Legal Updates for March 2024 Key Legislative Changes to Align Regulatory Regimes for BTs with Companies and REITs From 12 March 2024
The Business Trusts (Amendment) Act 2022 ("Amendment Act") contains changes to the Business Trusts Act 2004 ("BTA") which governs the registration and regulation of registered business trusts ("BTs"). Since the BTA came into effect, there have been various amendments to the Companies Act 1967 ("CA") to improve the regulatory regime for companies. As such, the Amendment Act introduces changes to amend the BTA to align with certain corresponding provisions in the CA to improve the regulatory regime for BTs. Changes under the Amendment Act will be implemented in two phases. Phase 1 amendments came into effect on 12 March 2024 and phase 2 amendments will be implemented concurrently with supporting subsidiary legislation. The Monetary Authority of Singapore intends to consult on supporting legislation for phase 2 amendments in Q2 2024, targeting implementation in Q4 2024. This Update gives a snapshot of salient key amendments to the BTA that came into force on 12 March 2024.
Ratification – Not Always a Magic Bullet
Modern day commercial transactions are typically executed by agents (usually, directors) on behalf of their principals. Where an agent’s act is not authorised by the principal, a valid ratification retrospectively authorises the agent to enter into the transaction. Yet ratification is not always a magic bullet. There are parameters to a principal’s power to ratify. Among others, can a principal ratify a contract in which it is expressly named as a party, even though it did not know about the contract at the time a litigation on the contract started?
The team of Gregory Vijayendran SC, Lester Chua and Tomoyuki Lewis Ban from Rajah & Tann Singapore LLP’s Commercial Litigation Practice Group successfully represented the respondents in resisting an appeal before Singapore’s apex court in Alternative Advisors Investments Pte Ltd v. Asidokona Mining Resources Pte Ltd anor [2024] SGCA 3. In this recent case, the dispute involved the issue of whether certain loan documents and deeds of assignment were valid, in circumstances where the purported principal was not aware of the agreements at the time the claim was initiated, and where the agent had not purported to act on the purported principal’s behalf when executing the agreements. The Court of Appeal held that the alleged ratification of the agreements was invalid.
The team from Rajah & Tann was instructed by M&A Law Corporation. This Update elucidates the key considerations that the Court of Appeal took into account in dismissing the appeal.
Consultation on Amendments to Enhance Beneficial Ownership Transparency and the Regulatory Regime for Corporate Service Providers
On 12 March 2024, the Ministry of Finance and the Accounting and Corporate Regulatory Authority jointly issued a consultation on the following draft bills:
- The draft Companies and Limited Liability Partnerships (Miscellaneous Amendments) Bill, which seeks to enhance the transparency of beneficial ownership of companies and limited liability partnerships; and
- The new draft Corporate Service Providers Bill, which seeks to enhance the regulatory regime for the Corporate Service Providers sector.
The consultation ends on 25 March 2024. This Update provides a summary of the key amendments introduced by the draft bills.
Mandatory Climate Reporting for Listed Issuers from FY 2025, and Large Non-Listed Companies to Follow from FY 2027
On 28 February 2024, the Accounting and Corporate Regulatory Authority and Singapore Exchange Regulation ("SGX RegCo") announced details of mandatory climate-related disclosure for: (1) issuers listed on the SGX-ST ("listed issuers") from financial year ("FY") 2025; and (2) large non-listed companies limited by shares with annual revenue of at least S$1 billion and total assets of at least S$500 million ("Large NLCos") (unless exempted) from FY 2027, as part of a finalised climate reporting and assurance implementation roadmap set out in the Response paper. This is following consultations on the recommendations from the Sustainability Reporting Advisory Committee.
SGX RegCo is separately conducting a public consultation on its proposals on the amendments to the listing rules of the SGX-ST to implement the above recommendations, as set out in its Consultation Paper on "Sustainability Reporting: Enhancing Consistency and Comparability" issued on 7 March 2024. The consultation closes on 5 April 2024.
This Update provides a snapshot of the upcoming and/or anticipated key mandatory climate reporting requirements for listed issuers and Large NLCos.
SGX RegCo Seeks Feedback on Enhancing Listing Rules on Restructuring and Trading Resumption Processes for SGX ListCos
The Singapore Exchange Regulation ("SGX RegCo") is seeking comments on its proposed changes to the SGX Listing Rules (Mainboard) and SGX Listing Rules (Catalist) to clarify the obligations of issuers listed on SGX-ST ("issuers") undergoing the corporate restructuring process under Insolvency, Restructuring and Dissolution Act 2018 of Singapore, and to streamline the application process for trading resumption by suspended issuers. If implemented, the changes will enable issuers to conduct restructuring more efficiently, while reducing the regulatory burden in the restructuring process.
The public consultation closes on 22 March 2024.
This Update provides a summary of SGX RegCo's key proposals to improve the restructuring and trading resumption frameworks.
