eOASIS is Rajah & Tann Singapore LLP's legal information website for clients, containing business and legal information prepared from a practitioner's viewpoint. It has four different modules, updated regularly, and materials range from commentaries on the latest legal developments to key legal and business information.
MAS Proposes New Omnibus Act to Implement Financial Sector-Wide Regulatory Approach
The Monetary Authority of Singapore ("MAS") is seeking feedback on a proposed new omnibus Act ("new Act") as set out in the "Consultation Paper on the New Omnibus Act for the Financial Sector" ("Consultation Paper") issued by MAS on 21 July 2020. The new Act aims to introduce a financial sector-wide regulatory approach for MAS by consolidating the provisions that relate to MAS' regulatory oversight of different financial institution classes in a single Act.
In addition, new provisions on the following areas are proposed to be included in the new Act:
This Update highlights the key new provisions that are proposed to be introduced in the new Act.
- Requirements to regulate digital token service providers created in Singapore for anti-money laundering and countering of financing of terrorism purposes;
- Harmonised power to impose requirements on technology risk management;
- Harmonised and expanded power to issue prohibition orders; and
- Statutory protection from liability for mediators, adjudicators and employees of an operator of an approved dispute resolution scheme.
Transitional Provisions under the Insolvency, Restructuring and Dissolution Act
The Insolvency, Restructuring and Dissolution Act 2018 ("IRDA") came into operation on 30 July 2020. The IRDA sets out the new regime for personal and corporate insolvency in Singapore. However, not all existing insolvency proceedings are immediately subject to the IRDA. The IRDA contains provisions to provide for transition over to the new regime.
In this Update, we look at the cut-off dates under the IRDA and when its provisions begin to apply with regard to winding-up, judicial management, schemes of arrangement, foreign proceedings, the regulation of insolvency practitioners and the restrictions on ipso facto clauses.
Guide to Procurement of Infrastructure Projects in Southeast Asia
As the custodians of the country, Governments are entrusted with the responsibility to develop new public facilities and infrastructure, operate and maintain such public facilities and undertake significant upgrades to existing public facilities and infrastructure, to serve the needs of its people. Governments in developing and developed countries have sought participation from the private sector as an alternative additional source of development and funding. The Public-Private Partnership ("PPP") model provides Governments with the capacity to assess and manage fiscal impact whilst managing the risk transfer between the public and private partner in order to extract long-term value-for-money over the life of the project.
This publication serves as a guide to highlight the similarities and differences of the reasons and motivations for implementing the PPP model by the Governments of selected countries in Southeast Asia. It also sets out the framework and policies for government procurement adopted for infrastructure projects in these jurisdictions.
Treatment of Collaborations During COVID-19: CCCS Guidance
The COVID-19 pandemic has resulted in tremendous disruption to logistics and supply chains and many companies face challenges in respect of demand. To deal with the effects of the outbreak, collaborations may be necessary between competitors.
Against this backdrop, the Competition & Consumer Commission of Singapore ("CCCS") has on 20 July 2020, issued a Guidance Note on Collaborations between Competitors in response to the COVID-19 Pandemic ("Guidance Note"), to provide clarity to businesses on how CCCS will view collaborations between competitors during this exceptional period.
This Update highlights a few salient points from the Guidance Note on the assessment framework CCCS will use to assess certain collaborations between competitors which are put in place from 1 February 2020 and end by 31 July 2021.
Ipso Facto Clauses under the New Insolvency, Restructuring and Dissolution Act
The much-anticipated Insolvency, Restructuring and Dissolution Act 2018 ("IRDA") has come into operation on 30 July 2020. With the new regime in force, commercial parties are keenly interested in the operation of its provisions and the new features introduced. In particular, the new restrictions on ipso facto clauses have attracted much attention.
Section 440 of the IRDA limits the exercise of ipso facto clauses which are triggered by the insolvency of a company or the commencement of specified proceedings. This prevents counterparties from terminating or amending contracts upon such contingencies occurring. This Update examines the precise scope of section 440 of the IRDA and its exclusions.
Are Lenders Liable to Corporate Borrowers when Loans are Misused by the Borrower's Officers?
Where funds from a loan to a company are misused by the company's officers, it is likely that the officers will be liable for breach of their duty to the company. However, are there circumstances in which the lender will also be liable to the company? This was one of the questions faced by the Singapore High Court in OUE Lippo Healthcare Ltd (formerly known as International Healthway Corp Ltd) v Crest Capital Asia Pte Ltd  SGHC 142.
