousand dollars or imprisonment for a term not exceeding one year or both such fine and imprisonment for any contravention thereof.

97. The Securities Industry Act, 1970 is hereby repealed.

98.12

*Mr. Ishihara, an economist in the Asian Department of the International Monetary Fund at the time this introduction was written, is a graduate of the Economics Department, Syracuse University (U.S.A.).Mr. Kim, a senior economist in the Fund’s Asian Department, obtained a degree from the University of Oregon and taught economics at a California state college before joining the Asian Department of the International Monetary Fund in February 1967.
1The Malaysian dollar ceased to be legal tender in Singapore from January 16, 1969. However, even after the currency split, the three Governments (Malaysia, Singapore, and Brunei) agreed on an arrangement by which their currencies would be freely interchangeable at par. The currency interchangeability between Malaysia and Singapore lasted until May 8, 1973.
2In addition to the regular commercial banks, the Development Bank of Singapore has also been allowed since 1968 to engage in some commercial banking functions, including acceptance of deposits. Also, there are 49 (as of March 1981) representative offices in Singapore—all branches or offices of foreign banking institutions.
3Although their number is small, domestic banks, with their extensive network of branches, have access to about half the total nonbank deposits in Singapore.
4The Second Schedule refers to the authorized local assets comprising primarily government securities, approved shares and debentures, real estate and land in Singapore, loans secured on real estate, land, and insurance policies in Singapore, cash balances and demand deposits with commercial banks, and other approved investments.
5Mention should also be made of another nonbank financial institution. This is the money-loan association that is found in a number of countries of Southeast Asia. It is variously known as “hwei,” “kutu,” “tontine,” or “chit fund.” In Singapore, such institutions are subject to licensing and regulation under the Chit Funds Act, 1971.
6Issuance of negotiable certificates of deposit is limited to banks that are specifically approved by the Monetary Authority. They are issued in multiples of S$50,000 subject to a minimum of S$ 100,000 and a maximum of S$1 million, except for restricted banks, when the minimum is S$250,000. There is no restriction on the purchase and sales of these negotiable certificates of deposit by nonresidents.
7The Monetary Authority conducts operations in treasury bills on behalf of the Government, and is ready to buy back treasury bills through the discount houses; the rediscount rate of the Monetary Authority is a “penalty rate,” i.e., it is slightly higher than the discount rate quoted by the houses.
8Until 1973, Singapore and Kuala Lumpur shared a single market for bonds and shares with the two trading rooms linked by direct telephone lines. However, the termination of the currency interchangeability in May 1973 brought about the split of the joint stock exchange, and this resulted in the incorporation of the Stock Exchange of Singapore. Full operation at a separate exchange commenced on July 4, 1973.
9Previously, exchange control approval was required for accepting deposits from Singaporean residents above a specified limit and lending to Singaporean residents for other than specified purposes. Since the complete liberalization of exchange control in June 1978, these restrictions no longer apply. ACUs may deal in all foreign currencies with Singaporean residents. If a loan is made to a nonresident, exchange control approval may be required from the country in which the nonresident resides.
10At the end of 1979, net claims of the ACUs on Asian countries totaled US$8 billion, an increase of US$7 billion from the end of 1973, while net liabilities to European countries amounted to US$6 billion, an increase of US$5 billion from the end of 1973.
11The Association of South East Asian Nations consists of Indonesia, Malaysia, the Philippines, Singapore, and Thailand.
12At the end of March 1981, loans with maturities of up to three months accounted for 62 per cent of total assets, and deposits of the same category accounted for 74 per cent of total liabilities, while loans and deposits of more than one-year maturity constituted 17 per cent of total assets and 5 per cent of total liabilities.