ACRA Consults on Draft Bill to Enhance Data Privacy, Facilitate Digital Communications with ACRA, Streamline Foreign Companies' Financial Reporting Requirements
On 5 March 2024, the Ministry of Finance and the Accounting and Corporate Regulatory Authority jointly issued a Consultation Paper on "Proposed Legislative Amendments Relating to Digital Communications and Regulatory Enhancements" to seek comments on the draft ACRA (Registry and Regulatory Enhancements) Bill ("Bill"). The Bill aims to enhance data privacy and digitalisation, and streamline the corporate regulatory regime. The consultation ends on 18 March 2024. This Update provides a summary of the key amendments introduced by the Bill.
When is Three a Crowd: Can a Stranger to an Arbitration Participate in Enforcement Proceedings for the Award?
In general, only the parties to an arbitration may participate in proceedings to enforce the resulting arbitral award. Are there exceptions to this? If so, under what circumstances can a third party apply to be added to the enforcement proceedings? What legal test should be applied under Singapore's new Rules of Court 2021 ("ROC 2021")? If the third party is unsuccessful in its application, when should the Court exercise its discretion to allow the third party to be added as an interested non-party instead?
These issues arose for consideration in DFD v DFE and another [2023] SGHCR 23, where an unsecured creditor ("Trustee") of a party to the arbitration sought to be added to proceedings to resist enforcement of an arbitration award ("Enforcement Challenge Application"). The addition was opposed by the claimant ("Claimant"), i.e. the party which had successfully obtained permission from the High Court to enforce the award on an ex parte basis.
The Court considered the approach to be taken under the ROC 2021, finding that the existing case law relating to the Rules of Court 2014 ("ROC 2014") continued to be relevant. It therefore had to determine whether it was "just and convenient" for the Trustee to be added, which involved whether the Trustee had a sufficient legal interest in the present proceedings. Ultimately, the Court held it was not appropriate to allow the addition of the Trustee as either a party or an interested non-party to the Enforcement Challenge Application.
The Claimant was successfully represented by Kelvin Poon, SC (Head, International Arbitration) and Devathas Satianathan (Partner, International Arbitration) as instructed counsel.
A Guide to Renewable Energy in Southeast Asia
The Association of Southeast Asian Nations ("ASEAN") recognises the crucial role of energy in driving the region's growth. This has led to two key priorities: energy security and clean energy development. ASEAN aims for a 23% renewable energy ("RE") share by 2025 in the ASEAN Energy Mix (or TPES: Total Primary Energy Supply), with discussions underway for an even more ambitious target soon. Southeast Asia has abundant RE resources, but several hurdles remain, for instance infrastructure, the need for policy harmonisation, and community engagement. Each ASEAN country faces its own particular set of challenges and constraints in achieving its net zero emissions goal due to a myriad of factors including its stage of economic development, resources (financial and non-financial) and geographical constraints. As such, the policies and focus of each country in the deployment and development of RE may differ. In this Guide, we provide an overview of the RE landscape in the region and certain salient legal and regulatory issues affecting the development and deployment of RE in Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
Business Collaborations for the Greener Good: CCCS issues Environmental Sustainability Collaboration Guidance Note
Competition benefits consumers. However, there may be instances where business competitors need to collaborate for the greater, or greener, good. Seeking to achieve net-zero emissions by 2050 under the Singapore Green Plan 2030, Singapore has embarked on a whole-of-nation sustainability movement. Businesses play an important part in this sustainability movement but may be hindered from doing so due to issues of scale and finance. One way to overcome these issues is via collaborations. However, businesses may be reluctant to collaborate due to fears of falling foul of competition laws.
The Competition and Consumer Commission of Singapore ("CCCS") recognises that the sustainability movement may involve business competitors engaging in various forms of collaborations in existing, emerging or new markets in pursuit of environmental sustainability objectives. Following a public consultation exercise that ran from 20 July to 4 September 2023, CCCS has issued, on 1 March 2024, its Guidance Note on Business Collaborations Pursuing Environmental Sustainability Objectives otherwise known as the Environmental Sustainability Collaboration Guidance Note ("ESCGN"), which aims to provide greater clarity to businesses on how CCCS will assess collaborations pursuing environmental sustainability objectives, so that such collaborations may be pursued in a way that does not harm competition.
This Update briefly outlines salient aspects of the ESCGN.
ASEAN Issues Guide on AI Governance and Ethics
The rapid growth of artificial intelligence ("AI") has shone a light on the pressing need to manage its development and inherent risks. While governments have been seeking to establish national AI frameworks, such frameworks are often jurisdiction-specific, while the propagation of AI commonly crosses national boundaries, resulting in potentially differing standards and requirements.
Building on greater cooperation in AI framework building and standards equivalence, the ASEAN member states have issued the ASEAN Guide on AI Governance and Ethics ("ASEAN AI Guide"), which establishes common principles and recommends best practices on the implementation of trustworthy AI in ASEAN. It seeks to help promote consumer confidence and facilitate cross-border deployment of AI services and solutions throughout the ASEAN region.
This Update provides a summary of the key elements of the ASEAN AI Guide, including the guiding principles, the key components, and the national-level and regional-level recommendations.
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