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LEGAL UPDATES |
Legislation
Pursuant to the Accounting and Corporate Regulatory Act (Commencement) Notification 2004 (S131/2004), the ACRA Act 2004 came into operation on 1 April 2004.
The ACRA Act established and incorporated the Accounting and Corporate Regulatory Authority (‘ACRA’). The ACRA is essentially a new statutory board, which results from the merging of the Registry of Companies and Businesses (‘RCB’) and the Public Accountants Board (‘PAB’).
Previously, the RCB regulated the formation of business firms and companies and was also a centre of information where one may obtain registered particulars of business entities. The PAB previously controlled and regulated the practice of accountancy by public accountants and accounting corporations.
With effect from 1 April 2004, the ACRA took the place of the RCB and the PAB and became the new regulator of corporate entities, businesses and public accountants. To this effect, employees, property, assets and liabilities from the RCB and the PAB were transferred to the ACRA.
The Statutes (Miscellaneous Amendments) Act 2004 makes amendments including the following, which are operative from 8 March 2004:
With the exception of s 28 (a) and (c), the Companies (Amendment) Act 2004 came into operation on 1 April 2004.
Section 28 (a) and (c) will come into operation on 1 October 2004. The amendments in s 28(a) and (c) are those relating to the inclusion of a company’s registration number on its stationary and publications.
Some of the key changes effected by the Act are:
• allowing private companies to have one director and one shareholder instead of the current requirement of two (except in the case of a wholly-owned subsidiary, where the sole shareholder is the holding company);
• a change in the definition of ‘private company’ in the Companies Act (Cap 50) removes the current prohibition on any invitation to the public to subscribe for shares in or debentures of the company;
• a new s 157C now accords directors protection for reasonable reliance on advice and information from professionals and experts; and
• the objects of a company no longer need to be stated in the company’s memorandum.
The following regulations and order have also been issued under the Companies Act:
• Companies (Approved Company Auditors) (Transitional and Savings Provisions) Regulations 2004 (S135/2004).
• Companies (Approved Liquidators) (Transitional and Savings Provisions) Regulations 2004 (S136/2004).
• Companies (Amendment) Regulations 2004 (S137/2004).
• Companies (Exemption from Notification of Substantial Shareholding)
Order 2004 (S138/2004).
The Maritime Offence Act 2003 will have come into operation on 3 May 2004.
The Maritime Offence Act 2003 gives effect to the Convention for the Suppression of Unlawful Acts against the Safety of Maritime Navigation (the ‘Rome Convention’). Consequential amendments will be made to the Hijacking of Aircraft and Protection of Aircraft and International Airports Act (Cap 124) and the Supreme Court of Judicature Act (Cap 322).
The Maritime Offence Act 2003 establishes the following offences:
(a) hijacking a ship;
(b) intentionally destroying or damaging a ship, or committing on board a ship an act of violence which is likely to endanger its safe navigation;
(c) intentionally destroying or damaging, or seriously interfering with, the operation of any property used for providing maritime navigation facilities;
(d) giving false information which endangers the safe navigation of a ship; and
(e) issuing a threat to carry out an act referred to in cl 4(1) or 5(1), which might endanger the safe navigation of a ship.
The offences under (b) to (e) above may be established irrespective of the nationality of the offender, the state of registration of the ship and the place of commission of the offence.
The Ministry of Trade and Industry (‘MTI’) has on 12 April 2004 released a Consultation Paper (‘Consultation Paper’) seeking feedback from the public on the draft Competition Bill (‘draft Bill’). The closing date for submissions of feedback to this Consultation Paper was 15 May 2004. The second round of public consultations will be in July/August 2004.
Parliament has issued a notice (‘notice’) inviting the public to submit written representations on the Building Maintenance and Management Bill 2004 (‘Bill’) for the consideration of the Select Committee on the Bill. The Bill was introduced in Parliament on 6 February 2004.
The Bill seeks to repeal and re-enact, with amendments, the Buildings and Common Property (Maintenance and Management) Act (Cap 30) and to make consequential amendments to the Land Titles (Strata) Act and certain other written laws. When passed into law, the Bill will constitute an integrated statute on the management and maintenance of both strata-subdivided and non-strata subdivided buildings.
All written representations were to have been submitted by 13 May 2004.
The Trade Unions (Amendment) Bill 2004 was introduced in Parliament on 19 March 2004 and passed on 20 April 2004.
When it comes into force, the Bill introduces a new s 30A in the Trade Unions Act (Cap 333). The new s 30A confers on the officers of a trade union (and any other persons duly appointed by the trade union to represent its members in negotiations with a view to a collective agreement) the authority to bargain collectively for all the members and to bind all the members by a collective agreement, without the need for ratification by the members.
The decision of such officers or persons on any matter in such negotiations will be the decision of all members of the trade union.
The officers of a trade union will be so empowered notwithstanding any provision in any rules or resolution of the trade union.
