Annual account and audit
Open ↗39.—(1) Notwithstanding the provisions of the Companies Act (Cap. 50), every designated financial holding company —(a)
shall on an annual basis, appoint, and obtain the approval of the Authority for the appointment of, an auditor; and
(b)
where, for any reason, the auditor ceases to act for the designated financial holding company, shall, as soon as practicable thereafter, appoint another auditor approved by the Authority.
(2) An auditor shall not be approved by the Authority as an auditor for a designated financial holding company unless the auditor is able to comply with such conditions in relation to the discharge of his duties as may be determined by the Authority.
(3) The Authority may appoint an auditor —(a)
if the designated financial holding company fails to appoint an auditor; or
(b)
if it considers it desirable that another auditor should act with the auditor appointed under subsection (1),
and may at any time fix the remuneration to be paid by the designated financial holding company to the auditor.
(4) The duties of an auditor appointed under subsections (1) and (3) shall be —(a)
to carry out, for the year in respect of which he is appointed, an audit of the accounts of the designated financial holding company;
(b)
to make a report in accordance with section 207 of the Companies Act, or if the Companies Act does not apply, in accordance with that section with the necessary modifications, upon the latest audited annual balance-sheet and profit and loss account, together with any notes thereon, of the designated financial holding company; and
(c)
to prepare such statements of account and other statement and in such form and manner as may be specified by the Authority and lodge them with the Authority.
(5) The Authority may, by notice in writing, impose all or any of the following duties on an auditor:(a)
a duty to submit such additional information to the Authority in relation to his audit as the Authority considers necessary;
(b)
a duty to enlarge or extend the scope of his audit of the business and affairs of the designated financial holding company;
(c)
a duty to carry out any other examination or establish any procedure in any particular case;
(d)
a duty to submit a report on any of the matters referred to in paragraphs (b) and (c).
(6) An auditor to whom a notice is given under subsection (5) shall comply with such direction or directions as may be specified in the notice.
(7) The designated financial holding company shall remunerate the auditor in respect of the discharge by him of all or any of the additional duties mentioned in subsection (5).
(8) Notwithstanding any other provision of this Act or the provisions of the Companies Act, the Authority may, if it is not satisfied with the performance of duties by an auditor appointed by a designated financial holding company —(a)
at any time direct the designated financial holding company to remove the auditor; and
(b)
direct the designated financial holding company, as soon as practicable thereafter, to appoint another auditor, and the designated financial holding company shall comply with such direction.
(9) An auditor’s report made under subsection (4) shall be attached to the balance-sheet and the profit and loss account and a copy thereof together with any report submitted under subsection (5) shall be transmitted in writing to the Authority.
(10) If an auditor, in the course of the performance of his duties as an auditor of a designated financial holding company, is satisfied that —(a)
there has been a serious contravention of any provision of this Act or that an offence involving fraud or dishonesty has been committed;
(b)
losses have been incurred which reduce the capital funds of the designated financial holding company by 50% or more;
(c)
serious irregularities have occurred, including irregularities that jeopardise the security of the creditors of the designated financial holding company; or
(d)
he is unable to confirm that the claims of creditors of the designated financial holding company are still covered by the assets,
he shall immediately report the matter to the Authority.
(11) Any designated financial holding company which contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000.
(12) Any auditor who contravenes subsection (4), (6) or (10) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 and, in the case of a continuing offence, to a further fine not exceeding $10,000 for every day or part thereof during which the offence continues after conviction.
(13) Any designated financial holding company which fails to comply with a direction under subsection (8) 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.
Inspection of designated financial holding companies and other companies within FHC group
Open ↗40. The Authority may, from time to time, inspect under conditions of secrecy —(a)
the books of any designated financial holding company and any other company within its FHC group which is a financial institution; and
(b)
any branch, agency or office outside Singapore opened by any designated financial holding company or any other company within its FHC group, referred to in paragraph (a).
