Statute Details
- Title: Securities and Futures (Offers of Investments) (Collective Investment Schemes) (Exemption from Expert’s Consent Requirement) Regulations 2011
- Act Code: SFA2001-S149-2011
- Legislation Type: Subsidiary legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289) (“SFA”)
- Enacting Formula (key powers): Made by the Monetary Authority of Singapore (MAS) under section 249(3), read with sections 302(1) and 305B(4), and section 337(1) of the SFA
- Commencement: 15 March 2011
- Key Provisions:
- Section 1: Citation and commencement
- Section 2: Definitions (including “principal Regulations” and “relevant statement”)
- Section 3: Exemption from the expert’s consent requirement under section 249(1) of the SFA (and related consent/requirements in the principal Regulations and Seventh Schedule)
- Related Legislation: Securities and Futures (Offers of Investments) (Collective Investment Schemes) Regulations 2005 (G.N. No. S 602/2005) (“principal Regulations”); also references to the SFA and its provisions on liability for expert statements
What Is This Legislation About?
The Securities and Futures (Offers of Investments) (Collective Investment Schemes) (Exemption from Expert’s Consent Requirement) Regulations 2011 (“Expert’s Consent Exemption Regulations”) create a targeted exemption from a general rule in the Securities and Futures Act. In broad terms, the SFA contains requirements relating to the inclusion of “expert” statements in offering documents (such as prospectuses, profile statements, and certain offer information statements). Typically, where an offering document includes a statement made by (or based on a statement made by) an expert, the expert’s consent may be required, and the expert may face statutory liability if the statement is included without appropriate safeguards.
This subsidiary legislation allows certain collective investment scheme offering documents to include “relevant statements” without obtaining the expert’s consent—provided specific conditions are met. The policy objective is to balance investor protection with practical market realities. In many collective investment scheme offerings, documents may include factual or analytical material drawn from reliable external sources (for example, published research, official statistics, or industry reports). The exemption recognises that not every such inclusion needs a formal consent process, especially where the expert is not acting for the scheme and the statement is not tailored to the scheme’s affairs.
Importantly, the exemption is not a blanket waiver. It is limited to offers of units in a collective investment scheme and is conditioned on how the relevant statement is sourced, the expert’s relationship to the offer, and the inclusion of clear disclaimers and verification statements in the offering document.
What Are the Key Provisions?
1. Definitions and the scope of “relevant statement”. Section 2 defines two key terms. First, “principal Regulations” refers to the Securities and Futures (Offers of Investments) (Collective Investment Schemes) Regulations 2005. Second, “relevant statement” means a statement purporting to be made by, or to be based on a statement made by, an expert. This definition is crucial because the exemption turns on whether the offering document includes a “relevant statement”. The wording captures both direct expert statements and statements presented as being based on expert input.
2. The core exemption for prospectuses and profile statements. Section 3(1) provides that section 249(1) of the SFA (read with section 302 of the SFA) does not apply to a prospectus or profile statement that includes a relevant statement, if (a) the document relates to an offer of units in a collective investment scheme, and (b) the conditions in section 3(4) are satisfied. In practical terms, this means the statutory expert-consent requirement is lifted for qualifying collective investment scheme offerings, even though the document contains an expert-linked statement.
3. Parallel exemptions for offer information statements under the principal Regulations and Seventh Schedule. Section 3(2) and (3) extend the exemption beyond prospectuses and profile statements. They address offer information statements under section 305B(1) of the SFA and under regulation 36(1) of the principal Regulations, respectively. The provisions contain cross-references and “notwithstanding” language to ensure that certain consent-related requirements in the principal Regulations and the Seventh Schedule do not apply where the conditions are met. For practitioners, this is a signal that MAS intended the exemption to operate consistently across different document types used in collective investment scheme offers.
4. The conditions that must be satisfied (the heart of the exemption). Section 3(4) sets out four categories of conditions. Each category is designed to ensure that the exemption is used only where investor risk is controlled and the expert is not effectively endorsing the scheme.
(a) Conditions relating to the relevant statement itself. The relevant statement must not be made by the expert in connection with the specific offer; it must not be made for the sole benefit of the collective investment scheme concerned; and it must not relate specifically to the affairs of the collective investment scheme concerned. These requirements are intended to prevent the exemption from being used where the expert has effectively tailored analysis or commentary to the scheme’s particulars. The exemption is therefore aimed at statements that are general in nature and not bespoke to the scheme.
(b) Conditions relating to the expert’s relationship and incentives. The expert must be a person whom the signatories to the offering document reasonably believe to be an expert, but with no material interest in the success of the issue or sale of the units. The expert must also not be acting at the instigation of, or by arrangement with, the collective investment scheme, its manager, trustee, directors (or equivalent persons), or any person with a material interest in the success of the issue or sale. This condition is a key investor-protection safeguard: it reduces the risk that the “expert” is effectively a paid or incentivised participant in the offering.
