ACRA (Registry and Regulatory Enhancements) Bill

Mr Speaker, I beg to move, "That the Bill be now read a Second time."

The ACRA (Registry and Regulatory Enhancements) Bill aims to bolster data protection, facilitate digital communications between the Government and businesses and enhance the regulatory framework for entities under the Accounting and Corporate Regulatory Authority's (ACRA's) purview. The Bill introduces amendments to eight Acts, namely:

(a) The Accountants Act 2004;

(b) The Accounting and Corporate Regulatory Authority Act 2004;

(c) The Business Names Registration Act 2014;

(d) The Companies Act 1967;

(e) The Limited Liability Partnerships Act 2005;

(f) The Limited Partnerships Act 2008;

(g) The Variable Capital Companies Act 2018; and

(h) The Insolvency, Restructuring and Dissolution Act 2018.

Sir, the first set of amendments focuses on enhancing the protection of residential addresses filed with the Registrar.

As the national business registry, ACRA maintains and makes publicly available information about business entities and their associated individuals, including their residential addresses, to facilitate regulatory and enforcement actions. However, residential addresses can be exploited for malicious purposes, such as harassment and vice-related or loan shark activities.

To improve the protection of residential addresses filed with the Registrar, the Bill will mandate the filing of a contact address, alongside the residential address. The contact address must be a physical address at which the individual can be reached or contacted by post, for instance, his or her office. With this, the Registrar will make public the contact address and not the residential address. Individuals can still opt to use their residential addresses as their contact address, if they prefer.

Should an individual be unreachable at the contact address, the Registrar is legally empowered to make the residential address public.

The contact address regime differs from the existing alternate address regime in that: under the current alternate address regime, filing an alternate address is optional and individuals have to pay a fee to file an alternate address. This alternate address will be made public, instead of the residential address. However, under the new contact address regime, the provision of a contact address is required and there will be no need for payment.

With the introduction of the new contact address regime, the existing alternate address regime will be discontinued.

To ease transition to the new contact address regime, existing alternate addresses will automatically convert to contact addresses upon the commencement of the amended Acts. For those who have not filed an alternate address and wish to use a non-residential contact address, you can update your information with ACRA at no cost. Corporate service providers should also verify their clients' preferred addresses and update ACRA accordingly. As long as the alternate addresses are filed before commencement of the amended Acts, these will be reflected as contact addresses upon commencement.

If an alternate address is not filed by the time of the commencement of the amended Acts, the residential address will serve as the default contact address, with the option to update at any time.

The Bill also introduces a new framework for differentiated information disclosure. This framework protects confidentiality of personal information by limiting public access, while still allowing selected, specified parties to access the information to fulfil their legal obligations.

For example, residential addresses will not be made publicly available by default. But certain parties, such as financial institutions, may still require the information to conduct customer due diligence checks on business entities. The Bill allows specified parties to access selected personal information to fulfil their regulatory obligations. These specified parties will be required to properly safeguard the use of such information.

The second set of amendments aims to facilitate digital communications between the Government and businesses. Today, the Registrar still sends documents, not in connection with Court proceedings, in hard copy. The Bill will empower the Registrar to collect additional information, such as email addresses and mobile numbers, to enable ACRA to send secure digital communications through BizFile, which is ACRA's business registration and filing portal. Recipients will be notified via their provided email addresses to retrieve documents on their BizFile digital mailbox. Hard copy documents will still be sent for Court proceedings.

The third and final set of amendments seeks to enhance ACRA's regulatory oversight and streamline processes. For instance, the Bill will allow the Registrar to obtain and use information from prescribed public agencies, reducing manual entry by users and enabling ACRA to maintain, rectify and update its registers more efficiently. This will provide greater convenience to individuals and entities.

In addition, the Bill will also allow the Registrar to use any information obtained from prescribed entities, such as electricity and telecommunication companies, to verify the accuracy of any document or information in ACRA's repository. This will support ACRA in performing its enforcement and regulatory functions, for instance, to detect businesses that are set up for illicit activities.

Sir, in conclusion, this Bill lays the groundwork for the enhanced BizFile system, targeted to launch by the end of the year. These amendments will also enable ACRA to advance its regulatory framework, better protect data in its registry and facilitate data collection and usage for regulatory needs. Mr Speaker, I beg to move.

Question proposed.

