PART IV | Books of holder of capital markets services licence |
39.—(1) For the purposes of Division 1 of Part 5 of the Act, the holder of a capital markets services licence shall keep books in the English language which contain the following, where applicable:| (a) | particulars of every customer, including particulars that satisfy such notices and guidelines as may be issued by the Authority under the Act; | | (b) | the name of any person —| (i) | guaranteeing the settlement of any amount owed in a customer’s account in respect of which a regulated activity is carried out by the holder; | | (ii) | who can give instructions to the holder on the carrying out of a regulated activity with respect to a customer’s account; or | | (iii) | who has trading authority or exercises any control with respect to a customer’s account; |
| | (c) | [Deleted by S 543/2003] | | (d) | particulars of every transaction carried out on behalf of customers, including —| (i) | a description and the quantity of the assets that are the subject of the transaction; | | (ii) | the price and fee arising from the transaction; | | (iii) | the name of the customer on whose behalf the transaction is entered into; | | (iv) | the name of the counterparty to the transaction; and | | (v) | the transaction date and settlement or delivery date; |
| | (da) | particulars of every transaction in which the holder lends, or arranges for a custodian to lend, a customer’s specified products, including —| (i) | the terms and conditions of the transaction; and | | (ii) | if any collateral is received, a description of the collateral received; [S 667/2018 wef 08/10/2018] |
| | (e) | a separate record maintained for each customer stating, where applicable —| (i) | the amount and description of each asset paid or deposited in the trust account and custody account as required by regulations 16 and 26 respectively and the date of such payment or deposit; | | (ii) | the date and quantity of each transfer of assets from or to the trust account and custody account arising from any asset borrowing or lending activity or otherwise; | | (iii) | the date, amount and purpose of each withdrawal from the trust account or custody account; [S 667/2018 wef 08/10/2018] | | (iv) | the date and amount of, and the reason for, each disposal of collateral from the trust account or custody account; | | (v) | whether the customer has a trust account or custody account maintained by the holder solely for that customer, or shares the same trust account or custody account with other customers of the holder; and [S 667/2018 wef 08/10/2018] | | (vi) | the names of the custodians with whom the holder deposits any assets of the customer; [S 667/2018 wef 08/10/2018] |
| | (f) | particulars of each asset that is not the property of the holder and for which the holder or any nominee controlled by the holder is accountable, indicating by whom and for whom the asset or the document of title to the asset is held and the extent to which it is held for safe custody by a third party or mortgaged, charged, pledged or hypothecated in accordance with regulation 34; | | (g) | particulars of every underwriting and placement transaction entered into by the holder including, where applicable —| (i) | the amount which the holder committed to underwrite; | | (ii) | the amount underwritten due to under-subscription; | | (iii) | the amount allotted to each subscriber; | | (iv) | the amount placed with each placee; and | | (v) | the amount subscribed by each subscriber or placee (including any related company); |
| | (h) | particulars of every proprietary transaction of the holder including, where applicable —| (i) | the description and quantity of the assets concerned; | | (ii) | the price and fee arising from the transaction; | | (iii) | the transaction date and settlement or delivery date; | | (iv) | the name of the counterparty to the transaction; and | | (v) | the realised or unrealised gain or loss; |
| | (i) | particulars of all income and expenses of the holder; [S 667/2018 wef 08/10/2018] | | (j) | particulars of all assets and liabilities (including contingent liabilities) of the holder and, in the case of assets, showing by whom these assets or the documents of title to these assets are held and, where they are held by some other person, whether or not they are held as security against loans or advances; and [S 667/2018 wef 08/10/2018] | | (k) | particulars of every transaction in relation to any OTC derivatives contract entered into on behalf of, or with, the holder’s customers, including —| (i) | the price at which the OTC derivatives contract was executed; | | (ii) | the fees or commission and other expenses paid in relation to the transaction; and | | (iii) | the terms and conditions of the transaction, including margin requirements relating to the transaction. [S 667/2018 wef 08/10/2018] [S 226/2023 wef 31/12/2021] |
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(2) The holder shall also keep books in the English language which contain the following documents, where applicable:| (a) | for each customer, every power of attorney or other document authorising the holder or its representative to operate the account of the customer on a discretionary basis; [S 667/2018 wef 08/10/2018] | | (b) | every written agreement, or copy thereof, entered into by the holder with its customer; | | (ba) | every disclosure made to a customer under regulation 18A or 27A; [S 667/2018 wef 08/10/2018] | | (bb) | every acknowledgment of a customer received under regulation 47DA(1)(b); [S 667/2018 wef 08/10/2018] | | (bc) | every document relating to the opening of any trading account of a customer with the holder for the purpose of entering into the transactions in relation to OTC derivatives contracts; [S 667/2018 wef 08/10/2018] | | (c) | every acknowledgment of a customer received under regulation 47E(1)(b) which shall be in Form 13; [S 709/2010 wef 26/11/2010] | | (d) | every acknowledgment of a customer received under regulation 47E(2) which shall be in Form 14; [S 709/2010 wef 26/11/2010] | | (e) | every statement acknowledging receipt of assets from a customer indicating the person in whose name the assets are registered; | | (f) | every order, whether filled, unfilled, amended or cancelled, which has been prepared or received in the course of the business of the holder; | | (g) | every report, letter, circular, memorandum, publication, advertisement and other literature or advice distributed by the holder to any existing or prospective customer, indicating the date of publication; | | (h) | every report, statement, submission, letter, journal, ledger, invoice, and other record, data or memoranda, which has been prepared or received in the course of business of the holder; | | (i) | written confirmation of every transaction to purchase or sell any capital markets products and every purchase and sale contract note and statement of account in respect of such transaction, being a transaction to which any of the following is a party:| (i) | the holder; | | (ii) | except where the holder is one referred to in sub-paragraph (iii), an executive director of the holder, if the transaction is a personal transaction of such executive director; and | | (iii) | where the holder is a branch or subsidiary of a foreign company with its head office located outside Singapore, an executive director of the holder who is directly involved in its operations and business, if the transaction is a personal transaction of such executive director; [S 667/2018 wef 08/10/2018] |
| | (j) | written confirmation of every transaction referred to in paragraph (1)(d) prepared by the holder as principal or as agent of a customer, and every purchase and sale contract note and statement of account in respect of such transaction prepared by the holder as principal or as agent of the customer, as the case may be, or received from any other party, whether licensed in Singapore or elsewhere; and | | (k) | in respect of every underwriting and placement transaction entered into by the holder, documentation stating the basis of allotment to each subscriber or placee, as the case may be. |
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(3) Subject to paragraph (4), the holder of a capital markets services licence to deal in capital markets products shall —| (a) | as soon as practicable upon the receipt of a customer’s order for capital markets products that are securities and units in a collective investment scheme that are not quoted on an organised market or the receipt of any amendment or cancellation of such an order, prepare and keep a written record of —| (i) | the particulars of the customer’s instruction in the order; | | (ii) | the date of receipt of the order, amendment or cancellation; and | | (iii) | where the instruction in respect of the order, amendment or cancellation is placed through an Internet-based trading platform, the Internet protocol address from which the instruction is received; [S 667/2018 wef 08/10/2018] |
| | (b) | as soon as practicable upon the execution of an order mentioned in sub-paragraph (a), prepare and keep a written record of the particulars of the transaction, including —| (i) | the date of the execution of the order; and | | (ii) | any subsequent variation to the order; [S 667/2018 wef 08/10/2018] |
| | (c) | as soon as practicable upon the receipt of a customer’s order for capital markets products other than securities and units in a collective investment scheme that are not quoted on an organised market or the receipt of any amendment or cancellation of such an order, prepare and keep a written record of —| (i) | the particulars of the customer’s instruction in the order; | | (ii) | the date and time of receipt of the order, amendment or cancellation; | | (iii) | where the instruction in respect of the order, amendment or cancellation is placed through an Internet-based trading platform, the Internet protocol address from which the instruction is received; and | | (iv) | where the order, amendment or cancellation is transmitted to a member of an organised market or to the trading floor of such an organised market, the date and time the order, amendment or cancellation is transmitted; [S 667/2018 wef 08/10/2018] |
