Legal Updates for February 2021
GFIT Handbook for Implementing Environmental Risk Management for Banks, Insurers, Asset Managers
On 28 January 2021, the Green Finance Industry Taskforce issued a handbook titled "Handbook on Implementing Environmental Risk Management" ("Handbook") providing financial institutions ("FIs") with practical implementation guidance and good practices on environmental risk management.
The Handbook complements the three sets of Monetary Authority of Singapore ("MAS") Guidelines on Environmental Risk Management (collectively, "ENRM Guidelines") issued in December 2020. For details on the ENRM Guidelines, refer to our December 2020 Client Update titled "MAS Issues Environmental Risk Management Guidelines for Banks, Insurers and Asset Managers”.
The Handbook applies to the FIs that are subject to the ENRM Guidelines:
- all banks, merchant banks and finance companies;
- insurers (including reinsurers); and
- fund management companies and real estate investment trust managers.
This Update gives an overview of selected key implementation recommendations described in the Handbook, focusing on the following main areas:
- Governance and Strategy to ensure, among other things, board accountability and oversight;
- Proper risk management to entrench environmental and climate-related financial risk in FIs' risk management and decision-making processes; and
- Effective environmental and climate-related financial disclosures.
Guide to Conducting Applications for Moratoria Pursuant to Schemes of Arrangement
The Insolvency, Restructuring and Dissolution Act 2018 ("IRDA") allows a company proposing or intending to propose a scheme of arrangement to its creditors to apply to Court for a moratorium restraining proceedings against the company. The Court may also extend the moratorium on application to cover a subsidiary or holding company.
The Supreme Court of Singapore has issued a Guide for the Conduct of Applications for Moratoria under Sections 64 and 65 of the IRDA ("Guide"), setting out the case management features and specialist practices for such applications. The Guide came into effect on 15 February 2021. This Update summarises and highlights the key features of the Guide.
Budget Speech 2021 – Emerging Stronger Together
After an unprecedented year in which Singapore experienced its worst recession since independence and with the global battle against COVID-19 far from over, Budget Speech 2021 was delivered by Singapore's Deputy Prime Minister (DPM) and Minister for Finance Mr Heng Swee Keat on 16 February 2021. With the theme "Emerging Stronger Together", DPM Heng laid out the following plans to tackle Singapore's immediate challenges:
There were also tax measures and changes announced which were categorised in the following manner:
- The COVID-19 Resilience Package to reopen Singapore safely and sustain the momentum of its recovery;
- The Household Support Package for families, with greater support for families in need;
- Singapore's investments in economic and workforce transformation to emerge stronger; and
- The Singapore Green Plan 2030 to enhance sustainability and deal with climate change.
In this Update, we discuss selected tax measures, changes, enhancements, extensions, and refinements.
- Extending Budget 2020 Temporary Tax Measures to Support Businesses;
- Updating Singapore's Tax Regime as the Digital Economy Grows;
- Maintaining the Competitiveness and Resilience of Singapore's Tax System;
- Emerging Stronger as a Community: Encouraging Philanthropy and Volunteerism;
- Encouraging Early Adoption of Electric Vehicles; and
- Environmental Sustainability.
Sustainability Financing: Taxonomy Proposed for Singapore-based Financial Institutions to Identify "Green" Activities
The Green Finance Industry Taskforce ("GFIT"), convened by the Monetary Authority of Singapore, is conducting a public consultation to seek feedback on the appropriate taxonomy, a classification tool, to help Singapore-based financial institutions identify economic activities that are considered "green" or are transitioning into "greener" activities in sustainability financing. The proposals are set out in the GFIT consultation paper titled "Identifying a Green Taxonomy and Relevant Standards for Singapore and ASEAN". The consultation closes on 11 March 2021.
