Statute Details
- Title: Variable Capital Companies (Dissolution of Sub-funds and Striking Off of VCCs' Names) Regulations 2020
- Full Title: Variable Capital Companies (Dissolution of Sub-funds and Striking Off of VCCs' Names) Regulations 2020
- Act Code: VCCA2018-S28-2020
- Type: Subsidiary Legislation (sl)
- Commencement Date: 14 January 2020
- Parts: Part 1: PRELIMINARY
- Key Sections: Section 2: Definitions
- Related Legislation: Companies Act, Variable Capital Companies Act 2018
What Is This Legislation About?
The Variable Capital Companies (Dissolution of Sub-funds and Striking Off of VCCs' Names) Regulations 2020 provide the legal framework for the dissolution of sub-funds within a variable capital company (VCC) and the striking off of a VCC's name from the register of VCCs. This legislation is a crucial component of the regulatory regime governing VCCs in Singapore, which were introduced under the Variable Capital Companies Act 2018 to provide a new corporate structure for investment funds.
The Regulations set out the grounds and conditions under which an umbrella VCC can apply to have a sub-fund dissolved, as well as the process for objecting to such a dissolution. They also outline the circumstances in which a VCC can apply to have its name struck off the register, and the procedures for objecting to a striking off. These provisions are designed to ensure an orderly and transparent process for winding down VCC structures when necessary.
What Are the Key Provisions?
The key provisions of the Regulations are as follows:
Dissolution of Sub-funds (Part 2)
Section 3 sets out the grounds and conditions under which an umbrella VCC can apply to the Registrar to have a sub-fund declared dissolved. These include situations where the sub-fund has no assets or liabilities, the umbrella VCC has ceased to carry on business in respect of the sub-fund, or the sub-fund is being wound up. The Registrar must be satisfied that the dissolution would not unfairly prejudice the interests of the sub-fund's shareholders.
Section 4 requires the Registrar to give notice to the sub-fund's shareholders and creditors, providing a prescribed period (not less than 28 days) for them to show cause why the sub-fund should not be dissolved. Section 5 prescribes the form that a notice of objection to the dissolution must take.
Section 6 outlines the factors the Registrar must consider in deciding whether to allow an objection to the dissolution, including the reasons for the objection, the interests of the sub-fund's shareholders and creditors, and any regulatory action that may be taken against the umbrella VCC on account of the sub-fund.
Striking Off of VCCs (Part 3)
Section 7 sets out the grounds and conditions under which a VCC can apply to the Registrar to have its name struck off the register of VCCs. These include situations where the VCC has ceased to carry on business, has no assets or liabilities, or is being wound up. The Registrar must be satisfied that the striking off would not unfairly prejudice the interests of the VCC's shareholders or creditors.
Section 8 requires the Registrar to give notice to the VCC's shareholders and creditors, providing a prescribed period (not less than 28 days) for them to show cause why the VCC's name should not be struck off. Section 9 prescribes the form that a notice of objection to the striking off must take.
Section 10 outlines the factors the Registrar must consider in deciding whether to allow an objection to the striking off, including the reasons for the objection, the interests of the VCC's shareholders and creditors, and any regulatory action that may be taken against the VCC.
Section 11 sets out the conditions for applications for the administrative restoration of a VCC's name to the register, including the requirement to pay any outstanding fees or penalties.
How Is This Legislation Structured?
The Regulations are divided into three main parts:
Part 1: Preliminary
This part includes the citation, commencement, and definitions provisions. The key definition is that of "regulatory action", which is important for understanding the Registrar's considerations in deciding whether to allow objections to the dissolution of sub-funds or the striking off of VCCs.
Part 2: Dissolution of Sub-fund
This part outlines the grounds and conditions for an umbrella VCC to apply for the dissolution of a sub-fund, the process for giving notice and considering objections, and the factors the Registrar must take into account in deciding whether to allow an objection.
Part 3: Striking Off of VCC's Name
This part sets out the grounds and conditions for a VCC to apply to have its name struck off the register, the process for giving notice and considering objections, the factors the Registrar must consider in deciding whether to allow an objection, and the conditions for administrative restoration of a VCC's name.
Who Does This Legislation Apply To?
The Regulations apply to umbrella VCCs seeking to dissolve sub-funds, as well as VCCs seeking to have their names struck off the register. They also provide protections for the shareholders and creditors of these entities, who must be given notice and an opportunity to object to the proposed dissolutions or striking offs.
The Regulations are an important part of the regulatory framework for VCCs in Singapore, which was introduced to provide a new corporate structure for investment funds. They ensure that the winding down of VCC structures is done in an orderly and transparent manner, with appropriate safeguards for stakeholders.
Why Is This Legislation Important?
The Variable Capital Companies (Dissolution of Sub-funds and Striking Off of VCCs' Names) Regulations 2020 play a crucial role in the effective regulation and governance of VCCs in Singapore. They provide a clear and consistent process for the dissolution of sub-funds and the striking off of VCCs' names from the register, ensuring that these actions are carried out in a fair and transparent manner.
The Regulations are particularly important in protecting the interests of VCC shareholders and creditors, who must be given adequate notice and an opportunity to object to proposed dissolutions or striking offs. This helps to safeguard against any unfair or prejudicial actions that could harm these stakeholders.
Moreover, the Regulations' consideration of potential regulatory action against VCCs or umbrella VCCs further strengthens the overall regulatory framework for these investment vehicles. By requiring the Registrar to take such actions into account, the Regulations help to ensure that the dissolution or striking off of VCC structures does not undermine the broader regulatory objectives for the VCC regime.
Overall, the Variable Capital Companies (Dissolution of Sub-funds and Striking Off of VCCs' Names) Regulations 2020 are a crucial component of the legal and regulatory infrastructure supporting the development of VCCs in Singapore as a new and innovative corporate structure for investment funds.
Related Legislation
- Companies Act
- Variable Capital Companies Act 2018
Source Documents
This article provides an overview of the Variable Capital Companies (Dissolution of Sub-funds and Striking Off of VCCs’ Names) Regulations 2020 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.