Monetary Authority of Singapore
SECURITIES AND FUTURES ACT
(CAP. 289)
GUIDELINES ON THE AGGREGATION OF OFFERS
MADE PURSUANT TO THE EXEMPTIONS FOR SMALL
OFFERS OF PRIVATE PLACEMENT

Guidelines on the Aggregation of Offers made pursuant to the Exemptions for Small Offers or Private Placement MONETARY AUTHORITY OF SINGAPORE 2 Guideline No. : SFA 13 – G17 Issue Date : 15 October 2005 (last revised on 8 October 2018) OFFERS OF INVESTMENTS (SECURITIES AND SECURITIES-BASED DERIVATIVES CONTRACTS) GUIDELINES ON AGGREATION OF OFFERS MADE PURSUANT TO THE EXEMPTIONS FOR SMALL OFFERS OR PRIVATE PLACEMENT 1 PURPOSE
1.1 These Guidelines are issued by the Monetary Authority of Singapore [the
“Authority”] pursuant to section 321 of the Securities and Futures Act (Cap. 289) [“SFA”]. The objective of these Guidelines is to clarify the Authority’s policy intent and regulatory objectives in respect of section 272A(5) and section 272B(3) of the SFA which requires a person making an offer of securities or securities-based derivatives contracts of an entity or business trust in reliance on an exemption under section 272A(1) or 272B(1) to aggregate closely related offers made during the last 12 months when determining whether the applicable limit under the relevant exemption has been exceeded (hereinafter the “aggregation rule”).
1.2 These Guidelines also seek to provide guidance on how the exemption under
section 272A(8)(c) of the SFA, when read together with the exemption under regulation
36 of the Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations 2005 [the “SF(OI)(SD) Regs”] Securities and Futures (Offers of Investments) (Securities and Securities-based Derivatives Contracts) Regulations 2018 [the “SF (OI)(SSDC) Regs”], is intended to facilitate market-making for securities or securities-based derivatives contracts acquired under section 272A(1). 2 DEFINITION
2.1 For the purposes of these Guidelines:
“specified person” means—
(i) a holder of a capital markets services licence to deal in capital markets products that are securities or securities-based derivatives contracts; (ii) an exempt person in respect of dealing in capital markets products that are securities or securities-based derivatives contracts; (iii) a person licensed under the Financial Advisers Act (Cap. 110) [“FAA”] in respect of the provision of financial advisory services concerning investment products;

Guidelines on the Aggregation of Offers made pursuant to the Exemptions for Small Offers or Private Placement MONETARY AUTHORITY OF SINGAPORE 3 (iv) an exempt financial adviser as defined in section 2(1) of the FAA; or (v) a person who is licensed, approved, authorized or otherwise regulated under the laws, codes or other requirements of any foreign jurisdiction in respect of dealing in capital markets products that are securities or securities-based derivatives contracts or the provision of financial advisory services concerning investment products, or who is exempted therefrom in respect of such dealing or the provision of such services. 3 STATUTORY REQUIREMENTS Exemption for Small Offers under section 272A(1) of the SFA
3.1 Section 272A(1) of the SFA provides an exemption from Subdivisions (2) and (3)
(other than section 257) of Division 1 of Part XIII for personal offers of securities or securities-based derivatives contracts of up to S$5 million (or such other amount as may be prescribed by the Authority) in any 12- month period made to persons who are likely to be interested in the offer, having regard to — (a) any previous contact between those persons and the person making the offer1 ; (b) any previous professional or other connection established between those persons and the person making the offer1 ; or (c) any previous indication made by those persons to the person making the offer or a specified person that they are interested in offers of that kind2 (hereinafter referred to as the “small offers exemption”).
3.2 The applicable limit for the small offers exemption is in respect of the amount of
funds raised (calculated in accordance with section 272A(4) of the SFA) in any 12

1
It is not the intent for specified persons to rely on the “previous contact” and “previous connection” limbs under section 272A(1) and section 272A(8)(c)(ii) of the SFA to offer securities or securities-based derivatives contracts to their network of retail clients without a prospectus. Any specified person who wishes to make an offer in reliance on the small offers exemption should instead rely on the “previous indication” limb under section 272A(1). 2 Any specified person who wishes to make an offer in reliance on the small offers exemption on the basis of the “previous indication” limb under section 272A(1) or section 272A(8)(c) should establish proper “know your client” procedures to ensure that the securities or securities-based derivatives contracts are offered only to those investors who have previously indicated interest in the exempted securities or securities-based derivatives contracts and who are fully aware of the risks involved. Further, after assessing the investor’s financial means and risk profile, the specified person ought to be satisfied that the investment in exempted securities or securities based derivatives contracts is appropriate for the investor. Please see the Guidelines on Personal Offers made pursuant to the Exemption for Small Offers, paragraph 6 on the “know your client” and pre￾qualification procedures.

Guidelines on the Aggregation of Offers made pursuant to the Exemptions for Small Offers or Private Placement MONETARY AUTHORITY OF SINGAPORE 4 months and not on the amount of funds offered. Small offers resale exemption under section 272A(8)(c) of the SFA
3.3 Section 272A(8)(c) of the SFA provides an additional exemption for subsequent
offers of securities or securities-based derivatives contracts which were initially acquired under the small offers exemption. To qualify for the exemption under section 272A(8)(c), the person making the subsequent offer must comply with certain conditions such as restricting the offer to only persons who are either connected to the initial offeror, or who have previously indicated interest to the initial offeror or a specific person that they are interested in offers of that kind (hereinafter referred to as the “small offers resale exemption”)3 . The amount of funds that may be raised from offers made in reliance of the exemption under section 272A(8)(c) is not subject to any limit.
3.4 An illustration of how a holder of a capital markets licence for dealing in capital
markets products that are securities or securities-based derivatives contracts or a person exempted from such licensing may rely on this exemption to conduct market-making activities for securities or securities-based derivatives contracts which it had acquired from the issuer under the small offers exemption is provided in paragraph 9.
3.5 The small offers exemption and the small offers resale exemption are illustrated in
a diagram in Appendix 1.
Resale of securities or securities-based derivatives contracts acquired under the small offers exemption
3.6 Subsequent purchasers who have acquired securities or securities-based
derivatives contracts under the small offers exemption or the small offers resale exemption can rely on the small offers resale exemption or any other exemption under Subdivision 4 of Division 1 of Part XIII of the SFA to resell the securities or securities￾based derivatives contracts without issuing a prospectus. However, the small offers exemption under section 272A(1) of the SFA may be invoked by the subsequent purchaser only after 6 months have elapsed from the date the securities or securities￾based derivatives contracts were acquired from the initial offeror under the small offers exemption. This restriction is imposed so as to confine the group of offerees to persons who are connected to the initial offeror within the first 6 months.

