Legal Updates for December 2021
Does Your Business Collaboration Breach Competition Law? CCCS Issues Guidance Note on Business Collaboration
The Competition and Consumer Commission of Singapore ("CCCS") has issued a Business Collaboration Guidance Note ("Guidance Note") that clarifies CCCS' position on common types of business collaborations and provides supplementary guidance on how CCCS will generally assess whether such collaborations comply with section 34 of the Competition Act. The Guidance Note also sets out factors and conditions under which competition concerns are less likely to arise.
In this Update, we highlight the salient features of the Guidance Note, including the key competition concerns of the common types of collaborations and how CCCS generally assesses compliance of such collaborations.
Further Extension of Relief Periods for Built Environment Sector under COVID-19 (Temporary Measures) Act
To address the adverse effects of COVID-19 on the Built Environment sector, the COVID-19 (Temporary Measures) Act ("Act") has provided certain legislative relief. Although the sector has made steps towards recovery, it has been noted that some firms are still facing challenges. The Government has thus announced the further extension of certain prescribed periods for legislative relief relating to the Built Environment sector.
While the prescribed periods were due to end on 31 December 2021, the relief periods under Part 2 and Part 8B of the Act have been extended to 28 February 2022, and the relief period under Part 10A of the Act has been extended to 31 March 2022. In this Update, we summarise the scope of the extensions and the relief under the respective Parts of the Act.
SGX's Measures to Ensure Adequate Shareholders' Engagement During General Meetings Amid COVID-19
The Singapore Exchange Regulation ("SGX RegCo") has issued a new guidance note setting out its expectations on the issuers’ conduct of general meetings amid the ongoing COVID-19 situation with regard to:
- The use of virtual information session ("VIS") for prescribed corporate actions; and
- Prescribed timeline for addressing shareholders’ questions submitted before general meetings ("Prescribed Q&A timeline").
The additional practices relating to VIS and the Prescribed Q&A timeline will take effect for any notice of general meeting served after 1 January 2022. Issuers listed on the Singapore Exchange Securities Trading Limited (SGX-ST) which do not utilise both real-time remote electronic voting and real-time electronic communication at their general meetings will be required to adopt these additional practices, in addition to the guidelines set out in the SGX RegCo “Guidance on the Conduct of General Meetings Amid Evolving COVID-19 Situation” that was issued on 1 October 2020.
To find out more about these additional practices set out in the new SGX RegCo “Guidance on what SGX RegCo expects on the conduct of general meetings amid the ongoing COVID-19 situation” that was issued on 16 December 2021, please click “READ MORE” for our Update.
Enhanced Disclosures on Climate-Related Information & Board Diversity Policy for SGX-Listed Companies
The Singapore Exchange Limited ("SGX") will introduce the following changes to nudge more issuers listed on the SGX-ST Mainboard and Catalist (collectively, "issuers") towards the direction of integrating environment, social and governance ("ESG") factors into their corporate governance practices and business strategy:
In addition, SGX is rolling out the following ESG initiatives that would help issuers, as well as their stakeholders, review and assess the issuers' ESG achievements objectively:
- Mandatory climate-related disclosures in issuers' sustainability reports consistent with recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) under a "phased approach";
- Enhanced requirements on the reporting timeframe for and assurance on issuers' sustainability reports;
- Mandatory training on sustainability for all directors; and
- Requirement to put in place a Board diversity policy and describe the policy in issuers' annual reports.
This Update highlights significant aspects of these new ESG initiatives.
- Starting with a list of 27 Core ESG Metrics as guidance to assist issuers in providing, and investors in accessing, an aligned set of ESG data; and
- Developing an ESG data portal to enhance alignment between issuers and investors over the use of ESG data, provide cost savings and guidance for issuers, and improve ESG data transparency and measurability, among other benefits.
MAS Consults on Proposed Due Diligence Requirements for Corporate Finance Advisers
Corporate finance advisers ("CF advisers") play a crucial role in the Singapore capital markets in advising entities intending to raise funds or entities which are involved in takeover and merger transactions.
On 15 December 2021, the Monetary Authority of Singapore ("MAS") issued a consultation paper setting out proposed due diligence requirements for CF advisers that will be set out in a new MAS Notice. For the purposes of the Notice, CF advisers are defined as being either (a) holders of a capital markets services ("CMS") licence, or (b) banks, merchant banks, and finance companies exempt from holding a CMS licence, that undertake the regulated activity of advising on corporate finance.
Examples of the new requirements include the duties to act with due care, skill, and diligence; manage conflicts of interests; and keep records of due diligence work performed.
In this Update, we cover key points of the proposed new Notice:
The consultation closes on 15 February 2022.
