Statute Details
- Title: Securities and Futures (Offers of Investments) (Exemption for SMP Share Purchase Plan) Regulations 2006
- Act Code: SFA2001-S344-2006
- Legislation Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289) (“SFA”)
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Legal Basis: Made under section 337(1) of the SFA
- Citation and Commencement: Comes into operation on 16 June 2006
- Key Provisions:
- Regulation 1: Citation and commencement
- Regulation 2: Definition of “SMP Share Purchase Plan”
- Regulation 3: Exemption and conditions
- Current Version: Current version as at 27 Mar 2026
- Notable Amendment: Amended by S 632/2018 with effect from 8 Oct 2018
What Is This Legislation About?
The Securities and Futures (Offers of Investments) (Exemption for SMP Share Purchase Plan) Regulations 2006 (“SMP Exemption Regulations”) is a targeted set of subsidiary regulations made under the Securities and Futures Act. In plain terms, it creates a specific regulatory exemption for a particular employee share purchase plan—namely, the “SMP Share Purchase Plan”—administered in connection with Chartered Semiconductor Manufacturing Ltd. and Silicon Manufacturing Partners Pte. Ltd.
Under the Securities and Futures Act, offers of investments to the public (and certain offers to specific groups) are generally subject to licensing, prospectus, disclosure, and other investor-protection requirements. However, the law also recognises that some offers—particularly those that are limited, employee-focused, and structured in a way that does not create the same risks as public fundraising—may be exempted from certain procedural requirements.
This legislation does not create a new employee share scheme. Instead, it provides a narrow exemption from specified provisions in the SFA for the offer of securities or securities-based derivatives contracts to employees of Silicon Manufacturing Partners Pte. Ltd. under the SMP Share Purchase Plan. The exemption is conditional, reflecting MAS’s approach: exemptions are granted only where the offer is unlikely to be used to circumvent investor protection rules.
What Are the Key Provisions?
Regulation 1 (Citation and commencement) is straightforward. It states that the Regulations may be cited as the SMP Exemption Regulations 2006 and that they come into operation on 16 June 2006. For practitioners, this matters mainly for determining the regulatory regime applicable to offers made around that date.
Regulation 2 (Definition) defines “SMP Share Purchase Plan” as the Chartered Semiconductor Manufacturing Ltd. Share Purchase Plan 2004 for employees of Silicon Manufacturing Partners Pte. Ltd. This definition is critical because the exemption in Regulation 3 is tied to this specific plan. If an employer or group runs a different plan (even if similar in concept), the exemption may not apply unless it falls within the defined plan.
Regulation 3 (Exemption) is the heart of the Regulations. Under Regulation 3(1), Chartered Semiconductor Manufacturing Ltd. is exempted from Subdivision (2) of Division 1 of Part XIII of the SFA (other than section 257) in respect of its offer of securities or securities-based derivatives contracts to employees of Silicon Manufacturing Partners Pte. Ltd. under the SMP Share Purchase Plan.
In practical terms, this means that certain statutory requirements in Part XIII—relating to offers of investments—do not apply to this particular employee offer, subject to the conditions in Regulation 3(2). The carve-out “other than section 257” indicates that not all provisions in that subdivision are removed; section 257 remains applicable. A lawyer advising on compliance should therefore not assume that the entire Part XIII regime is displaced—only the specified subdivision is exempted, and section 257 continues to operate.
Regulation 3(2) (Conditions) imposes two main conditions, both of which must be satisfied for the exemption to apply.
Condition (a): restrictions on selling or promotional expenses. The exemption is conditional on the rule that no selling or promotional expenses are to be paid or incurred in connection with the offer, other than expenses incurred for administrative or professional services, or by way of commission or fee for services rendered by either:
- (i) a holder of a capital markets services licence to deal in capital markets products that are securities or securities-based derivatives contracts; or
- (ii) an exempt person in respect of dealing in capital markets products that are securities or securities-based derivatives contracts.
This condition is designed to prevent the employee offer from being marketed or promoted in a way that resembles a public solicitation. It also ensures that any dealing-related remuneration is paid only to appropriately authorised (or exempt) intermediaries. The 2018 amendment (S 632/2018 effective 8 Oct 2018) refined the wording to align with the capital markets licensing framework and the categories of persons permitted to receive dealing commissions or fees.