| | (d) | as soon as practicable upon the execution of an order mentioned in sub-paragraph (c), prepare and keep a written record of the particulars of the transaction, including —| (i) | the date and time of the execution of the order; and | | (ii) | any subsequent variation to the order. [S 667/2018 wef 08/10/2018] |
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(4) Paragraph (3) shall not apply to the holder of a capital markets services licence to deal in capital markets products that are futures contracts in respect of a transaction by an arbitrageur or a market-maker for the purchase or sale of futures contracts specified by an approved exchange if —| (a) | the arbitrageur or market-maker, as the case may be, has given prior written consent for the holder not to prepare and keep the records as required in paragraph (3); | | (b) | the transaction is executed on the trading floor; and | | (c) | the transaction is entered into in accordance with the business rules or practices of the approved exchange. [S 667/2018 wef 08/10/2018] |
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(5) In this regulation —“arbitrageur” means a person who —| (a) | is appointed, approved or registered by an approved exchange as an arbitrageur in respect of futures contracts specified by the approved exchange; and [S 667/2018 wef 08/10/2018] | | (b) | purchases or sells any futures contract specified by the approved exchange in an organised market together with an off-setting sale or purchase of the same or equivalent contract in a different market at as nearly the same time as practicable for the purpose of taking advantage of a difference in prices in the 2 markets; [S 667/2018 wef 08/10/2018] |
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“market-maker” means a person who —| (a) | is appointed, approved or registered by an approved exchange as a market-maker in respect of futures contracts specified by the approved exchange; [S 667/2018 wef 08/10/2018] | | (b) | enters into transactions for the purchase or sale of futures contracts specified by the approved exchange for his own account; [S 667/2018 wef 08/10/2018] | | (c) | regularly publishes bona fide competitive bid and offer quotations in respect of futures contracts specified by the approved exchange; and [S 667/2018 wef 08/10/2018] | | (d) | is ready, willing and able to effect transactions at his quoted prices with other persons in respect of futures contracts specified by the approved exchange. [S 667/2018 wef 08/10/2018] |
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| Provision of statement of account to customers |
40.—(1) The holder of a capital markets services licence shall on a monthly basis furnish to each customer a statement of account containing the particulars referred to in paragraph (2).(1A) Paragraph (1) shall not apply to the holder where —| (a) | there is no change to any of those particulars since the date on which the last statement of account was made up to; or | | (b) | the customer is an accredited investor, an expert investor or an institutional investor, or a related corporation of the holder, and —| (i) | the holder has made available to the customer, on a real-time basis, those particulars in the form of electronic records stored on an electronic facility and the customer has consented to those particulars being made available to him in this manner; or | | (ii) | the customer has requested, in writing, not to receive the statement of account on a monthly basis from the holder. [S 667/2018 wef 08/10/2018] |
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| (1B) Despite paragraph (1A), where the holder of a capital markets services licence receives a request from a customer for a statement of account mentioned in paragraph (1), the holder must provide the customer with the statement as soon as practicable. [S 667/2018 wef 08/10/2018] |
(2) The statement of account referred to in paragraphs (1) and (1B) shall contain, where applicable, the following particulars:| (a) | transactions to purchase or sell securities or units in a collective investment scheme entered into by the customer and the price at which the transactions are entered into; [S 667/2018 wef 08/10/2018] | | (b) | a list of derivatives contracts entered into by the customer and spot foreign exchange contracts for the purposes of leveraged foreign exchange trading entered into by the customer that are outstanding and have not been liquidated, the prices at which such contracts were acquired, and the net unrealised profits or losses of the customer in all such contracts marked to the market; [S 667/2018 wef 08/10/2018] | | (c) | the status of every asset in the holder’s custody held for the customer, including any asset deposited with a third party that is used for the lending of specified products under regulation 33 or held as collateral under regulation 34; [S 667/2018 wef 08/10/2018] | | (d) | the movement of every asset of the customer, the date of and reasons for such movement, and the amount of the asset involved; | | (e) | the movement and balance of money received on account of the customer within the meaning of regulation 15(2); and | | (f) | a detailed account of all financial charges and credits to the customer’s account during the monthly statement period, unless the detailed account of financial charges and credits has been included in any contract note or tax invoice issued by the holder to the customer. |
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| (3) Subject to paragraphs (4), (5) and (6), the holder of a capital markets services licence shall furnish to each customer, at the end of every quarter of a calendar year, a statement of account containing, where applicable, the assets, derivatives contracts of the customer and spot foreign exchange contracts for the purposes of leveraged foreign exchange trading of the customer that are outstanding and have not been liquidated and cash balances (if any) of the customer as at the end of that quarter. [S 667/2018 wef 08/10/2018] |
(4) Paragraph (3) shall not apply to the holder of a capital markets services licence where —| (a) | such particulars have been furnished to the customer by the holder in accordance with paragraph (1) for the last month of that quarter; or | | (b) | the holder is exempted from complying with paragraph (1) by virtue of the application of paragraph (1A)(b). |
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| (5) Paragraphs (1) and (3) do not apply to a holder of a capital markets services licence for dealing in capital markets products that is a member of an approved clearing house, if the statements of account mentioned in those paragraphs are furnished to the customer by the approved clearing house or a Depository within the meaning of section 81SF of the Act. [S 667/2018 wef 08/10/2018] |
| (6) Paragraphs (1) and (3) do not apply to a holder of a capital markets services licence for dealing in capital markets products all the customers of which are institutional investors, if the holder performs periodic reconciliation, between the holder’s records and its customers’ records, in respect of its customers’ transactions and positions in capital markets products. [S 667/2018 wef 08/10/2018] |
(7) In this regulation —| (a) | a derivatives contract has not been liquidated if —| (i) | the derivatives contract has not been set off against any other transaction; | | (ii) | any underlying thing of the derivatives contract has not been delivered; | | (iii) | the derivatives contract has not been settled in accordance with the business rules or practices of an organised market or clearing facility; and | | (iv) | the derivatives contract has not been substituted with a cash commodity; and |
| | (b) | a spot foreign exchange contract for the purposes of leveraged foreign exchange trading has not been liquidated if —| (i) | the spot foreign exchange contract for the purposes of leveraged foreign exchange trading has not been set off against any other transaction; | | (ii) | the currency of the spot foreign exchange contract for the purposes of leveraged foreign exchange trading has not been delivered; | | (iii) | the spot foreign exchange contract for the purposes of leveraged foreign exchange trading has not been settled in accordance with the business rules or practices of an organised market or clearing facility; and | | (iv) | the spot foreign exchange contract for the purposes of leveraged foreign exchange trading has not been substituted with a futures contract. [S 667/2018 wef 08/10/2018] |
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| Documentation required by Authority, approved exchange or approved clearing house |
| 41. Where the Authority, an approved exchange or approved clearing house of which the holder of a capital markets services licence is a member, requests the holder to furnish it with the documentation of any cash transaction underlying the exchange of futures contract for any cash commodity, the holder shall request for such documentation from its customer and, upon receipt thereof, provide such documentation to the Authority, approved exchange or approved clearing house, as the case may be. [S 667/2018 wef 08/10/2018] |
