Skip to main content

Singapore: What happened in 2019 and significant events in 2020

Singapore Law: Year in Review 2019 summarises some key developments in Singapore in 2019 and Year to Come 2020 gives an overview of important changes that we anticipate in 2020. There are also links to further reading, where applicable.

Explore our overview of key developments below.

Updates in

34

key areas in 2019 and 2020

Our core practice areas saw significant legal and regulatory developments in 2019. Our review gives a snapshot of these developments. We also look forward to guiding our clients through the evolving Singapore legal and regulatory landscape in 2020.

Christopher Bradley, Managing Partner, Singapore

Chris Bradley

Significant legal and regulatory events in 2019

2019 saw important developments in the areas of corporate governance, public M&A, company and contract law, fintech, financial regulation, employment and cross-border enforcement of judgments, arbitral awards and mediation agreements.

Arbitration and Disputes

Singapore Convention on Mediation: In August 2019, Singapore hosted the signing of the United Nations Convention on International Settlement Agreements Resulting from Mediation, now known as the Singapore Convention on Mediation.

Read more

Enforcement of foreign judgments: With effect from October 2019, the statutory regimes for reciprocal enforcement of Commonwealth and other foreign judgments have been unified under a single statute, the Reciprocal Enforcement of Foreign Judgments Act. The new regime expands the types of foreign judgments enforceable in Singapore to include non-money judgments, judgments of lower courts, interlocutory judgments, consent judgments and settlement orders.

Key dispute resolution cases:

In Bi Xiaoqiong v China Medical Technologies, Inc (in liquidation) and another [2019] SGCA 50, the Singapore Court of Appeal held that a Mareva injunction may be granted in aid of foreign proceedings, but the Court must have jurisdiction over the defendant whose assets are targeted, and there must be a substantive claim against the defendant in Singapore. The decision departs from previous authority holding that Mareva injunctions would only be granted in aid of domestic court proceedings.

Read more

In Rakna Arakshaka Lanka Ltd v Avant Garde Maritime Services (Pte) Ltd [2019] SGCA 33, the Singapore Court of Appeal clarified that a party to arbitration proceedings who objects to the Tribunal’s preliminary ruling on jurisdiction, but who fails to challenge the ruling in the Singapore Courts within the statutory period of 30 days from the ruling date, can still apply to set aside the final arbitral award as long as it has not substantively participated in the arbitration.

Read more

The SICC issued its first decision on international arbitration (BXS v BXT [2019] SGHC(I) 10), relating to the setting aside of an arbitral award issued under the expedited procedure of the Singapore International Arbitration Centre Rules.

Read more

In Sun Travels & Tours v Hilton International Manage (Maldives) [2019] SGCA 10, the Singapore Court of Appeal held that it may, as the court of the seat of arbitration, grant an anti-enforcement injunction to restrain the foreign enforcement of a foreign court judgment obtained in breach of a Singapore-seated arbitration agreement. However, such relief would be granted only in exceptional circumstances, such as where the foreign judgment was procured by fraud.

Capital Markets

MAS guidance on 309B classification of CMPs: MAS published timely and helpful guidance on the product classification and notification requirements on issuers offering capital markets products in Singapore.

Read more

Mandatory trading obligations for OTC derivatives: MAS published new regulations requiring banks in Singapore to execute certain OTC derivatives contracts on organised markets. MAS also entered into separate agreements with US and EU regulators for the mutual recognition of derivatives trading venues across jurisdictions.

Read more

Corporate

Public M&A: The exit offer and voluntary delisting regime in the Listing Rules was amended in July 2019. Approval of at least 75% of independent shareholders is required to implement such an offer. The offer must be reasonable and fair (instead of just reasonable under the old regime). Previously non-independent shareholders could vote. The blocking right of shareholders holding 10% or more has been removed. The Takeovers Code was also amended to deal with takeovers of companies with dual class shares.

Corporate governance: The Code of Corporate Governance and the Listing Rules was amended in January to implement key changes relating to independent directors, board composition and the comply or explain regime for listed companies. The Monetary Authority of Singapore (“MAS”) also established a Corporate Governance Advisory Committee to advocate good corporate governance practices among listed companies. The Accounting and Corporate Regulatory Authority continued to step up enforcement and seeking deterrent sentences against directors who commit multiple breaches relating to default in holding annual general meetings and filing annual returns.

