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Singapore
Trust Law
Trust
law in Singapore is governed by the Trust Companies
Act of 2005, which was revised in 2006.
Singapore
reformed its trust laws in 2004, and since then
has increased the number of trust licences issued
from around 15 (before the reform) to 40 (as
of March 2010). In addition, 32 entities that
carry on trust business in Singapore have been
granted exemption. The reforms have greatly
enhanced Singapore as a centre for trust business
in Asia, with Hong Kong now looking to follow
the jurisdiction’s lead.
The
Singapore Trustees Association represents trust
companies in Singapore, and liaises and corresponds
with the Singapore government, statutory boards,
other government and non-government bodies,
and the media. The Association also promotes
Singapore as a location for trustee services
and trust administration abroad.
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Singapore
Banking Law
Banking
secrecy is key to Singapore’s success
as a financial centre. However, pressures from
the US and Europe resulted in Singapore negotiating
tax information exchange agreements (TIEAs)
to remove the jurisdiction from the OECD’s
“grey” list. This was achieved in
November 2009, when Singapore signed its twelfth
TIEA with France.
The
TIEAs do, though, allow Singapore to reject
requests for information that are spurious or
frivolous, or are mere “fishing expeditions”.
Information regarding a customer’s bank
account can only be disclosed under a court
order. Any disclosure that fails to meet Singapore’s
banking secrecy rules can result in a SGD78,000
fine or three years’ imprisonment.
A
foreign offshore bank must maintain eligible
assets of not less than SGD5m in Singapore at
all times. Foreign wholesale banks operating
in Singapore are required at all times to maintain
in Singapore the higher of an asset maintenance
ratio of not less than 0.15 or eligible assets
of SGD5m. Foreign full banks operating in Singapore
must at all times maintain in Singapore the
higher of an asset maintenance ratio of not
less than 0.35 or eligible assets of SGD5m.
Banking
law in Singapore has also allowed for the fast
development of Islamic finance in the jurisdiction
despite the economic downturn, driven by incentives
offered by the Monetary Authority of Singapore
(MAS) that mainly cater to the wholesale banking
sector.
Singapore
has set up a financial intelligence unit to
combat money laundering and the financing of
terrorism. The Financial Action Task Force reported
in 2008 that Singapore’s initiatives to
address weaknesses found on a previous investigation
in 1998-99 had significantly strengthened the
jurisdiction’s legal, institutional and
supervisory framework.
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Singapore
Investment Company Law
Investment
companies are regulated by the MAS, the Securities
and Futures Act (as amended) and the Code on
Collective Investment Schemes.
Companies
that issue to the public units in a collective
investment scheme or a business trust are required
to issue a prospectus, which must be registered
with the MAS before being circulated. The MAS
may exempt the requirement for a prospectus
in certain circumstances (e.g. where the requirement
would be unduly burdensome).
Also,
the prospectus requirements may be dispensed
with where there is a private securities placement
to no more than 50 persons within any 12-month
period, subject to conditions. Generally, though,
private placements without a prospectus, and
where MAS exemption does not apply, are not
permissible.
An
offering to the public in Singapore of an exchange-traded
fund (ETF) based in another jurisdiction, and
which, on application to the MAS by the ETF
itself or the foreign manager of the ETF, has
been recognised by the MAS, must also comply
with the prospectus rules. Whether the ETF will
be recognised by the MAS depends on a number
of factors, such as the ETF’s investment
guidelines being similar to those under the
Code, the ETF’s country of origin providing
similar protection to that available in Singapore,
and ensuring the ETF has a representative to
liaise between investors and the fund’s
foreign manager.
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