Legal Updates for November 2020
MAS Green and Sustainability-Linked Loan Grant Scheme for Corporates and Banks Available from 1 January 2021
With effect from 1 January 2021, corporates which plan to obtain green and sustainable financing may apply under the Green and Sustainability-Linked Loan Grant Scheme ("GSLS") for a grant to defray the expenses of engaging independent service providers to validate the green and sustainability credentials of the loan. In addition, banks which plan to develop green and sustainability-linked loan frameworks may apply under the GSLS for co-funding of specified expenses of such frameworks.
Launched on 24 November 2020, the GSLS is the first of its kind globally that seeks to support the aim of the Monetary Authority of Singapore ("MAS") to develop green and sustainable financial markets and products to aid Asia's transition to a low-carbon future.
This Update provides a summary of the key features and eligibility criteria for the GSLS, one of the initiatives under the MAS' Green Finance Action Plan.
MAS Consults on Stricter Requirements to Improve Identity Verification for Non-Face-to-Face Contact for Financial Institutions
The Monetary Authority of Singapore ("MAS") is seeking feedback on proposed requirements to strengthen identity verification for non-face-to-face contact situations for banks, insurers and other financial institutions (collectively, "FIs"). MAS' proposals are set out in its consultation paper on "Notice on Identity Verification" issued on 10 November 2020. Feedback on the consultation paper must be submitted to MAS by 11.59 pm, 9 December 2020.
To address the risks of theft and misuse of an individual's personal particulars and combat the rise of impersonation scam cases, MAS proposes to make it compulsory for FIs to augment the types of information they obtain for the purpose of verifying an individual's identity in non-face-to-face situations. FIs are not permitted to solely rely on information such as NRIC number, residential address and date of birth which are commonly given out by individuals for identity verification purposes.
This Update provides a summary of the proposed enhanced identity verification requirements.
Draft Advisory Guidelines on the Key Amendments to the Personal Data Protection Act
On 20 November 2020, the Personal Data Protection Commission ("PDPC") issued the Draft Advisory Guidelines on Key Provisions of the Personal Data Protection (Amendment) Bill ("Draft Guidelines"). The Draft Guidelines provide further clarification on certain key amendments introduced in the Personal Data Protection (Amendment) Bill ("Bill") as well as the steps that organisations or individuals should take in order to comply with the new provisions. The Bill was passed in Parliament on 2 November 2020, and will introduce changes to the Personal Data Protection Act 2012 ("PDPA"), representing the first comprehensive review of the PDPA since its initial enactment. In this Update, we highlight some of the key clarifications set out in the Draft Guidelines.
COMPETITION BITES 2020 - Issue 3
2020 was meant to be an exciting year, with new challenges and growth. Challenges did face us, but in the strangest of ways, and seem to continue with no immediate end in sight. Amidst the challenges, competition and consumer protection regulators across the region remained active, and hence, we have a meaty year-end issue of Competition Bites for 2020.
The focus for this issue is the publication of the findings and recommendations from the E-commerce Platforms Market Study conducted by the Competition and Consumer Commission of Singapore. Other snippets include the active merger control enforcement in Indonesia and Vietnam, the finalisation of Malaysia’s market review of the retail and wholesale service sector, and the coming into effect of new market dominance thresholds in Thailand. Separately, the Thailand competition authority has published for public consultation new guidelines on unfair trade practices in the online food delivery services.
Commentary: China Unveils Draft Personal Information Protection Law for Public Consultation
On 21 October 2020, the People’s Republic of China ("PRC") unveiled its highly anticipated draft personal information protection law (中华人民共和国个人信息保护法(草案)) ("Draft PIPL") for public consultation. The Draft PIPL consists of 70 articles divided into 8 Chapters. As the first comprehensive piece of legislation addressing personal information protection in the PRC, the Draft PIPL will have a significant impact on not just organisations conducting businesses within the PRC, but also those operating overseas. This update will examine some of the key highlights of the Draft PIPL.
Signing of the Regional Comprehensive Economic Partnership Agreement by 15 Asia-Pacific Countries
On 15 November 2020, the ten member states of the Association of Southeast Asian Nations ("ASEAN") – Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Singapore, the Philippines, Thailand, and Vietnam – in conjunction with Australia, China, Japan, South Korea, and New Zealand, signed the world's largest free trade agreement to date, known as the Regional Comprehensive Economic Partnership ("RCEP") Agreement.
Representing the culmination of eight years of negotiations, the RCEP builds on existing bilateral FTAs among the 15 RCEP Participating Countries ("RPCs"). Together, the RPCs account for about 30% of global gross domestic product and close to a third of the world's population. It signals the RPCs' strong commitment to maintaining open and connected supply chains; broadens individual RPCs' economic linkages and connectivity with the region; and gives them preferential access to the region's growing markets.
We provide an overview of the features of the RCEP below, which improves on the existing ASEAN Plus One agreement in four key areas:
- comprehensive trade facilitation measures;
- improved market access for Trade in Services;
- enhanced investment rules and disciplines; and
- expanded scope and commitments.
Amendments to Payment Services Act 2019 Tabled in Parliament to Enhance Regulation of DPT Service Providers and Address ML/TF Risks
On 2 November 2020, the Payment Services (Amendment) Bill ("Bill") was tabled in Parliament for first reading. The Bill seeks to amend the Payment Services Act 2019 ("PS Act") for the following main purposes:
The Bill has yet to be passed and is not in force yet.
