Financial institutions (“FIs”), as defined in ISCA EP 100, are public interest entities (“PIEs”).
ISCA, through its consultation with the relevant regulatory bodies, concluded that the following do not fall within the definition of FIs in ISCA EP 100. Accordingly, firms auditing these FIs would not be subject to higher independence requirements in ISCA EP 100.
a. Money changer;
b. Representative office (banking and insurance);
c. All persons1 exempt from holding a capital market services (“CMS”) licence to carry on business in advising on corporate finance under paragraph 7(1)(b) of the Second Schedule to the Securities and Futures (Licensing and Conduct of Business) Regulations (“SFR”)2
e. All persons1 exempt from holding a trust business licence in respect of the carrying on of trust business under paragraph 15(1)(d) and (e) of the Trust Companies Act.
ACRA has also issued Practice Direction No 1 of 2020 to clarify the scope of FIs which are not PIEs for purpose of the ACRA Code.
ISCA will also be issuing a clarification on FIs considered as PIEs.
1 Include any company or association or body of persons.
2 Paragraph 7(1)(b) of the Second Schedule to the SFR states that a person resident in Singapore who carries on business in Singapore in giving advice on corporate finance to accredited investors, expert investors or institutional investors, shall be exempted from the requirement to hold a CMS licence to carry on business in advising on corporate finance, provided that:
i) such advice is not specifically given for the making of any offer of specified products to the public by the accredited investor, expert investor or institutional investor to whom the advice was given; and
ii) where the accredited investor, expert investor or institutional investor is —
(A) a public company;
(B) listed on an approved exchange; or
(C) a subsidiary of a corporation listed on an approved exchange,
such advice is not circulated to the shareholders (other than shareholders who are accredited investors, expert investors or institutional investors) of (in the case of sub-paragraph (A) or (B)) the accredited investor, expert investors or institutional investors or (in the case of sub-paragraph (C)) the listed corporation, or is otherwise made known to the public.
3 Regulation 27(1)(d) of the FAR states that a person resident in Singapore who acts, whether directly or indirectly, as a financial adviser in giving advice in Singapore, either directly or through publications or writings or by issuing or promulgating research analyses or research reports, concerning any investment product (other than life policies), to not more than 30 accredited investors on any occasion, is exempt from holding a financial adviser’s licence under section 23(1)(f) of the Financial Advisers Act ("FAA"). Under section 23(1)(f) of the FAA, such person is exempt from holding a financial adviser’s licence to act as a financial adviser in Singapore in respect of any financial advisory service.