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
- Type: Subsidiary legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting authority: Monetary Authority of Singapore (MAS)
- Enacting formula (power source): Made under section 249(3), read with sections 302(1) and 305B(4), and section 337(1) of the Securities and Futures Act
- Citation and commencement: Commenced on 15 March 2011
- Legislative instrument number: SL 149/2011
- Key provisions: Section 1 (citation/commencement), Section 2 (definitions), Section 3 (exemption from expert’s consent requirement)
- Related legislation (as referenced): Securities and Futures (Offers of Investments) (Collective Investment Schemes) Regulations 2005 (“principal Regulations”)
- Related Act provisions (as referenced): Securities and Futures Act, including section 249(1), sections 302(1), 305B(4), and related liability provisions in sections 253 and 254
What Is This Legislation About?
The Securities and Futures Act (SFA) contains a regulatory framework governing offers of investments in Singapore, including offers connected with collective investment schemes (CIS). A recurring compliance issue in securities offerings is the role of “experts” (for example, valuers, auditors, or other professional persons) whose statements may be included in offering documents. In many contexts, the law requires that an expert provide consent before their statement is included, and that the expert may face statutory liability if their statement is relied upon.
This set of Regulations creates a targeted exemption from the expert’s consent requirement for certain CIS-related offering documents that include a “relevant statement”. In plain terms, the Regulations allow CIS offer documents to include certain expert-derived content without obtaining the expert’s formal consent, provided strict conditions are met. The exemption is not blanket: it is limited to CIS unit offers and is designed to preserve investor protection through mandatory disclosures and safeguards.
Practically, the Regulations are most relevant to issuers, managers, trustees, and their advisers who prepare prospectuses, profile statements, and offer information statements for CIS unit offers. They also matter to lawyers reviewing whether the document’s inclusion of expert material triggers consent requirements under the SFA and the principal Regulations.
What Are the Key Provisions?
Section 1 (Citation and commencement) is straightforward. It confirms the Regulations may be cited as the “Securities and Futures (Offers of Investments) (Collective Investment Schemes) (Exemption from Expert’s Consent Requirement) Regulations 2011” and that they came into operation on 15 March 2011.
Section 2 (Definitions) sets the interpretive groundwork. Two definitions are central:
- “principal Regulations” refers to the Securities and Futures (Offers of Investments) (Collective Investment Schemes) Regulations 2005 (G.N. No. S 602/2005). This matters because Section 3 cross-references specific provisions in the principal Regulations and its Seventh Schedule.
- “relevant statement” means a statement purporting to be made by, or to be based on a statement made by, an expert. This definition is broad enough to capture both direct expert statements and statements that are merely based on expert statements.
Section 3 (Exemption from requirement for expert’s consent under section 249(1) of Act) is the operative provision. It provides multiple exemption pathways depending on the type of offering document and the statutory provision being displaced. The exemption applies where:
- the document includes a relevant statement; and
- the document relates to an offer of units in a collective investment scheme; and
- the conditions in Section 3(4) are satisfied.
Section 3(1) addresses a prospectus or profile statement that includes a relevant statement. It states that Section 249(1) of the SFA (read with section 302 of the SFA) will not apply to such a document if the CIS unit offer condition and Section 3(4) conditions are met. In effect, the expert’s consent requirement is switched off for these documents, but only if the conditions are satisfied.
Section 3(2) and Section 3(3) extend the exemption to offer information statements under different parts of the CIS offering regime. These subsections are technical but important for practitioners: they ensure that the exemption can apply not only to prospectuses/profile statements, but also to offer information statements prepared under specific provisions of the SFA and the principal Regulations. Each subsection is framed as a disapplication of particular consent-related requirements, including references to paragraphs 36 and 37 of the Seventh Schedule to the principal Regulations (with express “notwithstanding” language).
The heart of the Regulations is Section 3(4), which sets out the conditions that must be satisfied for the exemption to apply. These conditions can be grouped into four practical categories: (1) the nature and provenance of the relevant statement; (2) the expert’s relationship and incentives; (3) accuracy and reliability; and (4) mandatory disclosures in the offering document.
1) Nature and provenance of the relevant statement (Section 3(4)(a))
- The relevant statement must not be made by the expert in connection with the offer concerned (i.e., the expert is not being engaged to produce an offer-specific statement).
- It must not be made by the expert for the sole benefit of the collective investment scheme concerned.
- It must not relate specifically to the affairs of the collective investment scheme concerned.
This set of requirements is designed to prevent the exemption from being used where the expert has effectively been commissioned to provide offer-specific support. If the expert’s content is tailored to the scheme’s affairs, consent is likely required.
2) Expert independence and lack of conflicts (Section 3(4)(b))
- The persons signing the document must reasonably believe the expert is an expert (i.e., has the relevant professional standing).