3 For the avoidance of doubt, subsequent purchasers of securities or securities based derivatives contracts offered in reliance on the exemption under section 272A(8)(c) can continue to rely on the exemption under section 272A(8)(c) to resell those securities or securities-based derivatives contracts.

Guidelines on the Aggregation of Offers made pursuant to the Exemptions for Small Offers or Private Placement MONETARY AUTHORITY OF SINGAPORE 5 Aggregation rule for offers made in reliance on the exemption under section 272A(1) of the SFA
3.7 In ascertaining whether the amount of funds raised from offers made in reliance
on the exemption under section 272A(1) of the SFA exceeds the S$5 million limit, the person making the offer is required, under section 272A(5), to aggregate – (a) all amounts raised by him from offers of securities or securities-based derivatives contracts issued by the same entity; and (b) all amounts raised, whether by him or by another person, from offers of securities, securities-based derivatives contracts, or units in a collective investment scheme which are closely related offers, made within the last 12 months in reliance on the small offers exemption.
3.8 This means that an offer of securities or securities-based derivatives contracts
will qualify for the small offers exemption only if the amount to be raised from the current offer, taken together with the amount raised from all other offers of the same type of securities or securities-based derivatives contracts made by the same person and from all closely related offers of securities, securities-based derivatives contracts, or units in a collective investment scheme made by the person or another person under the same exemption within a 12-month period, does not exceed $5 million. Exemption for Private placement under section 272B(1) of theSFA
3.9 Section 272B(1) of the SFA provides a safe harbour for private placements of
securities or securities-based derivatives contracts of an entity or business trust offered to not more than 50 investors (or such other number as may be prescribed by the Authority) during a 12-month period (hereinafter referred to as the “private placement exemption”).
3.10 In the case of the private placement exemption, it should be noted that the
applicable limit is placed on the number of offerees (calculated in accordance with
section 272B(5) of the SFA) and not on the persons accepting the offer.
Resale of securities or securities-based derivatives contracts acquired under the private placement exemption
3.11 Subsequent purchasers who have acquired securities or securities-based
derivatives contracts under the private placement exemption can rely on any exemption under subdivision 4 of Division 1 of Part XIII of the SFA to resell the securities or securities-based derivatives contracts without issuing a prospectus.

Guidelines on the Aggregation of Offers made pursuant to the Exemptions for Small Offers or Private Placement MONETARY AUTHORITY OF SINGAPORE 6
3.12 However, where securities or securities-based derivatives contracts are offered to
a person pursuant to the private placement exemption with a view to those securities or securities-based derivatives contracts being subsequently offered for sale by that person to another person using the private placement exemption, both persons would need to be attributed towards the 50-offerees limit. Aggregation rule for offers made in reliance on the exemption under section 272B(1) of the SFA
3.13 As in the case of the small offers exemption, a person making an offer in reliance
on the private placement exemption will be required under section 272B(3) of the SFA to aggregate the following persons when determining whether the number of offerees has exceeded the 50-offerees limit:
(a) every person to whom an offer of securities or securities-based derivatives contracts issued by the same entity is made by the person making the offer; and (b) every person to whom an offer of securities or securities-based derivatives contracts of an entity or a business trust or units in a collective investment scheme, is made by the person making the offer or another person, where such offer is a closely related offer, within the last 12 months in reliance on the private placement exemption.
3.14 This means that an offer of securities or securities-based derivatives contracts will
qualify for the private placement exemption only if the number of offerees for the current offer, taken together with the number of offerees for all other offers of the same type of securities or securities-based derivatives contracts made by the same person and for all closely related offers made by the person or another person under the same exemption within a 12-month period, does not exceed 50. 4 RATIONALE FOR AGGREGATION RULE
4.1 The aim of the aggregation rule is to prevent offerors from circumventing the $5-
million limit under the small offers exemption or the 50-offerees limit under the private placement exemption, as the case may be, by breaking up what is essentially a single offer into smaller parts such that each part would qualify for an exemption when the single offer would not.
4.2 Given that the small offers exemption and private placement exemption have
been introduced primarily to facilitate fund-raising by small and medium sized enterprises,

Guidelines on the Aggregation of Offers made pursuant to the Exemptions for Small Offers or Private Placement MONETARY AUTHORITY OF SINGAPORE 7 the aggregation rule also seeks to ensure that an offeror will not be exempted from issuing a prospectus in a case where the offer is clearly not made for the purposes of private fund-raising e.g. in the case of investment products offered by financial institutions4 . 5 APPLICATION OF THE AGGREGATION RULE
5.1 The aggregation provision under section 272A(5) or 272B(3) of the SFA, as the
case may be, applies only in respect of offers that are made in reliance on the exemption under section 272A(1) or 272B(1) respectively. That is, an offer made in reliance of the small offers exemption is required to be aggregated only with other offers also made in reliance on the small offers exemption. Similarly, an offer made in reliance on the private placement exemption is required to be aggregated only with other offers also made in reliance on the private placement exemption.
5.2 For the avoidance of doubt, subsequent offers made in reliance on section
272A(8)(c) of the SFA are not subject to any aggregation rule. Hence, an offer made in reliance on a small offers exemption under section 272A(1) would not need to be aggregated with a subsequent sale of securities or securities-based derivatives contracts made in reliance on the exemption under section 272A(8)(c). 6 DETERMINATION OF A CLOSELY RELATED OFFER
6.1 In determining whether an offer is a closely related offer for the purposes of
section 272A(5) or 272B(3) of the SFA, as the case may be, the person making the offer
shall have regard to the factors prescribed in regulation 35 of the SF (OI) (SSDC) Regs.
6.2 In line with our policy objective for incorporating the aggregation rule, the
aggregation factors set out in regulation 35 of the SF(OI) (SSDC) Regs are constructed based on the intent of the offer, i.e. whether the securities or securities-based derivatives contracts are offered for the purposes of raising funds for itself or its own business operations, or are investment products offered in the ordinary course of the offeror’s business. In relation to the former, the aggregation factors seek to prevent circumvention of the applicable limit so as to ensure that the reach of the securities or securities-based derivatives contracts will remain limited in size and/or scope. The aggregation factors applicable for offers of investment products (such as asset-backed securities and structured notes), on the other hand, seek to ensure that financial institutions offering investment products in their ordinary course of business in excess of $5 million or to more than 50 offerees will continue to make proper risk and product

4 Except where the aggregate amount of investment products offered by the financial institution does not exceed $5 million or the aggregate number of offerees does not exceed 50persons.

