A Conditional Primary Obligation to Pay Is Not a Penalty
In iTronic Holdings Pte Ltd v Tan Swee Leon [2016] SGHC 77 (Singapore High Court, 21 April 2016), the Singapore High Court held that an obligation to pay a specified additional sum (together with repayment of a loan amount) in the event that the defendant’s company failed to list was a conditional primary obligation and hence was not a penalty. With this clarification, it would be prudent, as far as commercially possible, to draft clauses that avoid breach of contract being a trigger.
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SGX Introduces Annual Sustainability Reporting Requirements
Issuers on the Mainboard and Catalist of the SGX are to begin sustainability reporting for any financial year ending on or after 31 December 2017. Unlike Hong Kong which mandates specific items for reporting on a comply-or-explain basis, an issuer listed on the SGX may determine the sustainability reporting framework appropriate for and suited to its industry and business model and use that.
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Exemption for Execution-Related Advice: MAS Consults on Draft Amendments
The MAS intends, in the third quarter of 2016, to put into effect a proposed exemption for execution-related advice from the recommendation requirements set out in section 27 of the Financial Advisers Act. The exemption will apply if a dealer is giving execution-related advice for a Listed Excluded Investment Product to a client. A consultation paper has been issued on the draft amendments needed to implement the proposal.
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New Requirements for Securities Crowd-funding Platforms to Ease Fund Raising
Operators of securities crowd-funding platforms may now find it easier to raise capital under new rules issued by the MAS on 8 June 2016. They are not, however, the only ones affected by new rules. Securities intermediaries and financial advisers that assist SMEs and start-ups generally with obtaining funding will need to consider how these new rules will affect their processes as well.
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MAS Specifies Minimum Areas of Coverage for Professional Indemnity Insurance
The MAS has revised its guidelines to specify that professional indemnity insurance must cover at a minimum breach of professional duty, infidelity or dishonesty and loss of documents evidencing title. The minimum sums specified in regulations / guidelines apply to each area.
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Inaugural Take-overs Bulletin Clarifies the Application of Take-over Rules and Procedures
Clarification was recently provided by the Secretariat of the SIC that the requirement to disclose dealings in the relevant securities under Rule 12 of the Code did not apply to the acceptance of a take-over offer by an associate of the offeror or offeree. It also clarified that the Code did not apply to a corporate restructuring where there is no effective change in control of the company. These clarifications were set out in its inaugural Take-overs Bulletin issued on 8 July 2016.
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