Under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA), a person can be found guilty of an offence if they enter into an arrangement knowing or having reasonable grounds to believe that it facilitates the retention or control of another person’s benefits from criminal conduct. In this scenario, the combination of an urgent, out-of-character instruction and a request to send funds to a new, unverified account constitutes ‘reasonable grounds to believe’ or at least be suspicious that something is amiss. By consciously bypassing the mandatory call-back verification—a key internal control designed to mitigate such risks—the representative’s actions could be interpreted as facilitating the fraud. This goes beyond a mere internal policy breach and falls within the scope of money laundering offences under the CDSA. The other options are incorrect because liability is not limited to internal sanctions, individuals can be held personally liable, and the act of facilitating the flow of criminal funds is itself an offence under the CDSA, regardless of whether the representative personally benefited.

The Singapore Code on Take-overs and Mergers, which is administered by the Securities Industry Council (SIC), mandates a general offer under specific circumstances to ensure fair treatment of all shareholders. One key trigger is when a person, or a group of persons acting in concert, acquires shares that result in them holding 30% or more of the voting rights in a company. In this scenario, Phoenix Capital and Dragon Equity are defined as ‘persons acting in concert,’ meaning their shareholdings are aggregated for the purposes of the Code. Phoenix Capital already holds 29.8% of the voting rights. Therefore, any acquisition by either party that brings their combined holding to the 30% threshold will trigger the mandatory offer obligation. An acquisition of 0.2% by Dragon Equity would raise their combined stake to exactly 30% (29.8% + 0.2%), thus compelling them to make a mandatory offer. The other options are incorrect because they either do not reach the 30% threshold or misapply other provisions of the Code, such as the ‘creeping’ provision, which only applies to entities already holding between 30% and 50% of voting rights.

The SGX-ST has established a framework with independent committees to handle listing and disciplinary matters. The Listings Disciplinary Committee (LDC) is specifically tasked with hearing and determining charges brought by SGX-ST against issuers, their directors, and executive officers for contraventions of the Listing Rules. Its powers include imposing sanctions like public reprimands and fines. The Listings Advisory Committee (LAC) is primarily involved in policy-making and reviewing complex listing applications, not post-listing disciplinary actions. The Listings Appeals Committee (LApC) serves as an appellate body for decisions made by the LDC, not as the initial hearing body. Therefore, in a scenario involving a breach of listing rules, the LDC is the designated body to adjudicate the matter and impose appropriate sanctions.

This scenario pertains to Rule 14.1 Note 5 of the Singapore Code on Take-overs and Mergers, which addresses the acquisition of voting rights by one member of a group acting in concert from another. The primary concern for the Securities Industry Council (SIC) in such a situation is not the total holding of the group (which remains unchanged), but the potential shift in the control dynamics within the group. The rule explicitly states that the SIC will consider whether the leader of the concert party has changed and whether the balance between the shareholdings in the group has altered significantly. A substantial transfer of shares from the established leader to another member could effectively change the leadership and control structure, even if the new largest shareholder’s stake is below 30%. This change in the internal balance of power is the critical factor for the SIC when deciding whether to waive the mandatory offer obligation. The other options are incorrect because the total holding of the concert party did not change, the transfer price is a secondary consideration to the issue of control, and a ‘whitewash’ resolution applies to the issuance of new securities, not the transfer of existing shares between concert party members.

Under the SGX-ST Listing Manual for the Catalist, the sponsor-supervised regime places a significant gatekeeping responsibility on the sponsor. The sponsor’s primary duty is to conduct thorough due diligence and be satisfied that the potential issuer is suitable for listing. Suitability is a holistic concept that extends beyond financial viability and growth prospects; it critically includes the adequacy of corporate governance, the experience and integrity of the management, and the robustness of internal controls. If significant deficiencies are found, the sponsor must guide the issuer to rectify them before proceeding with the listing application. Simply disclosing the weaknesses in the offer document is insufficient, as it does not absolve the sponsor of its duty to ensure the company is fundamentally ready for the public market. The sponsor’s role is not merely to facilitate a transaction but to uphold the quality and integrity of the market. Therefore, prioritizing the IPO timeline or fundraising outcome over fundamental governance issues would be a breach of the sponsor’s obligations. The sponsor must work with the company to address the issues to a satisfactory level before endorsing its listing application to the SGX-ST.

