Legislation

Financial Advisers (Amendment) Act 2005 (Act 2 of 2005) in force 1 July 2005

Pursuant to the Financial Advisers (Amendment) Act (Commencement) Notification 2005 (S361/2005), the Financial Advisers (Amendment) Act 2005 (A2/2005) (the ‘FA(A) Act’) came into force on 1 July 2005.

Among other changes, the Financial Advisers Act (‘FAA’) (Cap 110) is amended to exclude the application of the reasonable basis requirements when financial advice is given in seminars and talks, provided certain conditions are met.

In addition, section 24 (1) and (2) of the FAA has been deleted to remove the prohibition on the grant of unsecured credit facilities by a financial adviser to its officers and employees for the purpose of dealing in investment products. A financial adviser may only grant unsecured credit facilities to an officer and employee for any purposes if the aggregate and outstanding unsecured credit facilities that have been granted to the officer or employee at any one time does not exceed S$3,000. A financial adviser is still prohibited from granting unsecured credit facilities to its directors who is not an employee.

Also on 1 July 2005, the Financial Advisers Regulations are amended to implement the FA(A) Act and to introduce, among other things, the following changes:

•    exempting financial advisers who provide financial advisory services to the following persons from complying with some of the business conduct requirements in the FAA:

— institutional investors; or

— overseas investors; and

•    imposing a duty on financial advisers to disclose to an accredited or expert investor any exemptions from business conduct requirements in the FAA that are applicable to them when they provide financial advisory services to such investor.

Money-changing and Remittance Businesses (Amendment) Bill (B15/2005)

On 18 July 2005, the Money-Changing and Remittance Businesses (Amendment) Bill 2005 was introduced in Parliament to amend the Money-Changing and Remittance Businesses Act so as to fine-tune and better reflect the supervisory approach of the Monetary Authority of Singapore (the ‘MAS’) towards remittance houses.

The MAS does not supervise remittance houses for their safety and soundness. The MAS’ supervision of remittance houses and money-changers focuses on anti-money laundering (‘AML’) and countering of terrorist financing (‘CFT’) purposes. The changes introduced by the Amendment Bill are geared towards raising the professional and AML/CFT standards in the remittance industry.

The Amendment Bill makes the following changes:

•    to require the holder of a remittance licence to be incorporated and to have a minimum capital of S$100,000;

•    to expand the scope of the power of the MAS to revoke a licence granted under the Act, to empower the MAS to suspend a licence in lieu of revocation, and to provide for the circumstances under which a licence will lapse or may be surrendered;

•    to remove the powers of the MAS to arrest a person reasonably suspected of having committed an offence under the Act and to conduct proceedings in respect of offences under the Act;

•    to make officers or partners of a licensee personally liable under certain circumstances for any loss suffered where the licensee has carried on its business in a fraudulent manner;

•    to empower the MAS to issue directions in respect of a licensee’s inward remittance business; and

•    to increase the quantum of the penalties for certain offences under the Act.

Subordinate Courts (Amendment) Bill 2005 (B16/2005)

The Subordinate Court (Amendment) Bill 2005, which was introduced in Parliament on 18 July 2005, seeks to amend the Subordinate Courts Act to reform the law relating to transfers in civil proceedings. The Bill implements the recommendations of the Law Reform Committee of the Singapore Academy of Law. Their principal recommendations are:

(a) to provide a new mechanism to transfer civil proceedings:

(i)  from the Magistrate’s Court to the High Court;

(ii) from the High Court to the Magistrate’s Court; and

(iii) from the District Court to the Magistrate’s Court;

(b) to widen the existing ground for transferring civil proceedings from the Magistrate’s Court to the District Court (including a new provision in relation to the transfer of a counterclaim from the Magistrate’s Court to the District Court);

(c)        to clarify that a party intending to avail himself of reciprocal enforcement arrangements (should such be available under overseas legislation) may proceed with his claim in the High Court (unless for some other reason it would be inappropriate for him to do so), notwithstanding that the claim falls within the ordinary jurisdiction of the subordinate courts; and

(d)        to amend the provisions on costs in transferred cases, consequent to the above amendments.

The basic objective is to provide for greater flexibility to the courts to transfer proceedings between themselves so that cases may be dealt with as efficiently as possible. This Bill also seeks to remove anomalies and resolve certain shortcomings highlighted in recent decisions of the Singapore Supreme Court, so that transfers of civil proceedings between courts will be less complex and more flexible. The following are some features of the new regime:

(i)  transfers will be triggered by the application of a party to the proceedings, (except that the court will be empowered to transfer a case to a lower court on its own motion; this is a necessary safeguard to ensure that the jurisdictional demarcation between the various courts, set out by the legislature to ensure the efficient use of court resources, is respected);

(ii) applications for transfer, whether to or from a superior court, will be made to the superior court;

(iii) except as provided for in new ss 54E(2)(c) and 54F(2)(c), the court will have no power to transfer only part of the pending proceedings;

(iv) the court will have no power to transfer proceedings to a lower court which lacks the subject-matter jurisdiction to deal with those proceedings.

Elizabeth Wong

Allen & Gledhill