Statute Details
- Title: Variable Capital Companies (Application of Bankruptcy Act Provisions) Regulations 2020
- Full Title: Variable Capital Companies (Application of Bankruptcy Act Provisions) Regulations 2020
- Act Code: VCCA2018-S21-2020
- Type: Subsidiary Legislation
- Commencement Date: 14 January 2020
- Parts: Part 1: PRELIMINARY, Part 2: APPLICATION OF BANKRUPTCY ACT PROVISIONS TO WINDING UP OF VCC, Part 3: APPLICATION OF BANKRUPTCY ACT PROVISIONS TO WINDING UP OF SUB-FUND
- Key Sections: Sections 2-16
- Related Legislation: Bankruptcy Act, Variable Capital Companies Act 2018
What Is This Legislation About?
The Variable Capital Companies (Application of Bankruptcy Act Provisions) Regulations 2020 are subsidiary legislation made under the Variable Capital Companies Act 2018. They govern the application of certain provisions from the Bankruptcy Act to the winding up of variable capital companies (VCCs) and their sub-funds.
VCCs are a new corporate structure introduced in Singapore that allows for the establishment of investment funds with variable capital. This means the share capital of a VCC can fluctuate as investors buy and redeem shares. The Variable Capital Companies Act 2018 provides the legal framework for setting up and operating VCCs.
These Regulations specify how provisions from the Bankruptcy Act, such as those dealing with antecedent transactions and transactions at an undervalue, will apply in the context of VCC winding ups. This is important because the winding up of a VCC or its sub-fund has some unique features compared to the winding up of a regular company.
What Are the Key Provisions?
The key provisions of the Variable Capital Companies (Application of Bankruptcy Act Provisions) Regulations 2020 are:
Part 2: Application of Bankruptcy Act Provisions to Winding Up of VCC
- Sections 2-8: These sections modify how certain Bankruptcy Act provisions (sections 98, 99, 100, 102 and 103) apply to the winding up of a VCC. For example, they clarify who is considered a "person connected with the VCC" for the purposes of those sections.
- Section 4: This section specifies how the Bankruptcy Act's provisions on antecedent transactions will apply when an umbrella VCC enters winding up for the purpose of one of its sub-funds.
- Section 5: This section defines when a person will be considered an "associate" of a VCC sub-fund for the purposes of the Bankruptcy Act provisions.
- Sections 6-7: These sections clarify the scope of the court's powers under sections 98 and 99 of the Bankruptcy Act when applied to VCC winding ups.
- Section 8: This section provides that references to the "Official Assignee" in the Bankruptcy Act provisions shall be read as references to the liquidator of the VCC.
Part 3: Application of Bankruptcy Act Provisions to Winding Up of Sub-Fund
- Sections 10-16: These sections contain similar modifications to how the Bankruptcy Act provisions will apply when a sub-fund of a VCC enters winding up, as opposed to the winding up of the entire VCC.
How Is This Legislation Structured?
The Variable Capital Companies (Application of Bankruptcy Act Provisions) Regulations 2020 are divided into three main parts:
Part 1: Preliminary - This part contains only one section, which provides the citation and commencement date of the Regulations.
Part 2: Application of Bankruptcy Act Provisions to Winding Up of VCC - This part sets out how various provisions of the Bankruptcy Act will be modified and applied when a VCC enters winding up.
Part 3: Application of Bankruptcy Act Provisions to Winding Up of Sub-Fund - This part contains similar modifications for when a sub-fund of a VCC (rather than the entire VCC) enters winding up.
Who Does This Legislation Apply To?
These Regulations apply to the winding up of variable capital companies (VCCs) and their sub-funds in Singapore. VCCs are a new corporate structure introduced by the Variable Capital Companies Act 2018 to facilitate the establishment of investment funds with variable capital.
The Regulations specify how certain provisions of the Bankruptcy Act will be modified and applied in the context of VCC and sub-fund winding ups. This is necessary because the winding up of a VCC or sub-fund has some unique features compared to the winding up of a regular company.
Why Is This Legislation Important?
The Variable Capital Companies (Application of Bankruptcy Act Provisions) Regulations 2020 are an important piece of legislation for anyone involved in the establishment, management, or winding up of VCCs and their sub-funds in Singapore.
They provide clarity on how the Bankruptcy Act's provisions on antecedent transactions, transactions at an undervalue, and other related matters will be applied and modified in the VCC context. This is crucial because the winding up of a VCC or sub-fund can involve complex issues that are not present in the winding up of a regular company.
By specifying these modifications upfront, the Regulations help to ensure a smooth and consistent application of the relevant Bankruptcy Act provisions when a VCC or sub-fund enters winding up. This benefits VCC managers, investors, creditors, and other stakeholders by providing greater legal certainty and predictability.
Ultimately, these Regulations play an important role in supporting the development of Singapore's VCC framework as a competitive and well-regulated structure for investment funds.
Related Legislation
- Bankruptcy Act
- Variable Capital Companies Act 2018
Source Documents
This article provides an overview of the Variable Capital Companies (Application of Bankruptcy Act Provisions) Regulations 2020 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.