TRUSTEES (AMENDMENT) BILL

Order for Second Reading read.

3.57 p.m.

The Minister for Law and National Development (Mr E. W. Barker): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Sir, this is a very short Bill and I will keep my speech short. The Bill seeks to amend the Trustees Act (Chapter 40) by increasing the borrowing power of an "approved company" from two-thirds to three-quarters of its mortgaged assets.

Sections 3 and 4 of the Act lay down the prerequisites that must be complied with by a company before it can obtain the status of an "approved company" within the meaning of the Act. An "approved company" is defined in the Act as one that is incorporated in Singapore and which has a place of business in Singapore, having as its sole or primary object the promotion of home ownership by advancing purchase monies, repayable by instalments over a specified period of time. Such an "approved company" would then be permitted to seek loans from trustees in accordance with section 4 (1) (e) of the Trustees Act. Section 4 (2) of the Act, however, lays down the conditions under which trust funds may be invested with an "approved company". One of the conditions is that the total borrowing power of the "approved company" must not exceed two-thirds of its mortgaged assets.

Representations have been received for an increase of an borrowing power of an "approved company" from two-thirds to four-fifths of the company's mortgaged assets as the present limit is considered too restrictive. Consideration has been given to these representations. It is, however, felt that the limit imposed by the Act should be raised from two-thirds to three-quarters instead of four-fifths of the mortgaged assets. This requires an amendment to the relevant section of the Trustees Act; hence the Bill before this House.

Sir, I beg to move.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill.-[Mr E. W. Barker].

Bill considered in Committee; reported without amendment; read a Third time and passed.