Mr Louis Ng.

Sir, this Bill will streamline the regulation of corporate entities. I thank ACRA for conducting a public consultation on the proposed changes and for publishing its responses to the feedback received. I have three points of clarification to raise.

My first point is on the use of the BizFile+ digital mailbox to send statutory correspondence and notices. The Bill will empower the Registrar to send documents and information, other than Court summonses, through the digital mailbox.

In the public consultation, Ministry of Finance (MOF) and ACRA clarified that customers will be informed, including by email, when they receive new information or documents posted through the digital mailbox. The timing of when documents are received may be important, especially in Court proceedings.

Can the Minister clarify how documents will be deemed to have been received? Will it be based on when the document is posted in the digital mailbox, when the customer is informed about the posting, or when the customer accesses the documents in the digital mailbox?

MOF and ACRA have also made clear that hard copy documents for Court proceedings will still be sent via registered post. Can Minister share if there are any plans to allow Court documents to be served via the digital mailbox? After all, the Courts have now recognised substituted service of Court documents for civil proceedings via the Singpass app inbox. If so, what factors will the Ministry consider in determining whether it is appropriate to allow service via the digital mailbox?

My second point is on the ceasing the exclusion of residential addresses from public disclosure. I have three questions about this.

First, section 30C(1) prohibits any individual's residential address from being publicly disclosed. However, section 30D(1) sets out two exceptions where an individual's residential address may cease to be excluded from public disclosure. This includes where communications sent require a response within a specified period or where service of any document at the individual's contact address is not effective to bring it to the notice of the individual. Can the Minister clarify how publicly disclosing an individual's residential address will assist in obtaining the individual's response or bringing any document to the individual's notice?

Second, under section 30D(8), if the Registrar causes an individual's residential address to cease to be excluded from public disclosure, the individual will not be allowed to provide a contact address within three years unless the Registrar is satisfied that there is good cause to allow the individual to do so. Can the Minister clarify the rationale for not allowing the individual to provide a contact address within three years? Can the Minister also share what would be considered good cause to allow an individual to do so?

Third, when lawyers commence legal proceedings, they have to effect service on the individual personally and, sometimes, those persons are not at the office. Currently, when they cannot be found in the office, the lawyers will serve them at home based on the residential addresses listed in the ACRA corporate registers. Can the Minister clarify whether lawyers will still be able to obtain the residential addresses for the purposes of service of process?

My third and final point is on the provision of information and documents to third parties. Under section 30B(1), ACRA may provide information and documents to certain third parties. These third parties include authorised information service providers, trustees of a bankrupt's estate, liquidators, judicial managers, receivers, financial institutions, moneylenders and estate agents. Once the information is provided to these third parties, the information is then subject to the third party's data protection and management policies.

My concern is that the capabilities around protecting data may vary across different third parties. For instance, a moneylender or a real estate agent may not be able to set up data protection as robust as those of a financial institution. This is noteworthy because the information ACRA shares may include personal data. Can the Minister share how ACRA will ensure that information, especially personal data, provided to third parties will be adequately protected and not be subsequently used by these third parties for other purposes, such as marketing or sales? For instance, will ACRA require an undertaking from these third parties on the use and protection of the information provided? Sir, notwithstanding these clarifications, I stand in support of the Bill.

Assoc Prof Jamus Lim.

Mr Speaker, the proposed amendments to the Accounting and Corporate Regulatory Act of 2004 along with other related Acts are designed to improve registration procedures while making regulatory enhancements. I support the Bill but will flag some areas of concern.

I will begin by discussing the two main thrusts of the Bill pertaining to improving the business environment and enhancing corporate regulation. I will then move on to some more general reflections on the fundamental tensions between these two objectives. Since much of the Bill pertains to the business climate, I will also state at the outset that I am an associate professor at a business school.

Sir, the amendments include several that are meant to improve the ease of business registration. Clause 8 empowers the Registrar or Authority to obtain information related to ascertaining the veracity of registration from certain specified sources, including Government agencies. By a similar token, expanding the recognition of financial statements prepared according to internationally accepted standards, as embodied in clause 48, will make it easier for foreign investors to register the subsidiaries of their businesses locally.

Further simplifying the procedures involved in setting up private enterprises, not least by making the different arms of the Government talk to one another, will continue to lighten the burden of regulation. This, in turn, has the potential to spur further entrepreneurial activity, promote competition, stimulate the growth of existing businesses and even, potentially, raise productivity.

