Enhancement of Singapore's Corporate Governance Regime and Alignment with International Standards on Combating Money Laundering and Terrorism Financing

Prior to the amendments, the Companies Act requires companies to maintain a Register of members. The person holding the shares on behalf of another person is known as the nominee shareholder, whilst the person for whom the shares are held is known as the nominator. The nominee shareholder is listed in the Register of members as the shareholder on record, and the nominator did not have to be identified in the said Register. As the nominee shareholder typically acts on the instructions of the nominator, the lack of transparency on the identity of these persons who actually controls the shares is an area of concern on an international scale.

    

With the amendments, both local and foreign companies in Singapore now need to (i) keep a non-public Register of nominee shareholders and nominators, and (ii) update their Register within seven (7) days of being informed by the nominee.  This ensures that nominators are better identified, thus aligning Singapore's legislation with international standards.

  

The Register of nominee shareholders and nominators is not accessible by the public. However, the Registrar of Companies or an officer of the Accounting and Corporate Regulatory Authority may inspect and examine the said Register and make inquiries to ensure compliance with the Companies Act. Further, a public agency may also exercise such similar powers of inspection and conduct an inquiry in relation to the Register of nominee shareholders and nominators to administer and enforce any written law. A public agency includes a public officer and a ministry or department of the Singapore government.

  

The next set of amendments introduces new requirements in relation to the identification of registrable controllers, for both local and foreign companies and Limited Liability Partnerships (LLPs). 

In the past, companies and LLPs were required to maintain a Register of Registrable Controllers. These would be individuals or corporate entities with significant interest in or significant control over the company or LLP. However, there have been times when a company or an LLP would claim to have no registrable controllers with significant interest or control.

  

With the amendments, companies and LLPs which are unable to identify a registrable controller with significant interest in or who has significant control over the company or LLP, will be required to identify all individuals with executive control over the company or LLP as registrable controllers. Such individuals are the chief executive officers and directors or partners who exercise executive control over the daily or regular affairs of the company or the LLP through a senior management position. By ensuring a registrable controller to be identified, the transparency of beneficial ownership and the control of companies and LLPs in Singapore will be enhanced, in line with international expectations. 

  

Local companies are required to maintain a Register of Nominee Directors, reflecting their status as nominee director and the particulars of their nominator. However, there was no time frame specified as to when local companies had to update their register whenever there is a change in particulars of the nominee director or their nominator. The amendments require local companies to update the Register of Nominee Director within seven (7) days of such changes. This results in more clarity as to the timeline, and ensures the said Register to be updated in a timely manner.

  

Foreign companies are currently required to keep and maintain a Register of Members at their Singapore branch, but there is no time frame as to when updates are to be made when there is a change in members' particulars. The amendments specify a 30-day time frame for foreign companies to update their Register of Members. Specifying a 30-day time frame took into consideration that foreign companies would take more time to contact members who are located overseas, and to subsequently update the Register of Members, which is located in the registered office in Singapore.