Legal Updates

Legal Updates for November 2016

PRC Enacts Cyber Security Law
The Cyber Security Law of the People’s Republic of China (中华人民共和国网络安全法) (the “Cyber Security Law”) has been the subject of much attention, going through a number of stages of development. On 7 November 2016, the PRC’s highest legislative authority, the National People’s Congress Standing Committee, officially enacted the Cyber Security Law following a third and final round of amendments. The Cyber Security Law will come into effect on 1 June 2017. This article looks at the changes that have been made to the final Cyber Security Law since the second draft, and the potential impact of these changes.

Securities and Futures (Amendment) Bill 2016 Undergoes First Reading in Parliament
On 7 November 2016, the Securities and Futures (Amendment) Bill 2016 ("Bill") was introduced in Parliament. The legislative amendments contemplated in the Bill mark the completion of the Monetary Authority of Singapore's ("MAS") two-phase review to implement over-the-counter ("OTC") derivatives reforms, in line with recommendations made by the Financial Stability Board ("FSB") and the G20 to strengthen regulation of OTC derivatives markets following the 2008 global financial crisis. The first phase of legislative amendments was passed in November 2012. The Bill also introduces amendments aimed at enhancing regulatory safeguards for retail investors, enhancing the credibility and transparency of the capital markets, and strengthening MAS’ ability to take enforcement action against market misconduct.

This update aims to provide a general overview of the key provisions in the Bill.

Technology, Media and Telecommunications Quarterly Regional Update: Third Quarter Recap
Three-quarters of 2016 have gone by and the technology, media and telecommunications ("TMT") space has, as expected, continued to be the source of a myriad of exciting developments. Financial technology ("fintech") has continued to take centrestage in recent months, with financial regulators across the world looking to stimulate the domestic development of fintech products and services through the creation of conducive and supportive regulatory frameworks. Cybersecurity is another issue that has rapidly grown in prominence, with many governments becoming cognisant of the significant national security risks posed by vulnerable IT infrastructure and data systems.

This Update provides you with a helpful recap of key developments, and more, focusing on ASEAN and including several key TMT developments worldwide.

"Reasonable Care" Condition Precedent in an Insurance Policy
One of the common conditions found in insurance policies is the requirement that an insured should exercise reasonable care to comply with or duly observe legislations and regulations. In the case of Grace Electrical Engineering Pte Ltd v EQ Insurance Co Ltd [2016] SGHC 233, the Singapore High Court had to construe the ambit of such a condition, and whether it amounted to a condition precedent, the breach of which would release the insurer from liability. This Update provides a summary of the decision.

Misrepresentations During Pre-Contract Negotiations
In Honey Secret Pte Ltd v Atlas Finefood Pte Ltd and others [2016] SGHC 164, the Singapore High Court was faced with competing allegations of unfulfilled verbal representations made prior to the signing of an exclusive distributorship agreement and during the course of the parties' distributorship relationship. The Court thus had to navigate the complex factual narratives raised by both parties in order to determine if there were any misrepresentations made by either party. The Defendants were successfully represented by Mr Jonathan Yuen and Ms Doreen Chia of Rajah & Tann Singapore LLP.

Serious Misconduct and Employment - Court of Appeal Considers when Termination is Justified
In employment-related disputes, one of the most common issues is the grounds for termination. Employers and employees often clash over whether termination is justified, both under the terms of the employment contract and under common law. The recent Court of Appeal decision of Phosagro Asia Pte Ltd v Piattchanine, Iouri [2016] SGCA 61 provided important guidance in this key area, considering when employment may be terminated for serious misconduct. The employer was successfully represented in this appeal by Paul Tan and Arthi Anbalagan of Rajah & Tann Singapore LLP.

Revised CCS Guidelines Come Into Force On 1 December 2016
On 1 November 2016, the Competition Commission of Singapore ("CCS") announced that it had finalised its amendments to various guidelines and the amended guidelines will come into effect on 1 December 2016. This announcement by the CCS marks the conclusion of the first major overhaul of most, if not all of the CCS' guidelines since the Competition Act (CAP. 50B) first came into force on 1 January 2006. This Update sets out an overview of the key changes to the guidelines as presented by the CCS, and briefly highlights other key points businesses should be aware of.

Companies (Amendment) Bill 2017: Proposals to Reform Singapore’s Debt Restructuring and Corporate Rescue Framework
The Ministry of Finance and the Ministry of Law are jointly seeking feedback on proposed amendments to the Companies Act to strengthen Singapore as an international centre for debt restructuring. The consultation period runs from 21 October 2016 to 2 December 2016.

The proposed legislative amendments aim to ensure that Singapore's corporate insolvency laws are updated to meet current business needs, and also seek to enhance the debt restructuring framework for corporate rescue. Broadly, the proposed amendments seek to enact provisions to (i) support creditor schemes of arrangements that implement debt restructuring proposals, (ii) enable companies to apply for judicial management orders more easily, and (iii) facilitate the resolution of cross-border insolvencies.

Companies (Amendment) Bill 2017: Introduction of an Inward Re-domiciliation Regime
The Ministry of Finance and the Accounting and Corporate Regulatory Authority of Singapore are jointly seeking public feedback on proposals to amend the Companies Act to introduce an inward re-domiciliation regime in Singapore. The consultation period runs from 26 October 2016 to 16 November 2016.

Re-domiciliation is a process where a corporation transfers its registration from its home jurisdiction to another jurisdiction, while retaining its identity and history in the various regulatory jurisdictions it has presence in and minimizing operational disruptions. Under the proposed regime, an inbound corporation which is re-domiciled to Singapore will become a Singapore company and will be required to comply with the provisions of the Companies Act, like any other Singapore company.

This update takes a look at the key proposals in the consultation paper.

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