Guidelines on the Aggregation of Offers made pursuant to the Exemptions for Small Offers or Private Placement MONETARY AUTHORITY OF SINGAPORE 8 disclosures when selling investment products to their retail clients. Aggregation of Offers of Securities or Securities-based Derivatives Contracts (other than Asset-Backed Securities and Structured Notes), and units in Real Estate Investment Trusts (“REITs”)
6.3 Specifically, paragraph (1) of regulation 35 of the SF(OI) (SSDC) Regs provides
that an offer of securities or securities-based derivatives contracts (other than asset￾backed securities and structured notes) is a closely related offer to – (a) another offer of securities or securities-based derivatives contracts (other than asset-backed securities and structured notes); or (b) an offer of units in a REIT, under section 272A(5) or 272B(3) of the SFA, as the case may be, if — (i) both offers form part of a single plan of financing; (ii) both offers are made for the primary benefit of the same person(s); or (iii) both offers are made in connection with the same business or in relation to a common business venture (“fundraising aggregation criteria”).
6.4 Paragraph (3) of regulation 35 of the SF(OI) (SSDC) Regs further clarifies that
in assessing whether two offers satisfy any of the prescribed circumstances in paragraph (1) of regulation 35 of the SF(OI) (SSDC) Regs, the person making the offer shall have regard to the intended usage of the net proceeds raised from each offer and the person(s) who have the right to determine how the net proceeds are to beused.
6.5 To provide some illustration as to what may constitute “a single plan of financing”,
“for the primary benefit of the same person(s)” or “in connection with the same business or in relation to a common business venture”, sample scenarios illustrating the application of these criteria are set out in Appendix 2.
6.6 It should be noted that the factors prescribed in paragraph (1) of regulation 35
form the broad criteria. The actual determination of whether two offers are closely related (i.e. whether the offers satisfy one or more of the factors prescribed) will depend largely on the facts and circumstances of the case (including whether the offers are made with the intention of circumventing the prescribed limit).
6.7 The Authority acknowledges that the setting out of broad criteria instead of

Guidelines on the Aggregation of Offers made pursuant to the Exemptions for Small Offers or Private Placement MONETARY AUTHORITY OF SINGAPORE 9 prescribing detailed scenarios under which offers are to be aggregated could raise certain implementation difficulties for offerors. However, this is balanced with the concern of incorporating overly prescriptive rules. Moreover, it is not possible to comprehensively deal with all factual scenarios under which the aggregation rule is applicable. Hence, on balance, the Authority is of the view that the setting out of broad criteria, supplemented by guidelines, is the most appropriate approach. Aggregation of Offers of Asset-Backed Securities and Structured Notes and units in Collective Investment Schemes (other than REITs)
6.8 As asset-backed securities and structured notes are more akin to investment
products and are unlikely to be offered for the purposes of fund-raising, a separate set of aggregation criteria has been incorporated for offers of asset-backed securities and structured notes. Unlike the criteria applicable to offers of shares and debentures of a corporation, the aggregation criteria for such offers seeks to ensure that financial institutions offering investment products in the ordinary course of business in excess of $5 million or to more than 50 offerees will continue to provide proper risk and product disclosures when offering complex securities to retail investors.
6.9 It is noted that collective investment schemes (other than REITs) are, similarly,
investment products offered by financial institutions. Accordingly, paragraph (2) of regulation 35 of the SF(OI)(SSDC) Regs will require an offer of asset-backed securities or structured notes to be aggregated with another offer of asset-backed securities or structured notes or with a previous offer of units in such collective investment schemes if any of the aggregation criteria specified in that paragraph is satisfied.
6.10 Specifically, paragraph (2) of regulation 35 of the SF(OI)(SSDC) Regs provides
that an offer of asset-backed securities or structured notes is a closely related offer to – (a) another offer of asset-backed securities or structured notes; or (b) an offer of units in a collective investment scheme (other than a REIT), under section 272A(5) or 272B(3) of the SFA, as the case may be, if the person who makes or is a sponsor of the first-mentioned offer — (i) also makes or is a sponsor of the second-mentioned offer; or (iii) is a related corporation or related entity of the person who makes or is a sponsor of the second-mentioned offer (“investment products aggregation criteria”).
6.11 Sample scenarios illustrating the application of the aforesaid criteria are set out in
Appendix 3.

Guidelines on the Aggregation of Offers made pursuant to the Exemptions for Small Offers or Private Placement MONETARY AUTHORITY OF SINGAPORE 10 Aggregation Matrix
6.12 A matrix showing the circumstances under which 2 or more offers should be
aggregated and the applicable aggregation criteria is set out in Appendix 4. 7 PROPER RECORDS AND DOCUMENTATION
7.1 As the onus is on the offeror to show that the offer was not made in contravention
of section 240 of the SFA, it is important for a person intending to make an offer in reliance on the small offers exemption or private placement exemption to keep proper records and documentation of the offer to show that the offer qualified for the exemption. In addition, detailed records and documentation should be maintained in order to show that the offer was made in compliance with the aggregation rule. 8 SPECIFIC EXEMPTION FOR SPECIFIED FINANCIAL INSTITUTIONS
8.1 It is noted that a financial institution may issue securities or securities-based
derivatives contracts for the purposes of raising funds or offering investment products to its clients in its ordinary course of its business. Given that securities or securities￾based derivatives contracts could be offered for entirely different purposes, it is not the Authority’s intent to require the financial institution to aggregate, for example, offers of its shares together with offers of its structured notes.
8.2 Regulation 34 of the SF(OI)(SSDC) Regs, accordingly, provides relief to a
specified financial institution from compliance with the requirement under section 272A(5)(a) or 272B(3)(a) of the SFA to aggregate all offers of securities or securities￾based derivatives contracts it made within the last 12 months, subject to the condition that the offers concerned are not closely-related offers (as determined in accordance with regulation 35 of the SF(OI)(SSDC) Regs).
8.3 As the aggregation criteria applicable to an offer of shares in a specified financial
institution under regulation 35 of the SF(OI)(SSDC) Regs does not apply to an offer of structured notes, a previous offer of structured notes by a specified financial institution to its customers would not be regarded as a closely related offer to an offer of shares by the specified financial institution to raise funds for its operations. An offer of shares and an offer of debentures (other than structured notes) issued by the specified financial institution, on the other hand, are clearly made for the purposes of fund-raising and hence, would have to be aggregated if the offers satisfy any of the aggregation criteria set out in regulation 35 of the SF(OI)(SSDC) Regs. 9 MARKET-MAKING FOR SECURITIES OR SECURITIES-BASED DERIVATIVES CONTRACTS ACQUIRED PURSUANT TO THE SMALL OFFERS EXEMPTION

