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Singapore Introduces New Corporate Disclosure Regime

Wednesday, October 10, 2012

From November 19, 2012, the Monetary Authority of Singapore will introduce a new disclosure of interests (DOI) regulatory regime to streamline and enhance the existing requirements for disclosure by directors and substantial shareholders of listed entities.

Currently, directors and substantial shareholders of any listed company are required to report their interests, and changes in interests, in securities to the company under the Companies Act, and to the Singapore Exchange Limited (SGX) under the Securities and Futures Act (SFA). Reporting requirements for business trusts and real estate investment trusts (REITs) are found in the Business Trusts Act and the SFA respectively. Separately, the listed entity is required to announce such information to the market under the SGX Listing Rules.

Under the new regime, all DOI notification requirements in respect of interests in listed entities (corporations, business trusts and REITs) will be streamlined and consolidated in the SFA.

Furthermore, directors and substantial shareholders will no longer be required to separately report their interests, and changes in interests, in securities to the SGX. This is intended to simplify the reporting process and reduce the compliance burden on directors and substantial shareholders. As listed entities will be required to disclose the relevant information to investors, this change to the reporting process will not reduce market transparency.

In addition, only the holding company will be required to aggregate the interests of every related corporation for its reporting purposes. For each subsidiary, it will need only to report its own interests. This will cut down the volume of reporting by large corporate groups and reduce compliance costs.

To ensure that investors are kept informed of any changes in holdings of directors and substantial shareholders on a timely basis, it will also be made a legal requirement for listed entities to notify investors of interests or changes in interests as soon as possible and no later than the end of the following business day.

The notification requirements applicable to directors will be extended to CEOs who are not directors. Even if the CEO is not a director, he is a key decision maker in respect of operating and financial policies of the listed entity, and information on his dealings in the entity’s securities is thought to be relevant to investors.

Importantly, the legal obligations for directors and substantial shareholders to report their interests or changes in interests, which currently apply only to Singapore-incorporated listed companies, will be extended to foreign-incorporated corporations with a primary listing on the SGX. This should level the playing field between local and foreign listed companies and enhance investors’ protection.

For business trusts (BTs) and REITs where business and assets are externally managed by the manager, and where investors are likely to be concerned with the identity of the persons controlling the manager, a shareholder of the manager of a BT or REIT will be required to give notification when his shareholdings in the manager reaches, crosses or falls below the strategic levels of 15%, 30%, 50% and 75%. Any acquisition or disposal of interest in the securities of the BT or REIT by the manager must also be disclosed.

The MAS will introduce a stiffer penalty of up to SGD250,000 (USD200,000) and/or imprisonment for a term not exceeding two years for material contraventions which are committed intentionally or recklessly. Civil penalties may also be imposed for such flagrant breaches of the law. This will enable MAS to take enforcement action proportionate to the seriousness of the offence.

The MAS has also developed electronic notification forms for use by directors, CEOs and substantial shareholders. This removes the need for manual entries by the listed entity and increases the efficiency of the reporting process. The requirement to use prescribed notification forms also standardizes the information disclosed to the market.

In formulating all of the amendments, the MAS has confirmed that it has carefully considered all feedback received from various rounds of public consultations. Over the next few weeks, the MAS will work with industry participants and their professional organizations to familiarize relevant stakeholders with the new notification requirements (including the new electronic notification forms).

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The Report

Offshore Trusts Guide: Introduction

The History of Offshore Trusts
Development of Professional Competence in the Jurisdictions
What Future for the Trust?
The New Age of Transparency
The Swiss Association of Trust Companies
The Society of Trusts and Estates Practitioners

Offshore Trusts Guide: Jurisdictions

Bahamas

Bahamas: Legal Framework and Formation Rules and Fees
Bahamas: 2006 Private Trust Companies Legislation

Barbados

Barbados: Legal Framework and Formation Rules and Fees
Barbados: Supervisory and Licensing Regime and Fees

Bermuda

Bermuda: Legal Framework and Formation Rules and Fees
Bermuda: Supervisory and Licensing Regime and Fees

British Virgin Islands

British Virgin Islands: Legal Framework and Formation Rules and Fees
British Virgin Islands: Special Trusts Act 2003
British Virgin Islands: The Trustee Act 2003
British Virgin Islands: :Supervisory and Licensing Regime and Fees
British Virgin Islands: New Laws on Private Trust Companies
British Virgin Islands: New Private Trust Company Regulations

Cayman Islands

Cayman Islands: Legal Framework and Formation Rules and Fees
Cayman Islands: Supervisory and Licensing Regime and Fees

Cook Islands

Cook Islands: Legal Framework and Formation Rules and Fees
Cook Islands: Supervisory and Licensing Regime and Fees

Cyprus

Cyprus: Legal Framework and Formation Rules and Fees
Cyprus: Supervision, Licensing and Tax

Gibraltar

Gibraltar: Legal Framework and Formation Rules and Fees
Gibraltar: Legislation, Regulation and Supervision

Guernsey

Guernsey: Legal Framework and Formation Rules and Fees
Guernsey: Trusts Law 2007

Isle of Man

Isle of Man: Legal Framework and Formation Rules and Fees
Isle of Man: Supervisory and Licensing Regime
Isle of Man: Uses Clients and Tax Treatment

Jersey

Jersey: Legal Framework and Formation Rules and Fees
Jersey: Supervisory and Licensing Regime
Jersey: Trusts Amendment Act 2006
Jersey: Foundations

Liechtenstein

Liechtenstein: Legal Framework and Formation Rules and Fees
Liechtenstein: Regulation Supervision and Transparency
Liechtenstein: Characteristics of Liechtenstein Trusts
Liechtenstein: Foundations

Madeira

Madeira: Legal Framework and Formation Rules and Fees

Malta

Malta: Legal Framework and Formation Rules and Fees
Malta: The Trust and Trustees Act 2004

Mauritius

Mauritius: Legal Framework and Formation Rules and Fees
Mauritius: Characteristics of the 2001 Trusts Act
Mauritius: Additional Provisions of the 2001 Trusts Act
Mauritius: Tax Treatment

Monaco

Monaco: Legal Framework and Formation Rules and Fees

Nevis

Nevis: Legal Framework and Formation Rules and Fees

Panama

Panama: Legal Framework and Formation Rules and Fees
Panama: Requirements for Acting as Trust Company in Panama

Seychelles

Seychelles: Legal Framework and Formation Rules and Fees

Turks & Caicos

Turks & Caicos: Legal Framework and Formation Rules and Fees
Turks & Caicos: The Voidable Dispositions Ordinance

Vanuatu

Vanuatu Legal Framework and Formation Rules and Fees




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