The Ministry of Finance (MOF) has received the “Report of the Steering Committee for Review of the Companies Act”, and expresses its appreciation to the Steering Committee for its work. MOF, together with the Accounting and Corporate Regulatory Authority (ACRA) which administers the Companies Act, invite the public to provide feedback on the report. MOF and ACRA also invite the public to provide feedback on the review of the regulatory framework for foreign entities in Singapore. The public consultation exercise will run from 20 June 2011 to 16 September 2011.
Steering Committee’s Report
2. The Steering Committee was set up by MOF in October 2007 to carry out a fundamental review of the Companies Act. The review is aimed at ensuring an efficient and transparent corporate regulatory framework that supports Singapore’s growth as an international hub for both businesses and investors.
3. In its review, the Steering Committee considered existing legislation in leading jurisdictions such as Australia, New Zealand, the United Kingdom and the United States. The Steering Committee recommended that the Companies Act should contain core company law, while provisions relating to specific types of companies (e.g. foreign companies) should be in legislation specifically dealing with such entities. The Steering Committee also consulted key stakeholders before finalising its recommendations. Six consultation papers were issued to businesses, professional bodies, individuals who practise or are interested in corporate law and corporate finance, as well as other stakeholders. The Steering Committee received 128 written comments and held 17 focus group meetings to hear oral comments.
4. The Steering Committee’s Report comprises six chapters and 217 recommendations:
(a) Chapter 1 - Directors;
(b) Chapter 2 - Shareholders’ Rights and Meetings;
(c) Chapter 3 - Shares, Debentures, Capital Maintenance, Schemes, Compulsory Acquisitions and Amalgamations;
(d) Chapter 4 - Accounts and Audit;
(e) Chapter 5 - General Company Administration; and
(f) Chapter 6 - Registration of Charges.
The Steering Committee’s report is at Annex A and the highlights of its recommendations are at Annex B.
Review of the Regulatory Framework for Foreign Entities
5. The Companies Act contains provisions relating to foreign companies. The Steering Committee took the view that the laws relating to the registration and regulation of foreign entities, namely branches of foreign corporations registered in Singapore, should be placed in separate legislation to facilitate the streamlining of the Companies Act. There is no intent for any significant widening of the scope of regulation of foreign entities. The proposed standalone legislation will not regulate the operations of subsidiaries (incorporated in Singapore) of foreign companies, which will continue to be regulated under the Companies Act.
6. ACRA’s consultation paper on the review of the regulatory framework for foreign entities is at Annex C and the highlights of ACRA’s recommendations are at Annex D. This consultation is launched concurrently to provide the public with a comprehensive view of the proposed changes to the Companies Act. The consultation paper reflects the inputs from Working Group 5 appointed by the Steering Committee to study regulation of foreign entities in Singapore, and takes into account responses to an earlier consultation paper on foreign companies issued by ACRA in October 2007.
Public Consultation Details
7. MOF and ACRA invite the public to send their comments on the Steering Committee’s report and ACRA’s public consultation paper on the regulatory framework for foreign entities. The public can also access both documents on MOF website, ACRA website and REACH consultation portal. Comments should be submitted as follows:
Steering Committee’s Report
- Email: email@example.com (preferred mode)
- Fax: (+65) 6337 4134
- Mail: Corporate Regulation and Governance Unit
Economic Programmes Directorate
Ministry of Finance
100 High Street
#10-01, The Treasury
Consultation Paper on Foreign Entities
- Email: acra_FEconsultation@acra.gov.sg (preferred mode)
- Fax: 62251676
- Mail: Accounting and Corporate Regulatory Authority
Legal Services Division
10 Anson Road
#05-01/15 International Plaza
8. The three-month public consultation period will end on 16 September 2011. To reach out to a wider audience, MOF and ACRA will also collaborate with selected stakeholder groups to organise public seminars to share key recommendations from the Steering Committee’s Report and gather feedback. Details on the seminars will be announced at a later date.
MINISTRY OF FINANCE &
ACCOUNTING AND CORPORATE REGULATORY AUTHORITY
20 June 2011