- broadening the definition of digital payment token ("DPT") service to align with enhanced regulation standards adopted by the Financial Action Task Force in regulating virtual asset service providers on anti-money laundering and countering terrorist financing;
- widening the definition of "cross-border money transfer service" to mitigate money laundering/terrorist financing risks from certain cross-border business models; and
- expanding the powers of the Monetary Authority of Singapore to impose additional measures on DPT service providers.
This Update provides an overview of the key amendments to the PS Act and briefly addresses other amendments.
Changes to COVID-19 (Temporary Measures) Act: Re-align Framework, Additional Reliefs for Built Environment Sector, Fine-tuning Property Tax Rebate Regulations
Amendments to the COVID-19 (Temporary Measures) Act ("Act") were passed in Parliament to supplement the temporary reliefs provided in the Act in the following key aspects:
- introducing a new re-align framework for eligible businesses which are significantly affected by COVID-19 to renegotiate specified contracts;
- introducing additional reliefs for the Built Environment sector in the forms of: (i) an extension of time to the completion date for eligible construction contracts; (ii) co-sharing of qualifying costs arising from COVID-19 related project delays for eligible construction contracts; and (iii) an avenue for property developers to seek an extension of date of delivery of possession of property and provision of the right for purchasers affected by COVID-19 related delay in delivery of their units; and
- fine-tuning the application of the property tax rebate regulations to take into account the rental relief framework provided in Part 2A of the Act.
The Act was enacted in April 2020 to introduce a series of temporary legal reliefs and mechanisms for businesses and individuals to aid them in managing the impact of the COVID-19 pandemic. On 3 November 2020, the COVID-19 (Temporary Measures) (Amendment No. 3) Bill ("Bill") providing changes to the Act was passed in Parliament. The changes have yet to come into force.
This Update highlights the salient features of the key changes to be introduced by the Bill and the issues addressed by these new measures.
Transition to SORA: Key Timelines to Cease Issuance of SOR-Linked Financial Products & Market Guidance
To support the transition from Singapore Dollar Swap Offer Rate ("SOR") to Singapore Overnight Rate Average ("SORA") for a range of financial products, on 27 October 2020, the Steering Committee for SOR Transition to SORA ("SC-STS") announced key industry timelines to be observed by banks and financial institutions (collectively, "FIs"). The SC-STS also lists a set of market guides to help FIs adhere to the timelines.
This Update highlights the salient areas covered by the SC-STS market guides and action items for FIs in Singapore to take note of.
Regional Shipping Update: Shipping Law Updates – Fourth Quarter 2020
This is the Fourth Quarter 2020 issue of the Regional Shipping Update of Rajah & Tann Asia’s Shipping & International Trade Practice, a publication that provides a snapshot of the key legal issues in various jurisdictions where our member firms have regional presence.
In this issue, we focus on what shipowners should do when a ship is arrested in Thailand. We also discuss recent English cases on arbitration and anti-suit injunctions that have important implications for shipping and shipping law generally.
Apostille Bill Passed in Parliament: Facilitating Cross-Border Use of Public Documents
Notwithstanding the COVID-19 pandemic, the world remains intensively globalised, with cross-border transactions and movements continuing to take place. These often require public documents (such as court documents and official certificates, including marriage certificates, educational certificates, and identity documents like passports and birth certificates) issued by one State to be relied on for use in another State.
Ordinarily, States will require foreign public documents to undergo the process of legalisation, whereby the signature, seal, or stamp on the document in question is certified as authentic by a series of public officials in order to be recognised by the foreign State of destination. The formalities involved in the multi-stage process of legalisation can be cumbersome and often costly.
The Hague Convention of 5 October 1961 Abolishing the Requirement of Legalisation for Foreign Public Documents ("Apostille Convention") facilitates the use of public documents by replacing legalisation with a simplified one-step process. On 2 November 2020, the Apostille Bill was passed by the Parliament of Singapore, which will give domestic effect to Singapore's obligations under the Apostille Convention once it comes into force.
In this Update, we examine the new process provided for by the Apostille Bill, as well as comment on its implications and potential scope for improvement by way of digitalisation.
New Regulations of the Shenzhen Court of International Arbitration
The Standing Committee of the People's Congress of Shenzhen City has passed its new regulations on the Shenzhen Court of International Arbitration ("SCIA") with effect from 1 October 2020. The new regulations reflect SCIA's response to some long-standing issues of Chinese arbitral practice. It marks a significant step taken by SCIA towards aligning itself with international arbitral practice.
In this Update, we look at the key features of the new SCIA Regulations, which range from the independent governance of SCIA, the ability of parties to choose a foreign seat and applicable law to govern their dispute, and the diversification of dispute resolution mechanisms.
MAS Consults on Proposed Capital Requirements for Locally Incorporated Recognised Market Operators
The Monetary Authority of Singapore ("MAS") is seeking feedback on proposed capital requirements to be imposed on recognised market operators formed or incorporated in Singapore ("RMOs") set out in its consultation paper issued on 23 October 2020. Feedback on the consultation paper is required to be submitted to MAS by 11.59 pm, 4 December 2020.
MAS is proposing two key amendments to capital requirements: (i) a direct liquidity requirement for RMOs to, among other things, hold cash of at least 25% of their annual operating costs ("new liquidity requirement") and (ii) recalibration of the solvency requirement ("revised solvency requirement").
This Update provides a summary of the proposed new liquidity requirement and revised solvency requirement applicable to RMOs.