Under the Securities and Futures Act (SFA) and the accompanying Securities and Futures (Offer of Investments) (Shares and Debentures) Regulations (SFR), once a prospectus is registered with the Monetary Authority of Singapore (MAS), marketing materials may be distributed. However, they are subject to strict conditions. The material must not contain any information that is false, misleading, or not found within the registered prospectus. Crucially, it must include a specific legend stating where the prospectus can be collected and that applications must be made according to its terms. For advertisements in an audio-visual format, such as a video, Regulation 17 of the SFR explicitly requires this legend to be read audibly. The other options are incorrect. There is no regulatory requirement to restrict advertisements to the company’s website or to simply provide a hyperlink instead of the prescribed legend. The statement that no offer shall be made on the basis of the document is a requirement for a preliminary prospectus circulated *before* registration, not for post-registration marketing. Lastly, while the SGX-ST oversees listing matters, there is no general rule mandating that it must pre-clear all post-registration advertisements; the responsibility for compliance rests with the issuer and its advisors.

This question assesses the procedural requirements for an issuer to transition bonds, initially offered to specified investors, for trading by retail investors under the Seasoning Framework. The correct procedure, as outlined in the SGX-ST Listing Manual, specifically Practice Note 3.2, involves a proactive application to the exchange. The issuer must, five market days prior to the conclusion of the seasoning period, formally request confirmation from SGX-ST that the bonds are suitable for retail trading. This application must be accompanied by an undertaking that the issuer continues to meet the necessary eligibility criteria. It is only after receiving this confirmation from SGX-ST—a decision made at the exchange’s discretion—that the issuer is permitted to proceed. Upon receipt, the issuer has an obligation to immediately disseminate this information to the market via an SGXNET announcement. This announcement must include the confirmation itself, the date retail trading will commence, and the relevant offer documents. The other options describe incorrect procedures. Commencing trading automatically without exchange confirmation is not permitted. Preparing a new full prospectus negates the purpose of the Seasoning Framework, which provides an exemption from such a requirement. While re-denomination is a necessary condition for retail trading, it does not replace the critical step of obtaining and announcing SGX-ST’s confirmation.

According to MAS Notice SFA04-N02, a Capital Markets Services (CMS) licence holder must conduct an enterprise-wide risk assessment (EWRA) to identify and assess its Money Laundering/Terrorism Financing (ML/TF) risks. This assessment must be reviewed at least once every two years or when a material trigger event occurs, whichever is earlier. The acquisition of a new business, especially one that operates in high-risk jurisdictions or introduces new customer segments and delivery channels, constitutes a material trigger event. Therefore, the firm cannot wait for its scheduled two-year review. The appropriate response is to initiate a new, full EWRA to understand the consolidated risk profile of the newly combined entity. This new assessment must be comprehensive, covering all business units and product lines, and its results must be formally documented and approved by senior management. Simply conducting a limited-scope review is insufficient as it fails to assess the integrated risk across the entire enterprise. Waiting for the next scheduled review would leave the firm exposed to unassessed risks, violating the principle of timely risk management. Filing a blanket STR is incorrect as STRs are for specific suspicious activities, not a tool for managing inherent business risk upon acquisition.

This scenario tests the understanding of a Trading Representative’s obligations regarding market manipulation under the Securities and Futures Act (SFA) and SGX-ST Rules. The correct course of action is to exercise professional judgment and skepticism, especially when a client’s trading pattern could create a false or misleading market. Under SGX-ST Rule 13.8, Trading Members and Trading Representatives are explicitly prohibited from engaging in practices that create a false or misleading appearance of active trading or a false market. Crucially, the rule clarifies that while representatives must carry out customer instructions, they should not do so blindly and must exercise judgment in each case. Executing orders that are clearly structured to artificially inflate a stock’s price, even with a client’s stated rationale, could be deemed market manipulation under SFA Section 198. Simply executing the orders, modifying the execution strategy, or documenting the rationale is insufficient. The primary duty is to uphold market integrity. Therefore, the representative must challenge the client’s intent and, if suspicion of manipulation persists, refuse the trade and report the activity to their firm’s compliance department.