- The expert must have no material interest in the success of the issue or sale of the units.
- The expert must not be acting at the instigation of, or by arrangement with the CIS, the manager, the trustee, directors/equivalent persons, or any person with a material interest in the success of the issue or sale.
This is a conflict-of-interest safeguard. It ensures that the exemption is available only where the expert’s statement is not produced through a relationship that could bias the content.
3) Correctness, fairness, and reliance on reliable sources (Section 3(4)(c))
- The relevant statement must be a correct and fair copy of, or a representation of, or an extract from, a statement or information published by a reliable source that the signatories reasonably believe to be reliable.
In other words, the offering document cannot simply paraphrase or distort expert material. It must preserve fidelity to the original published content and rely on sources that are reasonably trusted.
4) Mandatory disclosures and disclaimers (Section 3(4)(d))
Even where consent is exempted, the Regulations require the offering document to include a suite of disclosures wherever the relevant statement appears. These are critical for investor protection and for managing statutory liability risk. The required inclusions include:
- Statement of non-consent and non-liability: a statement that the expert has not consented to the inclusion of the relevant statement for the purposes of the relevant SFA provisions (as applicable), and therefore is not liable for the relevant statement under the statutory liability provisions (sections 253 and 254, as read with the relevant cross-references).
- Any expert disclaimer in relation to reliance on the contents of the relevant statement, to the extent the signatories are reasonably aware of it.
- Verification statement: whether the persons signing the document have verified the accuracy of the relevant statement’s contents.
- Proper form and context statement: whether the signatories have included the relevant statement in its proper form and context.
- Proper citation identifying the source and location within the source, including (where available) author/editor names, title, publication date and revision dates, and if the source is an internet website, the URL and version date.
These disclosure requirements are often the most operationally demanding part of compliance. They require document drafting discipline and evidence of the signatories’ reasonable beliefs and verification processes.
How Is This Legislation Structured?
The Regulations are concise and structured as follows:
- Section 1: Citation and commencement (15 March 2011).
- Section 2: Definitions, including “principal Regulations” and “relevant statement”.
- Section 3: The exemption mechanism, with:
- Subsections (1)–(3) specifying which consent-related requirements are disapplied for different CIS offering document types (prospectus/profile statements and offer information statements under specified provisions).
- Subsection (4) setting out the common conditions that must be satisfied for the exemption to apply, including expert independence, statement provenance, accuracy, and mandatory disclosures.
Because the Regulations are cross-referential, practitioners must read Section 3 alongside the relevant provisions of the SFA and the principal Regulations (including the Seventh Schedule) to understand the exact consent and liability framework being displaced.
Who Does This Legislation Apply To?
The Regulations apply to parties involved in preparing and signing CIS offering documents that include statements attributable to, or based on statements made by, an expert. The exemption is relevant to the persons signing the prospectus, profile statement, or offer information statement, and to the CIS’s offering process generally.
In practice, this includes CIS managers, trustees, directors/equivalent persons, and their legal and compliance advisers. The exemption is limited to offers of units in a collective investment scheme. It does not generally apply to other types of securities offerings outside the CIS framework, and it does not apply unless the document includes a “relevant statement” as defined.
Why Is This Legislation Important?
This Regulations instrument is important because it provides a pragmatic compliance pathway for CIS offerings that include expert-derived information without requiring the expert’s formal consent—provided the expert’s involvement is sufficiently indirect and the document contains robust investor-facing disclosures.
From a legal risk perspective, the Regulations strike a balance. They reduce administrative friction (consent collection can be time-consuming and may be impracticable where the “expert statement” is actually a reproduction of previously published material). However, they also impose strict conditions designed to prevent the exemption from being used to circumvent consent where the expert has been engaged for the offer or where conflicts exist.
For practitioners, the key takeaway is that compliance is not merely a drafting exercise. The signatories must be able to demonstrate (i) the relevant statement’s provenance (not offer-specific, not scheme-specific, and derived from reliable sources), (ii) the expert’s independence (no material interest and no arrangement with the scheme or its key persons), and (iii) that the required disclaimers, verification/context statements, and detailed citations are included wherever the relevant statement appears. Failure to meet these conditions could mean the exemption does not apply, exposing the offering document to consent-related non-compliance and potentially triggering statutory liability consequences.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular sections 249(1), 302(1), 305B(4), and liability provisions in sections 253 and 254 (as cross-referenced)
- Securities and Futures (Offers of Investments) (Collective Investment Schemes) Regulations 2005 (G.N. No. S 602/2005) — the “principal Regulations”, including the Seventh Schedule (paragraphs 36 and 37) and relevant offer information statement provisions
- Futures Act (mentioned in the provided metadata as related legislation; not directly evidenced in the extract)
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.