SECURITIES AND FUTURES (AMENDMENT) BILL

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SECURITIES AND FUTURES (AMENDMENT) BILL:

The Minister for Education (Mr Tharman Shanmugaratnam): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

The Securities and Futures Act (SFA) was passed in October 2001. In September 2003, the Securities and Futures Act was amended to implement some of the recommendations of the Company Legislation and Regulatory Framework Committee (the CLRF Committee). The second phase of amendments, targeted for First Reading in October 2004, will give effect to the remaining recommendations of the CLRF Committee which the Government has accepted.

Prior to the second phase, we are amending the Securities and Futures Act concurrent with the new legislation which Parliament has just passed, which provides for a new business trust structure in Singapore. The Securities and Futures Act amendments will provide for the regulation of offers of units and derivatives of units in business trusts and take-over proceedings for business trusts.

The Monetary Authority of Singapore (MAS) invited feedback from the industry and the public on the draft Bill in December 2003. MAS has posted on its website its detailed responses to the comments received during this consultation.

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Mr Speaker, Sir, I will now go through the main provisionsof the Bill.

Regulation of offers of units and derivatives of units in business trusts

The Bill introduces a new Division 1A in Part XIII of the Securities and Futures Act to regulate the public offers of units and derivatives of units in business trusts in the same way as offers of shares in corporations. The intention is to enable investors to make informed investment decisions by requiring all material information relating to the business trust to be set out in the prospectus. Investors will also have the same statutory protections that subscribers to share offers have.

Registration of business trusts under the Business Trusts Bill will be voluntary. However, now section 282C(1)(a) of the Bill will require business trusts offered to retail investors to be registered under the Business Trusts Bill and therefore subject to a governance framework which seeks to safeguard investors' rights and establish the duties and accountability of trustees and their directors.

Amendment to the definition of securities

The definition of "securities" in the Securities and Futures Act will be amended to include units and derivatives of units in a business trust so that the provisions under the Securities and Futures Act relating to securities will also apply to business trusts, including provisions relating to market conduct. With the amendment to the definition of "securities", financial advice provided in relation to units and derivatives of units in a business trust will also be regulated under the Financial Advisers Act.

Regulation of take-over proceedings for business trusts

The definition of "take-over offer" in the Securities and Futures Act will be

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amended so that take-over offers for units in business trusts will be subject to the relevant provisions under the Securities and Futures Act and the Singapore Code on Take-overs and Mergers. This is to ensure a fair and orderly market for take-overs of business trusts.

Regulatory treatment of property trusts

Property trusts or Real Estate Investment Trusts (REITs), as they are more commonly known, are currently regulated as collective investment schemes (CIS) under the Securities and Futures Act. Property trusts fall within both the collective investment scheme and business trust regimes. Rather than prescribe a specific approach, the Bill will allow a listed property trust to choose to be structured and regulated as either a collective investment schemeor a business trust. To avoid confusion to investors, any property trust regulated as a business trust will be prohibited from being referred to as a "Real Estate Investment Trust".

_Conclusion
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In conclusion, the capital markets are constantly innovating and the regulatory framework must respond. This Bill facilitates the offer of units and derivatives of units in business trusts in Singapore, and in so doing, creates a new asset class which could potentially add depth and sophistication to Singapore's capital markets.

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 Tharman Shanmugaratnam].

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

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CRIMINAL LAW (TEMPORARY PROVISIONS) (AMENDMENT) BILL: Order for Second Reading read.

The Senior Minister of State for Law (Assoc. Prof. Ho Peng Kee): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Introduction

Sir, the Criminal Law (Temporary Provisions) Act (CLTPA) was enacted on 21st October 1955. Since then, Parliament has extended it 10 times. The last time was five years ago in 1999. The Act will expire on 20th October this year. This Bill seeks to extend the Act for another five years. The Bill also amends the Act to provide for the taking of body samples for DNA profiling of persons arrested, detained or placed on police supervision under the Act.

Need for the Act

Sir, five years ago, I informed this House of the improved secret society (SS) and drug situation and asked "Does it therefore mean that we do not need the Act anymore?" Sir, the answer I gave, which the House endorsed by passing the Bill, was a clear "No". Over the past five years, the SS and drug situation has continued to improve considerably. But, my answer today is still an emphatic "No". Though suppressed, secret society activities and violence still rear its ugly head in Singapore. Let me highlight a few examples to illustrate how the Act has proven to be effective against secret societies, syndicated criminal activities as well as drug trafficking.

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Secret societies/triads

Sir, in April last year, arising from an earlier dispute, members of one secret society attacked a member from another secret society. One person was fatally stabbed. In another incident, in the year 2002, rioting between members of two secret societies resulted in a 21-year old man being stabbed to death.

