Securities & Futures Regulations Flashcards

What is the penalty for insider trading under the SFA for a first offender (individual)?

Answer: A fine not exceeding S$250,000 and/or imprisonment not exceeding 7 years

Insider trading is a serious offence under the SFA. An individual convicted of insider trading faces a fine not exceeding S$250,000 and/or imprisonment not exceeding 7 years, reflecting Singapore's strict stance on market misconduct.

What is a 'debenture' as defined under Singapore law?

Answer: A document acknowledging or creating a debt obligation of a company, including bonds and notes

A debenture is a document issued by a company acknowledging or creating a debt obligation, typically including bonds, notes, and loan stock. Corporate bonds are the most common form of debenture in Singapore's capital markets.

Under the SFA, what is a 'real estate investment trust (REIT)'?

Answer: A collective investment scheme that primarily invests in income-generating real estate assets, listed on SGX, distributing at least 90% of taxable income to unitholders

A REIT in Singapore is a listed collective investment scheme investing in income-generating real estate. S-REITs listed on SGX must distribute at least 90% of taxable income to unitholders to qualify for tax transparency treatment from IRAS.

What is 'securities financing' as a regulated activity under the SFA?

Answer: Providing loans secured against securities or for the purpose of acquiring securities (margin financing)

Securities financing is a regulated activity under the SFA involving providing credit facilities to clients for purchasing securities (margin lending) or accepting securities as collateral for loans. A CMS licence with this regulated activity is required to conduct such business.

What is the purpose of the SFA's 'take-over' provisions and the Singapore Code on Take-overs and Mergers?

Answer: To ensure fair and equal treatment of all shareholders in take-over transactions and to regulate mandatory offers when a person acquires 30% or more of a company

The Singapore Code on Take-overs and Mergers, administered by the Securities Industry Council (SIC), ensures that all shareholders receive fair and equal treatment in take-over situations. The key provision requires a mandatory general offer when a person or concert party acquires 30% or more of a company's voting shares.

What does the SFA say about 'false or misleading statements' in connection with securities?

Answer: It is an offence to make statements or disseminate information that is false or misleading and likely to induce others to trade in securities or affect the price of securities

The SFA prohibits making or disseminating false or misleading statements, information, or forecasts that are likely to induce other persons to subscribe for, purchase, or sell securities, or that would be likely to have the effect of raising, lowering, maintaining, or stabilising the price of securities.