Division 1 — General provisions on prohibition order
Interpretation of this Part
6. In this Part, unless the context otherwise requires —“appointee”, in relation to a financial institution, or any other person who carries on a business or an activity, provides a relevant service or performs a relevant function —(a)
means a person, by whatever name called, in the employment of, or acting for, or by arrangement with, the financial institution or other person, who carries on, provides or performs for or on behalf of the financial institution or other person, any activity, business, service or relevant function, whether or not the person is remunerated, and whether the person’s remuneration, if any, is by way of salary, wages, commission or otherwise; and
(b)
includes any officer of the financial institution or other person who carries on, provides or performs for or on behalf of the financial institution or other person, any activity, business, service or relevant function, whether or not the officer is remunerated, and whether the officer’s remuneration, if any, is by way of salary, wages, commission or otherwise,
but does not include a representative;
“company” has the meaning given by section 4(1) of the Companies Act 1967;
“critical system”, in relation to a financial institution, means a system, the failure of which will —(a)
cause significant disruption to the operations of the financial institution; or
(b)
materially and adversely impact any service that the financial institution is providing to its customers;
“critical system administration” refers to the maintenance or operation of a critical system of a financial institution by persons granted access to the system;
“digital payment token” has the meaning given by section 2(1) of the Payment Services Act 2019;
“digital payment token instrument” has the meaning given by section 2(1) of the Payment Services Act 2019;[Act 18 of 2022 wef 30/06/2025]
“director” includes —(a)
any person occupying the position of director of a corporation by whatever name called;
(b)
a person in accordance with whose directions or instructions the directors of a corporation are accustomed to act; and
(c)
an alternate or substitute director;
“handling of funds or assets” means any of the following: (a)
the safeguarding or administration of funds or assets belonging to a customer of a financial institution;
(b)
the safeguarding or administration of funds or assets belonging to a financial institution;
(c)
the safeguarding of a digital payment token belonging to —(i)
a customer of a financial institution; or
(ii)
a financial institution, where the financial institution has control over the digital payment token;
(d)
the carrying out of an instruction relating to a digital payment token for —(i)
a customer of a financial institution; or
(ii)
a financial institution’s own account, where the financial institution has control over the digital payment token;
(e)
the safeguarding of a digital payment token instrument belonging to —(i)
a customer of a financial institution; or
(ii)
a financial institution, where the financial institution has control over one or more digital payment tokens associated with the digital payment token instrument;
(f)
the carrying out of an instruction relating to one or more digital payment tokens associated with a digital payment token instrument for —(i)
a customer of a financial institution; or
(ii)
a financial institution’s own account, where the financial institution has control over the digital payment token instrument;
“officer”, in relation to a corporation, includes —(a)
a director, a secretary or an employee of the corporation;
(b)
a receiver or manager of any part of the undertaking of the corporation appointed under a power contained in any instrument; and
(c)
the liquidator of the corporation appointed in a voluntary winding up;
“relevant function” means any one or more of the following functions in a financial institution, in relation to an activity, a business or a service, the conduct of which is regulated or authorised by the Authority:(a)
handling of funds or assets;
(b)
risk taking;
(c)
risk management and control;
(d)
critical system administration;
(e)
any other function critical to the integrity or functioning of financial institutions which the Authority may prescribe for the purpose of protecting trust or deterring misconduct in the financial industry;
“relevant service”, in relation to a financial institution —(a)
means any service which the financial institution obtains or receives from another person; but
(b)
does not include —(i)
a service provided in the course of employment by an employee of the financial institution; or
(ii)
a service provided by a director, a representative or an officer of that financial institution in the course of the director’s, representative’s or officer’s appointment;
“representative” —(a)
in relation to a financial adviser licensed under the Financial Advisers Act 2001, has the meaning given by section 2(1) of that Act; and
(b)
in relation to an authorised benchmark administrator, exempt benchmark administrator, authorised benchmark submitter, exempt benchmark submitter, designated benchmark submitter, or a person who carries on business in any regulated activity, under the Securities and Futures Act 2001, has the meaning given by section 2(1) of that Act;