13As from August 16, 1973, the definition and computation of the liquid assets ratio have undergone some important changes. The definition of deposit liabilities was extended to include net borrowing from banks, and the definition of liquid assets and primary liquid assets was altered to exclude net bank balances from liquid assets and to allow short-term government securities with a maturity of less than one year to be regarded as primary liquid assets. The excess balances at the Monetary Authority are not a good indicator of bank liquidity, for banks normally place their excess balances with discount houses or in treasury bills in order to earn interest. A better indicator of bank liquidity is the total liquidity ratio.
1Singapore Statutes, Cap. 64 (1970). Originally Act No. 5 of 1967. Relevant citations: Acts Nos. 35 of 1967; 3 of 1968; and 2 of 1969.
2Parts I and II, secs. 19 and 22, Part IV and sec. 32 of the Act came into operation on April 7, 1967 and secs. 11 to 18, 20, 21, 23 to 27 and 33 to 35 on June 12, 1967.
3The Second Amendment to the Articles of Agreement of the International Monetary Fund, effective April 1, 1978, abrogated par values under the Articles. Provision is made for a new par value system if the Fund decides in its favor by 85 per cent of the total voting power. Should such a decision be taken, each member would be able to decide whether to propose a par value for its currency. Under such a regime the margins around parity within which exchange transactions involving currencies with par values would have to be confined would be wider than those consistent with the original Articles of Agreement.
4The Second Amendment to the Articles of Agreement of the International Monetary Fund, effective April 1, 1978, abolished the official price of gold under the Articles. See footnote 3 to section 12 of this Act.
5The Schedule is omitted from this volume.
1Singapore Statutes, Cap. 62 (1955). Originally Ord. No. 24 of 1903. Relevant citations: Ords. Nos. 37 of 1952; 71 of 1959; G.N. S 223/59; G.N. S (N.S.) 177/59; and G.N. S (N.S.) 179/59.
1Act No. 42 of 1970 was amended by the Monetary Authority of Singapore (Amendment) Act, 1972 (Law No. 31 of 1972). The latter, “An Act to amend the Monetary Authority of Singapore Act (Chapter 195 of the Revised Edition) became law on December 22, 1972.
2Repealed by Law No. 31 of 1972, Monetary Authority of Singapore (Amendment) Act, 1972.
1Act No. 41 of 1970 was published in the Government Gazette Acts Supplement, No. 56, October 30, 1970. The Four Schedules to this Act are not published in this volume.
2In accordance with the version published in the Government Gazette Acts Supplement, No. 56, October 30, 1970, references formerly in this Act to the Minister, the Commissioner of Banking and the Accountant-General have, in accordance with sec. 21(4) of the Monetary Authority of Singapore Act (Cap. 195), been replaced by references to the Authority, and various consequential alterations have been made.
3The editor notes that this reference should probably read “(2)”.
4Not published in this volume.
5Not published in this volume.
1Singapore Statutes, Cap. 191 (1970). Originally Act No. 43 of 1967. Relevant citation: No. 21 of 1969.
2In accordance with the version published in Singapore Statutes, Cap. 191 (1970), references formerly in this Act to the Minister, the Commissioner for Finance Companies, and the Accountant-General have, in accordance with sec. 21(4) of the Monetary Authority of Singapore Act (Cap. 195), been replaced by references to the Authority, and various consequential alterations have been made.
1Singapore Government Gazette Acts Supplement, No. 25, October 5, 1979, Act No. 20 of 1979.
1Singapore Statutes, Cap. 220 (1970). Originally Ord. No. 58 of 1959. Relevant citations: Ord. No. 6 of 1960; Acts Nos. 19 of 1967; 13 of 1969; 48 of 1970; and 22 of 1975.
2The Moneylenders (Amendment) Act, 1975, provides in sec. 14 that “notwithstanding the repeal of subsection (2) of section 16 of the Moneylenders Act, that repealed subsection shall be of full force and effect with regard to those contracts made before the date of the commencement of the Moneylenders (Amendment) Act, 1975.” The repealed subsec. (2) of sec. 16 of the Moneylenders Act read:

