Legislative Amendments to Securities and Futures Act (SFA) and Financial Advisers Act (FAA)
The Securities and Futures (Amendment) Bill 2009 and the Financial Advisers (Amendment) Bill 2009 were passed by Parliament in January 2009. Some of the key amendments are set out below.
For capital markets licensing and business conduct, the amendments in the SFA introduced the Representative Notification Framework and continuing licensing regime for corporate licence holders, and the extension of the prohibition order regime. Under the market misconduct enforcement framework, there are new provisions to impose corporate derivative liability, empower the courts to order disgorgement of gains made from illegal trades, and allow for the transfer of evidence between the Commercial Affairs Department of the Singapore Police Force and MAS.
Notification requirements in relation to directors' and substantial shareholders' interests in listed corporations, previously found in both the Companies Act and the SFA, are now streamlined and consolidated in the SFA. The notification requirements are extended to any Chief Executive Officer who is not a director. The Real Estate Investment Trusts (REIT) regime in relation to takeovers and privatisations of REITs is enhanced, and the Takeover Code will apply to REITs.
MAS extended its existing emergency powers to deal with events that would impact approved exchanges and designated clearing houses, which are systemically important parts of the financial system. The amendments give MAS the power to appoint statutory advisers to provide advice to an approved exchange or designated clearing house, and to obtain information from any person to maintain the safe and efficient operation of a designated clearing house. Other amendments give MAS the power to prescribe products as 'securities' in order to bring new products within its regulatory ambit under the SFA in a timely manner. This provides enhanced regulatory flexibility to enable MAS to act more efficiently on market developments.
The amendments to the Financial Advisers Act are similar to those for the SFA in relation to capital markets licensing and business conduct, including the Representative Notification Framework and the new continuing licensing regime.
MAS will be consulting the industry and public on the Subsidiary Legislation, Notices and Guidelines to the SFA and FAA before the commencement of the operation of the Acts.