Extortion and protection rackets

In 2001, members of a secret society operated a protection racket to extort money from operators of KTV lounges and entertainment outlets in the vicinity of Joo Chiat Road, East Coast Road and Kallang Leisure Park. They confronted the lounge and pub managers demanding a monthly "protection fee" of $500. They also insisted that their gang members be hired as security officers in the outlets for $1,500a month. The operators had kept quiet for fear of reprisal.

CID crippled this gang and arrested 16 members of the "protection racket". Five of them were placed on Detention Orders (DOs) while the rest were placed on record by the Registrar of Societies or warned by CID.

Illegal moneylending syndicates

Another syndicated activity that is dealt with under the Act is illegal moneylending. In today's context, a typical unlicensed moneylending syndicate operates in various parts of Singapore. The syndicate adopts different aliases in its moneylending activities to evade police detection. The "Towkay" or "Boss" operates behind the scene and engages "office support staff" and runners to assist in operating the illegal moneylending "stalls". Debtors who default on their payments are harassed by the runners at their homes. The usual intimidation, I think as many of us would know on the ground,tactics include

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smashing of flower pots and splashing of soil or paint on debtors' doors.

Routine police operations usually only result in frontline syndicate members being arrested and prosecuted in court for their illegal moneylending offences. The "Towkays" who are leaders operating behind the scene, earn big bucks but they go unpunished.

Syndicate members would not testify against the "Towkay" for fear of reprisal. These syndicate leaders continue to expand their operations and perpetuate their nefarious activities with impunity by recruiting new members to replace those arrested and prosecuted. Instead of letting them go unpunished, we have to deal with them under the CLTPA.

Triad and organised criminal gangs in the region

Furthermore, Singapore is vulnerable to infiltration by triads and organised criminal gangs from countries, such as Hong Kong, China, Japan and Malaysia. These East Asian Gangs or "EAGs" are driven by profit and have no qualms about committing cross-border crimes if the opportunity arises. We must therefore be constantly on guard.

Singapore has succeeded in keeping itself free from triad-related problems faced by some of our neighbouring countries. A key factor that has deterred EAGs from locating their activities here is the Criminal Law (Temporary Provisions) Act, working in synergy with our tough laws, effective enforcement actions and a non-corrupt government.

Drug trafficking

Another area where the CLTPA is indispensable is drug trafficking. Drug trafficking is an extremely lucrative trade. Drug traffickers and syndicate leaders have become very sophisticated in their

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modus operandi. They deviously stay clear from the actual drug transactions and activities themselves. Instead, couriers, organisers and recruiters are engaged to conduct the business.

Allowing the Act to lapse may be misinterpreted as a softening of our tough stance and a weakening of our resolve or ability to deal with drug trafficking. This would be a wrong signal to send and may encourage international drug trafficking syndicates to use Singapore as a staging point for their illicit drug activities. More drugs will then find their way to the local population, resulting in higher "contamination" levels.

We should not expose ourselves to this possibility.

In short, Sir, secret society, syndicated crimes and drug trafficking activities have declined considerably and are under control. However, the possibility of resurgence is always there. We, therefore, still need the strong deterrence offered by the Act.

Built-in safeguards

Having explained why the Act is still necessary today, let me assure Members that there are adequate safeguards incorporated into the Act as well as built into the administrative procedures to ensure that endorsement agencies do not abuse their powers and resort to using the Act without the strongest justification.

First, any proposal by police or CNB to detain a person under the Act or to place him under police supervision will be scrutinised by senior officials and the Ministry of Home Affairs and the Attorney-General's Chambers before a Detention or Police Supervision Order is issued. In fact, the Permanent Secretary in the Ministry of Home Affairs and the Attorney General himself must give their consent. So, departments cannot take the easy way out. They must justify why

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they recommend using the Criminal Law (Temporary Provisions) Act.

Second, an Advisory Committee comprising prominent private citizens, such as Justices of the Peace, senior lawyers and community leaders, scrutinise the investigations and documentary evidence and may examine detainees, investigation officers and witnesses. At the Committee's hearing, detainees may be represented by legal counsel. The Committee subsequently makes its recommendation to the President.

Third, Detention Orders are reviewed annually by a separate Review Committee, also comprising prominent private citizens. Members of the Review Committee are distinct from the Advisory Committee, ensuring independent decision making. Any recommendation to extend detention for a further 12-month period must also be approved by the President.

Fourth, a separate Review Board, also with a different set of members, will consider all cases of detention extending beyond 10 years. This process ensures that cases where persons have been detained beyond 10 years are specially scrutinised to determine that they have not been detained longer than necessary.