Of course, Singapore already does reasonably well by this standard. The most recent edition of the World Bank's Doing Business Report ranked our nation second overall in terms of ease of doing business. Even so, the Starting a Business sub-indicator, the one that is most related to the Bill at hand, held us at fourth, behind New Zealand, Georgia and Canada.

It is a reminder that other economies do not sit still, even as we strive to continue to improve our own. Hence, any steps that we can take to continue easing the process of new business formation should, in and of itself, be welcome. Moreover, the amendments also enfold certain rudimentary personal data protections, especially pertaining to residential addresses.

For example, the new section 30C and 30D affords the exclusion of residential addresses from public disclosure, so long as contact addresses are also available. Several clauses apply the same to related acts, such as clause 14 for public accountants to list a distinct contact address for public inspection in the Accountants Act, or clause 40 for directors, chief executives or secretaries in the Companies Act.

These basic protections are to be welcome, not least, because in an age of pervasive information dissemination, where, as we all know, the Internet never forgets, individuals and their families should, at least, be able to find some refuge from public scrutiny in their homes.

This naturally begs the question of whether providing information that differs from official residency information may inhibit Police or judicial operations. Certain clauses, such as clauses 19, 26 and 45, stipulate that documents may be directly served to contact addresses.

I will note that clause 26 specifically states that such documents may be sent either via ordinary or prepaid registered post, but notably, no such language is included in clauses 19, 34, 45 or 65, albeit the preamble definition of contact address, which indicates the necessity of a physical address at which the individual can be contacted by post, may be sufficient. Relatedly, it does strike me as somewhat odd that there is no requirement that registered post be used to ensure receipt. This is a fairly common practice for at least initial attempts at personal service prior to any application for substituted service thereafter.

Sir, several clauses take steps to enhance the corporate regulatory landscape. Clause 39 allows the registrar to unilaterally amend the register of directors for a company with reasonable cause. But when paired with clause 8, where information may be obtained from any authorised information service provider, which could, of course, entail non-governmental entities, problems could emerge, especially in a world where there may be incentives to generate fraudulent information, or even if, in the absence of malicious intent, such entities suffer from lapses that could corrupt their databases.

To be fair, the proposed amendments to section 30A, Part 4, relieves the person of liability if there is erroneous or inaccurate information collected, if they have not been offered an opportunity to verify the said information. But it nonetheless raises questions about how much the Government should be reliant on external information sources.

I will be the first to acknowledge that restricting data providers to only intra-Government sources may be even worse, given capacity limitations in the public sector. But it, nevertheless, places a strong onus on the Government to carefully verify the accuracy of information obtained.

I trust that this will be emphasised to public officials as part of standard operating procedures as they will go about their due diligence processes. Furthermore, I hope that ACRA will clearly post information on its website that explains the appeal mechanisms that may be available to individuals who wish to contest a disqualification.

Sir, in introducing these two sets of amendments, the Government is threading a fine needle of easing what could otherwise be tiresome or onerous processes involved in individuals pursuing private interests, while also ensuring that these private interests do not come into conflict with broader public and social objectives. In this sense, then, it is important to remember that we must guard against carrying any pro-business policy too far.

We must understand that supporting business does not imply coddling them from exposure to competitive market forces nor does it preclude taking care of other stakeholders, especially workers, in our economy. For these reasons, sensible regulation must be necessary. Recent events surrounding the Doing Business report are instructive.

The World Bank suspended the publication of the indicators in 2020, in part because of backlash about how the measures failed to adequately account for pro-social considerations and perceptions that there was widespread gaming of the system. Worse, the indicators were accused of favouring a right-leaning ideology. For instance, it included an indicator for paying taxes that seemed to suggest that lower corporate taxes were always unambiguously better.

As the Workers' Party has argued on multiple occasions in this House before, a higher effective corporate tax rate, if directed appropriately, can yield many positive benefits, ranging from averting an increase in the Goods and Services Tax (GST) to providing further relief to small and medium enterprises (SMEs), to reinvesting more in our home-grown companies.

Another controversial indicator related to employing workers, where more robust labour regulations were treated crudely as a cost, thereby failing to take into account the offsetting benefits of stronger employment protections. The indicator was justifiably excluded from the compilation of the Aggregate Index since 2011, but its presence in the report was, nevertheless, viewed as symptomatic of the report's implicit biases.

More generally, we should also not allow the world to think that an easy business environment also means a permissive one. Some have even suggested the term "Singapore-washing", the process where foreign actors take advantage of our relatively simple registration processes and global reputation for incorruptibility to incorporate fronts for dubious business activities, in some form of a quid pro quo for investing in our city-state. Such a mindset will undermine our very hard-won brand name and eventually come back to bite us. Recent incidents have already raised questions on how indulgent we appear to be of illicit activities, especially with regard to financial flows.

The sentences meted out for the $3 billion Fujian gang money laundering case of between 13 months and 15 months' jail time struck some as excessively lenient. In a written response to the hon Member Mr Leong Mun Wai, Minister Shanmugam indicated that this duration is comparable to other jurisdictions, although he did concede that further tightening of regulatory measures was warranted.

The decision to extradite the alleged malware purveyor Wang Yunhe to the United States (US), without also prosecuting him for crimes here, also raises the question of why our laws do not appear to be sufficient to ensnare such criminal operations. After all, US court documents revealed that the companies he registered here were shell companies used to "concealed the identity and illegitimate nature of his proceeds".

I am aware that we will be debating the Anti-Money Laundering Bill in this House next month, where these matters are very likely to be debated at length. Nevertheless, I hope that we will reflect on whether our drive towards simplifying doing business here may have ended up erring on the side of becoming too permissive.

In closing, I will urge this House to guard against allowing the undeniable benefits of a favourable business climate to entrench itself as an ideology, divorced from the counter-balancing role of sound corporate regulation and, subsequently, insulated from critique. Internal criticism of the Doing Business report contributed to the resignation of the then-Chief Economist of the World Bank.

As we debate the present Bill in Parliament, it is my hope that we also remain clear-eyed on the value of considered, constructive criticism of our own business environment, too.

Mr Don Wee.

Mr Speaker, Sir, I would like to seek clarifications from the Minister on some aspects of this Bill. Mr Speaker, Sir, in Mandarin.

(In Mandarin): The first set of queries relate to the purpose of the Bill and its impact on businesses.

What are the primary reasons for requiring business entities, position holders, shareholders and members to maintain updated email addresses with ACRA? How will the use of a digital mailbox for statutory correspondences and notices (excluding summons) will affect the communication process for businesses and individuals?

I would also like to know which specific Government agencies will provide information to ACRA to keep its registers up to date? In addition, how will the process of updating registers with information from these agencies be managed and monitored for accuracy?

There is a clause to empower the Registrar to obtain and use information from specified Government agencies. Such updates should include email addresses and mobile numbers of Singaporeans and Employment Pass holders who are acting as company officers on behalf of the entities. Government agencies like the Immigration and Checkpoints Authority (ICA) and the Ministry of Manpower (MOM) should have the most updated information.

My second set of questions concern foreign companies. What specific changes will be made to streamline financial reporting requirements for foreign companies registered under the CA? How will these changes benefit foreign companies operating in Singapore?

One of the proposed changes is to empower the Registrar to notify the recipient via electronic means on how and when to access documents and information sent by the Registrar. How does the Registrar verify or ensure that the foreign recipients' email addresses or mobile numbers belong to the rightful person? Foreign companies incorporated by the same corporate secretaries may already be sharing the same email addresses or office numbers when updating their particulars with ACRA.

(In English): Thirdly, on data privacy and security. How will the tiered framework for the disclosure of personal data ensure privacy and security for different user groups? What measures will be in place to protect the data in the digital mailboxes?

Next, what are the new powers granted to the Registrar concerning the registers of directors? How will the Registrar determine and reflect the disqualification status of the individuals? Would the Ministry share with the House what were the main concerns and feedback raised during public consultation? How have MOF or ACRA addressed these concerns in the final version of the Bill?

Notwithstanding my queries, I can see the many benefits from these amendments. We can expect enhanced efficiency and speed in communication between ACRA and business entities, potential cost savings by reducing physical mail and increased accountability for businesses to maintain updated contact information.

With more accurate and up-to-date registers, the administrative burden on businesses should be reduced. Compliance processes may be simplified due to better integration with other Government agencies. There should also be greater privacy and security with improved data protection through a tiered disclosure framework, through businesses that may need to invest to meet new data security requirements.

As the Registrar will be better empowered to maintain accurate records of directors, including disqualification status, this could lead to greater transparency and trust in corporate governance. For foreign companies, these changes would potentially reduce compliance costs and administrative burdens, too, making Singapore a more attractive destination for their investments. Hence, I support the Bill.

Mr Yip Hon Weng.

Mr Speaker, Sir, this Bill represents a significant step forward in our journey towards digital transformation. Notwithstanding, I have several clarifications.

First, Mr Speaker, Sir, the new regulations must ensure digital inclusion and smooth implementation for all stakeholders. The Bill mandates the use of electronic transaction systems for interactions with the Registrar. This move towards digitisation is commendable. It streamlines processes and increases efficiency. However, we must also consider the potential accessibility issues that may arise.

There are individuals and small business owners who may lack digital literacy or access to reliable Internet services. The digital divide is a reality we must acknowledge and address. It is our responsibility to ensure that the benefits of digitalisation are accessible to all, regardless of their digital literacy or Internet accessibility, and that no one is left behind.

We must consider and mitigate any negative impact on SMEs. SMEs are the backbone of our economy, providing employment, fostering innovation and contributing significantly to our gross domestic product (GDP). Therefore, for any regulatory changes, we must consider the potential impacts on these vital entities.

While the Bill aims to streamline regulatory processes, I would like to ask what specific considerations have been taken to ensure that SMEs, which may not have the same resources as large corporations, are not disproportionately burdened by the new requirements? Specifically, these businesses may lack the resources to quickly adapt to new regulations. The costs of compliance can also be disproportionately higher for them. We need policies that support, rather than hinder these businesses.

An effective way to address the concerns of businesses and render the necessary support, is clear implementation and transition periods. This will give stakeholders time and resources to adapt. Can the Ministry provide detailed insights into the planned implementation timeline?

A clear and manageable transition plan is critical to ensure that stakeholders are adequately prepared for the changes, reducing potential disruptions. We need to understand how these changes will be rolled out and over what time period. Furthermore, what support mechanisms are in place for entities to transition smoothly to these requirements?

Second, Mr Speaker, Sir, this Bill must address data privacy concerns, while ensuring alignment with international standards. The Bill provides for the sharing of information, including personal data, with authorised information service providers and other public agencies. This is a matter of great significance, especially in an era where data breaches are increasingly common and global concerns about data privacy are at an all-time high. Can the Ministry elaborate on the specific measures that are in place to safeguard this data against breaches and misuse? In this data age, data is an asset, but it can also be a liability if not handled with the utmost care. We must ensure that the Bill aligns with the best practices in data security. We need robust data protection measures that not only comply with our national standards but also stand up to international scrutiny.

As we strive to enhance our corporate regulatory regime and data management practices, it is critical that we benchmark ourselves against the best in the world. How does this Bill align with international best practices in corporate regulation and data management? Are there specific countries or frameworks that influenced the drafting of this Bill? Understanding this can provide valuable insights into the strengths of our Bill and areas where we can improve. It can also help us ensure that Singapore remains competitive and compliant with international norms.

Further to the above, I am heartened by the exclusion of residential address from public disclosure, if contact address is available, pursuant to the proposed new section 30C. In particular, the new provisions would prevent the misuse of the residential address of company officers. Such misuse may include the use of such residential address for the purposes of harassing officers for perceived wrongs of the company.

Third, Mr Speaker, Sir, we must commit to a process of continuous monitoring and evaluation to ensure the long-term effectiveness and impact of the changes introduced by this Bill. Can the Minister explain the mechanisms that will be put in place to monitor and evaluate the long-term effectiveness and impact of these changes? We need robust systems that allow us to track the outcomes of our legislation and make necessary adjustments over time.

Furthermore, how will the Ministry ensure that the Bill's objectives are being met without unintended negative consequences? Legislation, no matter how well-intended, can sometimes have unforeseen impacts. It is our responsibility to monitor these impacts and take corrective actions when necessary. Continuous monitoring and evaluation are essential for adapting and improving regulatory frameworks over time.

In conclusion, Mr Speaker, Sir, I would like to draw parallels between the ACRA Bill and the Accountants (Amendment) Act, which I also spoke on in 2022. Both pieces of legislation aim to enhance our audit regulatory regime and introduce measures for better compliance with professional requirements and standards. This is a testament to our continuous efforts to strengthen our regulatory framework and maintain the highest standards of corporate governance.

