SINGAPORE Law and Practice Contributed by: Jason Lim, Sreenivasan Narayanan SC and Palaniappan Sundararaj, Sreenivasan Chambers LLC
• use of another person’s trading account – directly or indirectly to execute trades through another person’s account. Such offences may attract criminal or civil liability. Under Section 204 (1), a person is liable on conviction to a fine of up to SGD250,000 and/or imprisonment for up to seven years. The court may alternatively make an order for the payment of a civil penalty. Misleading Disclosures Section 200 of the SFA prohibits false or misleading statements in relation to capital markets products. It is an offence to: • induce or attempt to induce another person to trade by making a statement that is false or mis - leading; or • make or publish any statement, promise or fore - cast that is false or misleading, whether knowingly or recklessly. The offence is punishable by a fine of up to SGD250,000 and/or imprisonment for up to seven years. Non-Disclosures Under Section 203 of the SFA, it is an offence to intentionally, recklessly or negligently fail to notify the Singapore Exchange (SGX) of any information that is required to be disclosed under the Listing Manual. Under Rule 703 of the Listing Manual issued by SGX, subject to certain exceptions, a company whose shares are listed must announce any information known to it which: • is necessary to avoid the establishment of a false market in the company’s securities; or • would be likely to materially affect the price or value of its securities. Unauthorised Financial Services Activity The SFA also regulates the provision of financial ser - vices. A person must not carry on a business in any regulated activity (such as dealing in capital markets products or advising on corporate finance) without the appropriate Capital Markets Services licence or exemption under the Act.
Carrying on a regulated activity without authorisation constitutes an offence and may result in criminal sanc - tions, including fines and/or imprisonment, as well as regulatory action by the Monetary Authority of Sin - gapore. The Financial Advisers Act 2001 The Financial Advisers Act 2001 (FAA) acts as an additional safeguard by regulating financial advisory services and governing the conduct of financial advi - sors. Under the FAA, financial advisers are obliged to: • have the requisite financial adviser’s licence; • disclose all material information relating to the investment product when making a recommenda - tion; • ensure they do not make false or misleading state - ments; and • have a reasonable basis for any investment regard - ing any investment products. 3.5 Tax Evasion and Financial Reporting Tax Evasion Under the Income Tax Act 1947, it is an offence to evade or assist another person to evade tax. A person convicted of tax evasion is liable to: • a penalty of up to three times the amount of tax undercharged or obtained; and • a fine of up to SGD50,000 and/or imprisonment for up to five years. Where the offence involves serious fraudulent tax eva - sion, the penalty increases to: • up to four times the amount of tax undercharged or obtained; and • a fine of up to SGD50,000 and/or imprisonment for up to five years. Under the Goods and Services Tax Act 1993, where a person wilfully and with intent to evade goods and services tax understates output tax or overstates input tax or assists any other person to evade such tax, the Comptroller may impose a penal tax of up to three times the amount of tax undercharged and be liable to a fine and/or imprisonment.
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