On 6 November 2023, the Significant Investments Review Bill (“Bill“) was introduced in Parliament. The Bill sets out a new investment management regime which seeks to strengthen the resilience of Singapore’s economy and enhance Singapore’s national security by ensuring the continuity of critical entities. Moreover, to provide a level playing field for all investors, the new investment regime will apply to both local and foreign investors. The approach of the new law is to address national security threats whilst still preserving Singapore’s attractiveness to foreign investors.
To achieve this, only entities that are critical to Singapore’s national security interests will be designated under this new regime (“Designated Entities“) and be regulated, rather than adopting an entire sector approach for regulation. Entities that have not been designated but have acted against Singapore’s national security interests may also have their transactions reviewed under certain circumstances. This means that the designation is not finite and could potentially be undertaken ad hoc.
The Bill complements existing sectoral legislation, which extends to entities in sectors such as banking, insurance, telecommunications and utilities, where approvals are required for acquisitions that cross certain pre-fixed thresholds. The nature of the approval varies from sector to sector, with some akin to detailed market information being provided and the fact of competition not being affected being established. The approval approach for transactions involving a Designated Entity remains to be seen.
In this Update, we consider the key aspects of the Bill.
For more information, click here to read the full Legal Update.
