Speech by Mr Neil Parekh Nimil Rajnikant, Member of Parliament, on Significant Investments Review Bill
Investments, both local and foreign, are very important for the Singapore economy, both for creating quality jobs for our workforce as well as for growing the overall economy.
interests but also by geopolitical objectives. These concerns are most pronounced where the acquiring firms are state-owned or controlled.
Clarity and Consistency of policy is what sophisticated investors around the world look for. Striking a balance between ensuring national security and maintaining a business-friendly environment is crucial for enhancing Singapore’s competitiveness in the global arena.
Now, I would like to take this opportunity to seek some clarifications on this bill:
- The bill empowers the Minister to take various actions, including designating entities, issuing remedial directions, and conducting reviews of transactions. The potential for such an intervention may potentially result in delays in the approval of forthcoming legitimate investments. Could the minister please elaborate on the scenarios that may warrant remedial action? Has a maximum timeline been provided for issuing remedial decisions and conducting reviews of transactions? Also, has a timeline been established for the review of the list of designated entities?
- Another point where I would like to seek a clarification on is what may constitute “National Security Interests"? As we have witnessed in some instances in other nations, the ambiguity surrounding this definition has led to significant losses for investors.
- In the current geopolitical environment, the biggest national threat for Singapore is the economic threat. As had been mentioned, this new legislation will be in addition to the existing sectoral legislation in regulated sectors such as telecom, banking, and utilities. I would like to seek clarification how this will Not lead to inconsistencies in regulation of entities with a similar economic risk profile? Would we not have been better served by having one clear, consistent, and comprehensive Bill that covers all relevant sectors and entities? From a business investor point of view having one single comprehensive process would provide the enhanced clarity and consistency that is desired.
- In this regard I would like to seek a clarification on whether a more comprehensive approach to regulating foreign investments in entities significant to Singaporeans' daily lives was considered?
For example, in Australia, the Foreign Acquisitions and Takeovers Act 1975 applies to all foreign investments in that country. Having a similar Act for Singapore would help maintain all critical entities that play a key role in the daily life of all Singaporeans to remain in control of Singaporeans rather than fall prey in the hands of foreign investors who perhaps maybe more focused on short term profits rather than optimizing quality products and services for all Singaporeans.
To maintain the transparency, consistency, and clarity that investors desire Perhaps a high dollar limit of a minimum transaction value of S$ 400 million be established for such foreign investments to be included in this process. Establishing such a higher minimum transaction value could perhaps help maintain efficiency without compromising regulatory oversight and continue to make Singapore an attractive destination for foreign investment. In my view, in the current geopolitical environment such a broader proposal for a more comprehensive bill would be understood and readily accepted by foreign investors. - Many large institutional investors cannot invest in “designated entities” unless there is a clear mechanism for these designated entities to potentially regain their undesignated status in the future. Can you please provide information about the process established for such designated entities to be undesignated in the future?
- Effective communication of the key elements of the legislation with the business community is vital. May I get a clarification on the plans the Ministry has to collaborate closely with trade associations and chambers to provide clarity and potentially conduct debrief sessions for impacted parties to ensure better understanding and compliance with this new legislation?
In summary, aiming to enhance the resilience of the economy and strengthen Singapore’s position as a trusted hub for businesses to invest with confidence-the introduction of the SIRB at this time is highly advantageous for Singapore.
This Bill provides the necessary flexibility to the minister to act swiftly and decisively when needed. The establishment of the Office of Significant Investments Review also provides a very useful dedicated one-stop touchpoint for all stakeholders.
Mr Speaker Sir, notwithstanding my request for some clarifications, I believe this Bill is a very good First step for us to manage the unique risks emerging from allowing meaningful investments in critical entities in Singapore. I stand in support of the bill.
Thank You.
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