Occurrence of events precipitating payment of compensation
Open ↗21.—(1) Where, on or after 1 May 2011 —(a)
an order is made by a court in Singapore or elsewhere to wind up a DI Scheme member;
(b)
a DI Scheme member is wound up voluntarily under the Insolvency, Restructuring and Dissolution Act 2018 or under the law of a country or territory outside Singapore; or
(c)
the Authority is of the opinion that a DI Scheme member is insolvent, unable or likely to become unable to meet its obligations, or about to suspend payments,
the Authority may determine that compensation be paid out of the DI Fund to the insured depositors of the DI Scheme member in accordance with this Act.
[31/2018; 40/2018]
(2) Where the Authority determines that compensation be paid out of the DI Fund under subsection (1), the Authority must immediately give written notice to the Agency of its determination.
(3) The written notice referred to in subsection (2) must be in such form and contain such information as may be agreed between the Authority and the Agency.
(4) The Agency must, as soon as practicable upon receiving the notice referred to in subsection (2), publish a notice in the Gazette stating that a payment of compensation is to be made out of the DI Fund.
Entitlement to compensation
Open ↗22.—(1) Subject to subsection (5) and section 23, where an insured depositor has one or more insured deposits placed with a failed DI Scheme member (other than any moneys denominated in Singapore dollars placed with the failed DI Scheme member under the CPFIS and CPFRS), which —(a)
the insured depositor holds in the insured depositor’s own right;
(b)
the insured depositor holds in the insured depositor’s own right jointly with one or more other persons in a joint account;
(c)
the insured depositor holds in the name of the insured depositor’s sole‑proprietorship; or
(d)
consists of moneys denominated in Singapore dollars placed with the failed DI Scheme member under the Supplementary Retirement Scheme,
the insured depositor is entitled to compensation from the DI Fund computed on the basis of the aggregate amount, as at the quantification date, of such insured deposits falling within paragraphs (a), (b), (c) and (d), and such compensation must not exceed the aggregate amount of such insured deposits or the Maximum DI Coverage, whichever is lower.
[26/2016]
(2) Where any insured depositor has one or more insured deposits placed with a failed DI Scheme member (other than moneys denominated in Singapore dollars placed with the failed DI Scheme member under the CPFIS and CPFRS) which the insured depositor holds in an account as trustee under a trust or holds in a client account, the insured depositor is entitled, in respect of every such account, to compensation from the DI Fund, not exceeding the amount of such insured deposits in that account or the Maximum DI Coverage, whichever is lower.[26/2016]
(3) For the purposes of subsection (2), where there are 2 or more insured depositors holding any insured deposit in an account under a trust or in a client account jointly, the compensation referred to in subsection (2) must be divided equally among those insured depositors and paid accordingly.
(4) Where any insured deposit of any insured depositor placed with a failed DI Scheme member consists of moneys denominated in Singapore dollars placed with the failed DI Scheme member under the CPFIS or CPFRS, such moneys must not be aggregated with the insured depositor’s other insured deposits placed with that failed DI Scheme member for the purposes of determining the amount of compensation that the insured depositor is entitled to, and the insured depositor is entitled, in respect of moneys denominated in Singapore dollars placed with the failed DI Scheme member under the CPFIS and CPFRS, to compensation from the DI Fund, not exceeding the amount of such moneys placed with the failed DI Scheme member or the Maximum DI Coverage, whichever is lower.[26/2016]
(5) Where an insured depositor has one or more prescribed products placed with a failed DI Scheme member, which the Minister has, by order in the Gazette, determined to be subject to separate coverage under the DI Scheme (called in this section the firstmentioned prescribed products), whether on their own or in aggregation with other prescribed products (called in this section the other prescribed products) —(a)
the insured depositor is entitled to compensation from the DI Fund computed on the basis of the aggregate amount, as at the quantification date —(i)
of the firstmentioned prescribed products; or
(ii)
of the firstmentioned prescribed products in aggregation with the other prescribed products,
as the case may be; and
(b)
such compensation must not exceed —(i)
in the case where the firstmentioned prescribed products are subject to separate coverage on their own, the aggregate of the amounts of all the firstmentioned prescribed products held by the insured depositor or the Maximum DI Coverage, whichever is lower; or
(ii)
in the case where the firstmentioned prescribed products are to be aggregated with the other prescribed products, the aggregate of the amounts of all the prescribed products held by the insured depositor or the Maximum DI Coverage, whichever is lower.