As someone who is not an accountant by training, but who has studied financial markets and econometrics, and works in an international investment firm, I view these changes as necessary and important from a private sector perspective. However, as mentioned above, I urge the Ministry to consider the following.

First, digital inclusion. We must ensure a smooth transition for all stakeholders, including those with limited digital literacy or Internet access. SMEs, the backbone of our economy, may consider particular support to adapt to the new requirements. Second, data privacy. The Bill must have robust data protection measures aligned with international best practices to safeguard against breaches and misuse. Third, long-term effectiveness. We need a plan to monitor and evaluate the long-term impact of these changes to ensure that they achieve their objectives without unintended consequences.

Singapore is an established international financial centre and we aspire to project ourselves further, to be a leading global financial centre in the world. Unfortunately, we have been recently hit by a series of high-profile money laundering cases. This Bill will tighten and enhance our measures vis a vis corporate governance, which will hopefully minimise such cases moving forward. In doing so, we will improve investor confidence in Singapore, in a world now increasingly fraught with uncertainty, especially with digitalisation and cybercrimes. Ensuring that our information collected is updated is a critical part of this process.

While I support this Bill, I urge the Ministry to address these concerns and provide a clear implementation plan with support mechanisms for businesses. Let us ensure that Singapore remains a competitive and compliant global financial centre through this digital transformation, but also one that is inclusive and protects data privacy. I support this Bill.

Minister Indranee.

Mr Speaker, I would like to thank the Members of Parliament Mr Louis Ng, Assoc Prof Jamus Lim, Mr Don Wee and Mr Yip Hon Weng for their comments and support of the Bill.

They have raised questions around four main themes, which can be summarised as follows: one, relating to the transition to digital communications; two, the introduction of the new contact address regime; three, data protection and information sharing; and four, the proposed enhancements to the corporate regulatory regime.

I will address them in turn. Let me start by addressing questions relating to ACRA's transition to digital communications.

Mr Louis Ng asked how documents sent digitally would be deemed to have been received by the recipient. Mr Don Wee asked about the security of ACRA's digital mailbox system and how the Registrar can ensure that the email addresses provided are accurate.

Clause 28A provides that the document sent by ACRA is considered effective when it is uploaded to the recipient's digital mailbox and an email notification is sent to the recipient. As the email notification serves to alert individuals and businesses to access the information or documents addressed to them or their associated business entities, it is in the recipient's interests and their responsibility to provide an accurate email address to ACRA. If, for example, they do not fulfil their obligations under the Companies Act because they had provided an inaccurate or outdated email address and did not receive the alerts on ACRA's reminders and notices, they can still be held responsible.

To Mr Don Wee's query on security, the BizFile system is a secure environment and any information or document uploaded to the digital mailbox can only be accessed by individuals and businesses when they log in with their Singpass and/or CorpPass.

Mr Louis Ng asked whether there are any plans to allow Court documents to be served digitally. While the Bill does not cover that, ACRA will consider Mr Louis Ng's suggestion in future reviews but that will also depend on the rules of Court and what they permit.

Mr Don Wee and Mr Yip Hon Weng also asked about the impact of the transition to digital communications on individuals and businesses, particularly SMEs. Given that digital filing has been in place since 2003, most individuals and businesses that transact with ACRA would be familiar with the BizFile portal. So, we expect the transition to digital communications to be manageable. That said, we recognise that some individuals and businesses may need more time to adjust to digital communications. Hence, we will provide a one-year transition period. During this time, ACRA will send both hard copy documents and digital copies with reminders about the full transition to digital communications.

Next, I will address questions relating to the contact address regime. Mr Louis Ng asked how the disclosure of residential addresses when the contact address is found to be not effective will help to bring documents to the individual's notice. As mentioned in my opening speech, the contact and residential addresses are key in reaching individuals associated with the company. If the individual cannot be reached at the contact address provided, it would not be unreasonable to assume that the contact address is either inaccurate or outdated. To ensure that the individual can still be reached, ACRA may then disclose the individual's residential address for corporate transparency and to allow effective service of documents because, presumably, the individual will have to go home at some point in time.

