Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 10) Regulations 2005
- Act Code: SFA2001-S423-2005
- Legislation Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Authorising Provision: Section 337(1) of the Securities and Futures Act
- Citation: SL 423/2005
- Commencement: 29 June 2005
- Status: Current version as at 27 March 2026 (per legislation portal)
- Key Provisions: 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 2005 (“Stabilising Action Exemption Regulations”) creates a targeted regulatory exemption from certain market conduct rules under the Securities and Futures Act (the “SFA”). In practical terms, it allows specified persons to take “stabilising action” in relation to a particular bond issue without triggering the prohibitions that would otherwise apply.
In Singapore’s regulatory framework, market conduct provisions are designed to prevent manipulative or misleading trading practices and to ensure fair and orderly markets. However, stabilisation is a recognised market practice in some capital markets contexts—particularly during the initial period after issuance—where market participants may support the price or liquidity of newly issued securities to facilitate orderly trading.
This legislation is narrow in scope. It does not create a general stabilisation regime for all bonds. Instead, it defines a specific set of “Bonds” (a particular US$ guaranteed bond issue by Wan Hai Lines (Singapore) Pte. Ltd., guaranteed by Wan Hai Lines Ltd.) and defines a specific set of actors who may perform stabilising action (Citicorp Investment Bank (Singapore) Limited and its related corporations). The exemption is time-limited and applies only within a defined window after issuance.
What Are the Key Provisions?
1. Citation and commencement (Regulation 1)
Regulation 1 provides the short title and states that the Regulations come into operation on 29 June 2005. For practitioners, this matters because the exemption is tied to the issuance timeline and the statutory window for stabilising action. If stabilising activity occurs outside the effective period or outside the time window specified in the exemption, the protection may not be available.
2. Definitions (Regulation 2)
Regulation 2 is critical because the exemption depends entirely on whether the activity falls within the defined terms.
“Bonds” are defined very specifically as the 10-year US$ guaranteed bonds due June 2015 issued by Wan Hai Lines (Singapore) Pte. Ltd. for a principal amount of up to US$400 million, irrevocably and unconditionally guaranteed by Wan Hai Lines Ltd. This definition is not generic; it is an identification of a particular bond instrument and issuer/guarantor structure.
“Stabilising action” is defined as an action taken in Singapore or elsewhere by Citicorp Investment Bank (Singapore) Limited (or any of its related corporations) to buy, or 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. The definition is therefore both:
- Actor-specific (Citicorp Investment Bank (Singapore) Limited and related corporations); and
- Purpose-specific (to stabilise or maintain market price); and
- Conduct-specific (buying, offering to buy, or agreeing to buy).
For enforcement and compliance, this means that stabilising activity must be properly characterised as stabilisation (purpose) and must be performed by the defined entities (actor). If a different intermediary performs similar trades, the exemption may not apply.
3. The exemption from sections 197 and 198 of the SFA (Regulation 3)
Regulation 3 is the operative provision. 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, with respect to stabilising action undertaken by:
- (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.
Although the extract does not reproduce the text of sections 197, 198, 274, and 275(2), the structure indicates that the exemption is conditional on the status of the person taking the stabilising action. In other words, even if the action is “stabilising action” and relates to the defined “Bonds,” the exemption only operates when the stabilising action is taken by persons who fall within the specified categories.
Time limitation: “within 30 days from the date of issue”
The exemption is expressly limited to a 30-day period from the date of issue. This is a common feature of stabilisation exemptions in securities regulation: stabilisation is permitted during the early trading period when price discovery is still developing, but not indefinitely. Practitioners should therefore ensure that:
- the “date of issue” is correctly identified (for example, the issue date stated in offering documentation); and
- stabilising trades are monitored and documented to confirm they fall within the 30-day window.
Scope limitation: “in respect of any of the Bonds”
The exemption applies to stabilising action “in respect of any of the Bonds.” This is consistent with the definition of Bonds as a particular bond issue. It suggests that stabilisation may be conducted across the relevant tranches or amounts within that issue (subject to the definition’s parameters), rather than being limited to a single certificate or lot.
How Is This Legislation Structured?
The Regulations are structured in a straightforward manner, consisting of an enacting formula and three substantive provisions:
- Regulation 1 (Citation and commencement): sets the short title and commencement date (29 June 2005).
- Regulation 2 (Definitions): defines the two essential concepts—“Bonds” and “stabilising action”—which determine the scope of the exemption.
- Regulation 3 (Exemption): provides the legal effect: sections 197 and 198 of the SFA do not apply to stabilising action meeting the defined criteria, within 30 days from issue, and when undertaken by persons falling within section 274 or sophisticated investors under section 275(2).
Notably, the Regulations do not include detailed procedural requirements (such as reporting, limits on price, or disclosure mechanics) within the extract provided. Instead, the Regulations function as a targeted carve-out from specific SFA provisions, leaving other compliance obligations (if any) to the broader SFA framework and any applicable market conduct rules or guidance.
Who Does This Legislation Apply To?
The exemption is aimed at specific participants in a specific bond issuance. In terms of subject matter, it applies only to stabilising action relating to the defined Wan Hai Lines bond issue (10-year US$ guaranteed bonds due June 2015, up to US$400 million, guaranteed by Wan Hai Lines Ltd.).
In terms of actors, “stabilising action” is defined as actions taken by Citicorp Investment Bank (Singapore) Limited or its related corporations. However, Regulation 3 further restricts the exemption to stabilising action taken by a person who is either:
- a person referred to in section 274 of the SFA; or
- a sophisticated investor under section 275(2).
Accordingly, a practitioner should not assume that any Citicorp-related entity automatically qualifies. The exemption’s availability depends on the interaction between the definition of stabilising action and the category of person specified in Regulation 3. Similarly, even if a sophisticated investor is involved, the stabilising action must still meet the definition of stabilising action and relate to the defined Bonds.
Why Is This Legislation Important?
This Regulations matters because it illustrates how Singapore’s market conduct regime balances two competing objectives: (1) preventing manipulative or unfair market practices and (2) allowing legitimate market stabilisation during the early phase of a bond issuance. By carving out stabilising action from sections 197 and 198 of the SFA, the Regulations provide legal certainty for transactions that would otherwise be caught by broad prohibitions.
From a compliance perspective, the key value is the conditional exemption. It is not a blanket permission to trade in any manner. Instead, it is tightly bounded by:
- the instrument (the specific Wan Hai bond issue);
- the actor (Citicorp Investment Bank (Singapore) Limited and related corporations, as defined);
- the purpose (stabilise or maintain market price);
- the conduct (buying, offering to buy, or agreeing to buy); and
- the time window (within 30 days from the date of issue); and
- the status of the person (section 274 persons or sophisticated investors under section 275(2)).
For practitioners advising issuers, underwriters, or trading desks, the practical impact is that stabilisation strategies can be structured to fit within the exemption, reducing regulatory risk. At the same time, the narrow drafting means that documentation and trade surveillance are essential. Lawyers should ensure that offering documents, internal compliance policies, and trade records align with the defined “Bonds,” the defined “stabilising action,” and the 30-day limitation.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular sections 197, 198, 274, 275(2), and the regulation-making power in section 337(1)
- Futures Act (as referenced in the statute metadata)
- Stabilising Act (as referenced in the statute metadata)
- Legislation Timeline (for version control and amendment history)
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 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.