(6) For the purposes of determining the amount of compensation which an insured depositor is entitled under this section, the liabilities (if any) that are owing from the insured depositor to the failed DI Scheme member are disregarded.
(7) Despite the provisions in this section —(a)
in the case of an insured depositor who is deceased, the Agency must pay the compensation to the personal representatives of the deceased insured depositor;
(b)
in the case where, before the quantification date —(i)
an enforcement order for attachment of a debt was made under the Rules of Court in respect of the insured deposit; and
(ii)
pursuant to the enforcement order, a notice of attachment with respect to the insured deposit was served on the failed DI Scheme member,
the Agency —
(iii)
must, subject to any order of the court in determining any objection to the enforcement order, pay the whole or part (as the case may be) of the compensation to the enforcement applicant; but
(iv)
is not required to pay the compensation if the insured deposit is released from attachment (whether by the consent of the enforcement applicant or otherwise); and[Act 31 of 2022 wef 01/11/2022]
(c)
the Agency must pay the compensation to such other persons in such circumstances as the Minister may prescribe.
Deposits in own right and joint accounts
Open ↗23.—(1) Where an insured depositor holds any insured deposit in the insured depositor’s own right, the insured depositor is entitled, in respect of the insured deposit as at the quantification date, to compensation from the DI Fund.
(2) Where there are 2 or more insured depositors holding any insured deposit, each of those insured depositors is entitled, in respect of each insured depositor’s share in the insured deposit as at the quantification date, to compensation from the DI Fund.
(3) For the purposes of determining the share of any insured depositor in an insured deposit under subsection (2), each insured depositor holding such insured deposit is deemed to have an equal share in the insured deposit unless there is an express provision to the contrary in the books of the failed DI Scheme member.
(4) To avoid doubt, subsection (3) does not affect any rights as between the persons holding such insured deposit themselves.
Restrictions on entitlement to compensation under DI Scheme
Open ↗24. Where the Agency has paid an insured depositor the full amount of compensation payable to the insured depositor or any person referred to in section 22(7) or both (as the case may be) in respect of the insured depositor’s insured deposits, in accordance with this Act, no other person is entitled, in respect of those same insured deposits, to compensation under this Part.
Computation and method of payment of compensation under DI Scheme
Open ↗25.—(1) The Agency must compute the amount of compensation due to any insured depositor in respect of the insured depositor’s insured deposits placed with a failed DI Scheme member in accordance with this Act.
(2) In determining the eligibility and entitlement of any insured depositor to compensation and computing the amount of compensation due to any insured depositor, the Agency is entitled to rely on the books of the failed DI Scheme member and any other books which, in the opinion of the Agency, are relevant for such determination and computation.
(3) Subject to subsection (4), the Agency must pay the compensation in such form and manner as may be specified in the Rules.
(4) The Authority may make regulations for the purposes of payment of compensation by the Agency.
(5) Without limiting subsection (4), such regulations may —(a)
specify the person to whom, or the account into which, payment of compensation is to be made for the benefit of any insured depositor who is entitled to compensation under this Act;
(b)
provide for the payment of compensation in respect of any insured depositor holding insured deposits in different accounts;
(c)
provide for the payment of compensation into an equivalent account with another DI Scheme member and for such compensation to be held in that account in a manner equivalent to the manner of holding of the original insured deposit; and
(d)
provide for the treatment of any transfer order which has not been cleared and settled under the Rules of a payment system, in the computation of compensation due to any insured depositor who is entitled to compensation under this Act.[31/2018]
(6) In subsection (5)(d), “transfer order” and “Rules” have the meanings given by the Payment and Settlement Systems (Finality and Netting) Act 2002.[31/2018]
Merger or consolidation of, or acquisition by, DI Scheme members
Open ↗26.—(1) Where —(a)
a DI Scheme member merges or consolidates with another DI Scheme member; or
(b)
a DI Scheme member (called in this section the acquiring DI Scheme member) acquires the deposit-taking business of another DI Scheme member to form part of the business of the acquiring DI Scheme member,
and there is a subsequent failure of the merged or consolidated DI Scheme member or acquiring DI Scheme member (as the case may be) within one year after the date of the merger, consolidation or acquisition (called in this section the additional cover period), any insured depositor, who has insured deposits placed with both of the original DI Scheme members immediately before the merger, consolidation or acquisition (as the case may be) is entitled to compensation in accordance with this Act as if the merger, consolidation or acquisition did not take place; and in respect of the insured depositor’s insured deposits with each of the original DI Scheme members, is entitled to compensation of an amount not exceeding the Maximum DI Coverage or the amount of insured deposits placed with the relevant DI Scheme member, whichever is lower.
