International Enterprise Singapore Board (Amendment) Bill 2017 – Second Reading Speech by Dr Koh Poh Koon, Minister of State, Ministry of Trade and Industry
1. Madam Speaker, I beg to move, “That the Bill be now read a second time.”
Background
2. International Enterprise Singapore Board, also known as “IE Singapore” is the government agency responsible for promoting international trade and partnering Singapore companies in going global. The International Enterprise Singapore Board Act (“IESBA”) outlines the roles and responsibilities of IE Singapore. These include promoting and developing the commodity trading industry in Singapore.
3. IE Singapore also regulates the commodity trading industry through the Commodity Trading Act (“CTA”) and the Rubber Industry Act (“RIA”).
4. The CTA regulates spot commodity trading and over-the-counter (“OTC”) commodity derivatives contracts across all types of commodities. The regulatory oversight of commodity futures contracts had been transferred to the Monetary Authority of Singapore (“MAS”) in 2008. With the passing of the Securities and Futures (Amendment) Bill 2016 this year, IE Singapore will also be transferring the regulation of OTC commodity derivatives contracts under the CTA to MAS, for more effective regulatory oversight under one single agency. After the transfer, the scope of the CTA will be limited to spot commodity trading.
5. The RIA regulates the rubber trading industry, including forward trading which entails physical delivery of traded rubber. As physical commodity trading is not a regulatory domain under MAS, regulatory oversight of such activities will remain with IE Singapore.
6. This Bill proposes amendments to the IESBA to align IE Singapore’s regulatory functions over the commodity trading industry with the reduced scope of the CTA. These amendments are either consequential to MAS’ Securities and Futures (Amendment) Bill 2016 or are administrative in nature.
Key Amendments to the IESBA
7. Madam Speaker, I will now go through the key amendments in the Bill.
8. First, the IESBA will be amended to reflect that IE Singapore’s regulatory function over the commodity trading industry will be limited to spot commodity trading and the rubber trade industry. This is to provide clarity of IE Singapore’s regulatory role under the CTA and the RIA, when the Securities and Futures (Amendment) Bill 2016 comes into force.
9. Second, the IESBA will be amended to clarify that IE Singapore can collect, compile and analyse information relating to the commodity trade and industry. This gives IE Singapore, the lead agency responsible for the promotion and development of the commodity trading industry, continued access to company and market data for policy formulation purposes.
10. Third, the IESBA will be updated to set out the circumstances under which IE Singapore may disclose confidential information related to the commodity trading industry to another public agency. This would include disclosure of such information for the purpose of formulating or reviewing policy relating to trade.
11. In addition to these key amendments, there will also be an administrative amendment to update the purposes for which the Singapore Rubber Fund (“SRF”) may be used, to take into account the revised functions of IE Singapore. One query I received following the First Reading of the Bill was from the honourable member Mr Louis Ng, who pointed out to me that the use of the SRF in the amended IESBA is not exclusive to the rubber trading industry. This is indeed the case, to allow for some flexibility in the use of the SRF. While the fund has been and will continue to be used to facilitate the promotion and development of the rubber trading industry, it can be tapped upon to promote or develop the broader commodity trading industry, with the view that the benefits so accrued will also accrue to the rubber trading industry.
12. Clauses 2, 3, 4 and 5 amend Sections 5, 6, 19 and 20 of the IESBA respectively to give legislative effect to these changes.
13. IE Singapore has conducted a public consultation on the draft Bill and there were no objections to the proposed amendments.
Conclusion
14. Madam Speaker, the proposed changes to the IESBA will provide greater clarity to the commodity trading industry of IE Singapore’s regulatory functions in view of the reduced scope of the CTA.
15. Madam Speaker, I beg to move.