The scenario describes an act where a misleading statement is intentionally published to persuade or encourage others to buy securities. This directly aligns with the provisions of Section 200 of the Securities and Futures Act (SFA), which prohibits fraudulently inducing persons to deal in securities. The key elements of this offence are present: the publication of a statement or forecast that is misleading (as it is unverified and speculative), and the clear intent to induce others to transact. The standard for this offence includes recklessness, meaning the firm does not need to know for a fact that the information is false; being reckless as to its truth is sufficient. While the action may also affect the market price (related to SFA Section 199) and could be part of a deceptive scheme (related to SFA Section 201), the most direct and specific violation is the inducement to trade based on misleading information, which is the core focus of SFA Section 200.

According to the SGX Mainboard Rules and the Code of Corporate Governance, a company seeking a primary listing must meet specific requirements regarding its board composition. Firstly, as per the Code of Corporate Governance (Guideline 2.2), if the Chairman of the Board is also the chief executive officer, independent directors must constitute at least half of the board. In this scenario, with a 9-member board, this means the company needs a minimum of 5 independent directors (rounding up from 4.5). Secondly, Rule 221 of the Mainboard Rules stipulates that a foreign issuer must have at least two independent directors who are resident in Singapore. Therefore, to comply, the company must not only increase its number of independent directors to five but also ensure that at least two of them are Singapore residents. The other options are incorrect because they fail to satisfy all applicable requirements. Appointing only three independent directors would not meet the ‘at least half’ requirement of the Code. Separating the Chairman and CEO roles is a governance recommendation but does not in itself resolve the immediate numerical and residency requirements for the independent directors. Simply replacing the existing non-executive directors would only satisfy the residency rule but would leave the board short of the total number of independent directors required by the Code.

According to Section 137G of the Securities and Futures Act (SFA), a listed corporation that has been notified of a change in or cessation of a substantial shareholding must announce this information as soon as practicable, and in any case, no later than the end of the business day following the day on which it was notified. In this scenario, the company was notified on Monday, making the deadline Tuesday. This disclosure obligation is a strict, time-sensitive legal requirement under the SFA and is independent of any ongoing or potential delisting procedures under the SGX-ST Listing Manual. While formulating an exit offer is a requirement for a forced delisting (Listing Manual Rule 1310), it is part of the delisting process itself and does not override the immediate SFA disclosure duty. Requesting a trading suspension is a strategic option, not a primary legal obligation in this context. Waiting for a formal delisting notice from SGX-ST would result in a breach of the SFA’s disclosure timeline, which could lead to criminal or civil penalties.

Under Section 210 of the Companies Act, a scheme of arrangement typically requires approval from a dual threshold: a majority in number of the members present and voting, and those members must represent at least 75% in value of the shares voted. The entire process is also subject to the sanction of the High Court. The scenario describes a situation known as ‘share-splitting’, a tactic where a dissenting bloc transfers small numbers of shares to many friendly parties to defeat the ‘majority in number’ requirement, even if the ‘75% in value’ threshold is met. To address this potential abuse, the Companies Act was amended to provide the High Court with the discretion to approve a scheme even if the ‘majority in number’ test is not met. This allows the Court to consider the substance and fairness of the arrangement and prevent a commercially sensible scheme, supported by a significant majority in value, from being thwarted by such manipulative tactics. Therefore, the company’s recourse is to apply to the High Court, which can exercise its discretion to sanction the scheme. The scheme does not automatically fail, nor is the only alternative a general offer. While the Securities Industry Council (SIC) oversees the Take-over Code, the power to sanction a scheme of arrangement and override the voting technicality in this context rests with the High Court.