(2) The Minister may extend the additional cover period for the insured deposits under subsection (1) —(a)
where the Minister is satisfied that it is in the interest of the insured depositors of any DI Scheme member or the public to do so; or
(b)
to maintain financial stability in Singapore.
Subrogation
Open ↗27.—(1) Upon payment out of the DI Fund of any compensation under this Act to, or for the benefit of, any insured depositor in respect of the insured depositor’s insured deposit or any person referred to in section 22(7) in respect of that insured deposit, the Agency is subrogated to the extent of such payment to all the rights and remedies of —(a)
the insured depositor;
(b)
the person who received the compensation on behalf of the insured depositor;
(c)
the person referred to in section 22(7);
(d)
in the case where payment is made to an insured depositor who is a trustee, the trustee; or
(e)
in the case where payment is made to an insured depositor who held the insured deposit in a client account, that insured depositor,
as the case may be, in respect of the insured deposit in priority over —
(f)
the rights and remedies of the insured depositor, the person who received the compensation on behalf of the insured depositor or the person referred to in section 22(7) (as the case may be) in relation to that insured deposit; and
(g)
the rights and remedies of any person who is subrogated, whether or not before the Agency’s subrogation, to the rights and remedies of any of the persons referred to in paragraphs (a), (b), (c), (d) and (e) in relation to that insured deposit,
and may maintain an action in respect of those rights and remedies in the name of the person referred to in paragraph (a), (b), (c), (d) or (e) (as the case may be) or in the name of the Agency, subject to subsection (2).
(2) Where the Agency maintains an action in respect of the rights and remedies in the name of the person referred to in subsection (1)(a), (b), (c), (d) or (e) (as the case may be) the following provisions apply:(a)
in the case where the failed DI Scheme member is not wound up, the Agency is entitled to recover the full amount of compensation claimed against the failed DI Scheme member, despite any liabilities owing by the insured depositor to the DI Scheme member;
(b)
in the case where the failed DI Scheme member is wound up, the insolvency rules relating to set-off do not apply in relation to the rights and remedies of the insured depositor.
(3) For the purposes of subsection (1), where the Agency is unable to effect payment to an insured depositor (due to incorrect or outdated addresses, in respect of accounts which are dormant or any other reasons beyond the reasonable control of the Agency), the Agency is deemed to have made payment out of the DI Fund of compensation under this Act to, or for the benefit of, an insured depositor in respect of the insured depositor’s insured deposit, if the Agency makes payment of the compensation to the Public Trustee appointed under the Public Trustee Act 1915 to be held on trust for the insured depositor.
(4) The persons referred to in paragraphs (a), (b), (c), (d) and (e) of subsection (1), or any person who is subrogated, whether or not before the Agency’s subrogation, to the rights and remedies of those persons, is not entitled to receive any amount from, or out of, the assets of the failed DI Scheme member until the Agency has been reimbursed in full the amount of compensation paid to those persons and any expenses under subsection (5).