Finally, coming before Parliament every five years to renew this Act is an additional safeguard to ensure the Act is still needed in view of changing circumstances, and that it is being applied properly.

Once again, let me assure this House that, where there are witnesses willing to testify in court, we will definitely charge the culprits in court. But where victims and accomplices refuse to testify in open court, the Criminal Law (Temporary Provisions) Act prevents the mastermind

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and syndicate leader from getting away scot-free to enjoy their ill-gotten gains. Even when invoked, the Act is not used as a blunt instrument. Depending on the gravity of the offence, either a Detention Order or a Police Supervision Order can be issued.

Other amendments

Sir, let me now touch on another key amendment to the Act, which is to provide for the taking of body samples for DNA profiling of persons arrested, detained or placed on police supervision under the Act.

With advancement in technology, DNA profiling is widely used in forensic investigations in many countries. It has become an important tool in solving crimes. Each individual has a unique genetic DNA information. The chances of two persons in the world sharing the same DNA profile are in the region of one in 250 billion.

The Registration of Criminals Act (RCA) was amended in 2002 to provide for the establishment of a DNA database of criminals convicted in court for registrable offences. The Singapore Police Force DNA database became operational in February 2003 and was officially launched in July this year. But, in fact, police has been using DNA forensics from as early as 1991. Back then, DNA testing was largely confined to the direct matching of a suspect's DNA profile with that collected at the crime scene. The new DNA database, however, comprises both the offenders' DNA profiles as well as DNA profiles recovered from crime scenes. This is particularly useful in pinning down repeat offenders as their DNA profiles are matched against DNA profiles collected from crime scenes.

Detainees and supervisees under the Criminal Law (Temporary Provisions) Act have been known to be involved in other

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crimes. A check on those issued with detention and supervision orders from 1994 to 2003 showed that 60% of them were found to have conviction records. Hence, this amendment will ensure that our DNA database is more comprehensive and, in turn, it will help improve intelligence and focus investigative efforts for more effective crime solving.

Sir, take, for example, a case last year where the glass door to an office was shattered and several items were stolen. Three bloodstains were found at the scene and the DNA was analysed. Several months later, the DNA profile from the bloodstains were found to match that of a prisoner who was serving sentence in prison for another offence then. Without the DNA database, the offender might have gone unpunished for the crimes he committed.

It is, therefore, timely and essential to provide for the taking of body samples for DNA profiling for persons arrested, detained or placed on police supervision under the Criminal Law (Temporary Provisions) Act.

Sir, I beg to move.

Question proposed.

Assoc. Prof. Chin Tet Yung: Sir, I rise to speak in support of this Bill.

It is called the Criminal Law (Temporary Provisions) Act, but it has been with us since 1955. I think it is older than most of us and it gives a new meaning to the word "temporary". So, I wonder, first of all, why is it that we cannot call a spade a spade and call it the Criminal Law Preventive Detention Act?

Sir, there is a common principle of justice that no man should be imprisoned without an open trial, no man should be imprisoned without the chance to face his

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accusers in court, listen to the evidence against him and to challenge it. But we live in difficult times, and preventive detention is now seen more of a necessity, maybe a necessary evil, than not to have it at all. In fact, it is interesting to note that even in liberal countries, such as the United States and the United Kingdom, after 9/11 attack, they were compelled to provide legislation for preventive detention, but they use it mainly against terrorism, for which we have the Internal Security Act.

Sir, this Bill comes before us for an extension for another five years and it is to be strongly supported. But we must be careful. Public confidence will be eroded if we use preventive detention too freely, and it is very reassuring to hear from the Senior Minister of State that there are safeguards and checks in place to make sure that the power to order a preventive detention is carefully constrained. However, there is a question as to why we cannot have a schedule perhaps listing down the serious crimes of which the Senior Minister of State has mentioned, eg, drug trafficking, even human trafficking, syndicated crime, secret societies. Why can we not have a scheduled list of offences where this particular Act should apply? Why is this necessary? I think it would be good for the public in Singapore and for Members of this House to know the limits of this law, that preventive detention is seen more as an exception rather than the rule. Public confidence will be better if we can say that only in certain instances where it is absolutely necessary that we will have this Preventive Detention Order in place.

Sir, having made these comments, I do hope that we will be able to see less of the crimes that the Senior Minister of State has mentioned and, of course, at the end of the day, the presence of this particular piece of legislation is definitely a deterrence to all those who wish to come

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here and think that they can beat the system, as the Senior Minister of State has said, by avoiding open trials. I think it is a very good Act to support, and I strongly support it.