MOF, RCB And MAS Jointly Issue Guidelines On Offers Of Shares, Debentures And Unit Trusts Through The Internet

The Ministry of Finance, the Registrar of Companies and Businesses and the Monetary Authority of Singapore have jointly issued guidelines on offers of shares, debentures and unit trusts through the Internet to the public in Singapore.

2 The use of the Internet by both providers and users of financial services has increased rapidly, given the significant advantages offered by such electronic medium. The Internet represents an important and cost-efficient distribution channel for public offers of securities, including unit trusts. To facilitate and foster such public offers of securities through the Internet, the authorities have drawn up guidelines to provide guidance on how such offers may be made within the parameters of the Companies Act.

3 Minister of State for Trade and Industry Mr Lim Swee Say had announced in November last year that such a framework of guiding principles for issuers wishing to raise corporate finance on the Net would make Internet public offers a safe and reliable source of information for investment decisions, without constraining issuers' ingenuity in making such offers cheaper, faster and more convenient for the investor.

4 The Guidelines are in line with international practice. They deal with regulatory issues, and not with commercial aspects such as authentication of applications or how payments made through the Internet may be secured.

5 The key features of the Guidelines are as follows:

• a printed copy of a prospectus must be lodged with the Registrar of Companies before an offer is made through the Internet

• the offer through the Internet must be made with an electronic prospectus

• the electronic prospectus must contain the same information in substantially the same sequence as the printed copy lodged with the Registrar

• prospective investors must be given access to the electronic prospectus before the application form

• the electronic prospectus must be clearly demarcated on the website to distinguish it from other material

• hyperlinks created by offerors to the prospectus must bring prospective investors directly to the front page of the prospectus; no detour to other webpages/websites are allowed

• only hyperlinks within the electronic prospectus, hyperlinks from other websites to the electronic prospectus and hyperlinks from the electronic prospectus to the application form and documents required by the Listing Manual and/or Companies Act for public inspection, are permitted.

6 The Guidelines have been crafted in consultation with industry users, such as corporate lawyers and issuing agents. They serve to clarify the authorities' policy perspective on public offers of securities through the Internet. The authorities have also set out regulatory principles for advertisements of offers of securities on the Internet by way of Gazette Notifications. These Guidelines and Gazette Notifications support Government's efforts in promoting the measured and orderly growth of commerce and finance done over the Internet and in making Singapore a global e-commerce hub. The Guidelines and Gazette Notifications are also available on the following websites: http://www.mas.gov.sg and http://www.gov.sg/rcb/information.

7 Please contact Mrs Serena Tan of the Registry of Companies and Businesses at 3253710 for any clarifications.

MINISTRY OF FINANCE