(5) Despite any provision in the Insolvency, Restructuring and Dissolution Act 2018, the Agency is entitled —(a)
in the case where the failed DI Scheme member is wound up, to be reimbursed out of the assets of the failed DI Scheme member for the expenses incurred for or in respect of —(i)
the payment of any compensation to any insured depositor, including any interest charged on moneys borrowed by the Agency for the purpose of making payment of any compensation to any insured depositor under the DI Scheme;
(ii)
the lodging of any claim with the liquidator of the failed DI Scheme member for any compensation that has been paid out to any insured depositor;
(iii)
any communication with any insured depositor and the public on, or relating to, the payment of any compensation to any insured depositor under the DI Scheme; and
(iv)
such other matters as may be prescribed by the Authority; and
(b)
in any other case, to be reimbursed by the failed DI Scheme member or the provisional liquidator of the failed DI Scheme member (as the case may be) for the expenses incurred for or in respect of —(i)
the payment of any compensation to any insured depositor, including any interest charged on moneys borrowed by the Agency for the purpose of making payment of any compensation to any insured depositor under the DI Scheme;
(ii)
the lodging of any claim with the provisional liquidator of the failed DI Scheme member for any compensation that has been paid out to any insured depositor;
(iii)
any communication with any insured depositor and the public on, or relating to, the payment of any compensation to any insured depositor under the DI Scheme; and
(iv)
such other matters as may be prescribed by the Authority.[31/2018; 40/2018]
(6) The Authority may by regulations —(a)
provide for the manner, process or method by which the Agency may exercise its rights to be subrogated to the rights and remedies as set out in subsection (1); and
(b)
prescribe the matters mentioned in subsection (5)(a)(iv) and (b)(iv).[31/2018]
(7) For the purposes of making payment of compensation by the Agency to the Public Trustee under subsection (3) and payment of compensation by the Public Trustee to insured depositors and any person referred to in section 22(7), the Authority may, with the Public Trustee’s concurrence and in consultation with the Agency, make regulations for or in respect of all or any of the following matters:(a)
the manner in which moneys paid by the Agency to the Public Trustee are to be paid to insured depositors or any person referred to in section 22(7);
(b)
the fees to be paid by the Agency to the Public Trustee and the manner of payment of such fees;
(c)
such other matters as the Authority considers necessary.
(8) The provisions in the Fifth Schedule apply in relation to the holding and payment of compensation under this Act by the Public Trustee to insured depositors and any person referred to in section 22(7).
(9) If the Authority wishes to amend or vary any regulations made under subsection (7), the Authority must first conduct a joint review with the Public Trustee and such regulations must not be amended or varied without the Public Trustee’s concurrence and consulting the Agency.
Recovery of compensation paid in excess or in error under DI Scheme
Open ↗28.—(1) If —(a)
any compensation paid to, or for the benefit of, an insured depositor out of the DI Fund is in excess of what ought to have been paid to the insured depositor under this Act; or
(b)
any compensation is paid in error to any person,
the Agency may recover the amount paid in error or excess from the person who received the compensation, in such manner and within such period as may be specified by the Agency to that person.
(2) Without affecting any other remedy, any amount paid in error or excess to any person is recoverable as a debt due to the Agency by that person.
(3) Despite any provision in the Limitation Act 1959, an action to recover any amount paid in error or excess to any person recoverable by virtue of this section must not be brought after the expiry of the period during which the action may be brought against the person under the Limitation Act 1959 or the date of completion of the winding up of the failed DI Scheme member, whichever is later.
(4) Upon the recovery of any amount paid in error or excess from any person under this section (called in this section the recovered amount), the Agency must do the following:(a)
in the case where the failed DI Scheme member is not wound up or where the winding up of the failed DI Scheme member has not completed and the Agency has not recovered or has not recovered in full from the failed DI Scheme member or its liquidator (as the case may be) the compensation which it paid out to the insured depositors, the Agency must deduct from the recovered amount the shortfall in compensation and pay such deducted amount to the DI Fund, and pay the amount remaining from the recovered amount after the deduction (if any) to the failed DI Scheme member or its liquidator, as the case may be;
(b)
in the case where the failed DI Scheme member is not wound up or where the winding up of the failed DI Scheme member has not completed and the Agency has recovered from the failed DI Scheme member or its liquidator (as the case may be) in full the compensation which it paid out to the insured depositors, the Agency must pay the recovered amount to the failed DI Scheme member or its liquidator, as the case may be;
(c)
in the case where the winding up of the failed DI Scheme member has completed and the Agency has not recovered or has not recovered in full from the liquidator the compensation which it paid out to the insured depositors, the Agency must deduct from the recovered amount the shortfall in compensation and pay such deducted amount to the DI Fund, and pay the amount remaining from the recovered amount after the deduction (if any) to the Official Receiver to be placed to the credit of the Companies Liquidation Account;
(d)
in the case where the winding up of the failed DI Scheme member has completed and the Agency has recovered from the liquidator in full the compensation which it paid out to the insured depositors, the Agency must pay the recovered amount to the Official Receiver to be placed to the credit of the Companies Liquidation Account.