42.—(1) Subject to paragraph (1A), the holder of a capital markets services licence to deal in capital markets products shall, in respect of a sale or purchase of any capital markets products, after entering into the transaction —| (a) | give to the other party to the transaction a contract note which contains such information as may be prescribed; or | | (b) | procure that such a contract note be given in its name. [S 709/2010 wef 26/11/2010] [S 667/2018 wef 08/10/2018] |
| (1A) Paragraph (1) does not apply to any transaction of sale or purchase of securities, units in a collective investment scheme or exchange-traded derivatives contracts effected by the holder of a capital markets services licence through a member of an approved exchange or overseas exchange, if the holder gives, or arranges with that member to give, to the other party to the transaction a contract note, or a copy of a contract note, issued by that member in respect of the transaction, in accordance with the rules of that exchange or with any written law governing the issuance of contract notes by members of that exchange. [S 667/2018 wef 08/10/2018] |
(1AA) Paragraph (1) does not apply to any transaction of sale or purchase of OTC derivatives contracts, if the holder gives to the other party to the transaction a confirmation in respect of the transaction that states —| (a) | the name of the holder; | | (b) | the name of the party to whom the confirmation is given; | | (c) | where the holder is dealing in OTC derivatives contracts as a principal, a statement that is so acting; | | (d) | the date on which the transaction is entered into; and | | (e) | the type and notional value of the OTC derivatives contracts. [S 667/2018 wef 08/10/2018] [S 832/2020 wef 30/09/2020] |
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(1B) The holder shall include, in every contract note to be given under paragraph (1), where applicable —| (a) | the name or style under which the holder carries on business in dealing in capital markets products, and the address of the principal place at which the holder carries on the business; [S 667/2018 wef 08/10/2018] | | (b) | where the holder is —| (i) | dealing in capital markets products other than futures contracts as a principal; or [S 667/2018 wef 08/10/2018] | | (ii) | dealing in capital markets products that are futures contracts against its customer, |
| a statement that it is so acting; |
[S 667/2018 wef 08/10/2018] | | (c) | the name and address of the party to whom the contract note is given; | | (d) | the date on which the transaction is entered into; | | (e) | in respect of a sale or purchase of securities or units in a collective investment scheme, the number or amount, and description of the securities or units in a collective investment scheme that are the subject of the transaction; [S 667/2018 wef 08/10/2018] | | (f) | in respect of a sale or purchase of derivatives contracts or a transaction connected with spot foreign exchange contracts for the purposes of leveraged foreign exchange trading, the quantity and type of the derivatives contract or the amount of spot foreign exchange contracts that is the subject of the transaction, as the case may be; [S 667/2018 wef 08/10/2018] | | (g) | in respect of a sale or purchase of capital markets products, the price per unit of the transaction, the amount of the consideration for the transaction, the rate and amount of commission (if any) charged for the transaction by the holder and the amount of all stamp duties or other duties or taxes payable in connection with the transaction; and [S 667/2018 wef 08/10/2018] | | (h) | in respect of a sale or purchase of capital markets products, if an amount is to be added to or deducted from the settlement amount in respect of the right to a benefit purchased or sold together with the capital markets products, the first-mentioned amount and the nature of the benefit. [S 709/2010 wef 26/11/2010] [S 667/2018 wef 08/10/2018] |
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| (2) The holder of a capital markets services licence shall, no later than the business day immediately following a sale or purchase of capital markets products, give to the other party to the transaction a contract note for the transaction. [S 667/2018 wef 08/10/2018] |
| (2A) Notwithstanding paragraph (2), where any detail in a transaction that is required to be included in every contract note under paragraph (1B) becomes available or is only determined after the business day specified in paragraph (2), the holder of the capital markets services licence shall give to the other party to the transaction the contract note for the transaction no later than the business day immediately following the business day on which the information required to be included in every contract note in paragraph (1B) becomes available or has been determined. [S 373/2005 wef 01/07/2005] [S 709/2010 wef 26/11/2010] |
| (3) Any person who, without reasonable excuse, contravenes any of the provisions of this regulation shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000 and, in the case of a continuing offence, to a further fine of $5,000 for every day or part thereof during which the offence continues after conviction. [S 709/2010 wef 26/11/2010] |
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| Limits for unsecured credit and credit facilities |
43.—(1) The holder of a capital markets services licence shall not grant, whether directly or indirectly, any unsecured advance, unsecured loan or unsecured credit facility to —| (a) | any of its directors (other than a director who is also its employee); or | | (b) | in relation to a director who is not an employee of the holder, any connected person of such director who is himself also not an employee of the holder. |
| (2) Subject to paragraph (1) and section 162 of the Companies Act 1967, the holder of a capital markets services licence shall not grant, whether directly or indirectly, any unsecured advance, unsecured loan or unsecured credit facility to any relevant person of the holder, which in the aggregate and outstanding at any one time exceeds one year’s emoluments of such relevant person. [S 226/2023 wef 31/12/2021] |
(3) For the purpose of paragraph (2), any unsecured advance, unsecured loan or unsecured credit facility granted by the holder of a capital markets services licence to any person to purchase, subscribe for or trade in any capital markets product for —| (a) | the account of a relevant person of the holder; | | (b) | an account in which a relevant person of the holder has an interest; | | (c) | an account of any person who acts jointly with, under the control of, or in accordance with, the direction of a relevant person of the holder; or | | (d) | an account of any connected person of a relevant person of the holder, where the connected person is not himself a relevant person of the holder, |
| shall be deemed to be an unsecured advance, unsecured loan or unsecured credit facility granted by the holder to that relevant person. |
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(4) In this regulation —“market value”, in relation to assets which are specified products listed for quotation or quoted on an approved exchange or an overseas exchange, means —| (a) | the last transacted price of the specified products traded on the exchange on the preceding business day; [S 667/2018 wef 08/10/2018] | | (b) | if there was no trading in the specified products on the exchange on the preceding business day, then, subject to paragraph (c), the lower of the last transacted price and the last bid price of the specified products on the exchange; or [S 667/2018 wef 08/10/2018] | | (c) | if there was no trading in the specified products on the exchange in the preceding 30 days, the value of the specified products as estimated by the exchange or the holder and approved by the Authority; [S 667/2018 wef 08/10/2018] |
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“relevant person”, in relation to the holder of a capital markets services licence, means —| (a) | an officer of the holder (other than a director who is not its employee); or | | (b) | an employee of the holder; |
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“unsecured advance, unsecured loan or unsecured credit facility” includes —| (a) | any advance, loan or credit facility made by the holder of a capital markets services licence to its relevant person without security, whether it has been drawn down or not; | | (b) | in respect of any advance, loan or credit facility made by the holder to its relevant person with security, any part thereof which at any time exceeds the market value of the assets constituting that security or, where the Authority is satisfied that there is no established market value for those assets, on the basis of a valuation approved by the Authority; and | | (c) | any guarantee or performance bond entered into by the holder, or the provision of any security by the holder, in connection with a loan, advance or credit facility made by another party to its relevant person. [S 373/2005 wef 01/07/2005] |
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| Priority of customers’ orders |
44.—(1) Except as permitted by paragraph (2) —| (a) | the holder of a capital markets services licence to deal in capital markets products when acting as principal or on behalf of a person associated with or connected to the holder; or [S 667/2018 wef 08/10/2018] | | (b) | a representative of such a holder when acting for his own account or on behalf of a person associated with or connected to the representative, |
| shall not enter into a transaction for the purchase or sale of capital markets products that are permitted to be traded on an organised market of an approved exchange or a recognised market operator if a customer of that holder or representative, who is not associated with or connected to the holder or representative, has instructed the holder or representative to purchase or sell, respectively, capital markets products of the same class and the holder or representative has not complied with the instruction. |
