Keeping of books and providing of returns
Open ↗102.—(1) A holder of a capital markets services licence must —(a)
keep, or cause to be kept, such books as will sufficiently explain the transactions and financial position of its business and enable true and fair profit and loss accounts and balance sheets to be prepared from time to time; and
(b)
keep, or cause to be kept, such books in such a manner as will enable them to be conveniently and properly audited.
(2) An entry in the books of a holder of a capital markets services licence required to be kept in accordance with this section is deemed to have been made by, or with the authority of, the holder.
(3) A holder of a capital markets services licence must retain such books as may be required to be kept under this Act for a period of not less than 5 years.[2/2007]
(4) A holder of a capital markets services licence must —(a)
furnish such returns and records in such form and manner as may be prescribed or as may be notified by the Authority in writing; and
(b)
provide such information relating to its business as the Authority may require.
(5) The Authority may, without affecting section 341, make regulations in respect of all or any of the matters in this Division, including the keeping of such books, by a holder of a capital markets services licence, in such form and manner as the Authority may prescribe.
Penalties under this Division
Open ↗103. A holder of a capital markets services licence which, without reasonable excuse, contravenes section 102(1), (3) or (4) or any regulation made under section 102(5), shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000 and, in the case of a continuing offence, to a further fine not exceeding $5,000 for every day or part of a day during which the offence continues after conviction.
Division 2 — Customer Assets
Interpretation of this Division
Open ↗103A. In this Division, unless the context otherwise requires, “money or other assets” means money received or retained by, or any other asset deposited with, a holder of a capital markets services licence in the course of its business for which it is liable to account to its customer, and any money or other assets accruing therefrom.
Handling of customer assets
Open ↗104.—(1) A holder of a capital markets services licence must, to the extent that it receives money or other assets from or on account of a customer —(a)
do so, except in such circumstances as the Authority may prescribe, on the basis that the money or other assets must be applied solely for such purpose as may be agreed to by the customer, when or before it receives the money or other assets;
(b)
pending such application, pay or deposit the money or other assets in such manner as may be prescribed; and
(c)
record and maintain a separate book entry for each customer in accordance with the provisions of this Act in relation to that customer’s money or other assets.[34/2012]
(2) The Authority may, without affecting section 341, make regulations in respect of all or any of the matters in this Division, including the handling of money or other assets by a holder of a capital markets services licence.
Non‑availability of customer money and other assets for payment of debt
Open ↗104A. Except as otherwise provided in this Part or the regulations made thereunder, all money or other assets received from or on account of customers or deposited in the manner prescribed under section 104(1)(b) —(a)
are not available for payment of the debts of the holder of a capital markets services licence; and
(b)
are not liable to be paid or taken under or pursuant to an enforcement order or a process of any court.[Act 25 of 2021 wef 01/04/2022]
Penalties under this Division
Open ↗105. Any holder of a capital markets services licence which, without reasonable excuse, contravenes section 104(1) or any regulation made under section 104(2), shall be guilty of an offence and shall be liable on conviction —(a)
where it is found to have committed the offence with intent to defraud, 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; or
(b)
in any other case, to a fine not exceeding $50,000 and, in the case of a continuing offence, to a further fine not exceeding $5,000 for every day or part of a day during which the offence continues after conviction.
Appointment of auditors
Open ↗106. A holder of a capital markets services licence must appoint an auditor to audit its accounts and where, for any reason, the auditor ceases to act for such holder, the holder must, as soon as practicable thereafter, appoint another auditor.
Lodgment of annual accounts, etc.
Open ↗107.—(1) A holder of a capital markets services licence must, in respect of each financial year —(a)
prepare a true and fair profit and loss account and a balance sheet made up to the last day of the financial year; and
(b)
lodge that account and balance sheet with the Authority within 5 months, or such extension thereof permitted by the Authority under subsection (2), after the end of the financial year, together with an auditor’s report on the account and balance sheet.
(2) Where an application for an extension of the period of 5 months specified in subsection (1) has been made by a holder of a capital markets services licence to the Authority and the Authority is satisfied that there is any special reason for requiring the extension, the Authority may extend that period by not more than 4 months, subject to such conditions or restrictions as the Authority thinks fit to impose.
(3) Any holder of a capital markets services licence which contravenes subsection (1), shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $500 for every day or part of a day that the lodgment is late, subject to a maximum fine of $50,000.
(4) Any holder of a capital markets services licence which contravenes any condition imposed under subsection (2) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000.
(5) Despite any other provision of this Act or any other written law, the Authority may, if it is not satisfied with the performance of duties by an auditor appointed by a holder of a capital markets services licence —(a)
at any time direct the holder to remove the auditor; and
(b)
direct the holder, as soon as practicable thereafter, to appoint another auditor,
and the holder must comply with such direction.
Reports by auditor to Authority in certain cases
Open ↗108. Where, in the performance of his or her duties as an auditor for a holder of a capital markets services licence, an auditor becomes aware of —(a)
any matter which, in his or her opinion, adversely affects or may adversely affect the financial position of the holder to a material extent;
(b)
any matter which, in his or her opinion, constitutes or may constitute a contravention of any provision of this Act or an offence involving fraud or dishonesty; or
(c)
any irregularity that has or may have a material effect upon the accounts, including any irregularity that may affect or jeopardise the moneys or other assets of any customer of the holder,
the auditor must immediately thereafter send —
(d)
a report in writing of the matter or irregularity to the Authority; and
(e)
where the holder is a member of an approved exchange, a copy of the report to the approved exchange.[4/2017]
Power of Authority to appoint auditor
Open ↗109.—(1) Where —(a)
a holder of a capital markets services licence fails to lodge an auditor’s report under section 107; or
(b)
the Authority receives a report under section 108,
the Authority may, without affecting its powers under section 115, if it is satisfied that it is in the interests of the holder, the customers of the holder or the general public to do so, appoint in writing an auditor to examine and audit, either generally or in relation to any particular matter, the books of the holder.
