Knowledge Highlights 19 November 2021
On 1 November 2021, the Corporate Registers (Miscellaneous Amendments) Bill (“Bill”) was tabled for first reading in Parliament. The Bill aims to enhance Singapore’s regime on the transparency and beneficial ownership of companies and limited liability partnerships (“LLPs”). The amendments serve to reduce opportunities for the misuse of corporate entities for illicit purposes and are in line with international standards set by the Financial Action Task Force (“FATF”) for combating money laundering, terrorism financing and other threats to the integrity of the international financial system.
The introduction of the Bill follows a public consultation conducted by the Ministry of Finance (“MOF”) and the Accounting and Corporate Regulatory Authority (“ACRA”) from 2 to 30 July 2021 on the Bill.
On 27 October 2021, MOF/ACRA issued a summary of responses to the feedback received from the public consultation as set out in Annex A to the MOF/ACRA press release, which are briefly set out below.
Time frame for foreign companies to update register of members
Following feedback that a 14-day time frame for foreign companies to update their register of members would be particularly challenging for foreign companies with more than 50 members, MOF/ACRA will lengthen the time frame for compliance to 30 days.
Requiring local companies, foreign companies and LLPs to enter particulars of individual(s) with executive control in registers of controllers if no individual or legal entity having significant interest in or significant control over the entity has been identified
Following feedback, MOF/ACRA will provide greater clarity on what constitutes “executive control” in the guidance that ACRA will publish when the proposal is implemented. MOF/ACRA advised that the currently drafted definition of “executive control” is in line with FATF’s concept of beneficial ownership, and that the particulars of the individuals with executive control over the company, foreign company and LLP should be kept in the register of registrable controllers so that in the event that no individual or legal entity having significant interest in or significant control over the company or LLP has been identified, the individuals with executive control will be regarded as the registrable controllers of the entity.
Clarifying that local companies should update register of nominee of directors within seven days after receiving information and particulars from the directors
MOF/ACRA advised that the proposed time frame of seven days ensures that the register of nominee directors is updated in a timely manner by the company. MOF/ACRA have assessed that the seven-day time frame will give the company sufficient time to comply with the requirement to update the register, which is kept by the company.
Requiring local companies and foreign companies to keep non-public registers of nominee shareholders
With respect to the request in the feedback on the proposed definition of “nominee shareholders” in the draft Bill, MOF/ACRA clarified that the policy intent is not to include secured creditors in the proposed definition and that this will be clarified in the guidance that ACRA will publish, together with the concept of being “accustomed”.
With respect to the request in the feedback to consider implementing an additional measure of requiring the disclosure of any natural person(s) who own or control the nominator where the nominator is a legal entity, MOF/ACRA advised that at this stage, the policy intent of the Bill is not to require nominators that are legal entities to disclose their nominee shareholders. MOF/ACRA will continue to monitor international developments and enhance the requirement where necessary.
With respect to the request in the feedback to exempt (a) companies that are already required to keep similar registers in other countries from the requirement to keep a register of nominee shareholders in Singapore; and (b) nominee shareholders and their nominators that are funds, trusts or trustees from having to disclose their particulars, MOF/ACRA advised that on item (a), the FATF standards require the particulars of the nominee shareholders to be kept in Singapore and ACRA would not be able to exhaustively determine the countries which require similar registers to be kept for the purpose of implementing exemptions, and on item (b), it would not be appropriate to provide blanket exemptions for funds, trusts and trustees as they are set up differently, each with varying degree of powers and duties, and may be capable of being nominee shareholders and nominators.
The following materials are available on the MOF website www.mof.gov.sg:
- Press release: Summary of Responses to Public Consultation on the draft Corporate Registers (Miscellaneous Amendments) Bill 2021
- Annex A: MOF and ACRA’s responses to key feedback on the draft Corporate Registers (Miscellaneous Amendments) Bill 2021
The Corporate Registers (Miscellaneous Amendments) Bill is available on the Parliament website www.parliament.gov.sg.