(c) Conditions relating to sourcing and reliability. The relevant statement must be a correct and fair copy or representation of, or an extract from, a statement made or information published by a reliable source that the signatories reasonably believe to be reliable. This requirement ties the exemption to a “reliable source” model and emphasises accuracy and fairness. It also implies that signatories should conduct a reasonable diligence exercise to confirm that the extracted or represented content is faithful to the original.
(d) Mandatory disclosures and disclaimers in the offering document. Wherever the relevant statement appears, the offering document must include a set of specific statements. These include: (i) a statement that the expert has not consented to the inclusion of the relevant statement for the purposes of the relevant SFA provisions and is therefore not liable for the relevant statement under specified liability provisions; (ii) any disclaimer made by the expert in relation to reliance on the contents (to the extent the signatories are reasonably aware of it); (iii) a statement as to whether the signatories have verified the accuracy of the relevant statement; (iv) a statement as to whether the signatories have included the relevant statement in its proper form and context; and (v) a proper citation identifying the source and location within the source, including author/editor, title, publication date and revision dates, and—where available—URL and version date for internet sources.
For practitioners, the disclosure package is not optional. The exemption’s effectiveness depends on these document-level safeguards. In practice, counsel should treat these as drafting and compliance checklist items: citation formatting, version control for online sources, and explicit verification/context statements should be built into the document preparation workflow.
How Is This Legislation Structured?
The Expert’s Consent Exemption Regulations are concise and structured around three operative provisions. Section 1 covers citation and commencement. Section 2 provides definitions, including the reference to the “principal Regulations” and the key concept of a “relevant statement”. Section 3 is the substantive provision and is divided into multiple subsections: subsections (1)–(3) establish the exemption for different types of offering documents (prospectus/profile statement and various offer information statements), while subsection (4) sets out the conditions that must be satisfied for the exemption to apply.
From a legal drafting perspective, the structure is designed to be applied as a compliance test. A practitioner can map the document type to the relevant subsection, then verify each condition in section 3(4), and finally ensure the mandatory disclosure elements are included wherever the relevant statement appears.
Who Does This Legislation Apply To?
The regulations apply to offers of units in a collective investment scheme where offering documents include a “relevant statement” (as defined). The exemption is relevant to the persons responsible for preparing and signing the offering documents—typically the signatories to the prospectus, profile statement, or offer information statement. The conditions in section 3(4) repeatedly refer to what those persons “reasonably believe” and what they have verified, indicating that signatories carry a compliance responsibility.
While the regulations are framed as an exemption from statutory requirements, their practical effect is to govern how collective investment scheme offering documents may be drafted when they contain expert-linked material. The exemption is not limited by the identity of the expert; rather, it is limited by the expert’s relationship to the offering and the nature and sourcing of the statement.
Why Is This Legislation Important?
This legislation matters because it directly affects the regulatory mechanics of collective investment scheme fundraising. Expert consent requirements can be time-consuming and may be difficult to obtain where the “expert” material is drawn from published sources rather than commissioned reports. By carving out a controlled exemption, MAS enables issuers and their advisers to include relevant expert-linked content without triggering consent requirements—provided the conditions are met.
From an investor-protection standpoint, the regulations are equally significant. The exemption is conditioned on the expert not being engaged for the scheme, the statement not being tailored to the scheme’s affairs, and the expert not having a material interest. Additionally, the mandatory disclaimers and citations ensure that investors are informed that the expert has not consented and that the signatories have addressed verification, form, and context. This transparency is designed to preserve the informational value of expert-linked statements while reducing the risk of misleading reliance.
For practitioners, the key practical impact is compliance discipline. Counsel should implement a structured review process for any offering document that includes expert-referenced material: determine whether the content qualifies as a “relevant statement”; assess whether the statement is general and sourced from reliable publications; confirm the expert’s lack of material interest and lack of instigation/arrangement; and ensure the document contains the full set of required disclosures and accurate citations (including internet version details where applicable). Failure to satisfy any condition may mean the exemption does not apply, potentially exposing the offering document to regulatory issues and creating liability risk under the SFA’s expert statement provisions.
Related Legislation
- Securities and Futures Act (Cap. 289): In particular section 249(1) (expert consent requirement), section 302(1) (as referenced), section 305B(4) (as referenced), and the liability provisions referenced in section 3(4)(d)(i) (sections 253 and 254, as read with the relevant cross-references).
- Securities and Futures (Offers of Investments) (Collective Investment Schemes) Regulations 2005 (G.N. No. S 602/2005) (“principal Regulations”), including regulation 34(1), regulation 36(1) and regulation 36(3), and the Seventh Schedule (paragraphs 36 and 37) as referenced.
Source Documents
This article provides an overview of the Securities and Futures (Offers of Investments) (Collective Investment Schemes) (Exemption from Expert’s Consent Requirement) Regulations 2011 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.