Special investigation of designated financial holding companies
Open ↗41. The Authority may at any time make an investigation, under conditions of secrecy, of the books of any designated financial holding company and any other company within its FHC group, if the Authority has reason to believe that any designated financial holding company is contravening the provisions of this Act.
Provisions supplementary to sections 40 and 41
Open ↗42.—(1) For the purposes of an inspection under section 40 or an investigation under section 41, the designated financial holding company or a company within its FHC group shall —(a)
produce its books to the Authority and afford the Authority access thereto;
(b)
provide such information or facilities as may be required by the Authority to conduct the inspection or investigation; and
(c)
in the case where the books are not in the possession of the designated financial holding company or the company within the FHC group, as the case may be, procure that any person who is in possession of such books produce the books to the Authority and give such information and facilities as may be required by the Authority.
(2) The books referred to in subsection (1) shall not be required to be produced at such times or at such places as would unduly interfere with the proper conduct of the normal daily business of that designated financial holding company or that company within the FHC group, as the case may be.
(3) The Authority may appoint any person to exercise the powers of the Authority under section 40 or 41.
(4) The remuneration and expenses of the person appointed under subsection (3) shall be paid by the designated financial holding company.
(5) The Authority may make copies of, or take possession of, any of the books produced to it under subsection (1).
(6) Any designated financial holding company or any company within the FHC group which, without reasonable excuse, contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 and, in the case of a continuing offence, to a further fine not exceeding $10,000 for every day or part thereof during which the offence continues after conviction.
(7) Where the offence under subsection (6) is proved to have been committed with the consent of, or to be attributable to any negligence on the part of an officer of the company, that officer shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000 or to imprisonment for a term not exceeding 2 years or to both and, in the case of a continuing offence, to a further fine not exceeding $5,000 for every day or part thereof during which the offence continues after conviction.
Inspection in Singapore by foreign supervisory authority
Open ↗43.—(1) In relation to a designated financial holding company any of the holding companies of which is incorporated outside Singapore, a foreign supervisory authority may, with the prior written approval of the Authority and under conditions of secrecy, conduct an inspection in Singapore of the books of any branch or office of that designated financial holding company, and any other company within its FHC group which is a financial institution, in accordance with this section if the following conditions are satisfied:(a)
the inspection is required by the foreign supervisory authority for the sole purpose of carrying out its supervisory functions;
(b)
the foreign supervisory authority —(i)
is prohibited by the laws applicable to the foreign supervisory authority from disclosing information obtained by it in the course of the inspection to any other person; and
(ii)
has given to the Authority such written undertaking, as to the confidentiality of the information obtained, as the Authority may determine; and
(c)
the foreign supervisory authority has given a written undertaking to the Authority to comply with the provisions of this Act and such conditions as the Authority may impose under subsection (2).
(2) The Authority may at any time, whether before, on or after giving written approval for an inspection under this section, require the foreign supervisory authority to comply with conditions relating to —(a)
the classes of information to which the foreign supervisory authority shall or shall not have access in the course of the inspection;
(b)
the conduct of the inspection;
(c)
the use or disclosure of any information obtained in the course of the inspection; and
(d)
such other matters as the Authority may determine.
(3) Subject to compliance by a foreign supervisory authority with such conditions as the Authority may impose under subsection (2), a designated financial holding company, or any other company within its FHC group which is a financial institution under inspection —(a)
shall afford the foreign supervisory authority access to such books of the branch or office of the designated financial holding company or company under inspection, as the case may be, and provide such information (including information relating to the internal control systems of the designated financial holding company or company, as the case may be) and facilities as may be required to conduct the inspection; and
(b)
shall not be required to afford the foreign supervisory authority access to its books or to provide information or facilities at such times or at such places as would unduly interfere with the proper conduct of the normal daily business of the designated financial holding company or company under inspection, as the case may be.
(4) A foreign supervisory authority may, with the prior written approval of the Authority, appoint any person to conduct the inspection under subsection (1) and in such event, this section (other than this subsection) shall apply to the person as if a reference to the foreign supervisory authority in this section includes a reference to the person.
