Amendments to the Securities and Futures Act and regulations thereunder

27 December 2012

Marcus Chow

Amendments have been made to the disclosure of interests provisions set out in Part VII of the Securities and Futures Act (Chapter 289) (the SFA) and the relevant regulations thereunder. The key amendments are as follow:

  • The prescribed legislation will not just apply to directors and substantial shareholders of a listed corporation. They extend the notification obligations to the chief executive officers of listed corporations.

  • The notification obligations will apply to the relevant persons of not just Singapore incorporated companies but to foreign incorporated entities, both with a primary listing on the Singapore Exchange (the SGX-ST). 

  • The notification process is also now simplified for directors and substantial shareholders, who will no longer have to separately report their interests, and changes in interests, in securities to SGX-ST but only to the listed corporations. However, the listed corporations will be required to disclose this information to SGX-ST. 

  • In addition, a director of a listed corporation is required to notify the corporation in respect of his shareholdings in a related corporation. Such a notification must be made within 2 business days after (i) his appointment as director (ii) his acquiring or ceasing to have an interest or (iii) his becoming aware of a change in his interest.

  • The penalties for fragrant breaches had been stiffened and the MAS can impose a fine of up to $250,000 and/or jail of up to two years for any contravention committed "intentionally or recklessly". Civil penalties may also be imposed.

  • Electronic forms had been developed for use for the above notifications.

  • The MAS will be bringing these amendments into force on 19 November 2012.

Other proposed new rules include the introduction of the concept of attributed liability: a corporation, a partnership or a limited liability partnership may face liability resulting from a contravention of a provision in Part XII (Market conduct) by its employee, officer, partner or manager (referred to as the contravening person) if it has either consented to or connived in the contravention, or been negligent as to its internal compliance policies and procedures.

The new proposed rules also empower MAS or any claimant to apply to court for an order against a third party to disgorge the benefit it has derived from trades conducted for it in contravention of any of the market misconduct provisions in Part XII.  This new provisions are intended to prevent unjust enrichment by a third party where the person committing a contravention may not do so for his own account, but for the benefit of the third party. The third party may show cause why the order for disgorgement should not be made. The court may refuse to order disgorgement or may order disgorgement of a lesser sum if it is satisfied that the third party acquired the benefit innocently and had altered its position in reliance on that acquisition. The sum ordered to be disgorged will be distributed to the claimants who file claims for compensation in the same manner as if they were filing claims against the person who committed the contravention. Any sum remaining under the order for disgorgement will be paid into the Consolidated Fund.

The key changes to the disclosure regime are set out in MAS’ press release, which can be accessed at For any queries on the amendments, please contact our partner, Marcus Chow.

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> Amendments to the Securities and Futures Act and regulations thereunder




Marcus Chow


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