In this case, the company's officers had used funds from a facility to purchase the company's own shares, in breach of the prohibition against share buybacks. The officers were found to have breached their duties towards the company, and the lender was also found liable for dishonest assistance and unlawful means conspiracy. The plaintiff was successfully represented by Lee Eng Beng S.C., Mark Cheng, Jansen Chow and Sasha Gonsalves of Rajah & Tann Singapore LLP.
Imposing Conditional Terms on an Anti-Suit Injunction
The law of anti-suit injunctions has been the subject of much discussion before the courts. As a discretionary form of relief, the court may take into account the relevant factors in deciding whether to grant an anti-suit injunction. In Times Trading Corporation v National Bank of Fujairah (Dubai Branch)  EWHC 1078 (Comms), the English High Court demonstrated the scope of exercise of its discretion, declining to grant an anti-suit injunction as applied for, but imposing conditional terms on the injunction instead.
The decision marks a rare instance where the English courts have imposed such a condition in the grant of an anti-suit injunction. It also provides some insight of how the court will exercise its discretion to achieve a fair and just outcome. Kendall Tan and Max Lim of Rajah & Tann Singapore LLP acted for the bank in related Singapore proceedings, as well as in the conduct of the English court proceedings in conjunction with Messrs Campbell Johnston Clark and instructed Counsel.
Public Consultation on Seven Proposed Amendments to GST Act
On 20 July 2020, the Ministry of Finance ("MOF") announced a public consultation on seven proposed amendments contained in the draft Goods and Services Tax (Amendment) Bill 2020 ("Draft Bill"), which will amend the Goods and Services Tax Act ("GST Act") if passed. These amendments are briefly summarised as follows:
- Enhancement of Comptroller of Goods and Services Tax's powers
- Measures to counter Missing Trader Fraud; and
- Enhanced powers of the Inland Revenue Authority of Singapore ("IRAS") to seize goods for the investigation of tax offences.
- Improvement of Goods and Services Tax ("GST") administration and clarity of existing legislation
- Enhanced GST rules to counteract tax avoidance arrangements ("anti-avoidance rules");
- Introduction of a surcharge for tax avoidance arrangements;
- Clarification of treatment of claims relating to overpaid or erroneously paid GST;
- Mandatory use of electronic mode to pay all GST refunds; and
- Empowerment of the Comptroller to provide information to authorised IRAS officers for the purpose of administering public schemes such as the Jobs Support Scheme.
The consultation period runs from 20 July 2020 and closes on 7 August 2020. MOF has provided guidelines and a template for submissions, which should be submitted via email to firstname.lastname@example.org. A summary of comments received will be published by MOF in October 2020, with all respondents kept anonymous. If the Draft Bill is passed, its amendments are anticipated to take effect on 1 January 2021.
This Update covers the key features of the proposed amendments below.
Income Tax Act – Public Consultation on 38 Proposed Amendments
On 20 July 2020, the Ministry of Finance ("MOF") announced a public consultation on 38 proposed amendments contained in the draft Income Tax (Amendment) Bill 2020 ("Draft ITA Bill"), which will amend the Income Tax Act ("ITA") if passed, as well as implement certain amendments to the Stamp Duties Act ("SDA"). These amendments fall into three general categories:
- Implementing tax changes flowing from the Unity Budget;
- Exempting payouts received under the Resilience Budget, Solidarity Budget, and the Fortitude Budget; and
- Non-budget amendments to enhance the powers of the Comptroller of Income Tax ("Comptroller") to safeguard public monies, and to improve tax administration and the clarity of existing legislation.
The consultation period runs from 20 July 2020 and closes on 7 August 2020. MOF has provided submission guidelines and a template, which should be submitted via email to email@example.com. A summary of comments received will be published by MOF by end September 2020, with all respondents kept anonymous.
This Update will briefly cover key tax measures flowing from the 2020 Budgets, but principally focus on the last category.
Proposed Changes to Companies Act to Cope with Evolving Business Environment
The Accounting and Corporate Regulatory Authority is seeking public feedback on proposed amendments to the Singapore Companies Act and its subsidiary legislation set out in the consultation paper issued on 20 July 2020 ("Consultation Paper").
Feedback on the proposals in the Consultation Paper must be submitted to ACRA by 17 August 2020.
This Update provides a brief overview on certain notable proposed amendments in the Consultation Paper concerning the following areas:
- Facilitating digitalisation;
- Revising concepts of companies for purpose of financial reporting and auditor resignation;
- Revising requirements governing sole director company and director's duty of disclosure;
- Safeguarding shareholders’ interests;
- Refining provisions governing capital maintenance and financial assistance;
- Streamlining financial reporting requirements for companies and foreign companies; and
- Timing relating to the striking off and restoration of companies.