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 (as provided): Current version as at 27 Mar 2026
- Regulation number: SL 343/2004
- Key provisions: Section 2 (Definitions); Section 3 (Exemption)
- Regulator: Monetary Authority of Singapore (MAS)
- Relevant Act provisions referenced: Sections 197, 198, 274, 275(2) of the Securities and Futures Act
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 is a targeted exemption regulation. In plain terms, it allows certain market participants to take “stabilising action” in relation to a very specific bond issue—without triggering the prohibitions in the Securities and Futures Act that would otherwise restrict market manipulation or improper trading practices.
Stabilisation is a common feature of securities issuance. When bonds are first issued and begin trading, there can be volatility in price and liquidity. Under a stabilisation regime, designated persons may buy (or offer to buy) the relevant bonds to help maintain orderly market conditions and reduce extreme price swings. However, stabilising activity can resemble prohibited conduct if it is not clearly authorised and confined to a narrow window and purpose.
This regulation therefore carves out a limited exception from the general market conduct rules in the Securities and Futures Act. It does so by (i) defining the precise bonds covered, (ii) defining who may take stabilising action and what that action entails, and (iii) limiting the exemption to stabilising actions taken within 30 days from the date of issue, and only in respect of dealings with specified categories of counterparties (persons under section 274 of the Act or “sophisticated investors” under section 275(2)).
What Are the Key Provisions?
1. Citation and commencement (Regulation 1)
Regulation 1 provides the short title and the commencement date. The Regulations may be cited as the “Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 11) Regulations 2004” and come into operation on 16 June 2004. For practitioners, this matters because any stabilising trades must be assessed against the law in force at the relevant time. Where stabilisation occurs around issuance, the commencement date can be critical for compliance and enforcement risk.
2. Definitions (Regulation 2)
Regulation 2 is central because it narrows the exemption to a specific transaction and a specific stabilisation concept.
“Bonds” are defined narrowly as the 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 is not a general exemption for any bond stabilisation. It is an exemption tied to a particular issuer, tenor, maturity, and issuance size.
“Stabilising action” is defined as an action taken in Singapore or elsewhere by Credit Suisse First Boston (Europe) Limited (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. This definition is important for two reasons:
- It identifies the authorised stabiliser (Credit Suisse First Boston (Europe) Limited and its related corporations).
- It ties the conduct to a purpose—stabilising or maintaining market price—rather than any other trading objective.
3. The exemption from sections 197 and 198 (Regulation 3)
Regulation 3 is the operative provision. It states that sections 197 and 198 of the Securities and Futures Act shall not apply to any stabilising action taken in respect of any of the Bonds, within 30 days from the date of issue, with either:
- (a) a person referred to in section 274 of the Act; or
- (b) a sophisticated investor as defined in section 275(2) of the Act.
Although the extract does not reproduce sections 197 and 198, the structure indicates that those provisions contain prohibitions or restrictions relevant to market conduct (commonly, rules against market manipulation, misleading conduct, or improper trading). The exemption therefore functions as a “safe harbour” for stabilisation trades, but only if all conditions are met.
Practical compliance implications: A stabilising trader must be able to demonstrate that (i) the trades relate to the defined Bonds, (ii) the trades are taken by the defined stabiliser (or its related corporations), (iii) the trades are undertaken within the 30-day window from the bond issue date, and (iv) the counterparties fall within the permitted categories—either the section 274 persons or sophisticated investors under section 275(2). If any element is missing, the exemption will not apply, and the underlying prohibitions in sections 197 and 198 may become relevant.
4. Administrative and formal aspects (Made date and signatory)
The regulation is “made” on 14 June 2004 and signed by Koh Yong Guan, Managing Director of MAS. While not substantive, the making date can be relevant for understanding the regulatory timeline and ensuring that the exemption was properly promulgated before or at the time stabilisation commenced.
How Is This Legislation Structured?
This is a short, targeted subsidiary instrument with a conventional structure:
- Regulation 1 (Citation and commencement): sets the short title and when the Regulations take effect.
- Regulation 2 (Definitions): defines “Bonds” and “stabilising action” with high specificity.
- Regulation 3 (Exemption): provides the exemption from specified Securities and Futures Act provisions, subject to time, counterparty, and scope conditions.
Notably, there are no additional parts or complex schedules in the extract provided. The entire compliance analysis therefore turns on the definitions and the conditions in Regulation 3.
Who Does This Legislation Apply To?
The exemption is directed at stabilising activity in relation to the defined bond issue. In practice, it applies to the authorised stabiliser—Credit Suisse First Boston (Europe) Limited—and its related corporations, because the definition of “stabilising action” is limited to actions taken by that entity (or its related corporations).
It also indirectly applies to counterparties and trading counterpart relationships. The exemption is available only where the stabilising action is taken with either (i) persons referred to in section 274 of the Securities and Futures Act, or (ii) sophisticated investors under section 275(2). Accordingly, if stabilising trades are executed with other categories of persons, the exemption may not apply even if the trades are otherwise within the time window and relate to the defined bonds.
Why Is This Legislation Important?
This regulation is important because it illustrates how Singapore’s market conduct framework balances two competing objectives: (1) preventing market manipulation and improper trading practices, and (2) allowing legitimate market stabilisation during securities issuance. By granting a narrow exemption, MAS enables stabilisation while maintaining regulatory control through strict conditions.
For practitioners, the key value of this instrument is its precision. It is not a blanket permission for stabilisation. Instead, it is a transaction-specific and participant-specific carve-out. This means that legal advice must be highly fact-specific: counsel should verify the bond terms and issuance details (issuer, maturity, tenor, and issuance size), confirm the identity and corporate status of the stabilising entity, confirm the timing (within 30 days from issue), and confirm the counterparty category under the Securities and Futures Act.
From an enforcement and risk perspective, the exemption’s conditional nature is crucial. If stabilising activity falls outside the exemption, the stabiliser may face exposure under the underlying prohibitions in sections 197 and 198. Even where stabilisation is commercially standard, the legal permissibility depends on strict compliance with the regulatory conditions set out in the exemption regulation.
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 provided metadata)
- Stabilising Act (as referenced in the provided metadata)
- Legislation Timeline (for version control and amendments tracking)
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.