In particular, GFIT is seeking comments on:
- Whether there is a need for Singapore to have its own taxonomy;
- The four environmental objectives for the taxonomy, namely: (1) climate change mitigation; (2) climate change adaptation; (3) protection of biodiversity; and (4) promotion of resource resilience;
- The selection of the economic sectors that are covered by the taxonomy;
- The proposed "traffic light" classification system for activities within the selected economic sectors by grouping them into three classifications, namely, "green" for activities that are clearly aligned with the environmental objectives of the taxonomy; "yellow" for activities with quantifiable and time-bound pathway towards either green or significant de-carbonisation that will contribute to the objectives of the taxonomy; and "red" for activities that are inconsistent with the environmental objectives of the taxonomy; and
- The treatment of transition activities in the taxonomy.
State of Emergency in Myanmar – Two Weeks On
A one year state of emergency commencing from 1 February 2021 ("Emergency") pursuant to Article 417 of the Myanmar Constitution 2008 has been declared in Myanmar, and the legislative, executive and judicial powers of the country have been transferred to the Commander-in-Chief of Defence Services, Senior General Min Aung Hlaing.
In this article, we provide updates to some of the frequently asked questions regarding the situation on the ground in Myanmar at the time of writing, which has seen significant developments since our initial article of 3 February 2021 on the Emergency. This includes questions on protests, sanctions, border/movement controls, essential utilities and services, and the effect of the Emergency on business contracts.
Wrongful Dismissal Arising from Terminating Employees with Cause – Cautionary Note for Employers
Two recent Singapore High Court decisions are stark reminders that the summary dismissal of an employee can cause serious legal issues for a company if not handled well, and can result in wrongful dismissal claims. This is particularly so if it is unclear whether the employee had conducted himself in such manner as to have repudiated the employment contract or engaged in misconduct, amongst other things. The High Court decisions of Wong Sung Boon v Fuji Xerox Singapore Pte Ltd and another  SGHC 24 and Singapore Recreation Club v Abdul Rashid Mohamed Ali and another  SGHC 156 are examples of summary dismissals gone wrong.
While the employees in these two cases were terminated before the Employment Act ("EA") was expanded in 2019 to apply to all private sector employees, the cases raise important learning points and serve as a helpful reminder on how employers must operate post-2019, in particular in relation to the Section 14 EA due inquiry requirement before an employee may be summarily dismissed for misconduct. This Update provides a brief overview of the events in the two decisions and our comments on employers summarily dismissing an employee post-2019.
Public Consultation on the Proposed Copyright Bill
The Ministry of Law and the Intellectual Property Office of Singapore are conducting a public consultation ("Consultation") on the draft of a proposed Copyright Bill ("Proposed Bill"). This Consultation is part of an overall review of Singapore's copyright regime. The Proposed Bill is intended to repeal and replace the current Copyright Act, and this is slated to take place in the third quarter of 2021.
Part 1 of the Consultation seeks feedback on the Proposed Bill. Part 2 of the Consultation is slated for release on 22 February 2021, and will seek feedback on the newly introduced provisions for the regulation of Collective Management Organisations and the related issue of Copyright Tribunals. Both parts of the Consultation will end on 1 April 2021. This Update highlights the key aspects of the Proposed Bill.
Singapore Accedes to Apostille Convention for Facilitation of Cross-Border Use of Public Documents
To use a public document (such as court documents, official certificates, and identity documents) issued by one State in another State, a party would currently need to request a series of public officials to certify the authenticity of that document in a process known as legalisation. The Apostille Convention – formally known as the Hague Convention of 5 October 1961 Abolishing the Requirement of Legalisation for Foreign Public Documents – aims to facilitate the cross-border use of public documents by replacing legalisation with the simplified "one-step process" of the issuance of an apostille.
In our previous Legal Update titled "Apostille Bill Passed in Parliament: Facilitating Cross-Border Use of Public Documents", we covered the passing of the Apostille Bill in November 2020, which would give effect to Singapore's future obligations under the Apostille Convention.
