Minimum liquid assets
34.—(1) The Authority may, from time to time, by notice in writing to any designated financial holding company or class of designated financial holding companies, impose requirements in relation to the minimum amount or amounts of liquid assets to be held by the designated financial holding company or class of designated financial holding companies, having regard to the risks arising from the activities of the designated financial holding company and its FHC group and such other factors as the Authority considers relevant.
(2) Without prejudice to the generality of subsection (1), the Authority may impose limits on each liquid asset or class of liquid assets to be held by a designated financial holding company or class of designated financial holding companies.
(3) Where the Authority issues a notice under subsection (1) to a class of designated financial holding companies, the Authority may require different designated financial holding companies within the class of designated financial holding companies to hold different amount or amounts of liquid assets, having regard to the risks arising from the activities of each designated financial holding company and its FHC group, the systemic impact of each designated financial holding company and its FHC group on the financial sector and such other factors as the Authority may consider relevant.
(4) Whenever the Authority issues a notice under subsection (1), each designated financial holding company shall be allowed such period of grace, being not less than 3 business days, as may be specified in the notice, in which to comply with its provisions.
(5) A designated financial holding company shall not, during any period in which it has failed to comply with any requirement imposed under subsection (1), without the approval of the Authority, grant further credit facility to any person.
(6) Notwithstanding subsection (1) and subject to subsection (9), a designated financial holding company may, in accordance with the requirements imposed under subsection (7), utilise its liquid assets held for the purposes of subsection (1) if the designated financial holding company —(a)
is in a liquidity stress situation; and
(b)
is solvent immediately before, and will remain solvent after, the utilisation of its liquid assets.
(7) For the purposes of subsection (6), the Authority may, from time to time, by notice in writing to a designated financial holding company impose requirements in relation to the utilisation by the designated financial holding company of its liquid assets held for the purposes of subsection (1), including —(a)
the procedures which the designated financial holding company must comply with before or after utilising, or during the utilisation of, its liquid assets; and
(b)
the manner in which the designated financial holding company may utilise its liquid assets.
(8) A designated financial holding company shall, within such time as may be specified by the Authority, provide any information required by the Authority in relation to its liquidity stress situation and the utilisation of its liquid assets held for the purposes of subsection (1).
(9) Where the Authority is of the opinion that —(a)
a designated financial holding company is not in a liquidity stress situation;
(b)
a designated financial holding company has failed to comply with any requirement imposed under subsection (7);
(c)
a designated financial holding company is or is likely to become insolvent, or that it is or is likely to become unable to meet its obligations, or that it is about to suspend payments; or
(d)
it is in the public interest to do so,
the Authority may by notice in writing to the designated financial holding company —
(i)
where the designated financial holding company has already utilised its liquid assets held for the purposes of subsection (1), direct the designated financial holding company to comply with any requirement imposed under subsection (1) within such time as may be specified by the Authority in the notice; or
(ii)
where the designated financial holding company has not, or has not fully, utilised its liquid assets held for the purposes of subsection (1), do one or more of the following:(A)
refuse to allow the designated financial holding company to utilise its liquid assets held for the purposes of subsection (1) which are within the control of the Authority;
(B)
direct the designated financial holding company to cease utilising its liquid assets held for the purposes of subsection (1);
(C)
direct the designated financial holding company to comply with any requirement imposed under subsection (1) within such time as may be specified by the Authority in the notice.
(10) Any designated financial holding company which fails to comply with —(a)
subsection (5) or (8);
(b)
any requirement of the Authority under subsection (7); or
(c)
any direction of the Authority under subsection (1) or (9),
shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $250,000 and, in the case of a continuing offence, to a further fine not exceeding $25,000 for every day or part thereof during which the offence continues after conviction.
(11) In this section —“liquid assets” means —(a)
notes and coins which are legal tender in Singapore other than assets maintained and held by the subsidiary of the designated financial holding company which is a bank incorporated in Singapore for the purposes of section 40 of the Banking Act (Cap. 19);
(b)
balances with the Authority other than —(i)
cash balances maintained by a subsidiary of the designated financial holding company which is a bank incorporated in Singapore for the purposes of section 39 of the Banking Act; and
(ii)
assets maintained and held by a subsidiary of the designated financial holding company which is a bank incorporated in Singapore for the purposes of section 40 of the Banking Act; and
(c)
such other assets as the Authority may from time to time approve;
“liquidity stress situation” has the meaning given to it in the Schedule.
Minimum capital requirements
35.—(1) A designated financial holding company shall have a minimum paid-up ordinary share capital of not less than the highest amount of the paid-up capital which any of its subsidiaries that is a bank incorporated in Singapore or a licensed insurer incorporated, formed or established in Singapore is required to hold under the Banking Act (Cap. 19) or the Insurance Act (Cap. 142), respectively.
(2) A designated financial holding company shall have capital funds of not less than the highest amount of the paid‑up capital which any of its subsidiaries that is a bank incorporated in Singapore or a licensed insurer incorporated, formed or established in Singapore is required to hold under the Banking Act or the Insurance Act, respectively.
(3) Notwithstanding subsections (1) and (2), the Authority may, from time to time, by notice in writing, require a designated financial holding company or a class of designated financial holding companies to maintain paid-up capital and capital funds in Singapore of such amount, and in such manner as the Authority considers appropriate, having regard to the risks arising from the activities of the designated financial holding company and its FHC group and such other factors as the Authority considers relevant.
