MAS Issues Consultation Paper Proposing Changes To The Securities And Futures Regulations For Restricted Investment Scheme
In May 2009, Monetary Authority of Singapore (“MAS”) had released a consultation paper to make amendments to the Securities and Futures (Offers of Investments) (Collective Investment Scheme) (Amendment) Regulations 2009 (“Amended Regulations”). This is to effect changes to strengthen the regulatory regime for restricted collective investment schemes.
Restricted collective investment schemes cover a multitude of schemes that business entities employ to raise money from sophisticated investors. Restricted collective investment schemes cannot be offered to the public but only to relevant persons.
A “relevant person” includes (1) an accredited investor; (2) a corporation the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; and (3) a trustee of a trust the sole purpose of which is to hold investments and each beneficiary of which is an individual who is an accredited investor.
The conditions for authorising restricted collective investment schemes where units are only offered to relevant persons are less stringent than the conditions for authorising collective investment schemes where units are offered to retail investors. This is because relevant persons are expected to be more sufficiently informed with respect to the information of the schemes than public retail investors.
The only condition for the authorisation of restricted collective investment scheme is that the manager of the restricted collective investment scheme must be a holder of a capital market services licence under the Securities and Futures Act (‘”SFA”) and if applicable, the trustees of the schemes must be an approved trustee under the SFA.
To strengthen the regulatory regime for the restricted collective investment schemes, the Amended Regulations will allow the authority to more thoroughly regulate and manage the restricted collective investments schemes and allow investors in these schemes to be better informed of the status of their investments.
The new regime will comprise a notification framework implemented through an online platform called CISNet. A significant change from the current regime is that offerors will be required to make an annual declaration that information on the scheme offered remains true and correct. Offerors who do not make the annual declaration would have to stop offering the scheme in Singapore.
In addition, CISNet will also enable offerors to amend the annual declaration dates. This allows those offerors managing more than one scheme to consolidate their annual declaration dates which will provide offerors more convenience and to a large extent more control over their schemes. The new framework continues to allow offerors the option of appointing agents to make submissions on their behalf.
The consultation paper published by MAS on the 29th May 2009 invites interested parties to forward their views and comments on the draft Amendment Regulations and requests for all comments and feedback to be submitted by 29 June 2009. More information on the consultation paper can be found on the MAS website.
Written by
Ms Eileen Ng and
Ms Wong Joy Ling
By Ms Eileen Ng
Legal Associate (Corporate Practice)
Ph: (65) 6322-2283
Fax: (65) 6534-0833
E-mail: eileenng@loopartners.com.sg
Ms Wong Joy Ling
Foreign Counsel
Legal Associate (Corporate Practice)
Ph: (65) 6322-2234
Fax: (65) 6534-0833
E-mail: wongjoyling@loopartners.com.sg
Loo & Partners LLP
88 Amoy Street, Level Three
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