August 21, 2017

“HDB flat buyers – owners or lessees?” Deputy Head of Real Estate Sandra Han shares her views on The Straits Times

RHTLaw Taylor Wessing’s Deputy Head of Real Estate Sandra Han shares her views in The Straits Times on the differences between the terms lessee, tenant, and owner and how it applies to HDB flat owners. The article was first published in The Straits Times on 21 August 2017. HDB flat buyers - owners or lessees? Debate goes beyond semantics Source: The Straits Times © Singapore Press Holdings Ltd. Date: 21 August 2017 Author: Ng Jun Sen Lessee. Tenant. Owner. When it comes to Housing Board flats, these plain terms seem to befuddle many. What exactly should an HDB flat buyer be known as? Over the past two months, this discussion has been playing out in The Straits Times' Forum pages and online. Clearly, flat buyers are flat owners, with the right to sell, rent and renovate, within guidelines and for the tenure of their lease, said the HDB. But some people seized on the qualifiers - for the length of the lease. Does that not mean that a more accurate term for HDB flat owners is "lessees", they wonder. It also did not help that some HDB webpages and documents refer to flat buyers as "lessees" and the HDB as "lessor". This is not just a tussle over semantics. It goes to the heart of a longstanding debate over whether HDB flat owners can be called that when they have to return their homes to the state when their leases expire, and when rules over what they can or cannot do with their homes are generally more circumscribed than those for owners of private leasehold property. The question first arose on June 24 when a reader, Mr Larry Leong, wrote in to query the HDB on the terms it apparently used to refer to him. "While applying to rent out my HDB flat, I noticed that the Housing Board referred to me as a 'tenant', and my potential tenant as a 'sub-tenant'," said Mr Leong, adding that he had paid for his flat fully. "Can we have some clarity on whether HDB dwellers are tenants or real home owners for 99 years?" In its reply three weeks later, the HDB clarified that the term "tenants" refers only to those who rent public rental flats from it. Purchasers of HDB flats are owners of their property, its director of branch operations Lim Lea Lea stated categorically. She said: "Flat owners enjoy rights to exclusive possession of the flat during the tenure of the flat lease. They can sell, let out and renovate their flats, within the guidelines specified in the lease and Housing and Development Act." The board also said "the name of each HDB flat owner is reflected in the title deed, the original of which is kept with the Singapore Land Authority, as part of the central and comprehensive record for all properties in Singapore. This confirms his or her ownership of the property." But others remained unsure. Mr Andrew Seow Chwee Guan wrote in a letter dated July 20 that a duplicate lease of an HDB flat he holds "was executed by me and my spouse many years ago as a lessee in the presence of a lessor - an HDB representative". He added: "My understanding is that HDB purchasers are lessees and the HDB is the lessor. "There is a distinct difference between owners and lessees." In its latest reply published on Aug 14, the HDB said the leasehold system allows the land to be recycled and redeveloped, and is common around the world. It reiterated that leasehold property buyers are owners too, albeit for the length of the lease they hold. "During this period of ownership, they can decide to live in the flat, renovate it, rent it out or even sell it once they meet the eligibility conditions. They can decide on the selling price or rental rate of the flat, and they get to keep the proceeds from these transactions. "These are rights and benefits that only a flat owner can enjoy." However, experts have also pointed out that, unlike private property owners, HDB flat buyers cannot initiate collective sales of their homes, unless picked under the Selective En Bloc Redevelopment Scheme. On the flip side, HDB flat buyers are entitled to more benefits, including subsidised prices. Given the way the terms owner and lessee seem to be used interchangeably at times, should HDB then change its nomenclature for a buyer to "lessee" to avoid misunderstandings? Some argue that the term "owner" implies a person has possession of the property in perpetuity. They are in favour of the term "lessee", which they say states clearly that there is a lifespan to the possession of the property. "Lessee" is a more precise term, say property lawyers such as Ms Sandra Han of RHTLaw Taylor Wessing, though the word "owner" is still accurate. Acknowledging that the topic is "quite tricky", she added: "The term 'owner' is quite nebulous and is used very generally." Ms Tay Huey Ying, head of research and consultancy at property consultancy JLL Singapore, said ownership is typically implied for long-term leases of, say, more than 60 years. At any rate, the Government will likely not be keen to give up the use of the term, say real estate watchers like Mr Nicholas Mak, head of research and consultancy at ZACD Group. The word "owner" connotes rootedness and identity, unlike "lessee", and this is why the authorities would prefer to stick to the earlier term, he said. "In referring to buyers as owners, it is a case of HDB trying to have its cake and eat it too," he said. Ms Tay said it is more fruitful for the debate to focus on raising awareness of lease expiry. In fact, she said "ownership" has the advantage of allowing residents to feel that they have a stake in society and want to contribute actively to the country. "With some leases running down, what is more important is to educate purchasers on what leasehold means," she said.
August 17, 2017