Contract: The Singapore International Commercial Court (the “SICC”) looked at issues relating to cryptocurrency as a property right and subject to a trust, unilateral variation of contracts and whose knowledge is relevant in the context of contracts formed pursuant to the operation of an algorithm (BC2C Ltd v Quoine Pte Ltd [2019] SGHC(I) 3) and the implication of a contract pursuant to a SWIFT MT 103 message (Malayan Banking Berhad v Barclays Bank PLC [2019] SGHC(I) 4).

Company: The Singapore Court of Appeal considered the consequences of a listed company acquiring its own shares without complying with the share buyback provisions (The Enterprise Fund III Ltd v OUE Lippo Healthcare Ltd [2019] SGCA 48).

Employment

Amendments to the Employment Act: The amendments to the Employment Act took effect in April 2019. Key amendments include: (i) extending the core provisions of the legislation to all employees, irrespective of salary levels and (ii) empowering the Employment Claims Tribunal to hear wrongful dismissal claims.

Read more

Guidelines on wrongful dismissal: The Tripartite Guidelines on Wrongful Dismissal were released in April 2019, providing guidelines on what constitutes wrongful dismissal under the EA. The Employment Claims Regulations 2017 were also amended in April 2019 to set out the principles for computing compensation for wrongful dismissal. 

Amendments to the Protection from Harassment Act: The Protection from Harassment (Amendment) Bill was passed by Parliament in May 2019 and, when implemented, will enhance protection and accessibility to remedies for victims of harassment.

Updates to S-Pass eligibility: The minimum qualifying salary to apply for a S-Pass for foreign mid-level skilled staff increased from S$2,200 to S$2,300 in January 2019. It will further increase to S$2,400 in January 2020.

Financial Regulation

Digital bank licences: MAS opened applications for up to five digital bank licences comprising two digital full bank licences (permitting licensees to deal with retail clients); and three digital wholesale bank licences (permitting licensees to deal with SMEs and non-retail clients). Licences are available to digital players who demonstrate an innovative and sustainable business model, even if they have yet to establish a track record in banking. Applications will close end-2019.

Read more

Payment token derivatives: MAS launched a consultation on derivatives contracts that reference payment tokens as underlying assets.

Read more

Sandbox Express: MAS launched Sandbox Express, a ‘spinoff’ from its current fintech regulatory sandbox, which provides financial firms with the option to test innovative financial products and services in the market. Under Sandbox Express, firms can commence market testing within 21 days of applying to the MAS. Currently, the platform is only open to insurance brokers, recognised market operators and remittance businesses.

MAS’ inaugural Enforcement Report: MAS published its inaugural Enforcement Report, outlining key areas of enforcement focus and regulatory action taken during the period of July 2017 – December 2018. Key areas of focus included market abuse, financial services misconduct, and money laundering-related control breaches. The report also emphasised that an effective and robust enforcement function remains a key priority in MAS’ regulatory oversight.

Cyber Hygiene Notice: MAS issued its Notice on Cyber Hygiene, a set of legally binding requirements that aim to raise cyber security standards within the financial sector. The Notice makes compulsory certain key elements in MAS’ existing Technology Risk Management Guidelines, such as implementing robust security for IT systems and strengthening user authentication for critical systems. Financial institutions have 12 months to implement the requirements before the Notice comes into effect on 6 August 2020.

AI governance frameworks: In late 2018, MAS published the Principles to Promote Fairness, Ethics, Accountability and Transparency (FEAT) in the Use of Artificial Intelligence and Data Analytics in Singapore’s financial sector. The guidance was the first of its kind in the world and was a product of deep collaboration between MAS and leading representatives in the financial sector. In January, the Personal Data Protection Commission (“PDPC”) published its Proposed Model Artificial Intelligence Governance Framework, a sector-agnostic, cross-cutting set of principles and guidelines for artificial intelligence adoption.