Guidelines on the Aggregation of Offers made pursuant to the Exemptions for Small Offers or Private Placement MONETARY AUTHORITY OF SINGAPORE 11
9.1 Issuers may conduct their exempted securities or securities-based derivatives
contracts offerings through financial institutions which can subsequently “make a market”5 for the securities or securities-based derivatives contracts (“market- makers”).
9.2 Where a market-maker purchases securities or securities-based derivatives
contracts from the issuer and on-sells them to interested investors, the market-maker is not acting as an agent for the issuer in respect of the subsequent offer. Unless the subsequent offers are made in reliance on an exemption under Subdivision 4 of Division 1 of Part XIII of the SFA, such a subsequent offer would have to comply with prospectus requirements under Part XIII of the SFA.
9.3 Market-makers can rely on an exemption under section 272A(8)(c) of the SFA to
on-sell securities or securities-based derivatives contracts which it had acquired from the issuer to interested persons without having to issue a prospectus. In relation to over￾the-counter trading, persons who have purchased securities or securities-based derivatives contracts from the market-maker in reliance on section 272A(8)(c) and who wish to sell those securities or securities-based derivatives contracts back to a market￾maker can rely on an exemption under regulation 36 of the SF(OI)( SSDC) Regs from compliance with the requirement to give a warning statement and resale notification to the market-maker if the market-maker had previously indicated to such persons that those statements were not necessary. In reliance on these exemptions, a market￾maker will be able to on-sell securities or securities-based derivatives contracts to interested persons without the offers being made in or accompanied by a prospectus. Investors who purchased securities or securities-based derivatives contracts from the market-maker will also be able to rely on the same exemption to sell back those same securities or securities-based derivatives contracts to the market-maker or to another market-maker who, in turn, can rely on the same small offers resale exemption to re-sell the securities or securities-based derivatives contracts to other interested persons.
9.4 An illustration on how an exemption under section 272A(8)(c) of the SFA, when
read together with the exemption under regulation 36 of the SF(OI)(SSDC) Regs, is intended to facilitate market-making for securities or securities-based derivatives contracts acquired under section 272A(1)is set out below:
 Initial Sale by Market-Maker: In order to conduct market-making, the market￾maker must necessarily be the holder of a capital markets licence for dealing in capital markets products or a person exempted from such licensing. A

5 To maintain a firm bid and ask price in a given security by standing ready, willing, and able to buy or sell at the quoted prices.

Guidelines on the Aggregation of Offers made pursuant to the Exemptions for Small Offers or Private Placement MONETARY AUTHORITY OF SINGAPORE 12 market-maker can rely on the exemption under section 272A(8)(c) of the SFA to on-sell securities or securities-based derivatives contracts which it acquires from the issuer pursuant to the small offers exemption, provided that such sale of securities or securities-based derivatives contracts is limited to persons who are connected to the issuer, or who have previously indicated to the issuer or a specified person that they were interested in offers of this kind (“interested person”).  Subsequent Sale by Purchaser to Market-Maker: After an interested person acquires the issuer’s securities or securities-based derivatives contracts from the market-maker pursuant to section 272A(8)(c) of the SFA, he can similarly rely on section 272A(8)(c) to sell those same securities or securities-based derivatives contracts back to that market-maker or another market-maker. To facilitate the sale of such securities or securities-based derivatives contracts back to the market-maker, an exemption has been provided under regulation 36 of the SF(OI)( SSDC) Regs to relieve the interested person from the requirement under section 272A(8)(c)(iii) to give a warning statement and resale notification to the market-maker.  Subsequent Resale by Market-Maker to Other Interested Persons: Following the re-acquisition of the issuer’s securities or securities-based derivatives contracts from an interested person in its capacity as market-maker for the securities or securities-based derivatives contracts, the market-maker can continue to rely on section 272A(8)(c) of the SFA to re-sell those securities or securities-based derivatives contracts to other interested persons. Offers made in reliance on section 272A(8)(c) are not subject to any aggregation rule. Please refer to Appendix 5 for a diagrammatic illustration of the above. 10 RATIONALE FOR NOT EXTENDING SIMILAR EXEMPTION IN SECTION 272A(8)(C) OF THE SFA TO SECURITIES AND SECURITIES-BASED DERIVATIVES CONTRACTS ACQUIRED UNDER THE PRIVATE PLACEMENT EXEMPTION
10.1 In line with our intent to develop a vibrant over-the-counter market in Singapore,
the Authority has received suggestions to consider exempting all offers made by market￾makers from prospectus requirements.
10.2 In considering whether to provide market-makers with added flexibility and scope,
the Authority has had to balance its developmental objectives with the need to ensure that the securities or securities-based derivatives contracts offered under the exemptions under Subdivision (4) of Part XIII of the SFA remain limited in reach (either