[S 667/2018 wef 08/10/2018] (2) Paragraph (1) shall not apply to the holder of a capital markets services licence or a representative of such a holder —| (a) | if his customer required the purchase or sale of capital markets products on behalf of the customer to be effected only on specified conditions and he has been unable to purchase or sell the capital markets products by reason of those conditions; or [S 667/2018 wef 08/10/2018] | | (b) | if the transaction is entered into in accordance to the business rules or practices of the approved exchange or the recognised market operator through which the transaction is entered into. [S 667/2018 wef 08/10/2018] [S 832/2020 wef 30/09/2020] |
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| (3) Any person who contravenes paragraph (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 or to imprisonment for a term not exceeding 12 months or to both. [S 709/2010 wef 26/11/2010] |
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| Specified products borrowing and lending |
45.—(1) Subject to paragraph (2), where a holder of a capital markets services licence —| (a) | borrows specified products from an owner of those specified products (referred to in this regulation as the lender), the holder shall provide Collateral to the lender for the borrowing of the specified products; and [S 667/2018 wef 08/10/2018] | | (b) | lends specified products, including specified products belonging to its customer, to any person (referred to in this regulation as the borrower), the holder shall obtain Collateral from the borrower for the lending of the specified products. [S 667/2018 wef 08/10/2018] |
| (2) Paragraph (1)(a) shall not apply to a holder of a capital markets services licence when the holder borrows specified products from an accredited investor, expert investor or institutional investor. [S 667/2018 wef 08/10/2018] |
| (3) For the purposes of paragraph (1)(a) and (b), the holder of a capital markets services licence shall ensure that the Collateral provided to the lender or obtained from the borrower, as the case may be, shall, throughout the period that the specified products are borrowed or lent, have a value not less than 100% of the market value of the specified products borrowed or lent. [S 667/2018 wef 08/10/2018] |
| (4) Where the holder of a capital markets services licence borrows or lends specified products in accordance with paragraph (1), it shall ensure that the terms and conditions of the borrowing or lending, as the case may be, are recorded in a prior written agreement, which complies with paragraph (5) and is entered into between the holder and the lender or borrower or their duly authorised agent, as the case may be. [S 667/2018 wef 08/10/2018] |
(5) For the purposes of paragraph (4), the written agreement shall —| (a) | state the capacities in which the parties are entering into the agreement (whether as principal or agent); | | (b) | provide for the transfer of the title to and interest in the specified products lent from the lender to the holder, or the holder to the borrower, as the case may be; [S 667/2018 wef 08/10/2018] | | (c) | provide for the transfer of the title to and interest in the whole or part of the Collateral provided or obtained by the holder which is valued to be at least 100% of the market value of the specified products (referred to in this regulation as minimum Collateral) which is borrowed by the holder from the lender, or lent by the holder to the borrower, as the case may be; [S 667/2018 wef 08/10/2018] | | (d) | provide for the following rights throughout the period that the specified products are borrowed or lent:| (i) | in the case where the holder borrows specified products from a lender, the rights of the lender in relation to the minimum Collateral and the rights of the holder in relation to the specified products borrowed; and [S 667/2018 wef 08/10/2018] | | (ii) | in the case where the holder lends specified products to a borrower, the rights of the holder in relation to the minimum Collateral and the rights of the borrower in relation to the specified products borrowed, |
| including the treatment of dividend payments, voting and other rights and arrangements for dealing with any corporate action; |
[S 667/2018 wef 08/10/2018] | | (e) | provide for the procedure for calculating the lending or borrowing fees, as the case may be; | | (f) | include the requirement to mark to market on every business day the specified products lent or borrowed, as the case may be, and all minimum Collateral comprising specified products and the procedures for calculating the margins; [S 667/2018 wef 08/10/2018] | | (g) | provide for the procedures for the request for the return of the specified products lent, and the arrangements for dealing with the situation where such specified products cannot be delivered by —| (i) | the holder, where the holder borrows specified products from a lender; and | | (ii) | the borrower, where the holder lends specified products to a borrower; [S 667/2018 wef 08/10/2018] |
| | (h) | provide for the termination of the agreement by any party to the agreement, including any early termination fee which that party may be subject to; | | (i) | state whether there is any right of set-off of claims; | | (j) | set out the events of default and the rights and obligations of the parties to the agreement in such events of default; and | | (k) | provide for the law governing the agreement and the jurisdiction to which it is subject. |
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| (6) Where the holder of a capital markets services licence borrows specified products from an accredited investor, expert investor or institutional investor, the holder shall ensure that the terms and conditions of the borrowing are recorded in a prior written agreement, which complies with paragraph (7) and is entered into between the holder and the accredited investor, expert investor or institutional investor or their duly authorised agent, as the case may be, regardless of whether the holder provides any assets to the accredited investor, expert investor or institutional investor as collateral for the borrowing. [S 667/2018 wef 08/10/2018] |
(7) For the purposes of paragraph (6) —| (a) | the terms and conditions in the written agreement that apply to the borrowing of specified products shall include the details set out in paragraph (5), with the exception of paragraph (5)(f), and for this purpose —| (i) | any reference to the minimum Collateral in paragraph (5) shall be construed as a reference to any asset which may be provided to the accredited investor, expert investor or institutional investor as collateral for the borrowing; and | | (ii) | any reference to the lender shall be construed as a reference to the accredited investor, expert investor or institutional investor; and [S 667/2018 wef 08/10/2018] |
| | (b) | where assets are provided to the accredited investor, expert investor or institutional investor as collateral for the borrowing, the written agreement shall specify —| (i) | whether the specified products borrowed and the assets provided comprising specified products, if any, are marked to market; and | | (ii) | if so, the procedures for calculating the margins. [S 667/2018 wef 08/10/2018] |
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(8) Without prejudice to paragraph (3), the holder of a capital markets services licence may —| (a) | where it borrows specified products from a lender, provide assets other than Collateral (referred to in this regulation as additional assets) to the lender if the Collateral already provided to the lender is valued at not less than 100% of the market value of the specified products borrowed as at the time the additional assets are provided to the lender; and [S 667/2018 wef 08/10/2018] | | (b) | where it lends specified products to a borrower, obtain additional assets from the borrower if the Collateral already obtained from the borrower is valued at not less than 100% of the market value of the specified products lent as at the time the additional assets are obtained from the borrower. [S 667/2018 wef 08/10/2018] |
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(9) In this regulation —“Collateral” means —| (a) | cash; | | (b) | Government securities; | | (c) | marginable specified products; [S 667/2018 wef 08/10/2018] | | (d) | guarantees issued by banks licensed under the Banking Act 1970; [S 226/2023 wef 31/12/2021] | | (e) | letters of credit; | | (f) | any asset that —| (i) | is liquid and readily convertible into cash; | | (ii) | is in the possession or control of —| (A) | the holder where the holder borrows specified products from a lender; and [S 667/2018 wef 08/10/2018] | | (B) | the borrower where the holder lends specified products to a borrower; [S 667/2018 wef 08/10/2018] |
| | (iii) | is subject to a legally binding agreement between the lender and the holder or the holder and the borrower, as the case may be, which —| (A) | is evidenced in writing; | | (B) | is irrevocable and enforceable against —| (AA) | the holder where the holder borrows specified products from a lender; and [S 667/2018 wef 08/10/2018] | | (BB) | the borrower where the holder lends specified products to a borrower; and [S 667/2018 wef 08/10/2018] |
| | (C) | confers an unconditional right to apply the asset, to sell the asset or to otherwise convert the asset into cash on —| (AA) | the lender where the holder borrows specified products from a lender; and [S 667/2018 wef 08/10/2018] | | (BB) | the holder where the holder lends specified products to a borrower; [S 667/2018 wef 08/10/2018] |