On 19 January 2021, the Ministry of Law ("MinLaw") announced that Singapore had become a Contracting Party to the Apostille Convention, later adding that the Apostille Bill would come into effect on 16 September 2021.
In this Update, we briefly sketch out the new process for the authentication of documents under the Apostille Bill.
Amendments to the Personal Data Protection Act to Take Effect in Phases Starting from 1 February 2021
The Personal Data Protection (Amendment) Act ("Amendment Act"), which was passed in Parliament on 2 November 2020, is set to take effect in phases. On 1 February 2021, the implementation of the amendments entered its first phase, with the first batch of amendments coming into operation. This marks the first comprehensive update of the Personal Data Protection Act since its enactment.
In this Update, we highlight the changes in the Amendment Act which have taken effect in this first phase of implementation, and summarise the changes which have yet to come into operation.
Simplified Insolvency Programme in Effect from 29 January 2021
In the midst of the COVID-19 pandemic, the Singapore government has introduced the Simplified Insolvency Programme ("SIP"), which seeks to support micro and small companies to restructure their debts or to wind up. The SIP has come into effect on 29 January 2021.
The SIP provides simpler, faster, and lower-cost restructuring and insolvency proceedings for eligible companies. It will be available for application for a period of 6 months from 29 January 2021 to 28 July 2021. In this Update, we highlight some of the key features of the SIP – in particular, we look at the eligibility criteria for the SIP as well as the application process.
State of Emergency in Myanmar – Answering Your Pressing Questions
The military-nominated First Vice President U Myint Swe, who is currently serving as the acting President, has declared a state of emergency for one year commencing from 1 February 2021 ("Declaration"), pursuant to Article 417 of the Myanmar Constitution 2008. The Declaration was issued after the military detained government leaders including the State Counsellor Daw Aung San Suu Kyi, President U Win Myint and other senior government officials from the National League for Democracy on early morning of 1 February 2021.
In this Update, we answer some of the frequently asked questions regarding the state of emergency in Myanmar, including the current leadership situation, movement/border controls, essential utilities and the state of protests.
Data Management for Businesses: Launch of ASEAN Data Management Framework and Model Clauses on Data Transfer
To assist businesses in the region entering into the digital sphere, the ASEAN Digital Ministers’ Meeting has on 22 January 2021 approved the ASEAN Data Management Framework ("DMF") and Model Contractual Clauses for Cross Border Data Flows ("MCCs").
In this Update, we highlight the key features of the DMF and MCCs, and how businesses may utilise these tools to their advantage.
- The DMF provides a step by step guide for businesses to put in place a data management system, which includes data governance structures and safeguards.
- The MCCs are template contractual terms that may be included in agreements between businesses transferring personal data to each other across borders.
2021 Technology Risk Management Guidelines: Enhanced Requirements on Financial Institutions Concerning Technology Risk Governance and Security Controls
The revised Technology Risk Management Guidelines ("2021 TRM Guidelines") published on 18 January 2021 by the Monetary Authority of Singapore impose additional and/or more stringent requirements on financial institutions ("FIs"), their boards of directors and senior management concerning technology risk governance and security controls in FIs.
The revisions focus on the following key areas: (i) increased responsibilities of the Boards and senior management of FIs concerning technology risk governance and oversight; (ii) secure software development practices; (iii) managing risks from emerging technologies; and (iv) an enhanced focus on cyber resilience.
The 2021 TRM Guidelines is effective from 18 January 2021 and apply to all FIs, including banks licensed under the Banking Act, payment services licensees under the Payment Services Act 2019, capital markets intermediaries regulated under the Securities and Futures Act, as well as insurers licensed or regulated under the Insurance Act.
This Update provides a summary of the key areas of revisions in the 2021 TRM Guidelines, along with suggested action items for FIs' consideration to facilitate compliance with the 2021 TRM Guidelines.