(5) Section 197(4), (7), (8), (9) and (10) of the Insolvency, Restructuring and Dissolution Act 2018 applies, with the necessary modifications, to the money paid to the Official Receiver under subsection (4)(c) and (d).[40/2018]
Duties of liquidators in winding up of DI Scheme member
Open ↗28A.—(1) A person who —(a)
is appointed as a liquidator under the Insolvency, Restructuring and Dissolution Act 2018 for the winding up of a DI Scheme member; and
(b)
has been approved by the Authority as such under section 54(4) of the Monetary Authority of Singapore Act 1970 as in force immediately before the date of commencement of section 205 of the Financial Services and Markets Act 2022 or under section 63(4) of the Financial Services and Markets Act 2022,
(called in this section the liquidator) must, in carrying out its functions as a liquidator, work together with the Agency to ensure that any insured depositor who is entitled to receive compensation from the DI Fund receives payment from the Agency as soon as is reasonably practicable.
[31/2018; 40/2018]
[Act 18 of 2022 wef 10/05/2024]
(2) The Authority may, by written notice to the liquidator, require the liquidator to give the Agency such information and reasonable assistance as the Authority considers necessary —(a)
to ensure that any insured depositor who is entitled to receive compensation from the DI Fund receives payment from the Agency as soon as is reasonably practicable; and
(b)
to enable the Agency to fulfil its objects and discharge its functions under this Act.[31/2018]
(3) Despite any written law or rule of law but subject to subsection (4), the liquidator must not, without the prior written approval of the Authority, sell or transfer any assets of the DI Scheme member being wound up to —(a)
any person who provides services in connection with the winding up of the DI Scheme member; or
(b)
any person working for or on behalf of —(i)
the Agency;
(ii)
the Authority; or
(iii)
a person mentioned in paragraph (a).[31/2018]
(4) Subsection (3) does not prevent the payment by the liquidator of any debt of the DI Scheme member being wound up in accordance with any written law or rule of law relating to the winding up of companies.[31/2018]
(5) Any sale or transfer of assets by the liquidator in contravention of subsection (3) is void.[31/2018]
(6) Any liquidator who —(a)
without reasonable excuse, fails to comply with subsection (1), or any notice issued by the Authority under subsection (2); or
(b)
being required to provide information to the Agency under subsection (2), knowingly or recklessly provides any information or document that is false or misleading in a material particular,
shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $125,000 or to imprisonment for a term not exceeding 3 years or to both and, in the case of a continuing offence, to a further fine not exceeding $12,500 for every day or part of a day during which the offence continues after conviction.
[31/2018]
Powers of liquidator in respect of claims against insured depositor
Open ↗29.—(1) Subject to subsection (3), despite any written law or rule of law, where —(a)
the Agency has paid compensation to an insured depositor or any person referred to in section 22(7) out of the DI Fund in accordance with this Act;
(b)
such compensation is, or will be, accorded priority in the event of the winding up of the failed DI Scheme member under section 62 of the Banking Act 1970 or section 44A of the Finance Companies Act 1967, as the case may be; and
(c)
the failed DI Scheme member has one or more existing claims against the insured depositor,
the liquidator may bring legal proceedings with respect to those claims in the name, and on behalf, of the failed DI Scheme member against the insured depositor or any person who received compensation on behalf of the insured depositor, to recover such moneys as may be necessary to put the failed DI Scheme member into the position it would have been as against the insured depositor with respect to those claims, if —
(d)
the Agency had not paid out any compensation or been accorded priority under section 62 of the Banking Act 1970 or section 44A of the Finance Companies Act 1967 (as the case may be) in respect of the compensation paid to the insured depositor; and
(e)
the liquidator had applied the same rules with regard to the respective rights of debts provable and the valuation of future and contingent liabilities as are in force for the time being under the law relating to bankruptcy in relation to the estates of persons adjudged bankrupt, as if the failed DI Scheme member were a person so adjudged.
(2) Such moneys are recoverable as a debt due to the failed DI Scheme member by the insured depositor or any person who received compensation on behalf of the insured depositor.
(3) This section does not apply to any moneys held by the Public Trustee pursuant to any payment of compensation by the Agency under section 27(3).
Source: Singapore Statutes Online (Attorney-General's Chambers), © Government of Singapore.