“No contract for the repayment by a borrower or his agent of money lent to him or to any agent on his behalf by a moneylender or his agent after the coming into operation of this Act or for the payment by him of interest on money so lent, and no security given by the borrower or by any such agent as aforesaid in respect of any such contract shall if the amount of the loan is one hundred dollars or above be enforceable unless the money lent was given to the borrower or his agent in the form of a crossed cheque with the words ‘licensed moneylender’ endorsed legibly below the signature of the moneylender or his agent on the cheque, made payable to the borrower or his agent.”

3The First Schedule is omitted from this volume.
4The Second Schedule is omitted from this volume.
5The Third Schedule is omitted from this volume.
1Singapore Statutes, Cap. 195 (1955); Cap. 222 (1970). Originally Ord. No. 4 of 1898. Relevant citations: Ords. Nos. 1 of 1903; 11 of 1912; 26 of 1921; 45 of 1934; 63 of 1935; 41 of 1936; 15 of 1939; 37 of 1952; 12 of 1957; 71 of 1959; 38 of 1960; Acts Nos. 23 of 1966; and 7 of 1977.
2Schedule B is omitted from this volume.
3Schedule A, containing Form 3, is omitted from this volume.
4Schedule A is omitted from this volume.
5Section 23(1) and (3) of An Act to amend the Pawnbrokers Act. No. 7 of 1977 (Cap. 222 of the Revised Edition) provides:

“(1) Upon the date of the commencement of this Act, the Pawnbrokers Licensing Board established under section 7 of the Pawnbrokers Act prior to the date of the commencement of this Act shall cease to exist and all rights, obligations and liabilities of the Board which may have existed immediately prior to the date of the commencement of this Act shall be transferred to and shall vest in the Registrar.

“(3) In any written law and in any document whatsoever, unless the context otherwise requires, any reference to the Board shall be construed as a reference to the Registrar.”

1Singapore Government Gazette Acts Supplement. No. 2, January 7, 1972, Act No. 28 of 1971.
2The functions, duties, and powers of the Commissioner of Chit Funds under this Act were transferred to the Monetary Authority of Singapore in accordance with the Monetary Authority of Singapore (Transfer of Functions) Notification, 1973.
1Singapore Statutes, Cap. 189 (1970). Originally Ord. No. 21 of 1961. Relevant citations: Acts Nos. 9 of 1966; 4 of 1969; 3 of 1972; 38 of 1973; and 17 of 1975.
1Singapore Government Gazette Acts Supplement, No. 29, November 19, 1971, Act No. 13 of 1971.
2Editor queries whether “in” is necessary.
3Editor queries whether this phrase should read “as the Bank secs fit.”
4Editor queries whether there has been an omission here.
1Singapore Government Gazette Acts Supplement, No. 20, April 13, 1973, Act No. 17 of 1973. Additional citations: Acts Nos. 51 of 1973; and 6 of 1974.
2Deleted by sec. 2(h) of Act No. 6 of 1974, the Securities Industry (Amendment) Act, 1974.
3Deleted by sec. 3(b) of Act No. 6 of 1974, the Securities Industry (Amendment) Act, 1974.
4Deleted by sec. 4 of Act No. 6 of 1974, the Securities Industry (Amendment) Act, 1974.
5Deleted by sec. 8(b) of Act No. 6 of 1974, the Securities Industry (Amendent) Act, 1974.
6Deleted by sec. 9 of Act No. 6 of 1974, the Securities Industry (Amendment) Act, 1974.
7Editor’s insertion. Cf. sec. 10 of Act No. 6 of 1974, the Securities Industry (Amendment) Act, 1974.
8Deleted by sec. 13 (b) of Act No. 6 of 1974, the Securities Industry (Amendment) Act, 1974.
9Repealed by sec. 19 of Act No. 6 of 1974, the Securities Industry (Amendment) Act, 1974.
10Deleted by sec. 20 (b) of Act No. 6 of 1974, the Securities Industry (Amendment) Act, 1974.
11Repealed by sec. 27 of Act No. 6 of 1974, the Securities Industry (Amendment) Act, 1974.
12Repealed by sec. 11 of Act No. 51 of 1973, the Securities Industry (Amendment) Act, 1973.

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