| Details | Cross References |
| Issue Date: 21 December 2018 Effective Date: 1 January 2019 1 January 2022 11 January 2023 | Rule 210(5)(d)(iii) Rule 210(5)(e) Rule 720(5) Transitional Practice Note 3 |
1. Introduction
1.1 Rule 210(5)(d)(iv) states that a director will not be independent if he has been a director of the issuer for an aggregate period of more than nine years (whether before or after listing). Such director may continue to be considered independent until the conclusion of the next annual general meeting of the issuer.
1.2 Rule 210(5)(e) states that an issuer must establish one or more committees as may be necessary to perform the functions of an audit committee, a nominating committee and a remuneration committee, with written terms of reference which clearly set out the authority and duties of the committees.
1.3 Rule 720(5) states that an issuer must have all directors submit themselves for re-nomination and re-appointment at least once every three years.
1.4 This Practice Note provides guidance on the applicability of these Rules in relation to an issuer that is a Real Estate Investment Trust (REIT) or a Business Trust (BT).
2. Real Estate Investment Trusts
2.1 Under the Securities and Futures Act, the manager of an authorised REIT must act in the best interest of all unitholders as a whole and give priority to their interests over the manager's own interests and the interests of the shareholders of the manager in the event of a conflict. The Securities and Futures Act and regulations and notices made thereunder stipulate requirements for the composition of the board of a REIT manager, the establishment of an audit committee and the circumstances in which a director of the REIT manager is independent (the "SFA provisions").
2.2 As the SFA provisions substantively address the corporate governance requirements stipulated in Rules 210(5)(d)(iv), 210(5)(e) and 720(5), these Rules do not apply to a REIT so long as the REIT continues to comply with the SFA provisions.
3. Business Trusts
3.1 Under the Business Trusts Act, the trustee-manager of a registered business trust must act in the best interests of all unitholders as a whole and give priority to their interests over its own interests in the event of a conflict. The Business Trusts Act and the regulations made thereunder stipulate requirements for the composition of the board of the trustee-manager, the establishment of an audit committee and the circumstances in which a director of the trustee-manager is independent (the "BT provisions").
3.2 As the BT provisions made thereunder substantively address the corporate governance requirements stipulated in Rules 210(5)(d)(iv), 210(5)(e) and 720(5), these Rules do not apply to a business trust so long as the business trust continues to comply with the statutory stipulations.
Added on 1 January 2019 and amended on 11 January 2023.