Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 15) Regulations 2005
- Act Code: SFA2001-S529-2005
- Type: Subsidiary Legislation (sl)
- Authorising Act: Securities and Futures Act (Cap. 289), specifically section 337(1)
- Enacting authority: Monetary Authority of Singapore (MAS)
- Citation: SL 529/2005
- Commencement: 8 August 2005
- Status: Current version as at 27 March 2026 (per the legislation portal)
- 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. 15) Regulations 2005 (“Stabilising Action Exemption Regulations”) is a targeted regulatory instrument. In plain language, it creates a narrow exemption from certain market conduct rules in the Securities and Futures Act (the “SFA”) for stabilising activities relating to a specific bond issue.
Stabilising action is a practice commonly used around bond issuance. The issuer, its advisers, or designated financial institutions may buy (or offer to buy) the bonds shortly after issuance to help support liquidity and reduce volatility in the secondary market. Without an exemption, such conduct could be caught by statutory prohibitions designed to prevent market manipulation or misleading trading practices.
This set of Regulations therefore “carves out” stabilising actions in relation to a defined set of bonds, within a defined time window, and when carried out with specified categories of counterparties. The exemption is not general; it is limited to stabilising action taken in respect of the particular bonds described in the Regulations.
What Are the Key Provisions?
Section 1: Citation and commencement provides the formal name of the Regulations and states that they come into operation on 8 August 2005. For practitioners, this matters because the exemption is time-bound and applies only within the statutory framework as it existed from the commencement date.
Section 2: Definitions is central because it fixes the scope of the exemption. Two terms are defined:
(1) “Bonds” are defined very specifically as the 5-year convertible bonds due August 2010 issued by Aurobindo Pharma Limited for a principal amount of up to US$60 million. The bonds are convertible into ordinary shares of Aurobindo Pharma Limited, with each ordinary share having a par value of 5 Indian Rupees.
(2) “stabilising action” is defined as an action taken in Singapore or elsewhere by Barclays Bank PLC or any of its related corporations. The action must involve either (i) buying, or (ii) offering or agreeing to buy, any of the defined bonds, with the purpose of stabilising or maintaining the market price of the bonds in Singapore or elsewhere.
These definitions are not merely descriptive; they are the “gate” through which any conduct must pass to qualify for the exemption. If the bonds are different, if the stabilising actor is not Barclays Bank PLC (or its related corporations), or if the conduct is not directed at stabilising/maintaining market price, the exemption will not apply.
Section 3: Exemption 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 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.
In practical terms, Section 3 does two things simultaneously:
- Temporal limitation: the stabilising action must occur within 30 days from the bond issue date.
- Counterparty limitation: the stabilising action must be taken with either the specific category of persons in section 274 or with sophisticated investors under section 275(2).
For a practitioner, the most important compliance question is therefore not only “is the conduct stabilising?” but also “who is the counterparty?” and “when did the stabilising trades occur?” The exemption is conditional on both.
How Is This Legislation Structured?
The Regulations are short and structured around three provisions:
- Section 1 sets out the citation and commencement date.
- Section 2 provides definitions that precisely identify the bonds and the stabilising actor and conduct.
- Section 3 grants the exemption from specified SFA provisions (sections 197 and 198), but only for stabilising action meeting the defined criteria (bond type, actor, purpose, time window, and counterparty categories).
This “definition + exemption” structure is typical of Singapore market conduct exemptions: the Regulations do not attempt to restate the SFA’s market conduct framework; instead, they identify a narrow factual scenario and disapply the relevant prohibitions for that scenario.
Who Does This Legislation Apply To?
Although the Regulations are made under the SFA and relate to market conduct rules, their effect is primarily felt by the parties who would otherwise be subject to sections 197 and 198 of the SFA. The exemption is drafted to apply to stabilising action taken by Barclays Bank PLC or its related corporations in relation to the defined Aurobindo Pharma convertible bonds.
However, the exemption is also conditioned on the counterparty to the stabilising action. The stabilising trades must be conducted with either (i) a person referred to in section 274 of the SFA or (ii) a sophisticated investor as defined in section 275(2) of the SFA. Accordingly, even where the stabilising actor and the bonds match, the exemption may fail if the stabilising action is taken with counterparties outside those categories.
Why Is This Legislation Important?
This Regulations is important because it illustrates how Singapore balances two competing regulatory objectives: (1) preventing market manipulation and improper market conduct, and (2) allowing legitimate market practices that support orderly trading around new issuances. Stabilising activity can be commercially beneficial—improving liquidity and reducing abrupt price swings—but it also carries the risk of being perceived as artificial price support. The exemption therefore provides legal certainty for a specific, controlled stabilisation programme.
From an enforcement and compliance perspective, the exemption is narrow and conditional. A practitioner advising a financial institution should treat the Regulations as a “checklist instrument.” The institution must be able to evidence, for example:
- that the bonds traded are exactly the bonds defined in the Regulations (issuer, instrument type, maturity, conversion terms, and issue size);
- that the stabilising action is taken by Barclays Bank PLC or its related corporations;
- that the purpose of the trades is stabilising or maintaining market price;
- that the trades occur within 30 days from the bond issue date; and
- that the counterparties fall within the categories in section 274 of the SFA or are sophisticated investors under section 275(2).
In addition, because the exemption disapplies sections 197 and 198 of the SFA, it is crucial to understand what those sections prohibit. While this article focuses on the Regulations themselves, the practical impact is that certain conduct that would otherwise be unlawful under the SFA may become permissible—provided the exemption conditions are met. Lawyers should therefore cross-reference the SFA provisions to confirm the exact conduct elements and the compliance documentation expected by MAS.
Finally, the Regulations demonstrate the regulatory technique of issuing bespoke exemptions for particular transactions. Rather than creating a broad stabilisation regime for all bond issues, MAS has—at least in this instance—opted for a transaction-specific exemption. This approach can affect how issuers and arrangers structure stabilisation programmes and how counsel draft offering documents, internal trading policies, and compliance controls.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular:
- Section 197
- Section 198
- Section 274 (persons referred to)
- Section 275(2) (definition of “sophisticated investor”)
- Section 337(1) (power to make regulations)
- Futures Act (listed in the metadata as related legislation)
- Stabilising Act (listed in the metadata as related legislation)
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. 15) Regulations 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.