SINGAPORE - The Ministry of Finance has completed the review of the Companies Act and accepted 192 and modified 17 recommendations of the Steering Committee for the Review of the Companies Act (SC).
These changes are targeted at maintaining Singapore's competitiveness as a business hub, reduce regulatory burden for companies and improve the corporate governance landscape.
MOF said in a statement that this is the largest number of changes to the Act since it was enacted in 1967.
The changes are expected to reduce regulatory burden and compliance costs, provide greater flexibility for companies, and improve corporate governance. Various stakeholder groups such as companies, small-and-medium enterprises (SMEs), retail investors and company directors will benefit.
For instance, companies will be allowed to issue non-voting shares and shares carrying multiple votes if their Articles allow it and subject to certain safeguards. This will give companies greater flexibility in raising capital, and meet different investor preferences.
SMEs can look forward to lower compliance costs. An approximate additional 10 per cent of companies or about 25,000 more companies can enjoy exemption from audit. A new small company concept will also be introduced for determining the requirement for statutory audit.
A multiple-proxies regime will be introduced to allow indirect investors and CPF investors to attend and vote at shareholders' meetings. This will provide for more active participation at general meetings by the beneficial owners of the company, and help strengthen the culture of corporate governance.
Deputy Prime Minister and Minister for Finance, Mr Tharman Shanmugaratnam, announced the Government's decision on the SC's recommendations at the Securities Investors Association (Singapore) Investors' Choice Awards Dinner today.
He said, "In evaluating views on each of the 217 recommendations, MOF has adopted a principled, but pragmatic approach. We have sought to ensure that we keep a competitive business environment, but one that preserves investors' rights and interests where they really matter."
The steering committee, which was chaired by Professor Walter Woon, was appointed by the Minister in October 2007.
The SC submitted its final report to the Minister for Finance in April last year. MOF conducted a public consultation of the committee's recommendations from June to October 2011, and received many substantive feedback and comments.
The recommendations will be implemented through amendments to the Companies Act. MOF will seek public feedback on the draft amendment bill early next year.