Technology, Media and Telecommunications

Cyber Hygiene Notice: MAS issued its Notice on Cyber Hygiene, a set of legally binding requirements that aim to raise cyber security standards within the financial sector. The Notice makes compulsory certain key elements in MAS’ existing Technology Risk Management Guidelines, such as implementing robust security for IT systems and strengthening user authentication for critical systems. Financial institutions have 12 months to implement the requirements before the Notice comes into effect on 6 August 2020.

AI governance frameworks: In late 2018, MAS published the Principles to Promote Fairness, Ethics, Accountability and Transparency (FEAT) in the Use of Artificial Intelligence and Data Analytics in Singapore’s financial sector. The guidance was the first of its kind in the world and was a product of deep collaboration between MAS and leading representatives in the financial sector. In January, the Personal Data Protection Commission (“PDPC”) published its Proposed Model Artificial Intelligence Governance Framework, a sector-agnostic, cross-cutting set of principles and guidelines for artificial intelligence adoption.

Significant legal and regulatory events in 2020

2020 will see further developments in the fintech space and increased focus on financial regulation. Reforms in the areas of personal data protection and electronic execution of documents and to court and arbitration processes may be introduced.

Arbitration and Disputes

New insolvency law: In 2018 a new insolvency bill was passed that should come into effect in 2020. The new act consolidates the existing provisions on corporate and personal insolvency laws. New provisions include a restriction on ipso facto clauses, voluntary judicial management provisions and a new regime for licensing insolvency practitioners. 

Reforms to the Appellate Court and Appellate Process: A new appellate division is to be introduced to the High Court of Singapore, to ease the growing appeals caseload. The division will hear civil appeals which are not allocated to the Court of Appeal, which remains the apex court. The Court of Appeal will continue to hear all criminal appeals. Reforms are also being introduced to allow parties to consent to their appeals being conducted without oral arguments, or heard by a two- rather than three-Judge bench, so as to reduce the cost of the appellate process.

Amendment of the International Arbitration Act (“IAA”): The IAA may be amended in 2020 to include the introduction of a default mode of appointment of arbitrators in multi-party arbitrations, allowing parties to jointly request that the Tribunal rule on its jurisdiction at a preliminary stage, providing the Tribunal and the Courts with powers to support the enforcement of confidentiality obligations in arbitration, and an option for parties to incorporate a right to appeal to the Singapore Courts on a question of law arising out of the award (arbitral awards are currently not subject to appeal).

Third party funding: Third-party funding is currently permitted only in international arbitration proceedings and court or mediation arising from such proceedings. The Ministry of Law has announced that it intends to amend legislation to allow third-party funding in domestic arbitration, certain proceedings in the Singapore International Commercial Court ("SICC"), and mediations connected with these proceedings.

Conditional Fee Agreements (“CFAs”): CFAs are currently prohibited in Singapore. The law may be reformed to allow CFAs in domestic and international arbitration, certain SICC proceedings, and mediation relating to such proceedings. These reforms, if implemented, will bring Singapore’s regulatory regime in line with that of dispute resolution hubs such as England and Wales (where CFAs are permitted) and Australia, US and China (which allow CFAs in various forms).

Banking

Singapore Benchmark Reform: SIBOR and SOR are the two SGD interest rate benchmarks that are widely used in financial contracts. As part of interest rate reform, work is ongoing to enhance the robustness of SIBOR. In addition, ABS-SFEMC has made a recommendation for the transition of the SOR to SORA (Singapore Overnight Rate Average) and has released a road map for the transition.

Read more

New insolvency law: In 2018 a new insolvency bill was passed that should come into effect in 2020. The new act consolidates the existing provisions on corporate and personal insolvency laws. New provisions include a restriction on ipso facto clauses, voluntary judicial management provisions and a new regime for licensing insolvency practitioners.

Capital Markets

Singapore Benchmark Reform: SIBOR and SOR are the two SGD interest rate benchmarks that are widely used in financial contracts. As part of interest rate reform, work is ongoing to enhance the robustness of SIBOR. In addition, ABS-SFEMC has made a recommendation for the transition of the SOR to SORA (Singapore Overnight Rate Average) and has released a road map for the transition.