Guidelines on the Aggregation of Offers made pursuant to the Exemptions for Small Offers or Private Placement MONETARY AUTHORITY OF SINGAPORE 13 in terms of size of the offering or the number of persons to whom the offering can be made to).
10.3 From a policy perspective, any exemption given to market-makers should not
result in the offer of securities or securities-based derivatives contracts, when considered alongside subsequent offers of those same securities or securities-based derivatives contracts, amounting to one for which a prospectus would have been required.
10.4 On a balance, the Authority is prepared to provide an exemption for subsequent
offers made by market-makers which were acquired from the issuer under the small offers exemption. This is on the basis that offers made in reliance on the small offers exemption are subject to a cap on the amount of funds raised, i.e. $5 million in 12 months, and can be made only to qualified investors (i.e. persons who are connected to the offeror or who have previously indicated interest in offers of that kind). Hence, so long as subsequent sales are confined to the same group of qualified investors, we are of the view that the securities or securities-based derivatives contracts offered will remain sufficiently limited in reach.
10.5 On the other hand, if an issuer relies on the private placement exemption to offer
its securities or securities-based derivatives contracts to the market-maker, there is no limit on the amount of securities or securities-based derivatives contracts that can be placed to the market-maker. Exempting the market-maker from the requirement to issue a prospectus for its subsequent sale of the issuer’s securities or securities￾based derivatives contracts and/or from the requirement to aggregate sales which are made in reliance on the same exemption would have the effect of allowing an unlimited amount of securities or securities-based derivatives contracts to be offered by the market￾maker to an unlimited number of persons (through several rounds of sale and resale). This would not accord with the Authority’s policy intent that exempted offers should be limited in reach.
10.6 In any case, as section 272B(5)(g) of the SFA6
requires the issuer to aggregate the persons to whom the market-maker has offered the securities or securities-based derivatives contracts to, it is highly unlikely that a market-maker will rely on the private placement exemption for its subsequent offers of the issuer’s securities or securities￾based derivatives contracts. Therefore, even if an exemption is given to facilitate subsequent offers of securities or securities-based derivatives contracts which were

6 Section 272B(5)(g) provides that if an offer is made with a view to the securities or securities￾based derivatives contracts being subsequently offered for sale to another person, and that subsequent offer (a) is not an exempted offer; or (b) is made in reliance on private placement exemption, then both persons shall be counted in determining the number of offerees.

Guidelines on the Aggregation of Offers made pursuant to the Exemptions for Small Offers or Private Placement MONETARY AUTHORITY OF SINGAPORE 14 initially acquired under a private placement exemption, it is likely to be of limited use in practice.
10.7 The Authority believes that the exemption in section 272A(8)(c) of the SFA,
coupled with the exemption in regulation 36 of the SF(OI)( SSDC) Regs, is sufficient to facilitate the provision of a mechanism for effective secondary trading in over-the￾counter markets for securities or securities-based derivatives contracts under offers made in reliance on an exemption.

Guidelines on the Aggregation of Offers made pursuant to the Exemptions for Small Offers or Private Placement
APPENDIX 1
Illustration of the workings of the Small Offers Exemption [section 272A(1)] and Small Offers Resale Exemption [section 272A(8)(c)]
Section 272A(1):
Small Offer
Person X
Section 272A(8)(c):
Small Offers Resale
Persons X, Y and Z
Persons who have
 Previous contact with Offeror
 Previous professional or other connection with Offeror  Previously indicated to Note:
Section 272A(1):
Small Offer
Section
272A(8)(c):
Small Offers
Resale Section
272A(8)(c):
Small Offers
Resale
 Offeror
 the holder of a capital markets services licence to deal in capital markets products that are securities or securities-based derivatives contracts oran exempt person in respect of dealing in capital markets products that are securities or securities￾based derivatives contracts  a licenced financial adviser oranexempt financial adviser that he is interested in such offers Person Z Offeror of securities or securities based derivative contracts (“Offeror”) Person Y Exemptions under section 272A(1) and section 272A(8)(c) of the SFA are subjectto:
(a) Advertising restrictions;
(b) Provision of “warning statement”; and
(c) Notification of resale restrictions
(i.e. securities or securities-based derivatives contracts acquired shall not be subsequently sold unless it is made in compliance with Subdivisions (2) and (3) of Division 1 of Part XIII of the SFA, in reliance on an exemption on section 272A(8)(c) or any other exemption in Subdivision (4), or in reliance on the small offers exemption under section 272A(1) provided that 6 months have elapsed from the initial acquisition of securities or securities-based derivatives contracts from Co. A.) (d)

Guidelines on the Aggregation of Offers made pursuant to the Exemptions for Small Offers or Private Placement MONETARY AUTHORITY OF SINGAPORE 16 Sample Case (1)
APPENDIX 2
Corp X offered shares
Corp Y offered shares
Corporation X was set up by Person A to undertake property development projects. In August 2005, Corporation X offered 45m new shares at $1 each to 50 investors to raise funds for the purchase of a property at a cost of $45m. The offers were made in reliance on the private placement exemption. Corporation X, however, managed to raise only $22.5m from the 50 investors (being the maximum number of offerees allowed under the private placement exemption). To raise the remaining $22.5m, Person A proposes to set up another company, Corporation Y, and rely on the private placement exemption to offer shares in Corporation Y to another 50 investors. Determination The offers of shares in Corporation X and Corporation Y would be considered as being
part of a single plan of financing given that the funds raised from both offers will be used
for the purpose of acquiring the same property. The offers are therefore closely related and should be aggregated for the purposes of complying with the 50-offerees limit under the private placement exemption. Sample Case (2) X offers shares Proceeds to be loaned to Z Business Trust Z Proceeds to be loaned to Z Y offers shares Acquisition of property Corporation X erson A Corporation Y Corporation X Proceeds Corporation Y Proceeds Acquisition of Factory