“Co-parenting is possible; armed with respect, understanding and forgiveness,” shares Family and Matrimonial Partner Michelle Woodworth in her article written for The New Age Parents

RHTLaw Taylor Wessing Family & Matrimonial Partner Michelle Woodworth contributed an article published in The New Age Parents titled “Is Co-Parenting Possible After Divorce”. The article was first published on The New Age Parents on 17 August 2017. Is Co-Parenting Possible After Divorce Source: Copyright © The New Age Parents 2017 Date: 17 August 2017 Ending a marriage is often difficult. In my role as a family lawyer and mediator, I have witnessed a fair share of bitter battles. When children are involved, post-divorce child custody and parenting arrangements layer a level of further stress to parties. How does one help? It is easier said than done to ask that parties rise above their hurt and disappointment. But the need to restructure families to evolve into a new equilibrium is something I support, with the ultimate goal of parents securing a healthy, balanced environment for their children. Co-parenting is possible; armed with respect, understanding and forgiveness. What exactly is co-parenting? Co-parenting is a state in which decoupled parents continue to have joint responsibility in raising their children. A child’s best interest is at the heart of co-parenting where both parents consciously and intentionally put aside personal differences to prioritise their child’s well-being and development. A 2008 study by Ohio State University found that children who lived in unstable family environments after their parents’ divorce fared much worse as adults on a variety of levels compared to children who had stable post-divorce family situations. Co-parenting, if well-executed, helps mend and solidify relationships. It not only benefits children but also helps separated parents regain an amicable relationship as they work together to parent their children. It is an express demonstration to children that their welfare comes first. One of the common refrains I hear from divorcing parents is that co-parenting is “not workable”. It is never smooth sailing to communicate effectively after a relationship has broken down. Hurt, resentment and grief over the loss of the partnership are issues which need to be addressed so that healing can begin. There is no magical way to make co-parenting work and the issues that plagued the marriage do not disappear overnight post-divorce. What can ease the process is a mutual understanding that children deserve to have both parents in their lives. Parties are encouraged to keep communication channels open and forgive past hurts. Consciously seek to get better; not bitter. Be honest and find various ways to communicate your concerns, no matter how trivial One tip is to view your relationship with your ex-spouse as a partnership that puts the needs of your children first. Be it discussions on school work, child expenses or schedules; start by communicating objectively. If face-to-face discussions cause tensions to escalate, try communicating over email or text messages. Be flexible about co-parenting arrangements Co-parenting does not mean the time you and your ex-spouse spend with your children is to be divided equally. A fair arrangement puts your children’s interests first and accommodates both parents’ time and schedules. If this means letting your child go to football practice with your ex-spouse, as they had done in the past, try to maintain the routine even if it may mean it cuts into your time. Do consider the impact of the schedule on your children and your children’s wishes before making a decision. Remain flexible in adjusting the co-parenting schedule as the need arises. Take into account that life is not static. After divorce, stable families help minimise long-term harm to children. Putting differences aside and teaming up for your children is attainable. The end of a marriage does not have to signal the demise of a family. Successful co-parenting demonstrates a unified front to all children that they are loved and cherished. This article is contributed by Michelle Woodworth,a Partner at RHTLaw Taylor Wessing LLP, Court-appointed Child Representative, Senior Mediator under the Law Society Mediation Scheme, and an IMI and SIMI certified Mediator.
August 15, 2017

Head of Regulatory Practice Nizam Ismail shares with Asialaw in an article titled “Asia wades through cryptocurrency regulatory puzzle” on how a robust compliance framework is necessary to mitigate against risks for initial coin offerings creators

RHTLaw Taylor Wessing Head of Regulatory Practice Nizam Ismail was featured in an Asialaw article titled “Asia wades through cryptocurrency regulatory puzzle” on the topic of initial coin offerings (ICOs) and the compliance framework necessary to mitigate against such risks for ICO creators. The article was first published on on 15 August 2017. Asia wades through cryptocurrency regulatory puzzle Source: Copyright © Asialaw 2017 Date: 15 August 2017 Author: Karry Lai Initial coin offerings (ICO) have caught the attention of investors and regulators alike. In July, the US Securities and Exchange Commission issued a statement saying that ICOs can be considered to be a sale of securities and the rules to securities would apply. What’s the situation in Asia? Lawyers in Singapore, Japan and Korea told Asialaw about the deficiencies and ambiguities in existing regulations in their jurisdictions that buyers and sellers should be aware of in the cryptocurrency market. An ICO is a method of raising money, like an IPO, where investors offer cryptocurrencies such as Bitcoin or Ethereum to invest in a new cryptocurrency. The new cryptocurrency can be sold or bought on cryptocurrency exchanges if it is successful. Singapore, Japan and Korea are some of the most active jurisdictions in cryptocurrency trading, prompting regulators to make changes to existing laws. “The pace of change is accelerating,” says Urszula McCormack, partner at King & Wood Mallesons in Hong Kong. “There is a strong focus on cryptocurrency and blockchain-based products, services and platforms throughout APAC. Most jurisdictions are looking at them closely given the potential impacts on economic and financial stability, and risk. Regulation pretty much always follows innovation, but it’s catching up.” Singapore follows SEC closely on regulation On August 1, the Monetary Authority of Singapore (MAS) clarified that issuers will be subject to prospectus requirements if coins or tokens are securities or collective investment schemes. If they are and a platform that acts as an intermediary deals with these coins or tokens, the platform will need a capital markets services licence under the Financial Advisers Act.  “Many ICOs are structured so that they provide both service and investment features, blurring the legal status,” says Nizam Ismail, partner at RHTLaw Taylor Wessing.  He adds that while MAS is looking to set out anti-money laundering (AML)/combatting the financing of terrorism (CFT) guidelines, pending such guidance, issuers are still exposed to the more generic Corruption, Drug Trafficking and Other Serious Offences (Confiscation of Benefits) Act and the Terrorism (Suppression of Financing) Act in Singapore, so a robust AML/CFT compliance framework is necessary to mitigate against such risks for ICO creators. New virtual currency regulation in Japan Japan promulgated the Virtual Currency Act, under the Payment Services Act in April. The creation of the law was largely driven by the collapse of the Mt Gox bitcoin exchange in 2014 which led to the arrest of its chief executive officer and more than 800,000 Bitcoins disappeared. The Act recognises Bitcoin and Ethereum, the two most established cryptocurrencies -, as forms of payment, but not as legally-recognised currencies. Under the law, cryptocurrency exchanges must register with the government and may only obtain a licence after meeting requirements such as undergoing an annual audit by a certified accountant and installing a secure IT system. Cryptocurrency exchanges also have to comply with the Act on Prevention of Transfer of Criminal Proceeds, the Japanese law targeting AML/CFT. “Cryptocurrency exchanges must segregate clients’s assets from their own accounts and there is an obligation for the business to report information to customers,” says Masakazu Masujima, partner at Mori Hamada & Matsumoto. “The basic policy of the FSA is that they do not want to restrict innovation but there isn’t a clear definition of cryptocurrency,” adds Masujima. “This causes ambiguity and it is difficult to enforce regulation when it is unclear whether for example, the lending of bitcoin is regulated under lending business law and when an insurance premium is paid for by bitcoin, if that is regulated under insurance law.” According to So Saito, principal at So Law Office, the fund regulations under the Financial Instrument Exchange Act (FIEA) only apply to ICOs if they constitute collective investment schemes, but this is a broad and diverse concept. “Specifically, where an ICO is used to collect money from others, to invest in a business and pay dividends to holders, such structures most likely invite the application of the FIEA fund regulations” explains Saito. “Where ICOs are in exchange for payment in Bitcoin or Ether, the FIEA regulations are unlikely to come into play because neither are money under Japanese law.” “When cryptocurrencies start having securities features such as dividends and voting rights, they should be regulated as securities,” says Masujima. “The FSA is closely monitoring cryptocurrencies but it doesn’t move quickly.” “You need to consider yet another regulation if virtual currencies collected by way of an ICO is invested in a certain asset class,” explains Saito. “For example, some ICOs which invest in real estate might be regulated under the Act on Specific Joint Real Estate Ventures in Japan, which does not distinguish virtual currencies from money.” Work in progress in Korea In Korea, the National Assembly of Korea is introducing changes to the Electronic Financial Transactions Act to begin regulating cryptocurrencies. This follows on the heels of the hacking of Bithumb, one the largest Bitcoin exchanges. “The major proposals in these amendments provide the definition of cryptocurrency, approval requirements for cryptocurrency businesses and protection of cryptocurrency investors,” explains Joon Young, senior attorney at Kim & Chang. “Cryptocurrency businesses will be required to deposit cryptocurrencies in a depository institution or sign a damage compensation agreement and provide investors with disclosure on description of the cryptocurrency and the risks involved in trading. There will be measures to prohibit money laundering and imposition of limitations on trading methods.” John Saeyon Ra, CEO at Bitcoin Centre Korea, a hub that connects those in the Bitcoin industry in Korea, indicates that “if the regulation favours Bitcoin trading with no capital gains or VAT, then exchanges would benefit, but without proper categorisation of cryptocurrencies, there may be conflict even among different branches of the Korean government, such as the Bank of Korea and Financial Services Commission and the industry experiences set back overall”. Many investors are jumping on the ICO bandwagon because the short-term gain is deceivingly attractive, but they must understand the risks to reap the rewards. Regulators in Asia and around the world are working on clarifications and new regulations to ensure this area of the capital markets is transparent, but investors and issuers are faced with uncertainties as they figure out whether their projects might bring them into the orbit of different securities regulations.
August 14, 2017