Read more

Corporate

Listing Rules: SGX may finally release its consultation conclusions on the requirements relating to quarterly reporting. SGX may remove the minimum trading price requirement following consultations in 2019.

Contract: It is possible that the Court of Appeal may finally rule on the application in Singapore of the penalty rule restated by the English Supreme Court in Cavendish Square Holding BV v El Makdessi and ParkingEye Ltd v Beavis [2015] UKSC 67. The provisions on the electronic execution of documents in the Electronic Transactions Act may be amended in 2020 following consultations which concluded in November 2019.

New insolvency law: In 2018 a new insolvency bill was passed that should come into effect in 2020. The new act consolidates the existing provisions on corporate and personal insolvency laws. New provisions include a restriction on ipso facto clauses, voluntary judicial management provisions and a new regime for licensing insolvency practitioners.

Employment

Changes to Work Injury Compensation Act: The new Work Injury Compensation Act will take effect in 2020. The changes will expand compulsory insurance coverage to protect more employees and streamline the claims processing regime.

Read more

Financial Regulation

Payment Services Act: The Payment Services Act 2019 (the “PS Act”) was passed by Parliament in January 2019 and will come into force in January 2020. The PS Act will regulate key payments activities in Singapore, such as e-money issuance, domestic and cross-border money transfer services, and digital payment token services. MAS has consulted on subsidiary legislation and Notices and Guidelines under the PS Act and is expected to finalise these shortly.

Read more here and here

Proposed Individual Accountability and Conduct Guidelines due to take effect: MAS issued its response to feedback on its April 2018 consultation on proposed Individual Accountability and Conduct (“IAC”) Guidelines to strengthen accountability and standards of conduct across the financial industry. MAS further issued a consultation proposing to broaden the IAC Guidelines’ scope of application to cover a wider scope of MAS-regulated financial institutions. MAS has also clarified that smaller firms (i.e. with a headcount of less than 20) are generally not expected to adopt the Outcomes set out in the IAC Guidelines.

Read more

Outsourcing by banks and merchant banks: MAS consulted on proposed revisions to the regime governing banks’ and merchant banks’ outsourcing arrangements. These included the issuance of Outsourcing Notices in respect of banks’ and merchant banks’ material outsourcing arrangements, which would impose minimum requirements on the management of such outsourcing arrangements and assessment of service providers. MAS has proposed that the Notices take effect 12 months from their issuance, the date of which is to be confirmed.

Updated Technology Risk Management and Business Continuity Management Guidelines: MAS consulted on proposed changes to the Technology Risk Management and Business Continuity Management guidelines. The proposed updates included measures that financial institutions are expected to implement to strengthen their operational resilience in light of rapidly evolving cyber threats. The updated guidelines are pending issuance.

Regulation of merchant banks under the Banking Act: MAS consulted on the regulation of merchant banks under the Banking Act and has also proposed to move merchant banks to a licensing regime, from its current approval framework under the MAS Act. The consolidation of merchant bank regulation under the Banking Act will not introduce new requirements or modify existing ones, except for changes previously communicated or consulted on.

Technology, Media and Telecommunications

Updated Technology Risk Management and Business Continuity Management Guidelines: MAS consulted on proposed changes to the Technology Risk Management and Business Continuity Management guidelines. The proposed updates included measures that financial institutions are expected to implement to strengthen their operational resilience in light of rapidly evolving cyber threats. The updated guidelines are pending issuance.

Amendments to the personal data protection regime: The Personal Data Protection Act may be amended in 2020 to include a relaxation of the requirement to gather consent at data collection by introducing a concept of “legitimate interests” for businesses, introduction of a mandatory breach notification requirement, which would require businesses to notify the PDPC and the affected individuals if there had been an unauthorised disclosure of personal information, and data portability data innovation provisions, one of which will be the ability of individuals to request businesses to provide them with a copy of their data and transmit their data to another business in a commonly used format.

We hope that you have found this guide useful

Please contact your usual Linklaters contact if you would like to discuss any of these matters further.

Explore our Year in Review 2019 and Year to Come 2020 series across 20+ jurisdictions and a number of topics.

Explore the series