Guidelines on the Aggregation of Offers made pursuant to the Exemptions for Small Offers or Private Placement MONETARY AUTHORITY OF SINGAPORE 17 Z is a business trust engaged in the manufacture and sale of flexible and rigid packaging products. In August 2005, Z decided to purchase a new factory to expand its production capacity. The estimated cost of the new factory was $10m. As Z has many business associates who are keen to invest in its operations, it intends to raise the required funds for the acquisition of the factory by offering units to its suppliers and customers. Z, however, notes that the maximum amount it can raise in reliance on the small offers exemption is $5m. As Z has two controlling unitholders, X and Y, both corporations, Z proposes instead for each of X and Y to offer shares in reliance on the small offers exemption. The aggregate amount of $10m raised by X and Y would then be loaned to Z to purchase the factory. Determination X and Y are serving as conduits for Z to raise funds for the purchase of its new factory. As the offers of shares in X and Y are part of a single plan of financing made for the same purpose (i.e. to finance the acquisition of the new factory), the offers are closely related and should be aggregated for the purposes of complying with the $5m limit under the small offers exemption. Sample Case (3) Corp A offered shares Corp B offered debentures Corp C offered shares Corp D offered shares Corporation Z is the holding company of Corporation A which is engaged in the manufacture and sale of men’s apparel. On 1 October 2005, Corporation A offered 20m new shares to 40 new investors in reliance on the private placement exemption. Proceeds from the offers amounting to $20m were to be used by Corporation A for general working capital purposes. Corpora ion Corpora ion A (Research & Dev) Corpora ion B (Produc ion - Singapore) Corpora ion C (Produc ion – PRC) Corpora ion D (Marke ing & Sales)

Guidelines on the Aggregation of Offers made pursuant to the Exemptions for Small Offers or Private Placement MONETARY AUTHORITY OF SINGAPORE 18 Three months later, Corporation A decided to raise more funds to finance the acquisition of additional machinery as part of its plans to expand the production capacity of its facility in Singapore. Instead of offering shares (in which case it could only offer to another 10 persons if it wishes to rely on the private placement exemption), Corporation A decided to transfer its Singapore production facility to a newly incorporated company, Corporation B. On 31 January 2006, Corporation B offered $10m worth of bonds to 25 new investors in reliance on the private placement exemption. Funds raised were then used to acquire the new machinery. In June 2006, Corporation A decided to set up a production facility in PRC so as to take advantage of the lower costs of production. The new PRC factory was estimated to cost $8m. Corporation C was accordingly set up to raise the $8m from 20 new investors in reliance on the private placement exemption. With the expanded production, Corporation A subsequently decided to embark on an aggressive marketing programme so as to generate sales. In order to be able to rely on the private placement exemption again to raise funds for its advertising and promotion initiatives, Corporation A decided to transfer its sales and marketing function to a newly incorporated company, Corporation D, which subsequently raised $5m from another 10 investors in August 2006. Determination Even though the offers made by Corporation B, Corporation C and Corporation D were not anticipated at the time Corporation A made its offer and hence were, strictly speaking, not
part of the same plan of financing, the offers made by Corporation B, Corporation C and
Corporation D were in relation to the operations of the same business. The offers made by the four corporations were therefore closely related and should be aggregated for the purposes of complying with the 50-offerees limit under the private placement exemption.

Guidelines on the Aggregation of Offers made pursuant to the Exemptions for Small Offers or Private Placement MONETARY AUTHORITY OF SINGAPORE 19 Sample Case (4) Person A X offers units X Y Y offers debentures Property (2) to be leased to X Person A owns a business trust, X, and an entity, Y. X intends to acquire Properties (1) and (2) at a cost of $30m and $20m respectively. Person A noted that the funds that could be raised by X from the offer of its units to 50 investors are probably insufficient to finance the acquisition of both properties. In order for X not to incur the costs of issuing a prospectus, Person A decided to get Y to issue debentures to another 50 other investors so as to raise the additional funds required. Proceeds raised by Y would then be used to purchase Property (2) which, in turn, could be leased to X for its use. Determination The offer of units by X and offer of debentures by Y are part of a single plan of financing made for the purpose of acquiring the two properties. Without X’s intention to purchase Property (2), Y would not have issued the debentures. The offers are therefore closely related and should be aggregated for the purposes of complying with the 50-offerees limit under the private placement exemption. urchase Proper y (1) urchase Proper y (2)

Guidelines on the Aggregation of Offers made pursuant to the Exemptions for Small Offers or Private Placement MONETARY AUTHORITY OF SINGAPORE 20 Corp X offered new shares to investors and at the same time issued new Developmen of shares to Person A production managemen sy em erson A Corpora ion X Sample Case (5) Person A sells vendor shares in Corp X Person A owns Corporation X which is engaged in the printing business. In order to finance the development of its automated production management system (estimated to cost $7.8m), Corporation X intends to raise funds by offering shares to its suppliers, customers and other business associates using the small offers exemption. Given that Corporation X could only raise up to $5m under the small offers exemption, Person A proposes to raise the balance $2.8m by selling his shares in reliance on the small offers exemption. Proceeds received from the sale of shares owned by Person A would then be used to subscribe for new shares in Corporation X such that Person A’s ownership in Corporation X would remain unchanged. Person A thinks that since the offer of his shares and Corporation X’s subsequent placement of new shares to him are made using separate exemptions, they would not be subject to the aggregation requirement. Determination Although the offer by Person A and the subsequent offer by Corporation X to him are not subject to the aggregation requirement, the offer of shares by both Corporation X and Person A are made using the same type of exemption, i.e the small offers exemption. In this case, both offers are clearly part of a single plan of financing made for the purpose of financing the development of the production management system. The offers by Corporation X and Person A to investors are therefore closely related and should be aggregated for the purposes of complying with the $5m limit under the small offers exemption. Corp X of ers new shares o inve and subsequently issues new shares o Person A

Guidelines on the Aggregation of Offers made pursuant to the Exemptions for Small Offers or Private Placement MONETARY AUTHORITY OF SINGAPORE 21 Sample Case (6) Corporation X offered shares Corporation Y offered shares Corporation Z offered shares Corporation Y Proceeds from sale of shares used to repay B for issue of units Business Trust B Proceeds from sale of shares to repay B for issue of units B issues units to Corporations X, Y and Z A business trust, B, is engaged in the provision of PCB testing and finishing services. In order to finance its expansion into other PCB-related businesses, B issued units amounting to $5m to each of Corporations X, Y and Z in reliance on the private placement exemption. To raise funds for the purchase of the units, Corporations X, Y and Z, in turn, offered shares to their business associates in reliance on the small offers exemption. Proceeds totalling $15m were then used to repay B for its unit issue to each ofthem. Determination Corporations X, Y and Z were clearly acting as conduits to raise funds for B. As the offers were part of a single plan of financing made for the primary benefit of B, the offers made by Corporations X, Y and Z were closely related and should be aggregated for the purposes of complying with the $5m limit under the small offers exemption. Corporation X Corporation Z