Head of Regulatory Practice Nizam Ismail advises that if there is no prospectus, the offer of initial coin offerings and digital tokens may be illegal and could give rise to a criminal offence, as quoted in The Straits Times

RHTLaw Taylor Wessing Head of Regulatory Practice Nizam Ismail shares with The Straits Times on initial coin offerings (ICOs) and other investment schemes involving digital tokens. The article was first published in The Straits Times on 13 August 2017. Consumer Checklist Source: The Straits Times © Singapore Press Holdings Ltd Date: 13 August 2017 Author: Lorna Tan Financial experts say it is worthwhile putting in the time to educate ourselves on initial coin (or token) offerings (ICOs) and other investment schemes involving digital tokens. After all, digital is the future - but that does not mean that every digital currency-related investment will make money. Nor is it a suitable asset class for everyone. TSMP Law Corp's joint managing partner, Ms Stefanie Yuen Thio, advised consumers not to be seduced by sexy terms like "cryptocurrency", "ethereum" or "bitcoin" and think that this is a sure-win money-spinner. "Unless you know the arrangers of the transaction to be reputable and regulated, which can be verified against the Monetary Authority of Singapore (MAS) website, investors should proceed with extreme care," she said. "A white paper does not provide the same degree of information as a prospectus. We shouldn't let the new nomenclature make us believe that an ICO has the same protection as an initial public offering." Ms Chung Shaw Bee, head of deposits and wealth management, Singapore and the region, at UOB, cautioned there are a number of uncertainties that could confuse prospective investors. These include the technology which is the medium of the exchange of value, the real value of the virtual currency and the real value of the underlying assets. "The technology of and behind the virtual currency does not necessarily guarantee the substance, quality or even existence of the investment's underlying assets. Neither does it provide for certainty of returns," she said. Mr Nizam Ismail, head of regulatory practice, RHTLaw Taylor Wessing, said that if the coins offer some form of securities (for example, with rights similar to that of shares and bonds) or collective investment schemes, the issuer has to have a prospectus lodged with MAS. "If there is no prospectus, then the offer of securities may be an illegal one and could give rise to a criminal offence. If the coins do not offer securities, it would still be prudent for an investor to find out from the white paper, or from their own due diligence, how the company intends to use the proceeds from the ICO," he said. For those already invested in such schemes, Mr Anson Zeall, chairman of local trade body Access, suggests asking whether the coins issued to you are securities, that is, they give you rights similar to shares (ownership in a company), or debt (promise of return of coupon/interest), or a collective investment scheme. "If they do, the issuer should be regulated and cannot issue coins without a prospectus lodged with MAS. If you suspect that these are securities and there has been no prospectus, you should obtain legal advice or contact MAS," he said. Access represents the Singapore Cryptocurrency and Blockchain Industry Association. Mr Low Kah Keong, a partner at WongPartnership, recommends that an investor also consult his legal adviser to find out available remedies, including the right to cancel the agreement. The Sunday Times compiles a checklist from financial experts: Do you understand what business the ICO issuer is doing? Does the firm have a website that sets out what it does? Does the ICO issuer have a legitimate business presence in Singapore, or is planning to have one? Any track record? Be aware that if it is a foreign firm, there may be practical legal difficulties in suing the firm or enforcing judgment. Who are the persons running the company, the shareholders and what is their track record? How is the issuer planning to use the proceeds of the ICO and has it set out its projected financials? What sort of rights you are entitled to as the holder of a coin? Has the issuer disclosed risks relating to the ICO and are you able to accept those risks? What is your investment risk appetite? Coin or token investments carry risks and may be more volatile than other investment products. Are you prepared to write off the coin investment substantially or completely? Do the coins give you rights similar to shares (ownership in a company) or debt (promise of return of coupon/interest) or a collective investment scheme? If they do, the issuer should be regulated and cannot issue coins without a prospectus lodged with MAS, said Mr Nizam. Do you understand how to exit from your coin investments? Are the coins going to be listed on an exchange to allow you the ability to convert the digital tokens into cash? Is the person or entity regulated by MAS? The laws administered by MAS require disclosure of information on investment products being offered to consumers. They are also subject to conduct rules aiming to ensure they deal fairly with consumers. To find out whether an entity is regulated by MAS, consumers can check the authority's Financial Institutions Directory on the MAS website. Consumers can also look up the MAS' Investor Alert List for a non-exhaustive list of entities that may have been wrongly perceived to be regulated by MAS. Consumer alerts on the MoneySense website also has tips on avoiding scams. Consumers who suspect an investment scheme involving digital tokens could be fraudulent should report such cases to the police.