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| | (iv) | is not a security issued by —| (A) | in the case where the holder borrows specified products from a lender —| (AA) | the holder, that gives rise to exposure to the holder; or | | (BB) | a related corporation of the holder; and [S 667/2018 wef 08/10/2018] |
| | (B) | in the case where the holder lends specified products to a borrower —| (AA) | the borrower, that gives rise to exposure to the borrower; or | | (BB) | a related corporation of the borrower; and [S 667/2018 wef 08/10/2018] |
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| | (v) | is not a security that is prohibited from serving as collateral by any approved exchange or approved clearing house, as the case may be; or [S 667/2018 wef 08/10/2018] |
| | (g) | such other instruments as the Authority may from time to time, by a guideline issued by the Authority, determine; |
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“customer” means —| (a) | a person on whose behalf the holder of a capital markets services licence carries on any regulated activity; or | | (b) | any other person with whom the holder enters or will enter into transactions as principal for the sale or purchase of specified products; [S 667/2018 wef 08/10/2018] |
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| [Deleted by S 667/2018 wef 08/10/2018] |
“marginable specified products” means —| (a) | specified products listed for quotation or quoted on the Singapore Exchange Securities Trading Limited; | | (b) | in the case of an initial public offer, specified products to be listed for quotation or quoted on the Singapore Exchange Securities Trading Limited, for which the holder of a capital markets services licence has received full payment from the borrower; | | (c) | specified products quoted on a recognised group A exchange, and issued by a corporation with shareholders’ funds of not less than $200 million or its equivalent in a foreign currency; or | | (d) | such other specified products as the Authority may approve and set out in a guideline issued by the Authority; [S 667/2018 wef 08/10/2018] |
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“market value”, in relation to specified products listed for quotation or quoted on an approved exchange or overseas exchange, means —| (a) | the last transacted price of the specified products traded on the exchange on the preceding business day; [S 667/2018 wef 08/10/2018] | | (b) | if there was no trading in the specified products on the exchange on the preceding business day, then, subject to paragraph (c), the lower of the last transacted price and the last bid price of the specified products on the exchange; or [S 667/2018 wef 08/10/2018] | | (c) | if there was no trading in the specified products on the exchange in the preceding 30 days, the value of the specified products as estimated by the exchange or the holder and approved by the Authority; [S 667/2018 wef 08/10/2018] |
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| “recognised group A exchange” has the same meaning as in regulation 2 of the Securities and Futures (Financial and Margin Requirements for Holders of Capital Markets Services Licences) Regulations (Rg 13). [S 418/2011 wef 31/08/2011] |
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46.—(1) A specified person must not, whether through or in collaboration with another person —| (a) | disseminate or publish any product advertisement on or after 10 December 2018; or | | (b) | cause to be disseminated or published any product advertisement on or after 10 December 2018, |
| unless the product advertisement complies with the requirements mentioned in paragraph (2). |
(2) For the purposes of paragraph (1), the requirements are —| (a) | the product advertisement is not false or misleading; | | (b) | the product advertisement provides a fair and balanced view of the capital markets products to which it relates; | | (c) | the product advertisement presents information in a clear manner, regardless of whether such information is in text or otherwise; | | (d) | where the product advertisement appears in any medium of communication in visual form, the product advertisement is clearly legible; | | (e) | where the product advertisement appears in any electronic mail or website —| (i) | the product advertisement is in a font size of at least 10‑point Times New Roman or any other standard font type that is visually equivalent to that font size; and | | (ii) | any footnote in the product advertisement is not smaller than — | (A) | where the font size of the word or statement to which the footnote relates is or is smaller than 20‑point Times New Roman or any other standard font type that is visually equivalent to that font size — 10‑point Times New Roman or any other standard font type that is visually equivalent to that font size; | | (B) | where the font size of the word or statement to which the footnote relates is larger than 20‑point Times New Roman or any other standard font type that is visually equivalent to that font size but smaller than 29‑point Times New Roman or any other standard font type that is visually equivalent to that font size — half the font size of that word or statement; or | | (C) | where the font size of the word or statement to which the footnote relates is or is larger than 29‑point Times New Roman or any other standard font type that is visually equivalent to that font size — 14‑point Times New Roman or any other standard font type that is visually equivalent to that font size; |
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| | (f) | the product advertisement contains the following statement: | | “This advertisement has not been reviewed by the Monetary Authority of Singapore.”; and |
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| | (g) | the product advertisement has been approved by a person specified in regulation 46AA in the manner set out in that regulation prior to its dissemination or publication. |
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| (3) Without limiting paragraph (2)(a), examples of a product advertisement that is false or misleading are set out in paragraph 1 of the Fourth Schedule. |
| (4) Without limiting paragraph (2)(b), examples of a product advertisement that does not provide a fair and balanced view of the capital markets products to which it relates are set out in paragraph 2 of the Fourth Schedule. |
| (5) Without limiting paragraph (2)(c), examples of a product advertisement that does not present information in a clear manner are set out in paragraph 3 of the Fourth Schedule. |
| (6) Without limiting paragraph (2)(d), examples of a product advertisement that is not clearly legible are set out in paragraph 4 of the Fourth Schedule. |
(7) Paragraph (1) does not apply to any dissemination or publication of information that is —| (a) | pursuant to any requirement —| (i) | imposed under any written law or rule of law of Singapore, or by any court in Singapore; | | (ii) | imposed under the law of any foreign jurisdiction, or by any court in any foreign jurisdiction; or | | (iii) | under any listing rule or other requirement of an approved exchange or an overseas exchange; [S 667/2018 wef 08/10/2018] |
| | (b) | made in the course of an offer of securities or securities-based derivatives contracts —| (i) | other than an offer of securities or securities-based derivatives contracts that is exempt from the application of Subdivisions (2) and (3) of Division 1 of Part 13 of the Act (other than section 257 of the Act) under section 277(1) of the Act, by a person who is exempt from having to comply with section 251 of the Act; [S 667/2018 wef 08/10/2018] [S 226/2023 wef 31/12/2021] | | (ii) | that is exempt from the application of Subdivisions (2) and (3) of Division 1 of Part 13 of the Act (other than section 257 of the Act) under section 272, 272A(1), 272B(1), 273(1) or (5), 274, 275(1) or (1A) or 278(1) of the Act; or [S 226/2023 wef 31/12/2021] | | (iii) | that is exempt from the application of Subdivisions (2) and (3) of Division 1 of Part 13 of the Act under section 276(2) or 279 of the Act; or [S 667/2018 wef 08/10/2018] [S 226/2023 wef 31/12/2021] |
| | (c) | [Deleted by S 667/2018 wef 08/10/2018] | | (d) | made in the course of an offer of units in a collective investment scheme —| (i) | other than an offer of units in a collective investment scheme that is exempt from the application of Subdivision (3) of Division 2 of Part 13 of the Act under section 305B(1) of the Act, by a person who is exempt from having to comply with section 300 of the Act; [S 226/2023 wef 31/12/2021] | | (ii) | that is exempt from the application of Subdivisions (2) and (3) of Division 2 of Part 13 of the Act under section 302A, 302B(1), 302C(1), 303(2), 304 or 305(1) or (2) of the Act; or [S 226/2023 wef 31/12/2021] | | (iii) | that is exempt from the application of Subdivision (3) of Division 2 of Part 13 of the Act under section 303(1) of the Act. [S 381/2018 wef 09/07/2018] [S 226/2023 wef 31/12/2021] |
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(8) A specified person must not, directly or indirectly, publish, circulate or distribute on or after 8 October 2018 but before 10 December 2018 any advertisement —| (a) | which refers, directly or indirectly, to any past specific recommendations of the specified person in relation to any specified product or futures contract which were or would have been profitable to any person, except that the specified person may refer in an advertisement to a list of all recommendations made by the specified person within the period of not less than one year immediately before the date the advertisement is published, circulated or distributed, which list, if furnished separately from the advertisement, must —| (i) | state the name of each specified product or futures contract (as the case may be) recommended, the date and nature of the recommendation, the market price at that time, the price at which the recommendation was to be acted upon, and the market price of the specified product or futures contract (as the case may be) as of the most recent practicable date; and | | (ii) | contain a statement, in as large a font as the largest font used in the body of the advertisement, to the effect that the past performance of the specified product or futures contract (as the case may be) in the list is not indicative of the future performance of the specified product or futures contract (as the case may be); |
