On 12 September 2022, the Business Trusts (Amendment) Bill (“Bill“) was tabled in Parliament for First Reading. The Bill seeks to amend the Business Trusts Act 2004 (“BTA“) which governs the registration and regulation of business trusts (“BTs“). Introduced in 2004, a BT is a hybrid structure embodying the features of both a company and a trust. A key advantage of a BT is the ability to pay dividends to unitholders out of its cash profits, unlike a company which may only do so out of accounting profits. Given a BT’s similarities with a company, many provisions of the BTA are based on the Companies Act 1967 (“CA“). From the time the BTA came into effect, there have been various amendments to the CA, as well as revisions to the real estate investment trusts (“REITs“) regime.
In view thereof, the Monetary Authority of Singapore conducted a public consultation in November 2021 concerning proposed amendments to the BTA, mainly to align it with 2014 and 2017 amendments to the CA pursuant to the Companies (Amendment) Acts, “CAA”, as well as the regulatory regime for REITs. The amendments to the BTA also seek to streamline and clarify regulatory requirements. The proposed Bill received general support from respondents.
In this Update, we outline certain key amendments to the BTA set out in the Bill.
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