The Ministry of Finance (the “MOF”) and the Accounting and Corporate Regulatory Authority (the “ACRA”) have issued a consultation paper on a draft Accounting and Corporate Regulatory Authority (Amendment) Bill (the “draft Bill”).
The proposed new provisions seek to enhance the regulatory framework for corporate service providers (“CSPs”). This review of the Accounting and Corporate Regulatory Authority Act (the “ACRA Act”) also includes proposals to enhance the ACRA’s general enforcement powers in administering the various ACRA administered legislation.
Singapore is a member of the Financial Action Task Force (“FATF”), which is an intergovernmental body that sets global standards to combat money laundering and the financing of terrorism and proliferation of weapons of mass destruction, and carries out mutual evaluations of jurisdictions to assess their adherence to these standards. In 2012, the FATF Recommendations, which require all countries to have effective systems for preventing and addressing money laundering, terrorist financing and the financing of proliferation, was revised. The revisions provide authorities with a stronger framework to act against criminals and address new threats to the international financial system.
The proposed new regulations in the draft Bill will enable Singapore to comply with the revised FATF Recommendations relating to CSPs.
The following are a selection of the amendments made by the draft Bill:
- Definition: The draft Bill refers to CSPs as filing agents and qualified individuals and requires them to register or renew their registration with ACRA before they can carry out filing transactions with the ACRA.
- Bizfile: The draft Bill also establishes an electronic transaction system, Bizfile, and specifies the transactions that can be carried out upon payment of prescribed fees. The use of Bizfile will be required.
- Registered filing agents: The draft Bill sets out the framework for a person to register and renew his registration as a filing agent. The ACRA will be able to investigate and take action against a registered filing agent who has breached any prescribed term or condition. It is noted in the consultation paper that the term “filing agent” does not apply to a group of companies, who will have to enter into a separate arrangement with the ACRA to facilitate their filing as a group. The ACRA will write to the affected groups of companies in this regard closer to the implementation date.
- Registered qualified individual: A new provision in the draft Bill sets out the framework for an individual to register and renew his registration as a qualified individual. Under the amended Act, the ACRA will be able to investigate and take action against a registered qualified individual who has breached any prescribed term or condition. Unlike the current regime where some employees of professional number holders may be registered as prescribed persons by reason of their being employees, these employees will not be able to seek registration as qualified individuals in the new regime. Only individuals who satisfy the criteria of this new provision may apply. Employees who do not qualify can still assist registered qualified individuals with filing in their capacity as employees. The concept of “qualified individual” does not apply to a group secretary of a group of companies and therefore this individual will not need to seek registration.
- Actions the ACRA can take: Where a registered filing agent or qualified individual breaches the terms and conditions imposed on them, the ACRA will be empowered to either cancel or suspend their registration, restrict their use of Bizfile or impose a financial penalty.
- Right of appeal: The draft Bill will allow registered filing agents and qualified individuals to appeal to the Minister for Finance (the “Minister”) if they are aggrieved by the ACRA’s decision.
- Transitional arrangements: The draft Bill empowers the Minister to make transitional regulations for existing CSPs to be registered as registered filing agents and qualified individuals under the enhanced regulatory framework.
Other amendments to the ACRA Act
The consultation paper also sets out legislative amendments to other aspects of the ACRA Act:
- Amendment to section 30(1) of the ACRA Act in relation to the name, symbol or presentation of the ACRA to enhance protection against unauthorised use of the same. A new section 30A also gives the ACRA exclusive rights to the use of its name and acronym.
- Section 31 of the ACRA Act in relation to powers of enforcement has been clarified and enhanced.
- Section 34(1) of the ACRA Act has been amended to expand the situations in which disclosure of information is required or should be permitted.
- Section 36 is amended to align the maximum composition sum in the ACRA Act with the maximum composition sum in other ACRA administered legislation.
The consultation paper informs that new regulations will be drafted to elaborate on the obligations that registered filing agents and qualified individuals have to comply with in order to meet the revised FATF Recommendations as well as other regulatory requirements.
The period of the consultation runs from 7 November 2013 to 6 December 2013.
The following materials are available from the MOF website www.mof.gov.sg: