Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 11) Regulations 2004
- Act Code: SFA2001-S343-2004
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting power: Section 337(1) of the Securities and Futures Act
- Commencement: 16 June 2004
- Regulatory status: Current version as at 27 March 2026 (per legislation record)
- Key provisions: Section 2 (definitions); Section 3 (exemption)
- Regulatory focus: Exemption from market conduct rules for stabilising transactions in specified bonds
- Named market participant (for stabilising action): Credit Suisse First Boston (Europe) Limited and related corporations
- Named bond issue: 5-year fixed rate bonds due June 2009 issued by Chaoda Modern Agriculture (Holdings) Limited (up to US$200 million)
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 11) Regulations 2004 (“Stabilising Exemption Regulations”) is a targeted set of subsidiary legislation made under the Securities and Futures Act (the “SFA”). In plain terms, it creates a narrow exemption from certain “market conduct” restrictions that would otherwise apply to stabilising activities in connection with a particular bond issuance.
Stabilising action is a practice used in capital markets where, during the initial period after a bond is issued, an entity may buy (or offer to buy) the bonds to help maintain an orderly market price. Without an exemption, such conduct could be treated as potentially problematic market manipulation or as conduct prohibited under the SFA’s market conduct regime. This Regulations therefore permits stabilising activity, but only for a defined bond issue, only by specified persons, and only within a limited time window.
Importantly, the Regulations do not create a general permission for stabilisation in all bond offerings. Instead, it is an issue-specific and participant-specific exemption. That makes it particularly relevant for practitioners advising on underwriting, distribution, and post-issuance trading strategies for bond transactions in Singapore.
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the short title and confirms that the Regulations came into operation on 16 June 2004. This matters for compliance timing: the exemption is available only for stabilising actions taken after the Regulations are in force (and, as discussed below, also within the statutory 30-day period from the bond’s date of issue).
Section 2 (Definitions) sets the boundaries of the exemption by defining two central terms: “Bonds” and “stabilising action”. The definition of “Bonds” is highly specific: it refers to 5-year fixed rate bonds due June 2009 issued by Chaoda Modern Agriculture (Holdings) Limited for a principal amount of up to US$200 million. This means the exemption is not available for other maturities, other issuers, or different bond tranches unless they fall within the defined description.
Section 2 also defines “stabilising action” as an action taken in Singapore or elsewhere by Credit Suisse First Boston (Europe) 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 significant for two reasons. First, it expressly includes not only actual purchases but also offers or agreements to buy—so compliance teams must consider conditional orders and commitments, not just executed trades. Second, it covers stabilisation both in Singapore and “elsewhere,” which is relevant for cross-border trading and order routing.
Section 3 (Exemption) is the operative provision. It states that Sections 197 and 198 of the SFA shall not apply to stabilising action taken in respect of any of the Bonds, within 30 days from the date of issue, with respect to 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.
Practically, this means that the SFA’s market conduct prohibitions in sections 197 and 198 are “switched off” for the limited stabilising activity described in section 2, but only when the stabilising action is taken within the 30-day post-issuance period and only in relation to the relevant counterparties/categories of persons. For practitioners, the key compliance task is to map the stabilising trades and counterparties to the statutory categories: the exemption is not simply “any stabiliser may trade.” It is conditional on the identity of the person taking the action (as captured by the definition of stabilising action) and on the relevant SFA categories of persons/investors (sections 274 and 275(2)).
Although the extract does not reproduce sections 197, 198, 274, and 275(2), the structure indicates that the SFA contains specific market conduct restrictions and that the exemption is designed to carve out stabilisation conduct for certain regulated participants and sophisticated investors. The practitioner should therefore treat section 3 as a carefully calibrated exception rather than a broad relaxation.
How Is This Legislation Structured?
The Regulations are structured as a short instrument with an enacting formula and three substantive sections:
Section 1 covers citation and commencement.
Section 2 provides definitions that determine the scope of the exemption—particularly the identity of the bonds and what counts as stabilising action.
Section 3 sets out the exemption from specified SFA provisions (sections 197 and 198), including the critical temporal limitation (within 30 days from the date of issue) and the eligibility conditions tied to persons/investors referenced in sections 274 and 275(2) of the SFA.
From a legal drafting perspective, the Regulations follow a common Singapore legislative pattern for market conduct exemptions: define the instrument and conduct precisely, then exempt the relevant prohibitions only within defined parameters.
Who Does This Legislation Apply To?
The Regulations apply to stabilising action in respect of the defined bonds (Chaoda Modern Agriculture (Holdings) Limited 5-year fixed rate bonds due June 2009, up to US$200 million) when such action is taken by Credit Suisse First Boston (Europe) Limited or its related corporations as part of stabilising or maintaining the market price.
However, the exemption is also conditioned by the SFA categories referenced in section 3. Specifically, the exemption applies to stabilising action taken within 30 days from the date of issue with respect to either (a) a person referred to in section 274 of the SFA or (b) a sophisticated investor as defined in section 275(2). Accordingly, the practical applicability depends not only on who is trading, but also on the relevant counterparty/investor category and the timing of the trades.
For advisers, this means that transaction documentation, trading instructions, and compliance monitoring should be designed to demonstrate that the exemption conditions are satisfied. If stabilising trades fall outside the 30-day window, or if they involve counterparties not within the relevant categories, the exemption would not protect the conduct from the underlying SFA market conduct provisions.
Why Is This Legislation Important?
This Regulations is important because it illustrates how Singapore reconciles two competing regulatory objectives: (1) preventing market manipulation and improper market conduct, and (2) allowing legitimate stabilisation practices that can support orderly trading after a bond issuance. Stabilisation can reduce volatility and help ensure that the market price reflects genuine supply and demand rather than temporary dislocation immediately following issuance.
At the same time, the exemption is deliberately narrow. By limiting the exemption to a specific bond issue, a specific stabiliser (Credit Suisse First Boston (Europe) Limited) and its related corporations, and a strict 30-day post-issuance period, the Regulations reduce the risk that stabilisation becomes a loophole for prohibited trading practices. This is a key point for enforcement and compliance: regulators can scrutinise stabilising conduct against the defined parameters, and market participants cannot assume that “stabilisation” is automatically lawful.
From a practitioner’s perspective, the Regulations is most likely to be relevant in the context of:
- Underwriting and distribution arrangements for bond issues in Singapore;
- Trading and execution planning for stabilisation activities (including conditional orders and offers to buy);
- Compliance documentation to evidence timing (within 30 days from the date of issue) and eligibility (persons/investors within sections 274 and 275(2) of the SFA); and
- Cross-border trading governance, given that stabilising action may occur “in Singapore or elsewhere.”
In short, the Regulations provides a legally defined pathway for stabilisation in a particular transaction, while preserving the general market conduct framework of the SFA.
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 (not reproduced in the extract but referenced in the statute metadata)
- Stabilising Act (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. 11) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.