“risk management and control” means any of the following:(a)
the identification, assessment, monitoring and reporting of specified risks arising from a financial institution’s operations;
(b)
the development and implementation of policies and procedures intended to ensure compliance by a financial institution with the relevant legal and regulatory requirements in the jurisdictions that the financial institution conducts business in;
(c)
the monitoring of, auditing of or reporting on compliance with policies and procedures intended to ensure compliance by a financial institution with the relevant legal and regulatory requirements in the jurisdictions that the financial institution conducts business in;
“risk taking” means the taking of actions that result in a financial institution undertaking any specified risk in the course of the business of the financial institution;
“share” has the meaning given by section 4(1) of the Companies Act 1967;
“specified risk” means credit risk, asset risk, liquidity risk, market risk, operational risk, technology risk, market conduct risk, money laundering risk, terrorism financing risk, legal risk, reputational risk, regulatory risk, or any other risks as may be prescribed by the Authority;
“system” means any hardware, software, network or other information technology component which is part of an information technology infrastructure;
“treasury share” —(a)
in relation to a company, has the meaning given by section 4(1) of the Companies Act 1967; and
(b)
in relation to a corporation (other than a company), means any share equivalent to a treasury share in a company;
“voting share” has the meaning given by section 4(1) of the Companies Act 1967.
Power of Authority to make prohibition orders
7.—(1) The Authority may, by written notice, make a prohibition order against any person, if the Authority is satisfied that the person is not a fit and proper person in accordance with the Guidelines on Fit and Proper Criteria to carry out any one or more of the acts mentioned in subsection (2)(a), (b), (c), (d) or (e).
(2) A prohibition order made under subsection (1) may prohibit the person, whether permanently or for a specified period, from any one or more of the following:(a)
carrying on any activity or business, or providing any service, the carrying on or provision (as the case may be) of which is regulated or authorised by the Authority;
(b)
performing any relevant function;
(c)
taking part, directly or indirectly, in the management of, or acting as a director, partner or manager of, any financial institution;
(d)
becoming a substantial shareholder of any financial institution that is a corporation;
(e)
where the person is a substantial shareholder of a financial institution that is a corporation, acquiring any interest in any voting share in the financial institution other than a voting share in which the person already has an interest.
(3) A prohibition order made under subsection (1) may allow the person, subject to any condition specified in the order —(a)
to do a specified act; or
(b)
to do a specified act in specified circumstances,
that the order would otherwise prohibit the person from doing.
(4) The Authority must not make a prohibition order against a person without giving the person an opportunity to be heard.
(5) Any person who is aggrieved by the decision of the Authority to make a prohibition order against the person may, within 30 days after the decision, appeal in writing to the Minister.
(6) Where the Authority makes a prohibition order against any person who is an appointed, provisional or temporary representative under the Securities and Futures Act 2001 or an appointed or provisional representative under the Financial Advisers Act 2001, it must indicate against the person’s name in the public register of representatives under the Securities and Futures Act 2001 or the Financial Advisers Act 2001 (as the case may be) that fact, and the indication must remain in the register for the duration that the prohibition order is in force.
(7) For the purposes of this section, a person is a substantial shareholder of a financial institution that is a corporation if —(a)
the person has an interest or interests in one or more voting shares (excluding treasury shares) in the financial institution; and
(b)
the total votes attached to that share, or those shares, is not less than 5% of the total votes attached to all the voting shares (excluding treasury shares) in the financial institution.
(8) For the purposes of this section, a person is a substantial shareholder of a financial institution that is a corporation the share capital of which is divided into 2 or more classes of shares, if —(a)
the person has an interest or interests in one or more voting shares (excluding treasury shares) in one of those classes; and
(b)
the total votes attached to that share, or those shares, is not less than 5% of the total votes attached to all the voting shares (excluding treasury shares) in that class.
(9) In this section, “partner” and “manager”, in relation to a financial institution that is a limited liability partnership, have the meanings given by section 2(1) of the Limited Liability Partnerships Act 2005.
