Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 10) Regulations 2004
- Act Code: SFA2001-S325-2004
- Type: Subsidiary Legislation (sl)
- Authorising Act: Securities and Futures Act (Cap. 289), specifically section 337(1)
- Regulation Number: S 325/2004
- Date of Enactment: 5 June 2004
- Commencement: 9 June 2004
- Status: Current version as at 27 Mar 2026 (per provided extract)
- Key Provisions: Section 1 (Citation and commencement); Section 2 (Definitions); Section 3 (Exemption)
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 10) Regulations 2004 is a targeted regulatory instrument that creates a limited exemption from certain market conduct rules under the Securities and Futures Act (the “SFA”). In plain terms, it allows specified parties to take “stabilising action” in relation to a particular bond issuance without being treated as breaching the SFA’s general prohibitions on certain dealings.
Stabilisation is a common feature of capital markets transactions. When bonds are newly issued, there can be volatility in the trading price. Under stabilisation arrangements, a market participant may buy (or offer to buy) the relevant bonds for a limited period to help maintain orderly trading and reduce extreme price fluctuations. This Regulations package acknowledges that stabilisation can serve legitimate market functions, but it also carves out an exemption only when strict conditions are met.
Crucially, this is not a general exemption for all bond issuances. The Regulations define “Bonds” very specifically—referring to a particular 7-year fixed rate subordinated bond due July 2011 issued by DCA Group Limited, up to a specified principal amount. The exemption is therefore transaction-specific, reflecting the regulatory approach of allowing stabilisation only where the regulator has assessed the particular issuance and the parties involved.
What Are the Key Provisions?
1. Citation and commencement (Regulation 1)
Regulation 1 provides the legal citation and states that the Regulations come into operation on 9 June 2004. For practitioners, this matters because the exemption in Regulation 3 is time-bound (it applies within 30 days from the date of issue of the Bonds). Establishing the commencement date helps confirm that the exemption framework was in force for the relevant issuance period.
2. Definitions (Regulation 2)
Regulation 2 is the foundation for the exemption because it defines both the subject matter (“Bonds”) and the conduct (“stabilising action”).
“Bonds” are defined as the 7-year fixed rate subordinated bonds due July 2011 issued by DCA Group Limited, for a principal amount of up to AUD$115 million, including any bonds issued pursuant to an option connected with the issuance of up to AUD$15 million. This definition is highly specific and effectively limits the exemption to that issuance and its over-allotment/option component.
“stabilising action” is defined as an action taken in Singapore or elsewhere by Deutsche Bank AG or any of its related corporations, to buy or to offer or agree to buy any of the Bonds in order to stabilise or maintain the market price of the Bonds in Singapore or elsewhere. Two practical points follow from this definition:
- Only Deutsche Bank AG and its related corporations are within the definition of the stabilising actor.
- The conduct must be directed to stabilising or maintaining market price—not merely trading for investment purposes.
3. The exemption (Regulation 3)
The operative provision is Regulation 3. It states that Sections 197 and 198 of the SFA shall not apply to any stabilising action taken in respect of any of the Bonds, within 30 days from the date of issue of the Bonds, provided the stabilising action is taken with either:
- (a) a person referred to in section 274 of the SFA; or
- (b) a sophisticated investor as defined in section 275(2) of the SFA.
This is the heart of the exemption and it has several layers of limitation:
- Time limit: stabilising action must occur within 30 days from the date of issue of the Bonds. Any stabilisation outside this window would fall outside the exemption.
- Conduct link: the action must be “stabilising action” as defined—i.e., by Deutsche Bank AG or related corporations and aimed at stabilising/maintaining market price.
- Counterparty restriction: the stabilising action must be taken with a counterparty falling within section 274 or with a sophisticated investor under section 275(2). This ensures the exemption is not broadly available for dealings with unsophisticated retail counterparties.
- Exemption scope: the exemption is from Sections 197 and 198 of the SFA. While the extract does not reproduce those sections, in practice these provisions typically relate to market conduct restrictions around dealings and trading behaviour. The exemption therefore functions as a “safe harbour” for stabilisation conduct that would otherwise be prohibited or restricted.
4. Formalities and making of the Regulations
The Regulations were made on 5 June 2004 by the Monetary Authority of Singapore (MAS), signed by Koh Yong Guan, Managing Director. For legal practitioners, this is relevant for confirming the instrument’s validity and the regulator’s role in granting the exemption under the SFA’s enabling power.
How Is This Legislation Structured?
The Regulations are structured in a short, three-regulation format:
- Regulation 1 (Citation and commencement): identifies the instrument and its effective date.
- Regulation 2 (Definitions): defines the key terms “Bonds” and “stabilising action”, which determine the scope of the exemption.
- Regulation 3 (Exemption): provides the substantive exemption from SFA sections 197 and 198, subject to the time limit and the specified categories of counterparties.
Because the Regulations are concise, the practitioner’s task is largely interpretive: confirming whether the transaction fits the defined “Bonds”, whether the stabilisation activity fits the definition of “stabilising action”, and whether the counterparties fall within the specified SFA categories.
Who Does This Legislation Apply To?
The Regulations apply to stabilising action in relation to the defined DCA Group Limited bond issuance, and only when the stabilising action is taken by Deutsche Bank AG or its related corporations. In other words, the exemption is not a general permission for any market participant; it is tied to a particular stabilising actor.
Additionally, the exemption is conditional on the stabilising action being taken within 30 days from the date of issue and being conducted with either a person within section 274 of the SFA or with a sophisticated investor under section 275(2). This means that even where the stabilising actor and the bond issuance match, the exemption may not apply if the counterparty category requirement is not satisfied.
Why Is This Legislation Important?
For practitioners, this Regulations instrument is important because it provides a narrow compliance pathway for stabilisation activities that might otherwise trigger liability under the SFA’s market conduct provisions. Stabilisation is inherently sensitive: it can influence price formation, and regulators therefore typically require that stabilisation be tightly controlled, time-limited, and counterparty-restricted.
From a transaction execution perspective, the Regulations help market participants structure stabilisation programmes with legal certainty. If the stabilising action is properly documented and falls within the defined parameters—correct bonds, correct actor, correct time window, and correct counterparty category—then the exemption can reduce regulatory risk and support orderly market functioning during the post-issuance period.
From a legal risk management perspective, the Regulations also highlight the importance of operational controls. The 30-day limit is a bright-line condition. Similarly, the counterparty limitation requires careful classification of counterparties under the SFA framework (section 274 persons and sophisticated investors under section 275(2)). In practice, counsel should ensure that trading records, communications, and settlement documentation align with the stabilisation purpose and the defined scope.
Related Legislation
- Securities and Futures Act (Cap. 289) (including Sections 197, 198, 274, 275(2), and the enabling power in section 337(1))
- Futures Act (as referenced in the provided metadata context)
- Stabilising Act (as referenced in the provided metadata context)
- Timeline (legislation versioning reference, per the provided extract)
Source Documents
This article provides an overview of the Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 10) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.