| | (b) | which represents, directly or indirectly, that any graph, chart, formula or other device set out or referred to in the advertisement —| (i) | can, in and of itself, be used to determine which specified product or futures contract to buy or sell, or when to buy or sell them; or | | (ii) | will assist any person in deciding which specified product or futures contract to buy or sell, or when to buy or sell them, |
| without prominently disclosing in the advertisement the limitations of such graph, chart, formula or device (as the case may be) and the difficulties with respect to its use; |
| | (c) | which contains any statement to the effect that any report, analysis or other service will be provided free or without charge, unless such report, analysis or service is in fact or will in fact be provided in its entirety and without any condition or obligation; or | | (d) | which contains any inaccurate or misleading statement or presentation, or any exaggerated statement or presentation that is calculated to exploit an individual’s lack of experience and knowledge. [S 667/2018 wef 08/10/2018] |
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| Approval of product advertisement |
46AA.—(1) For the purposes of regulation 46(2)(g), a product advertisement must be approved by —| (a) | the senior management of a holder of a capital markets services licence —| (i) | which disseminates or publishes, or causes the dissemination or publication, of the product advertisement; or | | (ii) | which appointed representative, provisional representative or temporary representative disseminates or publishes, or causes the dissemination or publication, of the product advertisement; |
| | (b) | an agent of the holder of the capital markets services licence mentioned in sub-paragraph (a); or | | (c) | a committee of the holder of the capital markets services licence mentioned in sub-paragraph (a). |
(2) For the purposes of paragraph (1)(a), a product advertisement is approved by the senior management of the holder of the capital markets services licence only if every member of the senior management —| (a) | is satisfied that the product advertisement complies with the requirements mentioned in regulation 46(2)(a) to (f); | | (b) | records the member’s reasons for being so satisfied in writing; and | | (c) | gives written approval to the holder of the capital markets services licence for the dissemination or publication of the product advertisement, together with that member’s reasons mentioned in sub-paragraph (b). |
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(3) For the purposes of paragraph (1)(b), a product advertisement is approved by an agent of the holder of the capital markets services licence only if the agent —| (a) | is satisfied that the product advertisement complies with the requirements mentioned in regulation 46(2)(a) to (f); | | (b) | records the agent’s reasons for being so satisfied in writing; and | | (c) | gives written approval to the holder of the capital markets services licence for the dissemination or publication of the product advertisement, together with the agent’s reasons mentioned in sub-paragraph (b). |
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(4) For the purposes of paragraph (1)(c), a product advertisement is approved by a committee of the holder of the capital markets services licence only if every member of the committee —| (a) | is satisfied that the product advertisement complies with the requirements mentioned in regulation 46(2)(a) to (f); | | (b) | records the member’s reasons for being so satisfied in writing; and | | (c) | gives written approval to the holder of the capital markets services licence for the dissemination or publication of the product advertisement, together with that member’s reasons mentioned in sub-paragraph (b). |
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| (5) For the purposes of section 97(2) of the Act, the Authority must, when determining whether a chief executive officer or an executive director of a holder of a capital markets licence has failed to discharge the duties of his office, have regard to whether the chief executive officer or executive director (as the case may be) has caused the holder to disseminate or publish any product advertisement that has not been approved by the holder in accordance with regulation 46(2)(g). |
(6) In this regulation —“agent”, in relation to a holder of a capital markets services licence, means a person who —| (a) | may or may not be a member of the senior management of the holder of the capital markets services licence; and | | (b) | is unanimously appointed by all the members of the senior management of the holder of the capital markets services licence to —| (i) | determine whether a product advertisement complies with the requirements mentioned in regulation 46(2)(a) to (f); and | | (ii) | approve the dissemination or publication of the product advertisement by the holder of the capital markets services licence, or an appointed representative, a provisional representative or a temporary representative of the holder of the capital markets services licence, as the case may be; |
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“committee”, in relation to a holder of a capital markets services licence, means a group of persons that —| (a) | comprises at least 2 persons, each of whom may or may not be a member of the senior management of the holder of the capital markets services licence; and | | (b) | is unanimously appointed by all the members of the senior management of the holder of the capital markets services licence to —| (i) | determine whether a product advertisement complies with the requirements mentioned in regulation 46(2)(a) to (f); and | | (ii) | approve the dissemination or publication of the product advertisement by the holder of the capital markets services licence, or an appointed representative, a provisional representative or a temporary representative of the holder of the capital markets services licence, as the case may be; |
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“member of the senior management”, in relation to a holder of a capital markets services licence which is an entity, means a person for the time being holding the office of —| (a) | chief executive officer or an equivalent person of the entity; or | | (b) | executive director or an equivalent person of the entity, |
| and includes a person carrying out the duties of any such office if the office is vacant. |
[S 381/2018 wef 09/07/2018] |
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| Exemption from regulation 46(1) |
46AB.—(1) A specified person need not comply with regulation 46(1) if —| (a) | the product advertisement is prepared by another person (called in this regulation the preparer) for the specified person; and | | (b) | prior to the specified person disseminating or publishing, or causing the dissemination or publication of, the product advertisement —| (i) | the condition in paragraph (2) is satisfied; and | | (ii) | the preparer notifies the specified person in writing that the condition in paragraph (2) is satisfied. |
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(2) For the purpose of paragraph (1)(b), the condition is — | (a) | where the preparer is a specified person, the preparer has complied with regulation 46(1) as if the preparer were the specified person who will disseminate or publish, or cause the dissemination or publication of, the product advertisement; | | (b) | where the preparer is a specified financial adviser, the preparer has complied with regulation 22(1) of the Financial Advisers Regulations (Rg 2) as if the preparer were the specified financial adviser who will disseminate or publish, or cause the dissemination or publication of, the product advertisement; or [S 226/2023 wef 31/12/2021] | | (c) | where the preparer is a person other than a specified person or a specified financial adviser — | (i) | if the product advertisement is an advertisement or a publication mentioned in section 251(8), 273(8A) or 277(7) of the Act, the product advertisement complies with the requirements mentioned in regulation 17 of the Securities and Futures (Offers of Investments) (Securities and Securities-based Derivatives Contracts) Regulations 2018 (G.N. No. S 664/2018); [S 667/2018 wef 08/10/2018] | | (ii) | [Deleted by S 667/2018 wef 08/10/2018] | | (iii) | if the product advertisement is an advertisement or a publication mentioned in section 300(3C), 303(3) or 305B(8) of the Act, the product advertisement complies with the requirements in regulation 19A(1) of the Securities and Futures (Offers of Investments) (Collective Investment Schemes) Regulations 2005 (G.N. No. S 602/2005). [S 667/2018 wef 08/10/2018] |
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| (3) In this regulation, “specified financial adviser” has the meaning under paragraph (b) of the definition of “specified financial adviser” in regulation 2(1) of the Financial Advisers Regulations. [S 381/2018 wef 09/07/2018] |