According to the MAS Notice SFA 04-N02 on Prevention of Money Laundering and Countering the Financing of Terrorism, a Capital Markets Services (CMS) licence holder is not required to identify the ultimate beneficial owners (UBOs) of a customer if that customer is an investment vehicle managed by a financial institution supervised by MAS. This exemption is based on the principle that the MAS-supervised manager is already subject to stringent AML/CFT regulations, including its own customer due diligence obligations. Therefore, the advisory firm can rely on the regulatory status of the manager and is not obligated to ‘look through’ the investment vehicle to its underlying investors, unless other risk factors or suspicions of money laundering or terrorist financing are present. The other options describe actions that might be necessary in non-exempt situations. Requiring a full UBO list or focusing only on the manager’s directors would either be excessive or misdirected given the specific exemption that applies in this scenario. The standard 25% ownership threshold for UBO identification is superseded by this specific exemption for investment vehicles managed by regulated entities.

The Singapore Code on Take-overs and Mergers, which is administered by the Securities Industry Council (SIC), contains a provision often referred to as the ‘creeper’ rule. This rule applies to any person, along with their concert parties, who holds between 30% and 50% of a company’s voting rights. According to this rule, if such a person acquires additional shares carrying more than 1% of the voting rights within any six-month period, they are obligated to make a mandatory general offer to all other shareholders. In this scenario, Alpha Capital initially holds 35%, placing them within the 30-50% bracket. The acquisitions are aggregated over a rolling six-month period. The total shares acquired would be 0.4% (February) + 0.4% (April) + 0.3% (May) = 1.1%. Since this cumulative acquisition of 1.1% exceeds the 1% threshold within a six-month timeframe, the final 0.3% purchase acts as the trigger, compelling Alpha Capital to make a mandatory offer. The rule does not assess each transaction individually, nor does it wait for the 50% threshold to be crossed; it specifically governs the rate of acquisition for significant shareholders.

Under Chapter 10 of the SGX-ST Listing Manual, a major transaction generally requires the approval of shareholders in a general meeting. However, SGX-ST may grant a waiver under specific circumstances outlined in Practice Note 10.1 (for Mainboard) and Practice Note 10A (for Catalist). A valid basis for seeking a waiver includes situations where a listed issuer proposes to dispose of a non-core asset or a loss-making asset, provided the disposal does not materially alter the issuer’s risk profile. To support this, the application must be accompanied by an opinion from the board of directors to this effect and a confirmation from an independent financial adviser (IFA) that the board’s opinion was made after due and careful enquiry. Conversely, the Listing Manual explicitly states that certain grounds are insufficient for granting a waiver. These include obtaining undertakings from substantial shareholders to vote in favour of the transaction and citing the cost and inconvenience of convening a shareholders’ meeting. The strategic importance of the use of proceeds, while relevant for business strategy, is not a specified criterion for waiving the approval requirement for the disposal itself.

The advisor’s actions fall under the offence of assisting another to retain the benefits of criminal conduct by arrangement. According to the CDSA, a person is guilty of an offence if they enter into or are concerned in an arrangement, knowing or having reasonable grounds to believe that the arrangement facilitates the retention, control, or use of another person’s benefits from criminal conduct. In this scenario, the advisor, despite having reasonable grounds to suspect the illicit origin of the funds, deliberately created a complex transaction structure. This structure is an ‘arrangement’ designed to conceal the source of the funds, thereby facilitating their use in the acquisition. This goes beyond merely possessing the property or failing to report suspicion; it is an active and intentional facilitation. The other options are less accurate: the advisor is not primarily acquiring the property for personal use, and while a failure to disclose has occurred, the more direct and severe offence is the active structuring of the arrangement. Tipping-off is irrelevant as there is no mention of an ongoing investigation being prejudiced.