Mr Louis Ng also asked about the rationale for imposing a three-year restriction on updating contact addresses after the residential address is disclosed by the Registrar. The three-year period is to deter individuals from providing fake or unreliable contact addresses. We do not want individuals to intentionally file inaccurate contact addresses in order to avoid being reached, which would undermine the contact address regime. Hence, if individuals are uncontactable at the contact addresses they provided, it suggests these addresses are ineffective as a way to reach these individuals.

In this situation, ACRA has the power to publicly disclose their residential addresses for corporate transparency purposes. Once this happens, then, as a form of deterrence, these individuals will not be allowed to put up new contact addresses for a period of three years, even if they wish to do so for privacy reasons. They will have to accept their residential address functioning as the contact address for three years. However, if an individual genuinely needs the three-year restriction to be reviewed, they can make an application to the Registrar, who will consider the facts and circumstances of each case before deciding whether to allow the individual to provide another contact address.

Let me move on to questions relating to data protection and information sharing.

Mr Louis Ng asked whether lawyers will be able to obtain residential addresses of individuals registered with ACRA for the purpose of service of Court processes. The scope of the Bill does not presently cover this. However, the Member has raised a good suggestion. To provide for this, we will consider amending the disclosure framework relating to the use of personal information in the Sixth Schedule to the Bill, which can be amended as subsidiary legislation to permit disclosure of residential addresses to lawyers for the purposes of service of process.

Mr Louis Ng, Mr Don Wee and Mr Yip Hon Weng asked about the safeguards in place when sharing information with authorised information service providers and other specified persons. ACRA is committed to data protection. ACRA will implement the necessary safeguards, which include requiring these third parties to sign undertakings or agree to terms and conditions governing data use to prevent the disclosure of data to unauthorised persons or for unauthorised purposes. Breaches may result in severe consequences, including the termination of service contracts or debarment from Government procurement.

Mr Don Wee asked which Government agencies would provide information to ACRA and the accuracy of such information. The Government agencies that would provide information to ACRA will be published in the Government Gazette. For instance, the Immigration and Checkpoints Authority, or ICA, will provide realtime data updates of NRIC holders' personal information to ACRA registers. If any data discrepancies come to ACRA's attention, ACRA will conduct verification with the relevant agencies. This ensures accuracy of ACRA's registers and provides greater convenience to individuals and businesses who do not then need to update multiple agencies.

Fourth, let me address questions related to the refinements to our corporate regulatory regime.

Mr Don Wee asked about the Registrar's powers in relation to the registers of directors and how the Registrar will determine and reflect the disqualification status of disqualified directors on ACRA registers. The Bill will empower the Registrar to amend the register based on specific provisions in the Companies Act which set out the circumstances an individual is disqualified from acting as a director. This status will be publicly accessible, ensuring transparency on the eligibility of individuals to be appointed as directors. Once the disqualification period ends, the status will be removed.

Mr Don Wee also asked about the changes to the financial reporting requirements for foreign companies registered under the Companies Act. The amendments aim to reduce the administrative burden on foreign companies by allowing them to file the applicable financial statements that they have already prepared as long as the requirements under the Companies Act are met. For example, if a foreign company is listed in Singapore overseas, it can lodge with ACRA the financial statements prepared in compliance with the applicable rules of the exchange on which it is listed.

In relation to the questions raised by Members on the Bill process, let me assure the House that careful study has been done in the formulation of this Bill. We looked at the best practices of leading jurisdictions and adopted them for our local context. For example, our approach to not disclose residential addresses of individuals associated with businesses is similar to the United Kingdom and Hong Kong.

In the public consultations held in 2020, 2022 and 2024, the feedback received was broadly in support of the proposals and we incorporated the relevant feedback received into this Bill. For example, financial institutions highlighted the need to have access to residential addresses of individuals associated with businesses for compliance with anti-money laundering statutory obligations. As I have mentioned in my earlier speech, we accepted this feedback and provided for this under the disclosure framework. We also regularly review our policies and legislation to maintain a pro-business environment while ensuring a robust regulatory regime.

Assoc Prof Jamus Lim had a couple of questions. Let me just address that. He had mentioned, in relation to foreign companies, the suggestion was that clause 48 would make it easier for foreign investors to register the subsidiaries of their businesses. I just want to clarify that the purpose of clause 48 is not to make it easier for foreign investors to register their companies, but as I mentioned in my speech earlier, it relates to the streamlining of financial reporting requirements by foreign companies. In other words, if they have already prepared financial statements which substantially meet our requirements, then they can use that and it is easier for them.

