On 12 August 2014, the Monetary Authority of Singapore (the "MAS") issued a consultation paper on "Proposed Amendments to the Exemptions from Restrictions on Deposit-Taking and Solicitation" (the "Consultation Paper"). The consultation closes on 12 September 2014.

Section 4A of the Banking Act (the "BA") prohibits the taking of deposits in Singapore in the course of a deposit-taking business (the "deposit-taking restriction"). Certain entities are excluded from this prohibition ("authorised entities"), e.g. banks and merchant banks. However, deposits taken from accredited investors ("AIs") in specified circumstances are exempted from the deposit-taking restriction (the "Exemptions"). The Exemptions are set out in regulations 3A and 5(b) of the Banking Regulations (the "Regulations"). The concept of an AI used in the Regulations is currently aligned with that under the Securities and Futures Act (the "SFA").

In a separate consultation paper on "Proposals to Enhance Regulatory Safeguards for Investors in the Capital Markets" (the "July 2014 Consultation Paper") that the MAS issued on 21 July 2014, the MAS is proposing, among other things, changes to the concept of an AI under the SFA.

The Consultation Paper examines the relevance of the proposed changes to the concept of an AI under the SFA to the Exemptions, and proposes several changes to the Regulations to reflect appropriate changes to the AI concept for the purpose of the Exemptions.

Implementation timeline

The proposed amendments to the Regulations will take effect at the same time as the commencement of the new AI eligibility criteria under the SFA.

Reference materials

The Consultation Paper is available from the MAS website www.mas.gov.sg by clicking here.