SINGAPORE Law and Practice Contributed by: Lee Xin Mei, Cheryl Tan, Eugene Lee and Benjamin Liew, Rajah & Tann Singapore LLP
Rajah & Tann Singapore LLP 9 Straits View #06-07 Marina One West Tower 018937 Singapore Tel: +65 6535 3600
Email: info@rajahtannasia.com Web: www.rajahtannasia.com
1. Specific Financial Asset Types 1.1 Common Financial Assets In Singapore, the most commonly securitised financial assets are receivables, in particular credit card receivables and loan receivables. Recent securitisation transactions in the market have also included other asset classes such as vehicle fleets and related receivables. The Monetary Authority of Singapore (MAS) has also established a regime for Singapore banks to issue covered bonds in Singapore. The larg - est banks in Singapore have established sev - eral covered bond programmes backed by retail mortgages. 1.2 Structures Relating to Financial Assets The most usual securitisation structure in the Singapore market involves the issuance of listed and rated debt securities to investors. In a typical securitisation transaction in Singa - pore, the issuer would be an orphan special pur - pose entity (SPE) that is neither affiliated with the originator nor a member of any corporate group.
1.3 Applicable Laws and Regulations The legal and regulatory system in Singapore provides the framework within which securitisa - tion transactions are structured and document - ed, under contractual principles based on the common law. There is generally no Singapore law specifically related to securitisation, other than certain MAS Notices. Please see 4.9 Banks Securitising Financial Assets . Depending on the securitisation structure and the underlying assets, additional legislation and regulations may apply. Debt securities are issued typically in reliance on exemptions from the prospectus registration requirements under the Securities and Futures Act 2001 (SFA). Debt issuances are typically structured as “qual - ifying debt securities” under the Income Tax Act 1947 (ITA), which generally exempts interest, discount, early redemption fee or redemption premium to non-Singapore tax residents from Singapore withholding tax, and provides Singa - pore corporate investors with a preferential 10% tax rate on their income derived from the debt securities.
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