Condition (b): corporate shareholding link. The exemption is also conditional on Chartered Semiconductor Manufacturing Ltd. holding at least 49% of the shares in Silicon Manufacturing Partners Pte. Ltd. This requirement ensures that the employee offer is connected to a sufficiently close corporate relationship between the offering company and the employer entity. It reduces the risk that unrelated third parties could use the exemption to structure employee-like offers without the underlying group linkage that justifies regulatory relief.
How Is This Legislation Structured?
The Regulations are compact and consist of an enacting formula followed by three substantive provisions:
- Regulation 1: sets out the citation and commencement date.
- Regulation 2: defines the scope term “SMP Share Purchase Plan” by reference to a specific plan and specific employee group.
- Regulation 3: provides the exemption and sets out the conditions that must be met.
There are no additional parts or schedules in the extract provided, reflecting the Regulations’ purpose: to grant a narrow, plan-specific exemption rather than to establish a broad regulatory framework.
Who Does This Legislation Apply To?
Although the exemption is framed as applying to an “offer” made by a particular company, the practical beneficiaries and compliance stakeholders are identifiable.
Primary regulated party: Chartered Semiconductor Manufacturing Ltd. The exemption is granted to this company in respect of its offer of securities or securities-based derivatives contracts to employees of Silicon Manufacturing Partners Pte. Ltd. under the SMP Share Purchase Plan.
Employee group: employees of Silicon Manufacturing Partners Pte. Ltd. The exemption is specifically tied to offers made to these employees under the defined plan. If the plan is extended to other employee groups or restructured such that the defined plan no longer matches the “SMP Share Purchase Plan” definition, the exemption may not cover those offers.
Intermediaries and service providers: while not directly named as “regulated persons,” the conditions in Regulation 3(2)(a) indirectly regulate who may receive commissions or fees for dealing-related services. Only a licensed capital markets services dealer (for relevant dealing activities) or an exempt person for dealing in relevant capital markets products may receive such commission/fees.
Why Is This Legislation Important?
This legislation is important because it illustrates how Singapore’s securities regulatory framework balances investor protection with practical flexibility for employee share schemes. Employee share purchase plans can be beneficial for retention and alignment of interests, but they still involve offers of securities. The SMP Exemption Regulations provide a mechanism to relieve certain statutory requirements where the offer is structured in a way that reduces the need for the full investor-protection process.
For practitioners, the key significance lies in the precision of the exemption. It is not a general exemption for all employee share plans. It is tied to:
- a specific named plan (Share Purchase Plan 2004),
- a specific employee employer (Silicon Manufacturing Partners Pte. Ltd.),
- a specific offering company (Chartered Semiconductor Manufacturing Ltd.), and
- specific conditions (no selling/promotional expenses beyond permitted categories; and at least 49% shareholding).
From an enforcement and compliance perspective, the conditions create clear audit points. Counsel advising on ongoing administration should ensure that:
- expenses incurred in connection with the offer are properly classified and documented to show they are limited to administrative/professional services or permitted commissions/fees;
- any dealing-related commissions/fees are paid only to persons falling within the licensed or exempt categories described in Regulation 3(2)(a); and
- the 49% shareholding threshold is maintained throughout the relevant period (or that the exemption is reconsidered if corporate ownership changes).
Finally, the exemption’s interaction with section 257 is a practical compliance trap. Because Regulation 3 exempts the company from Subdivision (2) of Division 1 of Part XIII “other than section 257,” lawyers must check whether section 257 imposes continuing obligations that still apply to the offer. In other words, the exemption is not necessarily a complete “free pass” from all Part XIII requirements.
Related Legislation
- Securities and Futures Act (Cap. 289) — particularly Part XIII (Offers of Investments) and section 337(1) (power to make exemptions)
- Futures Act — relevant where securities-based derivatives contracts are involved (depending on the classification of the instruments offered)
- Timeline — for confirming the applicable version (notably the amendment by S 632/2018 effective 8 Oct 2018)
Source Documents
This article provides an overview of the Securities and Futures (Offers of Investments) (Exemption for SMP Share Purchase Plan) Regulations 2006 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.