Under the Securities and Futures Act (SFA), particularly in the context of prospectus liability under Sections 253 and 254, various parties, including the issue manager, can be held liable for false or misleading statements. However, the SFA provides for a ‘due diligence’ defence. The cornerstone of this defence is not about re-performing the work of every expert, but about demonstrating that the person made ‘all inquiries that were reasonable in the circumstances’. After making these reasonable inquiries, the person must also show they had reasonable grounds to believe, and did in fact believe, that the statement was true and not misleading. In this scenario, the issue manager’s defence would hinge on proving their process for selecting and relying on the expert valuer was robust and reasonable. Simply proving the expert was reputable or that they consented to be named is insufficient. Likewise, liability is not automatically transferred to the expert; the issue manager has a separate duty of care and must establish their own defence. While commissioning a second opinion might be a step in some due diligence processes, it is not a mandatory legal requirement to establish the defence.

The scenario describes a company that wants flexibility to manage its financing costs in a potentially falling interest rate environment, while also demonstrating a commitment to systematically reducing its debt obligations to enhance investor confidence. A call provision grants the issuer the right to redeem the bonds before maturity. This is highly advantageous if interest rates fall, as the company can retire the existing high-coupon debt and issue new bonds at a lower rate. A sinking-fund provision requires the issuer to periodically set aside funds to retire a portion of the bond issue over its life. This reduces the credit risk for investors by ensuring a gradual repayment of the principal, which makes the bond more attractive and addresses the company’s goal of assuring investors of its long-term solvency. A put provision would be counterproductive, as it benefits the bondholder when interest rates rise. A conversion feature is related to equity dilution and is not the primary tool for managing interest rate risk.

The detailed explanation for this scenario is rooted in the Securities and Futures Act (SFA), specifically the provisions under Section 197 concerning false trading and market rigging. The transaction described is a classic example of a ‘wash trade’. A wash trade is a form of market manipulation where a transaction or series of transactions are undertaken that result in no change in the beneficial ownership of the securities. In this case, although two distinct legal entities (Innovate Capital and Legacy Trust) are involved, the ultimate beneficial owner remains the same individual—the principal owner of the company who is also the sole beneficiary of the trust. The purpose of executing such a trade on the open market is to create a deceptive and artificial appearance of active trading and liquidity. This can mislead other market participants into believing there is genuine interest in the security, potentially influencing its price. The SFA explicitly prohibits any conduct that creates a false or misleading appearance of active trading. The other options are incorrect because a ‘matching order’ typically involves two or more independent, colluding parties, not a single beneficial owner acting through different entities. Classifying it as a legitimate portfolio rebalancing is incorrect because the method of execution on a public exchange to create a false impression is illegal, regardless of the internal accounting or portfolio management rationale. Finally, while the outcome is misleading information, the primary offence is the act of false trading itself, not the separate offence of disseminating false statements.

Under Singapore’s regulatory framework, particularly the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA), the consequences of non-compliance with Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) obligations are severe and multi-faceted. The correct answer accurately captures the full spectrum of these repercussions. Firstly, individuals, not just institutions, face severe penalties. For a money laundering offence, this includes personal liability in the form of imprisonment (up to 10 years) and/or a substantial fine. Secondly, the corporate entity (the CMS licence holder) is subject to significant financial penalties (up to $500,000 for ML offences). Thirdly, beyond the direct legal penalties, there is immense reputational risk, which can lead to a loss of client trust, business opportunities, and overall financial viability. Lastly, the Monetary Authority of Singapore (MAS) can impose additional regulatory sanctions, which may include restricting, suspending, or even revoking the firm’s Capital Markets Services (CMS) licence. The other options are incorrect because they present an incomplete or inaccurate picture. One option incorrectly suggests that imprisonment is not a penalty for the primary offence and that liability is purely financial. Another incorrectly claims that corporate liability shields individuals from prosecution, which is false in cases of criminal conduct. The final incorrect option wrongly minimizes the consequences to just a fine and internal review, ignoring the severe legal and regulatory powers of the authorities.

The primary regulatory objective for imposing a moratorium on shares held by promoters is to ensure their sustained commitment to the issuer post-listing. This lock-up period aligns the interests of the promoters, who have deep knowledge and influence over the company, with those of the new public shareholders who are investing based on the company’s future prospects. By preventing promoters from immediately selling their shares after the IPO, the rule encourages them to focus on the long-term growth and stability of the company, thereby protecting public investors. This requirement is outlined in the SGX-ST Listing Rules (e.g., Mainboard Rule 225 and Catalist Rule 419). The moratorium is distinct from measures aimed at resolving conflicts of interest or managing market liquidity, which are addressed by other specific rules. It also does not directly prevent earnings dilution, which is a function of issuing new shares.