- Requirements applying to all CF advisers under Part I of the Notice;
- Additional requirements under Part II of the Notice applying to CF advisers who are acting as issue managers ("IMs") for initial public offerings ("IPOs"). MAS also proposes applying Part II to CF advisers who advise on reverse takeovers ("RTOs") and very substantial acquisitions ("VSAs"); and
- Materiality considerations that apply to requirements in both Parts of the Notice.
Government Implements New Measures to Cool the Property Market
On 15 December 2021, the Ministry of Finance, Ministry of National Development and Monetary Authority of Singapore announced in a joint press release the implementation of a package of cooling measures on the purchase of residential properties. The new measures have since taken effect from 16 December 2021.
The three broad measures that have come into effect are: (a) Increase in Additional Buyer's Stamp Duty rates; (b) Tightened Total Debt Servicing Ratio threshold; and (c) Reduction in Loan-to-Value limits for HDB-granted loans. In this Update, we provide a summary of these key changes.
New Rules of Court to Streamline Litigation Process
Singapore is internationally recognised for having a justice system that is fair, transparent, and effective. To develop its position as a regional dispute resolution hub, Singapore has been making continual efforts to improve the efficiency of its justice system by implementing law reform initiatives.
The most recent development on this front has been the new Rules of Court 2021 (S914/2021) ("ROC 2021"). On 1 December 2021, the ROC 2021 was issued under the Supreme Court of Judicature Act (Cap 322) and will take effect from 1 April 2022. The ROC 2021 seeks to enhance Singapore's civil justice system by simplifying rules and modernising the language, streamlining procedural steps and enabling greater judicial control of the entire litigation process. In this Update, we highlight some saliant features in the ROC 2021 and how they may positively impact the litigation process.
Mandatory Packaging Reporting Via Waste and Resource Management System By 31 March 2022
The planning, development and administration of Singapore's waste management system comes under the purview of the Singapore National Environment Agency. As part of Singapore's strategy to build a sustainable nation, focused on resource efficiency and climate resilience, the Resource Sustainability Act ("RSA") was enacted. This lends legal force to regulatory measures to reducing waste and targets three priority waste streams – e-waste, food waste and packaging waste.
In this Update, we highlight the mandatory reporting requirements relating to packaging waste under the RSA. Affected companies are required to submit the first round of packaging data report and 3R (Reduce, Reuse, Recycle) plans for 2022 by 31 March 2022, through the Waste and Resource Management System.
Singapore High Court Allows Registration of Foreign Judgment in Relation to Gambling Debts Incurred at Foreign Casino
The Singapore High Court in The Star Entertainment QLD Ltd v Yong Khong Yoong Mark  SGHC 280 has confirmed that s 3(2)(f) of the Reciprocal Enforcement of Commonwealth Judgments Act (Cap 264, 1985 Rev Ed) does not prevent the registration of a foreign judgment based on a gambling debt. In doing so, the High Court held that it was bound by a previous decision of the Singapore Court of Appeal in Liao Eng Kiat v Burswood Nominees Ltd  4 SLR(R) 690 ("Burswood Nominees"), and that the remarks made by a differently constituted Court of Appeal in Poh Soon Kiat v Desert Palace Inc  1 SLR 1129 disagreeing with the reasoning in Burswood Nominees were merely obiter. This decision provides clarity for now on how the Singapore High Court will treat applications for the registration in Singapore of foreign judgments founded upon gambling debts incurred at overseas casinos.
Streamlining of Maritime Arbitration Proceedings under Fourth Edition of SCMA Rules
The Singapore Chamber of Maritime Arbitration ("SCMA") is a specialist arbitration institution that aims to promote maritime arbitration in Singapore. Since its formation, it has established a solid presence in the region, with the quantum of claims handled reaching approximately US$120 million in 2019.
Amidst a constantly evolving maritime arbitration landscape, SCMA continues to keep itself current by updating its rules with the launch of the Fourth Edition of the SCMA Rules on 1 December 2021. The Fourth Edition seeks to reflect current shipping arbitration practices, reduce costs, and streamline arbitral proceedings.
Here, we look at the following key changes:
- Streamlining arbitral proceedings by:
- Permitting two arbitrators to see an arbitration and an award to their conclusion;
- Removing the mandatory requirement for oral hearings;
- Implementing a default time limit for the close of proceedings;
- Requiring tribunal approval for change of counsel;
- Adoption of electronic methods, namely:
- Electronic service of documents;
- Electronic signing of awards;
- Virtual case management meetings and hearings;
- Other amendments, namely:
- Increasing the monetary threshold for the Expedited Procedure; and
- Application of the SCMA Standard Terms of Appointment by default.