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| Maintaining records of approval |
46AC.—(1) A holder of a capital markets services licence whose product advertisement is approved for the purposes of regulation 46(2)(g) must keep the following records for the following periods:| (a) | where the product advertisement is approved by the senior management of the holder under regulation 46AA(1)(a), the written reasons and written approvals of all the members of the senior management mentioned in regulation 46AA(2)(b) and (c), respectively, for a period of at least 5 years after the date on which the last member of the senior management gave his written reasons and written approval; | | (b) | where the product advertisement is approved by an agent of the holder under regulation 46AA(1)(b) —| (i) | the written consent of all the members of the senior management of the holder to the appointment of the agent; | | (ii) | the written reasons of the agent mentioned in regulation 46AA(3)(b); and | | (iii) | the written approval of the agent mentioned in regulation 46AA(3)(c), |
| for a period of at least 5 years after the date on which the agent gave his written reasons and written approval to the holder under regulation 46AA(3)(c); |
| | (c) | where the product advertisement is approved by a committee of the holder under regulation 46AA(1)(c) —| (i) | the written consent of all the members of the senior management of the holder to the appointment of the committee; | | (ii) | the written reasons of all the members of the committee mentioned in regulation 46AA(4)(b); and | | (iii) | the written approval of all the members of the committee mentioned in regulation 46AA(4)(c), |
| for a period of at least 5 years after the date on which the last member of the committee gave his written reasons and written approval to the holder under regulation 46AA(4)(c). |
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| (2) Where a holder of a capital markets services licence is exempt from regulation 46(1) under regulation 46AB(1) (read with regulation 46AB(2)(a)), paragraph (1) (read with regulation 46AA) applies to the preparer mentioned in regulation 46AB(2)(a) except that any reference to the holder of the capital markets services licence is read as a reference to the preparer. [S 381/2018 wef 09/07/2018] |
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| Advertisement other than product advertisement |
46AD.—(1) A specified person must not, whether through or in collaboration with another person —| (a) | disseminate or publish any non-product advertisement on or after 10 December 2018; or | | (b) | cause to be disseminated or published any non-product advertisement on or after 10 December 2018, |
| unless the non-product advertisement complies with the requirements mentioned in paragraph (2). |
(2) For the purposes of paragraph (1), the requirements are —| (a) | the non-product advertisement is not false or misleading; | | (b) | the non-product advertisement does not contain any statement to the effect that any report, analysis or other service will be furnished free or without charge, unless such report, analysis or service is in fact or will in fact be furnished in its entirety without any condition or obligation; and | | (c) | the non-product advertisement does not contain any exaggerated statement which is calculated to exploit an individual’s lack of experience and knowledge. |
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| (3) In this regulation, “non-product advertisement” means an advertisement, other than a product advertisement, that is in respect of the provision of any product or service that is regulated by the Act. [S 381/2018 wef 09/07/2018] |
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| Certain representations prohibited |
46A.—(1) Subject to paragraph (2), the holder of a capital markets services licence shall not represent or imply or knowingly permit to be represented or implied in any manner to any person that the holder’s abilities or qualifications have in any respect been approved by the Authority.| (2) Paragraph (1) does not apply to a statement that a person is holding a capital markets services licence to carry on business in any regulated activity. |
| (3) Any person who contravenes paragraph (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000 and, in the case of a continuing offence, to a further fine of $5,000 for every day or part thereof during which the offence continues after conviction. [S 709/2010 wef 26/11/2010] |
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| 47.—(1) The holder of a capital markets services licence to deal in capital markets products, or a representative of such a holder, shall not withhold or withdraw from an organised market any order or any part of a customer’s order for the benefit of itself or himself, or of any other person. [S 667/2018 wef 08/10/2018] (2) The holder of a capital markets services licence to deal in capital markets products, or the representative of such a holder, shall not divulge information relating to a customer’s order held by it, unless the disclosure —| (a) | is necessary for the effective execution of the order; | | (b) | is permitted under the rules of the relevant approved exchange, recognised market operator, approved clearing house or recognised clearing house, as the case may be; or [S 667/2018 wef 08/10/2018] | | (c) | is required by the Authority under the Act or these Regulations. [S 667/2018 wef 08/10/2018] |
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| Disclosure of certain interests in respect of underwriting agreement |
47A.—(1) Where —| (a) | specified products have been offered for subscription or purchase; and [S 667/2018 wef 08/10/2018] | | (b) | the holder of a capital markets services licence has subscribed for or purchased, or is or will or may be required to subscribe for or purchase, any of those specified products under an underwriting or sub-underwriting agreement by reason that some or all of the specified products have not been subscribed for or purchased, |
| the holder shall not, during the period of 90 days after the close of the offer referred to in sub-paragraph (a) — |
| (i) | make an offer to sell those specified products otherwise than in the ordinary course of trading on an approved exchange or recognised market operator; or [S 667/2018 wef 08/10/2018] | | (ii) | make a recommendation, whether orally or in writing and whether expressly or by implication, with respect to those specified products, |
| unless the offer or recommendation contains or is accompanied by a statement to the effect that the offer or recommendation relates to specified products that the holder has acquired, or is or will or may be required to acquire, under an underwriting or sub-underwriting agreement by reason that some or all of the specified products have not been subscribed for or purchased. |
[S 667/2018 wef 08/10/2018] | (2) For the purpose of paragraph (1), any reference to an offer shall be construed as including a reference to a statement, however expressed, that expressly or impliedly invites a person to whom it is made to offer to acquire specified products. [S 667/2018 wef 08/10/2018] |
(3) Paragraph (1) shall not apply to the holder of a capital markets services licence when —| (a) | making an offer to sell any specified products, or making a recommendation with respect to those specified products, to —| (i) | an accredited investor; | | (ii) | an expert investor; or | | (iii) | an institutional investor; or [S 667/2018 wef 08/10/2018] |
| | (b) | making an offer to sell any Government securities, or making a recommendation with respect to those Government securities, to any person. |
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| (4) Where the holder of a capital markets services licence sends to any person a written offer, written recommendation or written statement to which paragraph (1) applies, the holder shall retain a copy of the written offer, recommendation or statement for a period of 5 years after the date the written offer, recommendation or statement is made. |
| (5) Any person who contravenes paragraph (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $25,000. [S 709/2010 wef 26/11/2010] |
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| Dealing in securities as principal |
| 47B.—(1) Subject to paragraph (3), the holder of a capital markets services licence to deal in capital markets products shall not, as principal, enter into any transaction of sale or purchase of any specified product with any customer who is not the holder of a capital markets services licence to deal in capital markets products unless the holder first informs the customer that the holder is acting in the transaction as principal and not as agent. [S 667/2018 wef 08/10/2018] | (2) The holder of a capital markets services licence to deal in capital markets products which enters into a transaction of sale or purchase of specified products, as principal, with a customer who is not the holder of a capital markets services licence to deal in capital markets products shall state in the contract note that the holder is acting in the transaction as principal and not as agent. [S 667/2018 wef 08/10/2018] |
| (3) Paragraph (1) shall not apply to a transaction of sale or purchase of an odd lot of specified products that is entered into by the holder of a capital markets services licence to deal in capital markets products which is a member of an approved exchange or recognised market operator and specialises in transactions relating to odd lots of specified products. [S 667/2018 wef 08/10/2018] |
| (4) Paragraphs (1) and (2) shall not apply to a market-maker when dealing in specified products in such capacity. [S 667/2018 wef 08/10/2018] |