(5) A designated financial holding company, or any other company within its FHC group which is a financial institution which, without reasonable excuse, contravenes subsection (3)(a) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 and, in the case of a continuing offence, to a further fine not exceeding $10,000 for every day or part thereof during which the offence continues after conviction.
(5A) To avoid doubt, this section, and section 44 in relation to an inspection under this section, do not apply to any inspection by a foreign supervisory authority of the books of any branch or office of a designated financial holding company, if —(a)
the foreign supervisory authority is an AML/CFT authority as defined in section 152 of the Monetary Authority of Singapore Act (Cap. 186), and exercises consolidated supervision authority as defined in that section over the company; and
(b)
the inspection is solely for the purpose of such consolidated supervision.[Act 31 of 2017 wef 30/06/2022]
(6) In this section, “foreign supervisory authority” means the supervisory authority of a holding company of the designated financial holding company referred to in subsection (1), which is responsible, under the laws of the country or territory where the holding company is incorporated, for —(a)
supervising the holding company; and
(b)
exercising consolidated supervision over the holding company and all its subsidiaries which are financial institutions, including the designated financial holding company.
Confidentiality of inspection and investigation reports
Open ↗44.—(1) Where a written report or any part thereof (referred to in this section as the report) has been produced in respect of any designated financial holding company or any other company within its FHC group —(a)
by the Authority upon an inspection under section 40 or an investigation under section 41; or
(b)
by the foreign supervisory authority upon an inspection under section 43,
the report shall not be disclosed by the designated financial holding company or the company within the FHC group, as the case may be, or any officer or auditor of the designated financial holding company or the company within the FHC group, as the case may be, to any other person except in the circumstances provided under subsection (2).
(2) Disclosure of the report referred to in subsection (1) may be made —(a)
by the designated financial holding company or the company within the FHC group, as the case may be, to any officer or auditor approved under section 39 of that designated financial holding company or that company within the FHC group, as the case may be, solely in connection with the performance of the duties of the officer or auditor, as the case may be, in that designated financial holding company or that company within the FHC group, as the case may be;
(b)
by any officer or auditor approved under section 39 of the designated financial holding company or the company within the FHC group, as the case may be, to any other officer or auditor of that designated financial holding company or that company within the FHC group, as the case may be, solely in connection with the performance of their duties in that designated financial holding company or that company within the FHC group, as the case may be; or
(c)
to any other person as the Authority may approve in writing.
(3) In granting written approval for any disclosure under subsection (2)(c), the Authority may impose such conditions as it considers appropriate.
(4) The obligation on an officer or auditor referred to in subsection (1) shall continue after the termination or cessation of his employment or appointment at the designated financial holding company or that company within the FHC group, as the case may be.
(5) Any person who contravenes subsection (1) or fails to comply with any condition imposed by the Authority under subsection (3) shall be guilty of an offence and shall be liable on conviction —(a)
in the case of an individual, to a fine not exceeding $125,000 or to imprisonment for a term not exceeding 3 years or to both; or
(b)
in any other case, to a fine not exceeding $250,000.
(6) Any person to whom the report is disclosed and who knows or has reasonable grounds for believing, at the time of the disclosure, that the report was disclosed to him in contravention of subsection (1) shall be guilty of an offence and shall be liable on conviction —(a)
in the case of an individual, to a fine not exceeding $50,000 or to imprisonment for a term not exceeding 2 years or to both; or
(b)
in any other case, to a fine not exceeding $100,000,
unless the person proves that —
(i)
the disclosure was made contrary to that person’s desire;
(ii)
where the disclosure was made in any written form, the person has as soon as practicable surrendered or taken all reasonable steps to surrender the report and all copies thereof to the Authority; and
(iii)
where the disclosure was made in an electronic form, the person has as soon as practicable taken all reasonable steps to ensure that all electronic copies of the report have been deleted and that the report and all copies thereof in other forms have been surrendered to the Authority.
Source: Singapore Statutes Online (Attorney-General's Chambers), © Government of Singapore.
