Statute Details
- Title: Securities and Futures (Affairs of Business Trust and Affairs of Entity) Regulations 2018
- Act Code: SFA2001-S623-2018
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289), specifically powers conferred by section 341
- Commencement: 8 October 2018
- Status: Current version (as at 27 March 2026)
- Key Provisions (from extract): Regulations 1 to 4 (with substantive content in Regulations 2 and 3)
- Regulatory Focus: Defining what “affairs” means for (i) business trusts and (ii) non-corporate entities for specified purposes under the Securities and Futures Act
What Is This Legislation About?
The Securities and Futures (Affairs of Business Trust and Affairs of Entity) Regulations 2018 (“the Regulations”) are a definitional and scope-setting instrument. In plain terms, they clarify what regulators and courts should treat as part of the “affairs” of a business trust, and what should be treated as part of the “affairs” of certain non-corporate entities, when applying particular provisions of the Securities and Futures Act (SFA).
In the SFA, various regimes—such as those dealing with investigations, compliance, enforcement, and certain regulatory determinations—may refer to “affairs” of a regulated body. The challenge is that “affairs” is broad and can be interpreted differently depending on the legal form of the regulated party. Business trusts, for example, involve trustees, unit holders, trust property, and trustee conduct in a way that differs from a typical company. Similarly, “entities” may include persons and structures that are not corporations.
The Regulations therefore “fill in the blanks” by specifying, for defined purposes, what matters are included within “affairs.” This reduces ambiguity and helps ensure consistent application of the SFA across different legal structures—particularly where insolvency, restructuring, or administration proceedings are involved.
What Are the Key Provisions?
Regulation 1 (Citation and commencement) is straightforward. It provides the short title and confirms that the Regulations come into operation on 8 October 2018. This matters for practitioners because it fixes the temporal scope for when the definitions apply.
Regulation 2 (Affairs of business trust) is the core provision. It states that, for the purposes of specified SFA provisions—namely sections 251(18)(b) and (19)(b), 272A(11)(b), 275(2A)(b), and 330(3)(b)—a reference to the “affairs of a business trust” includes a detailed list of matters. The “unless the contrary intention appears” wording signals that the definition is default and may yield if the relevant SFA provision or context indicates otherwise.
Practically, Regulation 2(1) expands “affairs” far beyond day-to-day operations. It includes: (a) promotion, formation, control, business, profits and losses; (b) trading and transactions and dealings, and property and liabilities of the trustee acting as trustee; and (c) matters relating to identifying unit holders and derivative/unit holders, and the rights and payments they receive under the trust deed.
Several sub-paragraphs are particularly important for enforcement and dispute contexts:
- Insolvency and restructuring scenarios (Regulation 2(1)(e) and (f)): The definition expressly covers acts and contracts by or on behalf of the trustee when a receiver/receiver and manager is in possession or control of trust property; when the trustee (if a corporation) is under judicial management; when a compromise/arrangement under section 210 of the Companies Act is being administered; under a repayment arrangement with creditors; when the trustee is an undischarged bankrupt; and when the trustee or business trust is being wound up or dissolved. It also covers the conduct of the relevant insolvency office-holder (receiver, judicial manager, Official Assignee/Receiver, liquidator, etc.).
- Unit ownership and voting/control (Regulation 2(1)(g) and (h)): “Affairs” includes ownership of units/derivatives/debentures and the power of persons to exercise or control rights such as voting and disposal of units.
- Financial interest and influence (Regulation 2(1)(i)): It includes matters concerned with identifying persons who are financially interested in the success or failure (or apparent success/failure) of the business trust, or who can control or materially influence the trustee’s policy.
- Acquisition/disposal circumstances (Regulation 2(1)(j)): It includes the circumstances under which a person acquired or disposed of, or became entitled to acquire or dispose of, units/derivatives/debentures.
- Audit-related matters (Regulation 2(1)(k)): It includes matters relating to or arising out of the audit of the matters in (a) to (j), including auditor working papers or reports concerning those matters.
Regulation 2(2) provides interpretive definitions. It defines “business” in relation to a business trust as the business relating to the trust property and managed and operated by the trustee in its capacity as trustee. It also defines “trust property” by reference to the Business Trusts Act (Cap. 31A). This cross-referencing is significant: it anchors the scope of “business” and “trust property” in the primary business trust legislation, avoiding inconsistent meanings.
Regulation 3 (Affairs of entity, etc., that is not corporation) addresses a parallel issue for non-corporate structures. For the same specified SFA purposes (sections 251(18)(b) and (19)(b), 272A(11)(b), 275(2A)(b), and 330(3)(b)), the Regulations define “affairs” for “relevant entities” that are not corporations.
