Introduction

The Accounting and Corporate Regulatory Authority (ACRA), being the statutory board that regulates business registration, financial reporting, public accountants, and corporate service providers, is in the process of obtaining feedback from the public on proposed amendments to the Companies Act 1967 (Companies Act), Accounting and Corporate Regulatory Authority Act 2004 (ACRA Act) and a new Corporate Service Providers Bill (CSP Bill).

The proposed legislative amendments are part of ACRA’s continuing aim to ensure that the Singapore corporate regulatory environment remains competitive and robust. We have set out the salient proposed amendments and provisions in this article.

Proposed Amendments to the ACRA Act

To ensure that the financial penalties are effective, commensurate and dissuasive, taking into consideration sanctions imposed on other service providers in Singapore and on Corporate Service Providers (CSPs) in other foreign jurisdictions, ACRA proposes the following amendments:

Proposed Amendment to the Companies Act

The Financial Action Task Force (FATF) recommendations now require nominee directors and shareholders to disclose their nominee status and the identity of their nominator to ACRA, and for ACRA to maintain such information. They also require that the nominee status of the director/shareholder be made publicly available. In light of this, ACRA proposes the following amendments:

Proposed Enacting of the CSP Bill

ACRA is proposing to enact the CSP Bill, which will, amongst other things, require all entities or people providing corporate secretarial services (which includes forming corporations, acting or arranging for another person to act as director, and providing a registered office) in and from Singapore to register with ACRA as CSPs, regardless of whether they need to transact with ACRA. In addition, we have set out below, the effect that some of the salient new provisions of the CSP Bill will have:

Closing Thoughts

The proposals aim to enhance the corporate sector's regulatory regime for the purposes of, amongst other things, improving Singapore’s compliance with the FATF recommendations and maintaining Singapore’s reputation as a trusted financial hub. In addition, ACRA’s proposed legislative amendments seek to address the risks presented by the misuse of nominee arrangements in the creation of shell companies to facilitate money laundering and require individuals who act as nominee directors, by way of the provision of services in exchange for a fee or an award, to be qualified persons.