The SGX-ST has established the Listings Advisory Committee (LAC) to provide independent, expert opinions on specific listing applications and policies. A key function of the LAC is to review Mainboard listing applications that are referred to it by the SGX-ST. The referral criteria include situations where the application involves novel or unprecedented issues, requires specialist expertise, or touches upon matters of public interest. In the given scenario, the company’s unique blockchain-based revenue model is described as ‘novel’ and ‘unprecedented,’ directly meeting the criteria for a referral to the LAC. The purpose of this referral is to leverage the committee’s market expertise to ensure a thorough and sound evaluation before a listing decision is made. The Listings Disciplinary Committee (LDC) is incorrect as its role is to hear disciplinary cases concerning rule breaches, not to review the suitability of a new listing application. The Listings Appeals Committee (LApC) is also incorrect as it hears appeals against decisions made by the LDC or SGX-ST, and is not involved in the initial application review. Mandating a Catalist listing is not the prescribed procedure; the SGX-ST has a formal process to handle complex Mainboard applications through the LAC.

According to MAS Notice SFA04-N02 on Prevention of Money Laundering and Countering the Financing of Terrorism, a Capital Markets Services (CMS) licence holder must apply a risk-based approach to Customer Due Diligence (CDD). While a CMS licence holder is permitted to rely on a third party (such as another regulated financial institution) to perform CDD, this reliance does not absolve the CMS licence holder of its ultimate responsibility for ensuring compliance. In this scenario, despite the referral from a reputable institution, the CMS licence holder has independently identified several significant high-risk factors. These include the client being a personal asset holding vehicle, having an excessively complex ownership structure, and receiving frequent payments from unrelated third parties in jurisdictions known for high corruption risk. These are all explicit examples of situations requiring Enhanced Due Diligence (EDD) as outlined in the guidelines. The presence of these red flags overrides the ability to simply rely on the third party’s assessment or apply simplified CDD. The correct and most prudent course of action is to conduct an independent and more stringent EDD to fully understand and mitigate the potential Money Laundering/Terrorist Financing (ML/TF) risks associated with the client.

Under the Securities and Futures Act (SFA), a corporation can defend itself against an insider trading allegation using the ‘Chinese Wall’ defence. This defence is applicable when an officer or employee possesses inside information, but the corporation itself engages in a transaction involving the relevant securities. For the defence to be successful, three specific conditions must be met, as stipulated in Sections 226 and 227 of the SFA. First, the decision to execute the transaction must be made by a person (the ‘Decision-Maker’) who is not the individual in possession of the inside information. Second, the corporation must have pre-existing and effective arrangements in place that are reasonably expected to prevent the inside information from being communicated to the Decision-Maker and to stop the possessor of the information from giving advice to the Decision-Maker. Third, it must be proven that the inside information was not actually communicated, and no such advice was given. The other options are incorrect because they do not fully capture these stringent legal requirements. Simply having a compliance policy or notifying the regulator after the fact is insufficient. Likewise, while physical separation is a component of a Chinese Wall, it does not, by itself, satisfy the legal test, which focuses on the information flow and the specific decision-making process for the transaction in question.

According to the SGX Mainboard Rules, an issuer must have at least two non-executive directors who are independent. However, the Code of Corporate Governance, which new applicants must comply with, sets a higher standard under specific circumstances. Guideline 2.2 of the Code stipulates that independent directors must constitute at least half of the board when the Chairman of the Board is also the Chief Executive Officer. In this scenario, the company’s board has 11 members. Therefore, the minimum number of independent directors required is half of 11, which is 5.5. As a director must be a whole person, this number is rounded up to the next whole number, which is 6. The requirement of ‘at least two’ independent directors is the baseline minimum under the Mainboard Rules, but the more stringent condition from the Code of Corporate Governance applies here due to the dual role of the Chairman/CEO. The ‘one-third’ requirement applies only when the Chairman is independent and not part of the management team.

