Singapore: Prohibition Orders In Singapore: An Introduction

Last Updated: 20 June 2017
Article by Eric Chan
Most Read Contributor in Singapore, September 2018

 There has been a lot of prominence given to prohibition orders ("POs") in recent times, given the unprecedented scale of regulatory action undertaken by the Monetary Authority of Singapore ("MAS") following investigations into the troubled Malaysian owned 1Malaysia Development Bhd. ("1MDB"). This article provides an introduction to the PO regime in Singapore, and discusses how the regime has so far been used by MAS as a means to help ensure the integrity of persons working within the Singapore financial services industry.

As a preliminary point, it should be noted that the PO regime generally applies to both individuals and legal entities. However, this article will focus only on the use of POs against individuals.

Prohibition Orders under Singapore Financial Regulatory Law

Authorising Provisions

The MAS currently has the power to issue POs to prevent unsuitable persons from engaging in activities that are regulated by MAS under the Securities and Futures Act (Chapter 289) ("SFA"), the Financial Advisers Act (Chapter 110) ("FAA"), and the Insurance Act (Chapter 142) ("IA") (but only in the case of insurance intermediaries). In October 2013, MAS had also proposed to amend the Banking Act (Chapter 19) ("BA") to introduce the same regime into the regulatory framework for banking services, but this proposal hasn't yet been implemented. Nonetheless, in practice, most banks in Singapore are also subject to MAS regulation under the SFA and/or the FAA, and as such, many bank staff would already be subject to the existing PO regime under the SFA and/or the FAA.

The PO regime under the SFA, the FAA and the IA are broadly similar. The next few sections of this article will focus primarily on the PO rules under section 101A of the SFA.

Grounds for issuing a PO under the SFA

Until recently, the PO regime has been employed by MAS mainly as an enforcement tool in relation to market misconduct behaviour, such as market manipulation and insider trading. However, in the wake of investigations regarding 1MDB, MAS has also begun to use its power to issue POs in relation to cases involving failure to comply with anti-money laundering and countering the financing of terrorism ("AML/CFT") requirements.

Section 101A(1) of the SFA, in particular sub-sections (c) to (h), describes the grounds on which the MAS may make a PO against a person who is an individual. Broadly, these are as follows:

(i) Where the person's status as a representative has been suspended or revoked;

(ii) Where there exists a legal ground upon which the MAS may revoke the person's status as representative;

(iii) Where the MAS has reason to believe that the person is contravening, is likely to contravene, or has contravened any provision of the SFA, any condition or restriction imposed by MAS under the SFA, or any written direction issued by MAS under the SFA;

(iv) Where the person has been convicted of an offence under SFA, or has been convicted, whether in Singapore or elsewhere, of an offence involving fraud or dishonesty or the conviction for which involved a finding that he acted fraudulently or dishonestly;

(v) Where the person has an order for the payment of a civil penalty made against him by a court, or has entered into an agreement with the MAS to pay a civil penalty, under Part XII of the SFA;

(vi) Where the person has been convicted of an offence involving the contravention of any law or requirement of a foreign country or territory relating to any regulated activity carried out by that person; or

(vii) Where the person has been removed, at the direction of the MAS, from office or employment as an officer of the holder of a capital markets services licence under section 97(1)(h) of the SFA.

In determining whether to issue a PO against a person, the MAS would be guided by considerations as to the person's fitness and propriety. The measure of whether a person is fit and proper is set out in the MAS Guidelines on Fit and Proper Criteria [FSG-G01] (last updated 3 September 2015) ("Fit and Proper Guidelines"), which overlaps to some extent with the statutory criteria, but would involve more specific consideration of the following aspects of a person:

  • His honesty, integrity and reputation;
  • His competency and capability; and
  • His level of financial soundness.

Procedural aspects under the SFA

Procedurally, the MAS is statutorily required under section 101A(4) of the SFA to afford the person an opportunity to be heard before making a PO against him. Thus, the person against whom the MAS intends to issue a PO against would be notified in writing of MAS' intention to do so, and would be afforded an opportunity to make representations to MAS. Such representations would be given due consideration by MAS before a final decision is made as to whether the PO should or should not be issued. In the event that MAS decides to issue a PO against the person, that person will be entitled under section 101A(5) of the SFA to appeal in writing to the Minister in charge of the MAS within 30 days of the MAS decision to issue the PO.

MAS has a practice of publicising the issuance of POs issued under the SFA, FAA and/or IA on the MAS website. Notification of the PO, on the enforcement action page of the MAS website, will remain for a period of 5 years, or until the PO ceases to be in force, whichever is longer.

In relation to individuals who are representatives registered under the SFA and/or FAA, a notation that a PO has been issued would also be indicated against the name of the person within the public register of representatives, and this notation will remain in the register of representatives for the duration of the PO.