| (5) Where the holder of a capital markets services licence to deal in capital markets products fails to comply with paragraph (1) or (2) in respect of a contract for the sale of specified products by the holder, the purchaser of those specified products may, if he has not disposed of them, rescind the contract by a notice of rescission given in writing to the holder not later than 30 days after the receipt of the contract note. [S 667/2018 wef 08/10/2018] |
| (6) Where the holder of a capital markets services licence to deal in capital markets products fails to comply with paragraph (1) or (2) in respect of a contract for the purchase of specified products by the holder, the vendor of those specified products may, in like manner, rescind the contract. [S 667/2018 wef 08/10/2018] |
| (7) Nothing in paragraph (5) or (6) shall affect any right that a person has apart from those paragraphs. |
| (8) Any person who contravenes any of the provisions of this regulation shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 or to imprisonment for a term not exceeding 12 months or to both. |
(9) For the purposes of this regulation —| (a) | a reference to the holder of a capital markets services licence to deal in capital markets products entering into a transaction of sale or purchase of specified products as principal includes a reference to the holder entering into such a transaction on behalf of —| (i) | a person associated with or connected to the holder; | | (ii) | a corporation in which the holder has a controlling interest; or | | (iii) | a corporation in which the holder’s interest and the interests of the directors of the holder together constitute a controlling interest; [S 667/2018 wef 08/10/2018] |
| | (b) | a reference to specified products is a reference to specified products permitted to be traded on an organised market of —| (i) | an approved exchange; | | (ii) | an overseas exchange; or | | (iii) | a recognised market operator; and [S 667/2018 wef 08/10/2018] |
| | (c) | a reference to a market-maker is a reference to —| (i) | the holder of a capital markets services licence which —| (A) | deals in capital markets products that are specified products for its own account; [S 667/2018 wef 08/10/2018] | | (B) | regularly publishes bona fide competitive bids and offers quotations in respect of those specified products; [S 667/2018 wef 08/10/2018] | | (C) | is ready, willing and able to enter into transactions at such quoted prices with other persons in respect of those specified products; and [S 667/2018 wef 08/10/2018] | | (D) | is recognised as a market-maker by an approved exchange, an overseas exchange or the Authority; or [S 667/2018 wef 08/10/2018] |
| | (ii) | a designated market-maker referred to in paragraph 2(1)(i) of the Second Schedule. [S 709/2010 wef 26/11/2010] [S 832/2020 wef 30/09/2020] |
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47BA. A holder of a capital markets services licence must not deal with a retail customer as an agent when dealing in capital markets products that are —| (a) | OTC derivatives contracts; or | | (b) | spot foreign exchange contracts for the purposes of leveraged foreign exchange trading. [S 667/2018 wef 08/10/2018] |
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47C.—(1) The holder of a capital markets services licence to deal in capital markets products shall not knowingly enter into a transaction to buy from or sell to its customer any futures contract for —| (a) | the holder’s own account; | | (b) | an account of a person associated with or connected to it; or | | (c) | an account in which the holder has an interest, |
| except with the customer’s prior consent and in accordance with the business rules and practices of an approved exchange or recognised market operator. |
[S 667/2018 wef 08/10/2018] | (2) Any person who contravenes paragraph (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 or to imprisonment for a term not exceeding 12 months or to both. [S 709/2010 wef 26/11/2010] |
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47D.—(1) The holder of a capital markets services licence to deal in capital markets products shall not knowingly fill or execute a customer’s order for the purchase or sale of a futures contract on an organised market by off-setting against the order or orders of any other person, without effecting such a purchase or sale either —| (a) | on the trading floor or electronic futures trading system; or | | (b) | in accordance with the business rules and practices of an approved exchange or recognised market operator. [S 667/2018 wef 08/10/2018] |
| (2) Any person who contravenes paragraph (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 or to imprisonment for a term not exceeding 12 months or to both. [S 709/2010 wef 26/11/2010] |
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| General risk disclosure requirements |
47DA.—(1) Subject to paragraph (3), a holder of a capital markets services licence to deal in specified capital markets products must not open a trading account for a customer for the purpose of entering into transactions of sale and purchase of any specified capital markets products unless the holder —| (a) | furnishes the customer with a written risk disclosure document prepared by the holder that discloses the material risks of the specified capital markets products; and | | (b) | receives from the customer an acknowledgment signed and dated by the customer that he has received and understood the nature and contents of the risk disclosure document provided. |
(2) Subject to paragraph (3), the holder must not enter any transaction of sale or purchase of any specified capital markets products unless —| (a) | the holder has informed the customer whether the holder is acting in that transaction as a principal or an agent; | | (b) | the holder —| (i) | has informed the customer that the holder intends to act as a principal in all transactions of sale or purchase of specified capital markets products with the customer; and | | (ii) | is acting in that transaction as a principal; or |
| | (c) | the holder —| (i) | has informed the customer that the holder intends to act in as an agent for all transactions of sale or purchase of specified capital markets products with the customer; and | | (ii) | is acting in that transaction as an agent. |
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(3) Paragraphs (1) and (2) do not apply to the holder in respect of a customer who is —| (a) | an accredited investor; | | (b) | an expert investor; | | (c) | an institutional investor; or | | (d) | a related corporation of the holder. |
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| (4) In this regulation, “specified capital markets products” means capital markets products other than futures contracts, spot foreign exchange contracts for the purposes of leveraged foreign exchange trading and FX OTC derivatives contracts. [S 667/2018 wef 08/10/2018] |
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| Risk disclosure by certain persons |
47E.—(1) The holder of a capital markets services licence to deal in capital markets products shall not open a trading account for the purposes of trading in futures contracts, spot foreign exchange contracts for the purposes of leveraged foreign exchange trading or FX OTC derivatives contracts for a retail customer who is not a related corporation of the holder unless it —| (a) | furnishes the customer with a separate written risk disclosure document in Form 13; and | | (b) | receives from the customer an acknowledgment signed and dated by the customer that he has received and understood the nature and contents of the risk disclosure document in Form 13. [S 667/2018 wef 08/10/2018] |
(2) The holder of a capital markets services licence for fund management shall not solicit or enter into an agreement with a prospective retail customer who is not a related corporation of the holder for the purpose of —| (a) | managing the retail customer’s trading account for the purposes of trading in futures contracts, spot foreign exchange contracts for the purposes of leveraged foreign exchange trading or FX OTC derivatives contracts; or [S 667/2018 wef 08/10/2018] | | (b) | guiding the retail customer’s trading account for the purposes of trading in futures contracts, spot foreign exchange contracts for the purposes of leveraged foreign exchange trading or FX OTC derivatives contracts, |
| by means of a systematic programme that recommends specific transactions unless, at or before the time the holder engages in the solicitation or enters into the agreement (whichever is the earlier), the holder — |
| (i) | delivers or causes to be delivered to the prospective retail customer who is not a related corporation of the holder a risk disclosure document in Form 14; and [S 667/2018 wef 08/10/2018] | | (ii) | receives from the prospective retail customer who is not a related corporation of the holder an acknowledgment signed and dated by him that he has received and understood the nature and contents of the risk disclosure document in Form 14. [S 667/2018 wef 08/10/2018] |
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| (3) Paragraph (2) shall not apply to collective investment schemes that are approved under Division 2 of Part 13 of the Act. [S 226/2023 wef 31/12/2021] |
| (4) The holder of a capital markets services licence shall ensure that copies of Forms 13 and 14 delivered to its prospective retail customer who is not a related corporation of the holder are kept in Singapore. [S 667/2018 wef 08/10/2018] |
| (5) Any person who contravenes any of the provisions of this regulation shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 or to imprisonment for a term not exceeding 12 months or to both. [S 709/2010 wef 26/11/2010] |
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