(10) Section 4 of the Securities and Futures Act 2001, with the necessary modifications, applies for the purpose of determining whether a person has an interest in a voting share as if a reference to securities, securities‑based derivatives contracts or units in a collective investment scheme is a reference to voting shares.
Effect of prohibition orders
8.—(1) A person against whom a prohibition order is made must comply with the prohibition order.
(2) Where a prohibition order is made against a person (A), a financial institution must not employ or enter into any arrangement with A, or use A’s service, whether directly or indirectly —(a)
to carry on any activity or business, or provide any service, the carrying on or provision (as the case may be) of which is regulated or authorised by the Authority; or
(b)
to perform any relevant function,
to the extent that the activity, business, service or relevant function is prohibited by the order.
(3) A person who contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 or to imprisonment for a term not exceeding 2 years or to both.
(4) A financial institution that contravenes subsection (2) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000.
(5) Where a financial institution is charged with an offence for contravening subsection (2) for indirectly employing or entering into an arrangement with A or indirectly using A’s service, to carry on any activity or business, or provide any service, the carrying on or provision of which is regulated or authorised by the Authority, or to perform any relevant function, that is prohibited by a prohibition order made against A, it is a defence for the financial institution to prove —(a)
that the financial institution took all reasonable steps to ensure compliance with subsection (2); and
(b)
after doing so, believed on reasonable grounds, that it is not and will not be indirectly employing or entering into an arrangement with, or indirectly using the services of, any person to carry on any activity or business, provide any service, or perform the relevant function, where the person is prohibited by a prohibition order made against the person from carrying on the activity or business, providing the service, or performing the relevant function.
(6) Any person against whom a prohibition order has been issued prohibiting the person from —(a)
carrying on any activity or business, or providing any service the carrying on, or provision (as the case may be) of which is regulated or authorised by the Authority; or
(b)
performing any relevant function,
must (by written notice) immediately inform all its representatives or appointees who, for or on behalf of the person, carry on the activity or business, provide the service or perform the relevant function, of the prohibition order and the period for which the prohibition order is to be in force.
(7) Any representative or appointee to whom notice of the prohibition order is given under subsection (6) must cease to carry on any activity or business, provide any service or perform any relevant function, for or on behalf of the person against whom the prohibition order was issued to the same extent that that person is prohibited from carrying on that activity or business, providing that service, or performing that relevant function under the prohibition order.
(8) A person who contravenes subsection (6) or (7) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part of a day during which the offence continues after conviction.
(9) A prohibition order does not operate so as to —(a)
avoid or affect any agreement, transaction or arrangement entered into by the person against whom the order is made, whether the agreement, transaction or arrangement was entered into before, on or after the issue of the prohibition order; or
(b)
affect any right, obligation or liability arising under any such agreement, transaction or arrangement.
Variation or revocation of prohibition orders
9.—(1) The Authority may vary or revoke a prohibition order, by giving written notice to the person against whom the order was made, if the Authority is satisfied that it is appropriate to do so because of a change in any of the circumstances based on which the Authority made the order.
(2) The Authority may vary or revoke a prohibition order under subsection (1) —(a)
on the Authority’s own initiative; or
(b)
if the person against whom the order was made lodges with the Authority an application for the Authority to do so, accompanied by such documents as may be required by the Authority.
(3) An application mentioned in subsection (2)(b) must be accompanied by the prescribed fee, if any.
(4) The Authority must not vary a prohibition order made against a person under subsection (2)(a) without giving the person an opportunity to be heard.
(5) A person who is aggrieved by the decision of the Authority to vary a prohibition order made against the person under subsection (2)(a) may, within 30 days after the decision, appeal in writing to the Minister.
Date and effect of prohibition orders
10. A prohibition order, or any variation or revocation of a prohibition order, takes effect on the date specified by the Authority in the order or the notice in section 9(1), as the case may be.
Power of Authority to publish information
11. The Authority —(a)
must publish the making of a prohibition order under section 7, and the variation or revocation of a prohibition order under section 9, in such manner as the Authority thinks will secure adequate publicity for the fact that the prohibition order was made, varied or revoked, as the case may be; and
(b)
may from time to time and in such form or manner as the Authority thinks fit, publish such other information relating to —(i)
the making of a prohibition order under section 7, or the variation or revocation of a prohibition order under section 9; or
(ii)
the person in respect of whom a prohibition order was made under section 7, or varied or revoked under section 9,
as the Authority may consider necessary or expedient to publish in the interest of the public or a section of the public or for the protection of investors.
Records of prohibition orders
12.—(1) The Authority must keep, in such form as the Authority thinks fit, records on persons —(a)
against whom prohibition orders are made under section 7; and
(b)
whose or which prohibition orders are varied or revoked under section 9.
(2) The Authority may publish the records mentioned in subsection (1), or any part of the records, in such manner as the Authority considers appropriate.
(3) Any person may, upon payment of such fee as may be prescribed, inspect the records kept or published by the Authority under subsection (1) or (2), or require a copy of or extract from, such records to be given or certified by the Authority.
(4) A copy of or an extract from any record mentioned in subsection (3) that is certified by the Authority to be a true copy or extract is admissible as prima facie evidence of the matter stated therein in any legal proceedings.
Division 2 — Appeals on prohibition orders and miscellaneous
Appeals to Minister
13.—(1) Where an appeal is made to the Minister under this Part, the Minister may confirm, vary or reverse the decision of the Authority on appeal, or give such directions in the matter as the Minister thinks fit, and the decision of the Minister is final.
(2) Where an appeal is made to the Minister under this Part, the Minister must, within 28 days after the receipt of the appeal, constitute an Appeal Advisory Committee comprising not less than 3 members of the Appeal Advisory Panel and refer that appeal to the Appeal Advisory Committee.
(3) The Appeal Advisory Committee is to submit to the Minister a written report on the appeal referred to the Committee under subsection (2), and may make such recommendations as the Committee thinks fit.
(4) The Minister must consider the report submitted under subsection (3) in making his or her decision under this section but he or she is not bound by the recommendations in the report.
Appeal Advisory Committees
14.—(1) For the purpose of enabling Appeal Advisory Committees to be constituted under section 13, the Minister is to appoint a panel (called in this Part the Appeal Advisory Panel) comprising such members from the financial services industry, and the public and private sectors, as the Minister may appoint.
(2) A member of the Appeal Advisory Panel is to be appointed for a term of not more than 2 years and is eligible for re-appointment.
(3) An Appeal Advisory Committee has the power, in the exercise of its functions, to inquire into any matter or thing relating to the financial services industry and may, for this purpose, summon any person to give evidence on oath or affirmation or produce any document or material necessary for the purpose of the inquiry.
(4) Nothing in subsection (3) compels the production by an advocate and solicitor, or a legal counsel referred to in section 128A of the Evidence Act 1893, of a document or material containing a privileged communication made by or to him or her in that capacity or authorise the taking of possession of any such document or material which is in his or her possession.
(5) An advocate and solicitor, or a legal counsel referred to in section 128A of the Evidence Act 1893, who refuses to produce any document or other material referred to in subsection (4) is nevertheless obliged to give the name and address (if he or she knows them) of the person to whom, or by or on behalf of whom, the privileged communication was made.
(6) For the purposes of this Part, every member of an Appeal Advisory Committee —(a)
is taken to be a public servant for the purposes of the Penal Code 1871; and
(b)
in case of any suit or legal proceedings brought against him or her for any act done or omitted to be done in the execution of his or her duty under the provisions of this Part, has the like protection and privileges as are by law given to a Judge in the execution of his or her office.
(7) A person who contravenes subsection (5) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000.
(8) Every Appeal Advisory Committee must have regard to the interest of the public, the protection of investors and the safeguarding of sources of information.
(9) Subject to the provisions of this Part, an Appeal Advisory Committee may regulate its own procedure and is not bound by the rules of evidence.
Source: Singapore Statutes Online (Attorney-General's Chambers), © Government of Singapore.