PO regime under the FAA

The PO regime under the FAA is almost identical to that under the SFA. The grounds under which the MAS can make prohibition orders against individuals under section 59(1)(ba) to (f) of the FAA are similar to those under the SFA. Section 59(3) of the FAA also requires MAS to afford the person an opportunity to be heard before making a PO against the person, while section 59(4) of the FAA provides for a right of appeal in writing to the Minister in charge of the MAS, within 30 days of MAS' decision.

PO regime under the IA

Under the IA, the PO regime takes a more limited form. The regime is available only in relation to insurance intermediaries, and the PO operates only to prohibit a person from carrying on business as an insurance intermediary or from taking part in the management of an insurance intermediary. The grounds for issuing a PO under section 35V of the IA are also confined to instances where the person is guilty of some form of dishonesty or fraud. Procedurally, the PO regime also provides for a show cause period whereby the person is given the opportunity to be heard before a PO is issued, and once the PO is issued, there is again the right of the person to appeal in writing to the Minister in charge of the MAS within 30 days of MAS' decision.

Forms of the POs

In terms of content, in the case of a PO issued under the SFA or the FAA, MAS has ability to specify sanctions in different forms within the PO. This may include banning the offending person from performing any regulated activity permanently or for a specified period of time, stripping him from his managerial or directorial position (whether direct or indirect), and/or barring him from being a substantial shareholder in the financial institution.

The duration of the PO and the specific sanctions within the PO would generally depend on MAS' assessment of severity and grievousness of the misconduct. Typically, for market misconduct cases, MAS has imposed POs of duration ranging from one year to four years.

For example, Ngo Poon Khiam and Ng See Kim Kelvin had engaged in a conspiracy to transact in shares in Chuan Soon Huat Industrial Group Ltd, which had the effect of creating a false or misleading appearance with respect to the market for such shares, and were duly convicted under section 197(1)(b) of the SFA read with section 109 of the Penal Code (Chapter 224). Apart from the financial penalties of S$200,000 and S$180,000 respectively imposed on them, POs were issued under the SFA against both of them which prohibited them from carrying on business in any regulated activity under the SFA, from acting as a representative in respect of any such regulated activity, and from taking part in the management of, acting as a director of, or becoming a substantial shareholder of any capital markets services licensee or exempt financial institution in Singapore, for a period of 4 years.

In another case involving insider trading, a PO was issued under the FAA against Koh Huat Heng prohibiting him from providing any financial advisory service and from taking part in the management of, acting as a director of, or becoming a substantial shareholder of a financial adviser, for a period of 3 years, alongside a civil penalty of S$50,000.

In the case of POs recently issued or proposed to be issued in connection with contraventions of AML/CFT laws, the penalties appear to be significantly more punitive.

Tim Leissner (a former director of Goldman Sachs) was in March 2017 slapped with a 10-year PO that prohibited him from performing any regulated activity under the SFA and from taking part in the management of any capital market services firm in Singapore. This was based on him having issued an unauthorised letter to a financial institution based in Luxembourg, and having made false statements on behalf of Goldman Sachs, without the latter's knowledge.

MAS has also given notice of its intention to impose a lifetime ban on Jens Fred Sturzenegger (formerly of Falcon Bank), following his criminal convictions in Singapore for, inter alia, failure to disclose information on suspicious movement of funds by Low Taek Jho into and out of Falcon Bank.

MAS also gave notice of its intention to impose a lifetime ban on former BSI banker Yak Yew Chee and a 15 year ban on former BSI banker Yvonne Seah Yew Foong, again in connection with the 1MDB money laundering scandal.

Failure to comply with a PO

Failure to comply with the PO is a criminal offence under Singapore law with varying sanctions, which are briefly outlined in the table below:


The move by MAS to resort to POs in relation to contraventions of AML/CFT laws – as well as the more substantive sanctions provided in each of the POs – underscores the firm policy stance that the regulator is taking on any misconduct action that could undermine trust and confidence in Singapore's financial system.

That having been said, one should not at the same time be unduly alarmed at the harsh regulatory response. MAS has also continued to reiterate that it will exercise its power to issue POs only in egregious cases, for example where there is clear misconduct that reflect a lack of honesty and integrity.

All things considered, the present regulatory reaction to the 1MDB scandal in Singapore continues to emphasise the need for financial institutions to have appropriate and proportionate measures to address money laundering risks. A financial institution should not only ensure effective customer due diligence procedures, and the effective monitoring of suspicious transactions, but it should also consider implementing appropriate reporting or whistleblowing procedures that ensure the anonymity of informants. This would enable appropriate action to be taken by the authorities on a timely basis.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions