INSITE - Singapore - May 2024
- sukhwinder21
- Jun 10, 2024
- 4 min read
ACRA (REGISTRY AND REGULATORY ENHANCEMENTS) BILL INTRODUCED IN PARLIAMENT
Summary: On 5 March 2024, the Ministry of Finance and Accounting and Corporate Regulatory Authority (ACRA) released a Consultation Paper on 'Proposed Legislative Amendments Relating to Digital Communications and Regulatory Enhancements' to get feedback on the draft ACRA (Registry and Regulatory Enhancements) Bill (Bill). The Bill aims to improve data privacy, boost digitalisation, and simplify corporate regulations.
In Detail:
Key Amendments
The Bill will amend the Companies Act 1967 and the Accounting and Corporate Regulatory Authority Act 2004 to introduce the following key updates.
Digitalisation of Communications
The Bill will allow ACRA to send letters and notices (except summonses) to a secure digital mailbox in BizFile+. Only authorised individuals with a Singpass or Corppass account can access this mailbox. ACRA can also notify recipients via email or other electronic methods about how and when they can access documents or information.
Collection of Data
To support digital communication between the government and businesses, position holders and shareholders must provide and update their email addresses and mobile numbers. Business entities must do the same for their business email addresses. Additionally, anyone conducting a transaction on BizFile+ may need to provide information, including email addresses and mobile numbers, as required by ACRA for the transaction or under relevant laws.
The Bill will also allow ACRA to collect data from certain government agencies to help with transactions and to verify information in ACRA's register. This aims to reduce the need for individuals and businesses to repeatedly provide the same data to government agencies.
Enhancing Data Privacy
A new system will be introduced to manage how ACRA discloses data. This system will specify:
The types of data ACRA can share.
Who ACRA can share the data with.
The rules recipients of the data must follow.
ACRA will tailor these rules for different purposes, like meeting anti-money laundering requirements.
Simplifying Financial Reporting for Foreign Companies
The Bill will make financial reporting easier for foreign companies by:
Requiring foreign companies listed in Singapore or overseas to submit financial statements that follow the rules of the exchange they are listed on.
Allowing unlisted foreign companies to submit financial statements if they follow accounting standards similar to those prescribed in Singapore.
Allowing unlisted foreign companies that use their home country's accounting standards to submit those financial statements.
Allowing foreign companies that do not prepare financial statements to submit unaudited summary financial statements as prescribed by ACRA.
Additionally, ACRA will exempt non-listed companies from disclosing their directors' interests in securities. This exemption will apply to all public non-listed and private companies if they declare in their annual return that all shareholders agree to this non-disclosure.
Conclusion: The Bill introduces significant updates aimed at enhancing data privacy, promoting digitalisation, and streamlining corporate regulations. By allowing digital communication through secure mailboxes and requiring updated contact information, the Bill supports efficient government-to-business interactions. It also simplifies financial reporting for foreign companies and exempts non-listed companies from certain disclosure requirements, provided shareholders consent. These amendments collectively aim to modernize regulatory practices, reduce administrative burdens, and ensure compliance with evolving digital and privacy standards.
Public Consultation on Proposed Legislative Amendments Relating to Digital Communications and Regulatory Enhancements (acra.gov.sg)
Response to Public Consultation on Proposals Relating to Personal Data Collection and Use, Filing Convenience and Digital Correspondences and Other Proposed Amendments (acra.gov.sg)
CORPORATE SERVICE PROVIDERS BILL AND THE COMPANIES AND LIMITED LIABILITY PARTNERSHIPS (MISCELLANEOUS AMENDMENTS) BILL INTROUCUED IN PARLIAMENT FOR THEIR FIRST READING
Summary: The Corporate Service Providers Bill (CSP Bill) and the Companies and Limited Liability Partnerships (Miscellaneous Amendments) Bill (CLLPMA Bill) were introduced in Parliament for their first reading. These Bills aim to enhance transparency in company and LLP ownership, aligning with the Financial Action Task Force (FATF) standards.
In Detail: On 7 May 2024, the CSP Bill and the CLLPMA Bill were introduced in Parliament for their first reading.
The Ministry of Finance (MOF) and the ACRA had earlier conducted a public consultation on these proposals. The consultation, which ran from 12 to 25 March 2024, sought feedback on the proposed CSP Bill, and amendments to the Companies Act 1967 and the Limited Liability Partnerships Act 2005 to improve regulatory oversight and transparency.
Key Amendments to the CSP bill:
The bill requires all businesses providing corporate services in and from Singapore to register with ACRA as CSPs.
It mandates registered CSPs to comply with anti-money laundering, countering terrorism financing, and countering the proliferation of weapons of mass destruction (AML/CFT/PF) obligations.
It introduces fines for CSPs and their senior management for non-compliance with AML/CFT/PF obligations.
It prohibits individuals from acting as nominee directors for business purposes unless arranged by registered CSPs and assessed as fit and proper.
It requires nominee directors and shareholders to disclose their nominee status and the identities of their nominators to ACRA.
It increases fines related to the Register of Registrable Controllers, Register of Nominee Directors, and Register of Nominee Shareholders.
Key Amendments to the CLLPMA bill:
To (a) require companies and foreign companies to file all information about their nominee directors and shareholders with ACRA, and (b) for ACRA to maintain this information. Once disclosed to ACRA, the nominee status will be publicly available, including in business profile extractions. Only public agencies may access the full information maintained by ACRA for legal administration or enforcement.
The bill introduces some amendments to the definition of nominee shareholder.
Conclusion: The introduction of the CSP Bill and CLLPMA Bill marks a significant step towards strengthening regulatory oversight and transparency in Singapore’s corporate service sector. By aligning with FATF standards and enhancing the disclosure requirements for nominee directors and shareholders, these amendments will ensure greater accountability and integrity in business operations.
Key Links: Public Consultation on Corporate Service Providers Bill and Proposed Amendments to Companies Act and Limited Liability Partnerships Act (acra.gov.sg)
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