International Enterprise Singapore Board (Amendment) Bill

Order for Second Reading read.

The Minister of State for Trade and Industry (Dr Koh Poh Koon): Mdm Speaker, I beg to move, "That the Bill be now read a Second time."

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.

IE Singapore also regulates the commodity trading industry through the Commodity Trading Act (CTA) and the Rubber Industry Act (RIA).

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 a single agency. After the transfer, the scope of the CTA will be limited to spot commodity trading.

The RIA regulates the rubber trading industry, including forward trading, which entails physical delivery of traded rubber. As physical commodity trading is not the regulatory domain under MAS, regulatory oversight over such activities will remain with IE Singapore.

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.

Mdm Speaker, I will now go through the key amendments in the Bill.

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.

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.

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.

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 hon Member Mr Louis Ng who pointed out 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.

Clauses 2, 3, 4 and 5 amend sections 5, 6, 19 and 20 of the IESBA respectively to give legislative effect to these changes.

IE Singapore has conducted a public consultation on the draft Bill and there were no objections to the proposed amendments.

Mdm 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. Mdm Speaker, I beg to move.

Mdm Speaker: I understand there are no speakers for this Second Reading, but Mr Louis Ng, do you wish to seek a clarification?

3.03 pm

Mr Louis Ng Kok Kwang (Nee Soon): Thank you, Madam. As the Minister of State has mentioned, following the First Reading of the Bill, I did submit some of the concerns to the Minister of State. I thank him for providing some clarifications on some of the concerns I had raised.

I just have two further clarifications. One, as he mentioned about the Singapore Rubber Fund, I would like to ask if there are any plans or ideas in the pipeline regarding the regulation of rubber trade and industry, bearing in mind that while rubber production in Singapore has fallen over the years, Singapore remains as a big player in this industry. In this regard, this is still an industry that the Government should remain interested in and assist as much as possible.

Secondly, referring to section 5(1)K, I note that IE Singapore may advise and assist only the Government and public authorities. Would it be more helpful for businessmen and women and companies if IE Singapore could also advise and assist any persons, bodies or organisations since IE Singapore is currently already able to act as agents for them?

3.04 pm

Dr Koh Poh Koon:Mdm Speaker, I would like to thank Mr Louis Ng who has spoken and raised some questions about points in the Bill. I will address the points raised.

Mr Ng pointed out that Singapore remains a big player in the rubber industry and asked if there are any pipeline plans relating to the regulation of the rubber trade and industry. The regulations under the RIA, which includes licensing of rubber traders and dealing, shipping and treatment of natural rubber, have served the industry well. It remains relevant. IE Singapore will continue to administer the RIA and will conduct periodic reviews of the Act. IE Singapore will also continue to work in promoting the growth of the rubber trade and industry in Singapore.

Mr Ng also asked if IE Singapore's advisory and assistance role pertaining to the development or regulation of trade can be extended to persons, bodies or organisations. I would like to clarify that this is already provided for under section 6(2) of the IESBA, and it is, in fact, the key role that IE Singapore plays today. IE Singapore provides advisory and assistance to individuals and public organisations in various ways. These include organising industry events, such as the annual Global Trader Dialogue and regulatory advisory seminars, that help individuals and companies keep up to date with the latest developments affecting global commodity trading.

Through its different assistance schemes, such as the Market Readiness Assistance and Global Partnership programmes, IE Singapore also helps Singapore companies expand their presence overseas.

To conclude, IE Singapore plays an important role in the promotion and development of the trading industry. It also takes on certain regulatory functions to ensure commodity trade is carried out smoothly and efficiently.

The proposed amendments to the IESBA will provide better clarity on IE Singapore's regulatory functions in view of the reduced scope of the CTA. Mdm Speaker, I beg to move.

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. – [Dr Koh Poh Koon].

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