Regulation 3(1) identifies “relevant entity” to include: (a) an entity; (b) a person making an offer; (c) an issuer; and (d) an underlying entity. The definition is again subject to “unless the contrary intention appears.”
Regulation 3(2) then states that “affairs” includes all the matters in paragraph (2). These are broadly analogous to the business trust definition, but adapted to non-corporate contexts. The matters include promotion, formation, membership, control, business or trading; transactions and dealings (including where the relevant entity acts as agent, bailee or trustee); property held (including as agent, bailee or trustee); liabilities (including joint liabilities and liabilities incurred as trustee); and profits, income, receipts, losses, outgoings and expenditure.
Regulation 3(2) also includes trust-specific elements where the relevant entity is a trustee of a trust: identification of beneficiaries, their rights, and payments they have received or are entitled to receive. It further includes internal management and proceeding, and acts or things done by or on behalf of the relevant entity in relation to its business or property during insolvency or restructuring events—specifically where a receiver/receiver and manager is in possession or control of property; under a repayment arrangement with creditors; or during winding up or dissolution.
Note on the extract: The provided text is truncated after “the person administering the repay…”. However, the visible structure indicates that Regulation 3(2)(e) and subsequent sub-paragraphs likely mirror Regulation 2’s approach by expressly capturing the conduct of insolvency office-holders and administrators. For practitioners, the key takeaway is the legislative method: it anticipates that “affairs” must include both the underlying commercial/financial matters and the conduct of those administering insolvency or restructuring processes.
Regulation 4 (Revocation) indicates that the Regulations revoke an earlier instrument (not shown in the extract). Revocation is important when advising on historical conduct or when determining which definition applied at the relevant time.
How Is This Legislation Structured?
The Regulations are short and structured as follows:
- Regulation 1: Citation and commencement.
- Regulation 2: Defines “affairs of a business trust” for specified SFA purposes, with a detailed inclusive list and interpretive definitions.
- Regulation 3: Defines “affairs” for non-corporate “relevant entities,” again for specified SFA purposes, with an inclusive list tailored to entities and trust trustees.
- Regulation 4: Revocation of prior subsidiary legislation (details not included in the extract).
Who Does This Legislation Apply To?
The Regulations apply indirectly to parties subject to the Securities and Futures Act. They do not create a standalone licensing or conduct regime. Instead, they determine what “affairs” means when applying particular SFA provisions listed in Regulations 2 and 3.
For business trusts, the definition captures matters involving the trustee acting in its capacity as trustee, unit holders and their rights, and the trustee’s conduct and dealings—especially during insolvency, judicial management, compromises/arrangements, repayment arrangements, bankruptcy, and winding up/dissolution. For non-corporate entities, it captures the commercial, financial, property, liability, governance, and trust-beneficiary aspects of the relevant entity, including during insolvency or repayment/winding-up processes.
Why Is This Legislation Important?
Although the Regulations are definitional, they can be highly consequential in practice. In SFA-related matters, the breadth of “affairs” affects what information can be sought, what conduct can be scrutinised, and how regulators frame their analysis. By explicitly including insolvency and administration scenarios, the Regulations ensure that “affairs” is not artificially narrowed when a trustee or entity is under financial distress.
For practitioners, the Regulations are particularly useful when dealing with:
- Regulatory investigations and information-gathering: The inclusion of audit working papers and reports supports a broader evidential scope.
- Disputes involving unit holders and control: The explicit treatment of voting and disposal rights, and identification of persons with financial interest or influence, helps structure arguments about control, accountability, and entitlement.
- Insolvency and restructuring coordination: By capturing acts and conduct during receivership, judicial management, compromises/arrangements, repayment arrangements, bankruptcy, and winding up, the Regulations reduce uncertainty about whether certain historical or administrator-mediated transactions fall within “affairs.”
Finally, the Regulations promote consistency across different legal forms. Business trusts operate through trustees and trust property rather than corporate shareholding. Non-corporate entities may include persons and structures that do not fit neatly into corporate concepts. The Regulations provide a tailored, inclusive definition that aligns the SFA’s “affairs” references with the realities of trust and non-corporate governance.
Related Legislation
- Securities and Futures Act (Cap. 289) — sections referenced in Regulations 2 and 3 (including sections 251, 272A, 275, and 330)
- Business Trusts Act (Cap. 31A) — definition of “trust property”
- Companies Act (Cap. 50) — section 210 compromise or arrangement referenced in Regulation 2(1)(e)(iii)
- Futures Act — listed in the provided metadata (relevance not shown in the extract)
Source Documents
This article provides an overview of the Securities and Futures (Affairs of Business Trust and Affairs of Entity) Regulations 2018 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.