(4) A designated financial holding company shall not, without the approval of the Authority —(a)
reduce its paid-up capital; or
(b)
purchase or otherwise acquire shares issued by the designated financial holding company if such shares are to be held as treasury shares.
(5) For the purposes of subsections (1), (2) and (3), a designated financial holding company shall not maintain its paid‑up capital and capital funds in any foreign currency or currencies without the approval of the Authority.
(6) Any designated financial holding company which fails to comply with any requirement under subsection (1), (2) or (3) shall immediately notify the Authority.
(7) Where the designated financial holding company fails to comply with subsection (1), (2) or (4), or any requirement under subsection (3), the Authority may, without prejudice to subsection (8), by notice in writing to the designated financial holding company —(a)
restrict or suspend the activities of the designated financial holding company; or
(b)
give such other directions to the designated financial holding company as the Authority considers appropriate.
(8) Any designated financial holding company which fails to comply with —(a)
subsection (1), (2) or (5);
(b)
any requirement of the Authority under subsection (3); or
(c)
any direction of the Authority under subsection (7),
shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $250,000 and, in the case of a continuing offence, to a further fine not exceeding $25,000 for every day or part thereof during which the offence continues after conviction.
(9) In this section, “paid-up capital” does not include any amount that is represented by treasury shares.
Capital adequacy requirements
36.—(1) The Authority may, from time to time, by notice in writing to any designated financial holding company or a class of designated financial holding companies, require the designated financial holding company, or class of designated financial holding companies, to maintain, on a consolidated basis in aggregate with any one or more companies in which the designated financial holding company has a major stake, as the Authority may determine, such amount of capital adequacy, as calculated in the form and manner determined by the Authority.
(2) Notwithstanding subsection (1), the Authority may, if it considers appropriate in the particular circumstances of a designated financial holding company, or a class of designated financial holding companies, having regard to —(a)
the risks arising from the activities of the designated financial holding company and its FHC group, or of the class of designated financial holding companies and their respective FHC groups, as the case may be; and
(b)
such other factors as the Authority considers relevant,
vary the amount of capital adequacy to be maintained by that designated financial holding company or class of designated financial holding companies.
(3) Where a designated financial holding company fails to comply with any requirement under subsection (1) or (2), the Authority may, without prejudice to subsection (4), by notice in writing to the designated financial holding company —(a)
restrict or suspend the activities of the designated financial holding company; or
(b)
give such other directions to the designated financial holding company as the Authority considers appropriate, and the designated financial holding company shall comply with such directions.
(4) Any designated financial holding company which fails to comply with —(a)
any requirement of the Authority under subsection (1) or (2); or
(b)
any direction of the Authority under subsection (3),
shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $250,000 and, in the case of a continuing offence, to a further fine not exceeding $25,000 for every day or part thereof during which the offence continues after conviction.
(5) In subsection (1), “major stake” has the meaning as defined in section 31(10).
Leverage ratio requirement
37.—(1) The Authority may, from time to time, by notice in writing to any designated financial holding company, or any class of designated financial holding companies, require that its leverage ratio must not be less than a specified amount as calculated in the form and manner determined by the Authority.
(2) Any person to whom a notice is issued under subsection (1) shall comply with the notice.
(3) Where the Authority issues a notice under subsection (1) to a class of designated financial holding companies, the Authority may specify different minimum amounts of leverage ratios for different companies within that class having regard to the risks arising from the activities of the designated financial holding company and its FHC group, the financial soundness of the designated financial holding company and such other factors as the Authority may consider relevant.
(4) Any prescription of, or change in, the minimum amount of leverage ratio under subsection (1) or (3) shall take effect only after the expiration of 30 days’ notice to the designated financial holding company of the Authority’s intention to take such action.
(5) Any designated financial holding company which fails to comply with subsection (2) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $250,000 and, in the case of a continuing offence, to a further fine not exceeding $25,000 for every day or part thereof during which the offence continues after conviction.
(6) In this section, “leverage ratio” means the ratio of the capital to the exposures of the designated financial holding company, as calculated in the form and manner determined by the Authority.
Power of Authority to secure compliance with any provision in this Part
38.—(1) Any designated financial holding company, if at any time called upon in writing by the Authority to do so, shall satisfy the Authority by the production of such evidence or information as it may require, that the designated financial holding company is not in contravention of any of the provisions in this Part.
(2) Without prejudice to sections 34 to 37, the Authority may, for the purposes of securing compliance with those sections on a consolidated basis, from time to time by notice in writing, require any designated financial holding company to aggregate, in such manner as may be specified in the notice, its accounts, with all the accounts of all or any of —(a)
the designated financial holding company’s related corporations; and
(b)
companies in which the designated financial holding company acquires or holds, directly or indirectly, a major stake as defined in section 31(10).
(3) The designated financial holding company shall comply with the requirement referred to in subsection (2) within such time as is specified in the notice.
(4) Any designated financial holding company which fails to comply with subsection (1) or (3) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $250,000 and, in the case of a continuing offence, to a further fine not exceeding $25,000 for every day or part thereof during which the offence continues after conviction.
(5) In this section, “accounts” means any item on the profit and loss accounts and balance-sheet.
Source: Singapore Statutes Online (Attorney-General's Chambers), © Government of Singapore.