Guidelines on the Aggregation of Offers made pursuant to the Exemptions for Small Offers or Private Placement MONETARY AUTHORITY OF SINGAPORE 22 Sample Case (7) Corp A sells cable TV systems to Corp X, Corp Y and Corp Z Proceeds from offers to be used to repay Corp A for purchase of TV systems Corp X offers shares Corp Y offers shares Corp Z offers shares Proceeds from offers to be used to repay Corp A for purchase of TV systems Corp X, Corp Y and Corp Z enters into agreements with Corp A to lease the cable TV systems to Corp A Corporation A is engaged in the business of leasing cable TV systems. To expand its business, it intends to purchase 3 additional sets of systems costing $5m each. In order to be able to rely on the small offers exemption and avoid having to issue a prospectus, Corporation A decides to set up three new corporations, namely, Corporation X, Corporation Y and Corporation Z. The plan is for Corporation A to first acquire the TV systems and each of Corporation X, Corporation Y and Corporation Z to then raise the required funds by offering shares using the small offers exemption. Funds raised by each of Corporation X, Corporation Y and Corporation Z would then be used to acquire the TV systems from Corporation A. The systems, in turn, would be leased to Corporation A. Determination Corporation X, Corporation Y and Corporation Z would be serving as conduits for Corporation A to raise funds for the purchase of the cable TV systems. As the offers are
part of a single plan of financing made for the same general purpose, the offers will be
regarded as closely related and should be aggregated for the purposes of complying with the $5m limit under the small offers exemption. Corpora ion X Corpora ion Corpora ion A Corpora ion Y

Guidelines on the Aggregation of Offers made pursuant to the Exemptions for Small Offers or Private Placement MONETARY AUTHORITY OF SINGAPORE 23 Sample Case (8) Corp Z offers shares Persons A and B have joint ownership and management control of a business trust, X, and the corporations, Y and Z. X, Y and Z are engaged in distinct businesses, each having its own funding needs. Person A and Person B plans to expand the businesses of X, Y and Z. To raise the required funds, it is their intention for each of X, Y and Z to offer new units or shares, as the case may be, to new investors in reliance on the private placement exemption. Determination In this case, notwithstanding that the proceeds raised by each of X, Y and Z would be used by each of them in their own businesses, the offers are made at the direction of Persons A and B who have full discretion over usage of the proceeds raised. The offers are therefore made for the primary benefit of Persons A and B. Accordingly, the offers by X, Y and Z are closely related and should be aggregated for the purposes of complying with the 50-offerees limit under the private placement exemption. usiness usiness Business erson A erson B Trust X Corpora ion Y Corpora ion X o ers units Corp Y o ers shares

Guidelines on the Aggregation of Offers made pursuant to the Exemptions for Small Offers or Private Placement MONETARY AUTHORITY OF SINGAPORE 24 Sample Case (9) BT Y offered units Proceeds paid to Corporation X in return for 50% interest in new factory Person A owns Corporation X which is engaged in the business of manufacturing steel coils. It is Person A’s intention to expand the business of Corporation X. To do so, he plans to build a plant in Batam, Indonesia which is estimated to cost $10m. Person A notes that Corporation X could only raise up to $5m using the small offers exemption. To raise the balance amount required, he therefore decides to set up a business trust, Business Trust Y. Person A intends to appoint Corporation X as both the trustee and the manager of the business trust (i.e. Corporation X will act as the trustee for the unitholders of Business Trust Y as well as manage the business held by Business Trust Y on behalf of the unitholders). Both Corporation X and Business Trust Y could then raise funds by issuing new shares and new units of up to $5m each respectively. Proceeds raised from the issue of units in Business Trust Y would be given to Corporation X as payment for the purchase of a 50% interest in the new Batam factory. Corporation X, in turn, would use the proceeds from the two offers to purchase and construct the new Batam factory. Determination The offers of shares in Corporation X and units in Business Trust Y are part of a single plan of financing made for the purpose of constructing the new Batam factory. The offers are therefore closely related and should be aggregated for the purposes of complying with the $5m limit under the small offers exemption. erson A Corpora ion X Corp X ered shares Business Trust Y (Trustee & Manager - Corporation X)

Guidelines on the Aggregation of Offers made pursuant to the Exemptions for Small Offers or Private Placement MONETARY AUTHORITY OF SINGAPORE 25 Sample Case (10) Person A has unit holdings of 10%, 20% and 25% in the business trusts, X, Y and Z respectively. Other than Person A, X, Y and Z have no other common unitholders. X, Y and Z are engaged in infrastructure building, IT systems integration and electronics waste management respectively. Person A is merely an investor and is not actively involved in the management of the business operations of X, Y and Z. The assessment of funding needs and the usage of funds raised are left entirely to the controlling unitholders and management of X, Y and Z. On 1 January 2006, 30 January 2006 and 3 February 2006, X, Y and Z offered new units to 40-50 new investors respectively to raise funds for their individual projects. Determination Notwithstanding Person A would benefit as a unitholder of the three business trusts, he would not derive primary benefit from the offers. Further, the assessment of funding needs and the usage of funds are left entirely to the controlling unitholders and management of X, Y and Z. Person A is only a passive investor. The offers by X, Y and Z, therefore, would not be regarded as closely related offers and hence, would not need to be aggregated for the purposes of complying with the 50-offerees limit under the private placement exemption. Proj erson A Unitholders oup X Unitholders oup Y Unitholders oup X Y X ered units Y ered units ered units

Guidelines on the Aggregation of Offers made pursuant to the Exemptions for Small Offers or Private Placement MONETARY AUTHORITY OF SINGAPORE 26 Sample Case (11) Person A Shareholders Group X Interest-holders Group Y Interest-holders Group Z Corporation X Corp X offered debentures Entity Y Entity Y offered debentures Entity Z Entity Z offered debentures Person A is a controlling shareholder of Corporation X and a controlling interest-holder of Entity Y and Entity Z. Other than Person A, Corporation X has no other shareholders who are also interest-holders of Entity Y and Entity Z. Corporation X, Entity Y and Entity Z are engaged in different businesses and have separate funding needs. Notwithstanding his controlling interests, Person A is not actively involved in the management of the business operations of Corporation X, Entity Y and Entity Z. The assessment of funding needs and the usage of funds raised are left entirely to the management of Corporation X, Entity Y and Entity Z. On 1 January 2006, 30 January 2006 and 3 February 2006, Corporation X, Entity Y and Entity Z issued debentures to 40-50 new investors respectively to raise funds for their individual businesses. Person A agreed to be the guarantor for each of these issues. Determination In this case, notwithstanding Person A is the guarantor for all the offers by Corporation X, Entity Y and Entity Z and would also benefit as a controlling shareholder and interest￾holder of the three entities, it is noted that Person A is only a passive investor and is not involved in the decision to raise additional funds and the deployment of funds raised. The offers, therefore, would not be regarded as closely related offers and hence, would not need to be aggregated for the purposes of complying with the 50-offerees limit under the private placement exemption. Business X Business Y Business Z

