Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 14) Regulations 2005
- Act Code: SFA2001-S523-2005
- Legislation Type: Subsidiary legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Legal Basis: Powers under section 337(1) of the Securities and Futures Act
- Commencement: 2 August 2005
- Regulation Number: SL 523/2005
- Key Provisions (as extracted): Regulation 1 (Citation and commencement); Regulation 2 (Definitions); Regulation 3 (Exemption)
- Relevant Act Provisions Exempted: Sections 197 and 198 of the Securities and Futures Act
- Publication/Status Note: “Current version as at 27 Mar 2026” (per the provided extract)
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 14) Regulations 2005 is a targeted regulatory instrument. In essence, it creates a narrow exemption from certain “market conduct” restrictions in the Securities and Futures Act for a specific type of stabilising activity involving a defined bond issuance.
Stabilising action is a well-known mechanism in capital markets. When a new bond is issued, market prices can be volatile. Under certain circumstances, an issuer, dealer, or related party may take steps to support or stabilise the market price—typically by buying (or offering to buy) the relevant securities—so that trading conditions are orderly and confidence is maintained. However, stabilisation can also raise concerns about market manipulation. Singapore’s Securities and Futures Act therefore contains provisions that regulate or restrict stabilising conduct.
This set of Regulations addresses that tension by carving out an exemption. It allows stabilising action to be taken in relation to a particular bond issue, within a defined time window, and only with specified categories of counterparties. The exemption is not general; it is expressly limited to the bonds described in the Regulations and to stabilising actions taken within 30 days from the date of issue.
What Are the Key Provisions?
Regulation 1 (Citation and commencement) provides the formal citation and sets the commencement date. The Regulations “may be cited as” the named instrument and “shall come into operation on 2nd August 2005.” For practitioners, this matters because exemptions and compliance obligations often turn on effective dates—particularly where stabilisation occurs around the issuance period.
Regulation 2 (Definitions) is central because it defines both the subject matter (“Bonds”) and the conduct (“stabilising action”). The definition of “Bonds” is highly specific: it refers to “the 10-year US$ fixed rate subordinated bonds due August 2015 callable with a step-up in 2010 issued by Hong Leong Bank Berhad in August 2005 for a principal amount of up to US$200 million.” This level of specificity indicates that the exemption is intended for a particular issuance, not for future or other bond series.
Similarly, “stabilising action” is defined as an action taken in Singapore or elsewhere by “BNP Paribas, 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. First, the exemption is tied to the stabiliser (BNP Paribas and its related corporations), not to any market participant. Second, the stabilising activity can occur outside Singapore, but the regulatory objective remains tied to stabilising or maintaining the market price of the Bonds in Singapore or elsewhere.
Regulation 3 (Exemption) is the operative provision. It states that “Sections 197 and 198 of the Act shall not apply” to stabilising action taken in respect of any of the Bonds “within 30 days from the date of issue of the Bonds,” with stabilising action carried out 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, 198, 274, or 275, the structure is clear: the Regulations remove the applicability of specified market conduct restrictions for stabilising actions, but only if the stabiliser deals with the right counterparties and only within the right timeframe. The 30-day limit is a key compliance boundary. After that period, the exemption would no longer apply, and the general statutory restrictions in sections 197 and 198 would presumably resume.
From a practitioner’s standpoint, the counterparty limitation is equally important. The exemption is not simply “anyone can be dealt with.” It is limited to dealings with persons falling within section 274 of the Act and with sophisticated investors. This implies that the stabilising activity is permitted only in a controlled context—likely to ensure that counterparties have the requisite knowledge, risk tolerance, or regulatory status to mitigate concerns about unfair price support or informational asymmetry.
How Is This Legislation Structured?
Despite being a short instrument, the Regulations follow a conventional subsidiary legislation structure:
Regulation 1 sets out the citation and commencement. This is procedural and establishes when the instrument takes effect.
Regulation 2 provides definitions. It defines the scope of the “Bonds” and the meaning of “stabilising action,” including the identity of the stabilising entity (BNP Paribas and related corporations) and the geographic dimension (actions taken in Singapore or elsewhere).
Regulation 3 contains the exemption. It identifies the specific provisions of the Securities and Futures Act that are disapplied (sections 197 and 198), the time window (within 30 days from issue), and the permitted counterparties (persons under section 274 or sophisticated investors under section 275(2)).
Notably, the Regulations do not create additional procedural requirements in the extract provided (such as reporting, record-keeping, or disclosure). In practice, however, lawyers should verify whether the Securities and Futures Act or other subsidiary instruments impose conditions, notifications, or compliance steps that still apply even where an exemption exists.
Who Does This Legislation Apply To?
The exemption is directed at stabilising action in respect of the defined bonds. The stabilising action must be taken by BNP Paribas or its related corporations. Therefore, the primary regulated entities are those within BNP Paribas’s corporate group that undertake the relevant buying or offers to buy the bonds for stabilisation purposes.
However, the exemption also depends on the counterparties involved. The stabilising action must be taken “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. This means that even if BNP Paribas (or a related corporation) engages in stabilising purchases, the exemption may not apply if the counterparties fall outside those categories. Practitioners should therefore treat counterparty classification as a gating issue for reliance on the exemption.
Why Is This Legislation Important?
This Regulations is important because it demonstrates how Singapore’s market conduct framework balances two competing objectives: (1) allowing legitimate market stabilisation to support orderly trading in newly issued securities, and (2) preventing stabilisation from becoming a vehicle for market abuse.
By disapplying sections 197 and 198 for a limited period and limited counterparties, the Regulations provides legal certainty for the stabilising participants. Without such an exemption, stabilising purchases could potentially trigger prohibitions or restrictions under the Securities and Futures Act. For bond issuers, dealers, and trading desks, certainty is crucial: stabilisation strategies are time-sensitive and operationally complex, and reliance on a clearly defined exemption reduces regulatory risk.
From an enforcement and compliance perspective, the narrow tailoring is also significant. The exemption is not open-ended. It is confined to a particular bond issuance (Hong Leong Bank Berhad’s 10-year US$ fixed rate subordinated bonds due August 2015, callable with a step-up in 2010, issued in August 2005 up to US$200 million). It is also confined to a specific stabiliser group (BNP Paribas and related corporations) and a specific timeframe (within 30 days from issue). These limits suggest that MAS intended the exemption to facilitate a particular transaction while preserving the general integrity of the market conduct regime for other issuances and periods.
Practically, lawyers advising on bond issuance documentation, dealer arrangements, and trading conduct should ensure that stabilisation activities are aligned with the exemption’s conditions. This includes confirming: (i) the bonds match the defined description; (ii) the stabilising entity is within the BNP Paribas group; (iii) stabilisation occurs within the 30-day window; and (iv) the counterparties are within the permitted categories (section 274 persons or sophisticated investors). Where any element is uncertain, counsel should consider whether alternative approvals, contractual safeguards, or compliance measures are needed.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular, sections 197 and 198 (market conduct provisions), and sections 274 and 275(2) (counterparty categories and “sophisticated investor” definition)
- Futures Act (as referenced in the provided metadata)
- Stabilising Act (as referenced in the provided metadata)
- Legislation Timeline (MAS legislation timeline referenced in 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. 14) Regulations 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.