There was another point which Assoc Prof Jamus Lim raised. He mentioned that it is odd that there was no requirement that registered posts be used to ensure receipt, it being a common practice for, at least, initial attempts at personal service prior to any application for substituted service thereafter. Actually, they are all three different concepts. Assoc Prof Jamus Lim may be confused between the three.

Registered post is not the same as personal service and personal service is not the same as substituted service. When there is personal service, you have to actually hand it to the person directly, in person. You would never, in any circumstances, use registered post as a means for personal service, nor would it be a prerequisite. You would send by way of registered post if you want to be doubly sure that it reaches a certain address. But registered post does not ensure it reaches an individual because you can have registered post delivered to a certain address. The domestic helper may be at home, another family member may be at home, not the addressee. So long as they receive it and sign for it, it is registered, but that is not personal service.

Then, substituted service comes when you are not able to actually deliver to the person face-to-face. Usually, for Court documents, the Court is satisfied that you could not meet that person face-to-face, so you have a substituted service, leaving it at the doorstep, in some cases, if the Court allows, sending it digitally. So, I just wanted to lay that framework so that everybody understands all three are very separate things for separate purposes.

However, in terms of what the regime provides, first, documents for Court proceedings will continue to be served in hard copy, including whichever means they are required to be served. Second, under existing legislation, ACRA sends certain documents only digitally, as there is no requirement for these documents to be sent in hard copy or by registered post. For documents required by ACRA-administered legislation to be sent in hard copy, clause 28A will allow the documents to be sent digitally.

There was one more question, which was whether the contact address would inhibit Police or enforcement action. The answer is no, because the residential addresses still need to be filed with ACRA. It is just that they will not be made public, but ACRA can share the residential address and other data or information with other Government agencies if needed.

With that, Sir, in conclusion, the amendments in this Bill will strengthen data protection, facilitate digital communications between the Government and businesses and streamline our corporate regulatory framework. It strikes a fine balance between corporate transparency and personal data protection as we advance the digitalisation of our corporate regulatory services. Mr Speaker, I beg to move.

Are there any clarifications? Assoc Prof Jamus Lim.

Mr Speaker, I thank the Minister for the clarification about the distinction between registered post, personal service and substituted service. In fact, my comment is a little more straightforward and, that is, that in one of the clauses, clause 26, it states specifically that documents may be sent by ordinary or prepaid registered post. But for clauses 19, 34, 45 and 65, in terms of contacting the individual, no such requirement exists. So, I thought that there was an inconsistency that I hope the Minister will be able to clarify.

Can I just check the other clauses? Clause 26, I got. Which were the other clauses that were being referred to?

Yes, they were clauses 19, 34, 45 and 65. And there, it just states that a contact address, but it does not require, specifically, the language of ordinary or prepaid registered post is not included, unlike clause 26A.

I will have to have this checked specifically. However, the general principle of the contact address is that if you have done a BizFile search or a company search, you will know that when they show, let us say, director's particulars, there will always be an address. That is for general purposes. There will be, sometimes, when you have specific documents where you need a specific mode of delivery, for example, Court documents; or if we send reminders to pay money, we will normally do registered post. So, the Act sometimes prescribes situations where a specific mode has to be followed. But when you file general particulars, there is a general address.

Clause 16, if I am not mistaken and that was the one that was being referred to— no, clause 19, that talks about the alternate address being replaced with contact address. An alternate address is one of those generic addresses. So, when you print out the search in an ACRA search, you will see director's name. Then, there may be residential address. Then, there may be alternate address. This is the generic one and this is the one for alternate addresses which will be replaced by the contact address regime.

Clearly, in the Act, it contemplates different underlying functions and you have different addresses or different things for that. So, one refers to the address, the other refers to the mode of delivery of the document.

Any more clarifications for the Minister? I do not see any.

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. – [Ms Indranee Rajah.]

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

Order. I propose to take a break now. I suspend the Sitting and will take the Chair at 4.50 pm.

Sitting accordingly suspended

at 4.33 pm until 4.50 pm.

Sitting resumed at 4.50 pm.

[Deputy Speaker (Ms Jessica Tan Soon Neo) in the Chair]