Guidelines on the Aggregation of Offers made pursuant to the Exemptions for Small Offers or Private Placement MONETARY AUTHORITY OF SINGAPORE 27 Sample Case (1)
APPENDIX 3
Bank A
Credit-linked
Notes
Equity-linked
Notes
Bank A issued a series of credit-linked notes totalling $5m and another series of equity￾linked notes totalling $2m under a separate programme. Determination Given that both series of notes were offered by the same person, the offers would be regarded as closely related offers and should be aggregated. Sample Case (2) Bank A set up SPV 1 and transferred loans to SPV 1 SPV 1 issued asset-backed securities. Proceeds from the issue were used to repay Bank A for the loans transferred. Bank A issued a series of credit-linked notes. It was also the sponsor of an asset-backed securities programme offered by SPV 1. Determination Bank A was the offeror of the credit-linked notes and the sponsor for the asset-backed securities. The two offers, accordingly, were closely related and should be aggregated. Bank A SPV 1 Credit-linked Notes Asset-Backed Securities

Guidelines on the Aggregation of Offers made pursuant to the Exemptions for Small Offers or Private Placement MONETARY AUTHORITY OF SINGAPORE 28 Holding Company X Bank A C Credit-linked No 1 Credit-linked No 2 1 100% Sample Case (3) Bank A was a full-fledged bank. Its business activities include the arranging and issuing of structured notes (e.g. credit-linked notes), the offering of units in collective investment schemes (e.g. a scheme which invests in technology stocks) and various forms of securitization (e.g. the setting up of a single purpose vehicle to issue credit-linkednotes). Determination All offers of structured notes, asset-backed securities and units in collective investment schemes (other than REITs) in respect of which Bank A was the offeror or the sponsor would be regarded as closely related offers and must be aggregated. Sample Case (4) SPV 1 Credit-linked Notes Bank A Credit-linked Notes CIS 1 SPV 1 Credit-linked Notes

Guidelines on the Aggregation of Offers made pursuant to the Exemptions for Small Offers or Private Placement MONETARY AUTHORITY OF SINGAPORE 29 Holding Company X owns Bank A and Entity C which are engaged in banking and fund management services respectively. Bank A’s banking activities include the arranging and issuing of structured notes (e.g. credit-linked notes) and various forms of securitization (e.g. the setting up of a single purpose vehicle to issue credit-linked notes). Sometimes, Bank A also issues structured products through its wholly owned subsidiary, Entity B. Determination Given the relationship between Bank A, Entity B and Entity C (each of them being a related corporation or related entity to the other), all offers of structured notes, asset￾backed securities and units in collective investment schemes (other than REITs) by them would be regarded as closely related offers and must be aggregated. Any offer of credit￾linked notes by SPV 1 (where Bank A is the sponsor) is also regarded as a closely related offer to an offer made by Bank A and must be aggregated.

Guidelines on the Aggregation of Offers made pursuant to the Exemptions for Small Offers or Private Placement MONETARY AUTHORITY OF SINGAPORE 29 Matrix showing circumstances in which 2 or more offers should be aggregated
APPENDIX 4
1 st offer
2 nd offer
Securities and securities-based derivatives contracts# (other than ABS & Structured Notes) ABS & Structured Notes BTs CIS REITs CIS (other than REITs) Securities and securities-based derivatives contracts (other than ABS & Structured Notes) Fundraising aggregation criteria X Fundraising aggregation criteria Fundraising aggregation criteria X ABS & Structured Notes X Investment products aggregation criteria X X Investment products aggregation criteria CIS REITs Fundraising aggregation criteria X Fundraising aggregation criteria Fundraising aggregation criteria X CIS (other than REITs) X Investment products aggregation criteria X X Investment products aggregation criteria

“Securities” and “securities-based derivatives contracts” are as defined in s2 of the SFA i.e. debentures or units of debentures of an entity, shares

or units of shares of a corporation, and units or derivatives of units in a business trust. “Fundraising aggregation criteria” – see paragraph 6.3 of these Guidelines “Investment products aggregation criteria” – see paragraph 6.10 of theseGuidelines

Guidelines on the Aggregation of Offers made pursuant to the Exemptions for Small Offers or Private Placement MONETARY AUTHORITY OF SINGAPORE 30 erson X erson Y erson Marke - Company A Maker M
3. Section
272A(8)(c)
2. Section
272A(8)(c)
1. Section
272A(1)
4. Section 272A(8)(c)
1. Company A makes a
small offer to Market￾Maker M.
4. Section
272A(8)(c)
Market making for securities acquired pursuant to the small offers exemption
APPENDIX 5
2. Market-Maker M sells securities acquired from
Company A to Person X in reliance on section
272A(8)(c).
3. Person X sells back securities to Market-Maker M in
reliance on section 272A(8)(c). Person X is exempted from requirement to provide warning statement and resale notification to Market-Maker M if Market-Maker M had previously indicated to him that such statements are not necessary.
4. Market-Maker M re-sells
securities acquired from
Company A to Person X and
Person Y in reliance on
section 272A(8)(c).
Note:
In order to rely on section 272A(8)(c),
Persons X, Y and Z must be persons who have
 Previous contact with Co. A
 Previous professional or other connection with Co. A  Previously indicated to  Co. A  theholderofacapital markets services licence to deal in capital markets products that are securities or securities-based derivatives contracts or an exempt personinrespect of dealing in capital markets products that are securities or securities-based derivatives contracts  alicencedfinancialadviser or an exempt financial adviser that he is interested in such offers