(2) Where the Authority is of the opinion that the whole or any part of the costs and expenses of an auditor appointed by the Authority under subsection (1) should be borne by the holder of a capital markets services licence, the Authority may, in writing, direct the holder to pay a specified amount, being the whole or part of such costs and expenses, within such time and in such manner as may be specified in the direction.
(3) Where a holder of a capital markets services licence fails to comply with a direction under subsection (2), the amount specified in the direction may be sued for and recovered by the Authority as a civil debt.
(4) An auditor appointed under subsection (1) must, on the conclusion of the examination and audit, submit a report to the Authority.
Power of auditors appointed by Authority
Open ↗110.—(1) An auditor appointed by the Authority under section 109 may, for the purpose of carrying out an examination and audit of the books of a holder of a capital markets services licence —(a)
examine, on oath or affirmation, any officer, employee or agent of the holder or any other auditor appointed under this Act in relation to those books;
(b)
require any officer, employee or agent of the holder, or any other auditor appointed under this Act, to produce any of the books held by or on behalf of the holder relating to its business, and to make copies of or take extracts from, or retain possession of, such books for such period as is necessary to enable them to be inspected;
(c)
require any approved exchange, licensed trade repository, approved clearing house or recognised clearing house to produce any of the books kept by it, or any information in its possession, relating to the business of the holder;
(d)
employ such persons as he or she considers necessary to assist him or her in carrying out the examination and audit; and
(e)
authorise in writing any person employed by him or her to do, in relation to the examination and audit, any act or thing that he or she could do as an auditor under this subsection, other than the examination of any person on oath or affirmation.[34/2012; 4/2017]
(2) Any person who, without reasonable excuse, refuses or fails to answer any question put to the person, or fails to comply with any request made to the person, by an auditor appointed under section 109 or a person authorised under subsection (1)(e), 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 12 months or to both.
Offence to destroy, conceal, alter, etc., books
Open ↗111.—(1) Any person who, with intent to prevent, delay or obstruct the carrying out of any examination or audit under this Division —(a)
destroys, conceals or alters any book relating to the business of a holder of a capital markets services licence; or
(b)
sends, or conspires with any other person to send, out of Singapore, any book or asset of any description belonging to, in the possession of or under the control of a holder of a capital markets services licence,
shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 or to imprisonment for a term not exceeding 2 years or to both.
(2) If, in any proceedings for an offence under subsection (1), it is proved that the person charged with the offence —(a)
destroyed, concealed or altered any book referred to in subsection (1)(a); or
(b)
sent, or conspired to send, out of Singapore, any book or asset referred to in subsection (1)(b),
the onus of proving that, in so doing, the person did not act with intent to prevent, delay or obstruct the carrying out of an examination and audit under this Division lies on that person.
Safeguarding of books
Open ↗112.—(1) A holder of a capital markets services licence must take reasonable precautions —(a)
to prevent falsification of the books required to be kept by it under this Act; and
(b)
to facilitate the discovery of any falsification of any such book.
(2) Any holder of a capital markets services licence who contravenes this section shall be guilty of an offence under this Act.
Restriction on auditor’s and employee’s right to communicate certain matters
Open ↗113. Except as may be necessary for the carrying into effect of the provisions of this Act or so far as may be required for the purposes of any legal proceedings, whether civil or criminal, an auditor appointed under section 109 or carrying out any duty imposed under section 115, and any employee of such an auditor, must not disclose any information which may come to his or her knowledge or possession in the course of performing his or her duties as such auditor or employee (as the case may be) to any person other than —(a)
the Authority; and
(b)
in the case of an employee of such auditor, the auditor.
Exchanges, etc., may impose additional obligations on members
Open ↗114. Nothing in this Division prevents any approved exchange, licensed trade repository, approved clearing house or recognised clearing house from imposing on its members any additional obligation or requirement which it thinks is necessary with respect to —(a)
the audit of accounts;
(b)
the information to be given in reports by auditors; or
(c)
the keeping of books.[34/2012; 4/2017]
Additional powers of Authority in respect of auditors
Open ↗115.—(1) The Authority may impose all or any of the following duties on an auditor of a holder of a capital markets services licence:(a)
a duty to submit to the Authority such additional information in relation to his or her audit as the Authority considers necessary;
(b)
a duty to enlarge or extend the scope of his or her audit of the business and affairs of the holder;
(c)
a duty to carry out any other examination or establish any procedure in any particular case;
(d)
a duty to submit a report to the Authority on any of the matters referred to in paragraphs (b) and (c),
and the auditor must carry out such additional duty or duties.
(2) A holder of a capital markets services licence must remunerate the auditor in respect of the discharge of such additional duty or duties as the Authority may impose under subsection (1).
Defamation
Open ↗116.—(1) No auditor or employee of such auditor shall, in the absence of malice on his or her part, be liable to any action for defamation at the suit of any person in respect of —(a)
any statement made orally or in writing in the discharge of his or her duties under this Part; or
(b)
the submission of any report to the Authority under section 108, 109(4) or 115(1)(d).
(2) Subsection (1) does not restrict or otherwise affect any right, privilege or immunity that, apart from this section, the auditor or his or her employee has as a defendant in an action for defamation.
Source: Singapore Statutes Online (Attorney-General's Chambers), © Government of Singapore.