However, Parliament recognises that the changes to the Trade Unions Act alone will not improve relations within the union or their relationship with management. In this regard, the tripartite partners comprising the employers, unions and the Government have formulated a Code of Industrial Relations Practice to promote and guide both employers and trade unions to conduct industrial relations and deal with labour management relations in a responsible and constructive manner for the benefit of the company and its workers.
The Companies (Amendment) Regulations 2004 are effective from 1 April 2004. Among the changes are those relating to the following.
The Companies Act (Cap 50) contains a new s 206(1A) which provides that a public company shall, under prescribed circumstances, undertake a review of the fees, expenses and emoluments of its auditor to determine whether the independence of the auditor has been compromised.
A new Regulation 12 is introduced providing for auditors’ remuneration. Regulation 12 provides that for the purposes of s 206 (1A) of the Companies Act, a review of the fees, expenses and emoluments of an auditor of a public company must be undertaken if the total amount of the fees paid to the auditor for non-audit services in any financial year of the company exceeds 50% of the total amount of the fees paid to the auditor in that financial year.
Section 171(1AA) of the Companies Act lists the persons eligible to be appointed a company secretary. Section 171(1AA)(c) provides for inter alia members of professional bodies as may be prescribed, while s 171(1AA)(d) provides for persons eligible by virtue of prescribed academic or professional qualifications.
Regulation 89 of the Companies Regulations, which provides for the professional qualifications of a company secretary, is deleted and substituted with a new provision. Pursuant to the new Regulation 89, the professional associations for the purposes of s 171 (1AA)(c) of the Companies Act shall be as follows:
(a) Institute of Certified Public Accountants of Singapore;
(b) Association of International Accountants (Singapore Branch); and
(c) Institute of Company Accountants, Singapore.
Prior to the amendment, Regulation 89 provided for eligible persons under s 171(1AA)(d), not s 171(1AA)(c). For this purpose, eligible persons were members of the Association of International Accountants (Singapore Branch) and members of the Institute of Company Accountants, Singapore.
New versions of the following forms are also introduced:
• Form 45 — Consent to act as director and statement of non disqualification to act as director.
• Form 45A — Consent to act as director and statement of non disqualification to act as director with leave of court and/or written consent of Official Assignee.
The Companies (Exemption from Notification of Substantial Shareholding) Order 2004 is operative from 1 April 2004.
Pursuant to the Order, the following persons are exempted from the substantial shareholding notification requirements under the Companies Act:
(a) any person, being the holder of a capital markets services licence or an exempt person, who acts as a securities lending intermediary in a securities lending transaction where the securities are transferred to and out of the person’s securities account within two business days; and
(b) any substantial shareholder, other than a person referred to in paragraph (a), who lends his securities to any borrower pursuant to a securities lending arrangement, subject to the condition that there is in force between the substantial shareholder and the borrower an agreement for the lending of the securities which provides that the substantial shareholder shall (i) retain all beneficial interests in the securities, and (ii) be in a position to exercise any of his rights as a shareholder of the securities.
On 15 April 2004, the Monetary Authority of Singapore (the ‘MAS’) issued the Banking (Credit Card and Charge Card) (Amendment) Regulations 2004 (S198/2004) (the ‘Banking Amendment Regulations’). The Banking Amendment Regulations came into operation on 15 April 2004.
The Banking Amendment Regulations amended the Banking (Credit Card and Charge Card) Regulations 2004 (the ‘Regulations’) to introduce two main changes:
With effect from 15 April 2004, a card issuer is allowed to issue a credit card or charge card to an individual who does not qualify for the unsecured credit limit prescribed under regulation 4(1) of the Regulations subject to the following requirements:
• he/she has, in his/her name, one or more deposits amounting in the aggregate to not less than S$10,000 with any bank which he/she may use to secure the credit limit of the card; and
• he/she is a citizen of Singapore or a permanent resident.
A card issuer is required to ensure that an individual, who has been issued a card with a secured credit limit, maintains one or more deposits amounting in the aggregate to not less than S$10,000 during the period he holds the card.
A principal cardholder with a secured credit limit may be issued supplementary cards as long as the aggregate credit limit granted on the principal card and its supplementary cards are adequately secured by the principal cardholder’s deposit.
Regulation 4(1) of the Regulations is repealed and re-enacted to introduce the new requirement on secured credit limit for credit card and charge card. Consequential amendments are also made to Regulations 2 and 7.
The definition of ‘maximum credit limit’ set out in Regulation 6(6) of the Regulations is repealed and re-enacted.
The new definition of ‘maximum credit limit’ clarifies that a card issuer shall not permit the aggregate outstanding amount of a cardholder who is a citizen of Singapore or a permanent resident to exceed:
• two months’ income of the cardholder (even if he holds more than one card with unsecured credit limit), or
• the amount of deposit/s of the cardholder which secures the credit limit of the card (even if he holds more than one card with secured credit limit).
Consequently, new Regulation 4(2) of the Regulations removes the requirement for a card issuer to perform income verification checks before issuing additional card to an existing cardholder. In such case, no additional credit is made available for the second card.
Elizabeth Wong
Allen & Gledhill