Under the Seasoning Framework, a re-tap allows an issuer to offer new bonds to retail investors that have the same terms as a previously issued and seasoned tranche of bonds. The rules specify which terms must be identical and which can be adjusted. The maturity date, coupon rate, currency, denomination, and seniority must be the same as the original seasoned bonds. However, the framework provides flexibility for the issue date, term to maturity, issuance price, and size of the re-tapped offer. Therefore, adjusting the issuance price to reflect current market conditions is a permissible action. Changing the coupon structure from fixed to floating, adding a convertibility feature, or altering the currency of the issue are all fundamental changes to the bond’s terms and are not permitted for a re-tap, as they would create a security that is different from the original seasoned bonds. These restrictions ensure that the re-tapped bonds are fungible with the initial tranche trading in the market.

Under Section 254 of the Securities and Futures Act (SFA), a person who suffers loss due to a false or misleading statement in an Offer Information Statement (OIS) can seek to recover damages. However, Section 255 of the SFA provides several statutory defences. In this scenario, the most applicable defence is that of reasonable reliance on information provided by a third party, as stipulated in Section 255(3). Meridian Capital, the issue manager, relied on a report from ‘Market Forecasters,’ an independent firm. A person is not considered an agent merely for performing a professional or advisory function. Therefore, if Meridian Capital can prove it reasonably relied on this third-party information, it may be absolved of civil liability. The concept of materiality is not a defence for civil liability under the SFA, making that option incorrect. The defence of making all reasonable inquiries is a general due diligence defence, but the reasonable reliance defence is more specific and stronger given the facts. Finally, publicly withdrawing consent is a valid defence under Section 255(5), but it must be done before the harm occurs, not after a lawsuit has been initiated.

This question assesses the candidate’s understanding of the interaction between the SGX-ST Listing Manual’s requirements for a voluntary delisting and the Singapore Code on Take-overs and Mergers. According to Rule 1307 of the Listing Manual, a voluntary delisting requires a reasonable exit offer to be made to shareholders. The Securities Industry Council (SIC) has clarified that such an exit offer falls within the scope of the Take-over Code. A key provision in the Take-over Code is Rule 33.2, which generally prohibits an offeror (or its concert parties) from making a subsequent offer for the target company at a price higher than the previous offer for a period of six months after the close of that successful offer. In the scenario, Innovate Corp’s successful take-over was at S$1.00 per share. The proposed exit offer, made within six months, is at a higher price of S$1.10. This directly contravenes the principle of Rule 33.2, which is designed to ensure that shareholders who accepted the initial offer are not disadvantaged by a subsequent, more attractive offer made shortly after. The other options are incorrect. The voting threshold for a voluntary delisting is 75% of the shares held by shareholders present and voting, not all issued shares. The SIC’s waiver typically applies to procedural rules like the offer timetable, not substantive pricing rules like Rule 33.2. Lastly, the appointment of an Independent Financial Adviser (IFA) is a mandatory requirement under Rule 1309 of the Listing Manual for a voluntary delisting, irrespective of the controlling shareholder’s stake.

Under Section 266 of the Securities and Futures Act (SFA), if a trustee for a bond issue forms a belief that the issuer’s assets are, or are likely to become, insufficient to meet its obligations to bondholders, the trustee has specific duties. The primary recourse is not to act unilaterally but to leverage the legal framework for protection. The trustee may apply to the court for an order to protect the bondholders’ interests. The court, after giving the issuer an opportunity to be heard, can issue a range of orders, including directing a bondholder meeting to seek their directions, staying other legal proceedings, restraining payments, or appointing a receiver over the secured property. The trustee cannot unilaterally seize assets or declare a default and initiate liquidation without following the due process outlined in the trust deed and relevant laws, which typically involves court intervention. Similarly, while bondholder directions are important, the trustee’s duty to apply to the court is not contingent on first obtaining a specific majority consent from them; the trustee can act on its own initiative to fulfill its fiduciary duty.