Several acts of parliament provide the legal framework for the Singapore securities market:
1. Companies Act (Cap 50)
All companies in Singapore are governed by the Singapore Companies Act (Cap 50 of the 1994 Revised Edition of the Singapore Statutes). The act provides for the formation (and ultimately termination) of companies; confers on companies some special features; and regulates the relationships between participants in companies and facilitates dealings between companies and outsiders. A summary of recent amendments to the act can be found in the website of Janus Corporate Solutions.
212. Securities and Futures Act 2001 (Cap 289)
The SFA was first passed by parliament on 5 October 2001. Since then, it has been coming into force in parts. Part I (“Preliminary”), Part VIII (“Securities Industry Council and Take-over Offers”), Part IX (“Supervision and Investigation”), Part X (“Assistance to Foreign Regulatory Authorities”), and Part XV (“Miscellaneous,” except sections 314, 342[1] and [3]) came into effect on 1 January 2002. MAS announced on 23 May
21 Janus Corporate Solutions. http://www.guidemesingapore.com/incorporation/topics/singapore-companies-act-recent-amendments
Box 1.4 continuation
2002 that Part XIII of the SFA would come into force on 1 July 2002. This part deals with offers of shares, debentures, and collective investment schemes.
In tandem with the announcement of the date of enforcement of Part XIII of the SFA, MAS also issued new regulations to supplement it, the main regulations of which are:
(i) The Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations 2002 (Shares and Debentures Regulations); and
(ii) The Securities and Futures (Offers of Investments) (Collective Investment Schemes) Regulations 2002 (Collective Investment Schemes Regulations).
These regulations also came into force on 1 July 2002.
3. Monetary Authority of Singapore Act (Cap 186)
The act was passed to establish a corporation to be known as the Monetary Authority of Singapore (MAS). It also provides for the transfer to the corporation of certain functions and assets of the government, and for matters incidental thereto and connected therewith.
22The Act established MAS as the principal banker and fiscal agent of the Government of Singapore. In addition, its sets out MAS’ regulatory function for the securities market.
4. Local Treasury Bills Act (Cap 167)
The Local Treasury Bills Act, designated as LBTA, was passed into law as Ordinance 4 in 1923 (Treasury Bills (Local) Ordinance 1923). It was last revised in 2002 and came into effect on 31 December 2002.
23Under the Act, Parliament will empower the Minister for Finance to borrow money on behalf of the government by issuing Treasury bills, up to a defined maximum amount. This amount is revisited every financial year. The actual issuance of Treasury bills is facilitated by MAS.
5. Government Securities Act (Cap 121A)
The Government Securities Act, designated as GSA, was promulgated on 6 March 1992 as Act 1 of 1992, and was last revised and came into effect on 31 December 2002.
24V. Definition of Securities
“Securities” is defined under Chapter 29 of the SFA in sections 2(1), 196A, 214, and 239. Such definitions are provided in Table 1.6.
22 Attorney-General’s Chamber. http://agcvldb4.agc.gov.sg/non_version/cgi-bin/cgi_retrieve.
pl?actno=REVED-186&doctitle=MONETARY%20AUTHORITY%20OF%20SINGAPORE%20 ACT%0A&date=latest&method=part
23 Attorney-General’s Chamber. http://statutes.agc.gov.sg/non_version/cgi-bin/cgi_retrieve.pl?actno=REVED-167&doctitle=LOCAL%20TREASURY%20BILLS%20ACT%0A&date=latest&method=part&sl=1
24 Attorney-General’s Chamber. http://agcvldb4.agc.gov.sg/non_version/cgi-bin/cgi_retrieve.pl?&actno=Reved-121A&date=latest&method=part
Section 9: Singapore Bond Market Guide
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Table 1.6 Definitions of Securities under the Securities and Futures Act 2001
Section Definition
Sec. 2(1) 2. (1) In this Act, unless the context otherwise requires —
“securities” means —
(a) debentures or stocks issued or proposed to be issued by a government;
(b) debentures, stocks or shares issued or proposed to be issued by a corporation or body unincorporated;
(c) any right, option or derivative in respect of any such debentures, stocks or shares;
(d) any right under a contract for differences or under any other contract the purpose or pretended purpose of which is to secure a profit or avoid a loss by reference to fluctuations in —
(i) the value or price of any such debentures, stocks or shares;
(ii) the value or price of any group of any such debentures, stocks or shares; or (iii) an index of any such debentures, stocks or shares;
(e) any unit in a collective investment scheme;
(f) any unit in a business trust;
(g) any derivative of a unit in a business trust; or
(h) such other product or class of products as the Authority may prescribe, but does not include —
(i) futures contracts which are traded on a futures market;
(ii) bills of exchange;
(iii) promissory notes;
(iv) certificates of deposit issued by a bank or finance company whether situated in Singapore or elsewhere; or (v) such other product or class of products as the Authority may prescribe as not being securities
Sec. 196A 196A. In this Division —
“debenture” has the same meaning as in section 2 and, in relation to a business trust, means any debenture issued by the trustee of the business trust in its capacity as trustee of the business trust;
“securities” —
(a) in relation to a corporation, for the purposes of sections 196 (a) (i) and (b) (i), 198, 202 and 203, means —
(i) debentures, stocks or shares issued or proposed to be issued by a corporation;
(ii) any right, option or derivative in respect of any such debentures, stocks or shares;
(iii) any right under a contract for differences or under any other contract the purpose or pretended purpose of which is to secure a profit or avoid a loss by reference to fluctuations in —
(A) the value or price of any such debentures, stocks or shares;
(B) the value or price of any group of any such debentures, stocks or shares; or (C) an index of any such debentures, stocks or shares; or
(iv) such other product or class of products as the Authority may prescribe, but does not include —
(AA) futures contracts;
(BB) bills of exchange;
Sec. 214 214. In this Division —
“debenture” has the same meaning as in section 2 and, in relation to a business trust, means a debenture issued by the trustee of the business trust in its capacity as trustee of the business trust;
Sec. 239 239. (1) In this Division —
“debenture” includes debenture stock, bonds, notes and any other debt securities issued by a corporation or any other entity, whether or not constituting a charge on the assets of the issuer but does not include —
(a) a cheque, letter of credit, order for the payment of money or bill of exchange;
(b) subject to the regulations made under this Act, a promissory note having a face value of not less than $100,000 and having a maturity period of not more than 12 months; or
(c) for the purposes of the application of this definition to a provision of this Act in respect of which any regulations made thereunder provide that the word “debenture” does not include a prescribed document or a document included in a prescribed class of documents, that document or a document included in that class of documents, as the case may be;
“debenture issuance programme” means any scheme or arrangement by an entity for the issue of debentures or units of debentures where only part of the maximum amount or aggregate number of debentures or units of debentures under the programme is offered initially and a further tranche or tranches may be offered subsequently;[sic]
Source: Attorney-General’s Chamber. Securities and Futures Act 2001.