Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 16) Regulations 2004
- Act Code: SFA2001-S572-2004
- Legislation Type: Subsidiary legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289) (“SFA”)
- Authorising Provision: Section 337(1) of the SFA
- Regulatory Body: Monetary Authority of Singapore (MAS)
- Commencement: 10 September 2004
- Enacting Date: 8 September 2004
- Regulation Number: SL 572/2004
- Status: Current version as at 27 March 2026 (per the provided extract)
- 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. 16) Regulations 2004 (“Stabilising Exemption Regulations”) is a targeted regulatory instrument made under the Securities and Futures Act. Its central purpose is to carve out a limited exemption from certain market conduct rules when stabilising activity is carried out in connection with a specific bond issuance.
In plain terms, the Regulations recognise that, during the early period after a bond is issued, market participants may engage in “stabilising action” to help maintain orderly trading and avoid excessive volatility. However, stabilisation can also resemble conduct that the general market conduct framework seeks to regulate—particularly where it could affect price formation or mislead investors. The Regulations therefore provide a narrow legal pathway: stabilising actions meeting the defined criteria are exempt from specified statutory provisions.
Importantly, this is not a general stabilisation regime. It is bond-specific and time-limited. The exemption applies only to stabilising action taken in respect of the defined “Bonds”, only by the defined stabilising actor (UBS AG and related corporations), and only within a strict 30-day window from the date of issue.
What Are the Key Provisions?
Section 1 (Citation and commencement) confirms the legal identity of the instrument and its effective date. The Regulations may be cited as the “Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 16) Regulations 2004” and came into operation on 10 September 2004. For practitioners, commencement is relevant when assessing whether stabilising activity occurred within the legal framework.
Section 2 (Definitions) is the backbone of the Regulations because it precisely identifies (i) the bond instrument and (ii) what counts as “stabilising action”. The definition of “Bonds” is highly specific: it refers to 5-year zero coupon unsecured guaranteed exchangeable bonds due September 2009 issued by IOI Investment (L) Berhad up to a principal amount of US$345 million, guaranteed by IOI Corporation Berhad, and exchangeable into new ordinary shares in IOI Corporation Berhad (with a stated par value). This level of specificity means the exemption cannot be extended to other bond series, maturities, or issuers.
The definition of “stabilising action” is also tightly constrained. It means an action taken in Singapore or elsewhere by UBS AG (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. Practically, this definition captures both actual purchases and certain forward-looking commitments (offers or agreements to buy). It also clarifies that stabilisation may occur cross-border, not only in Singapore.
Section 3 (Exemption) provides the operative relief. 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 stabilising action carried out by 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.
From a compliance perspective, Section 3 contains multiple cumulative conditions:
- Time condition: stabilising action must be within 30 days from the date of issue of the Bonds.
- Instrument condition: the action must be in respect of the defined “Bonds”.
- Actor/eligibility condition: the stabilising action must be taken by a person within the category in section 274, or by a sophisticated investor under section 275(2).
- Conduct condition: the action must meet the definition of “stabilising action” (UBS AG or related corporations; buy/offer/agreement to buy; stabilise or maintain market price).
Although the extract does not reproduce Sections 197 and 198 of the SFA, the structure indicates that those provisions are part of the SFA’s market conduct framework—likely addressing improper trading, misleading conduct, or restrictions on certain dealings. The Regulations effectively suspend the application of those provisions for the specified stabilisation scenario, thereby reducing legal risk for stabilisation that is consistent with the defined purpose.
How Is This Legislation Structured?
The Regulations are structured as a short, three-section instrument:
- Section 1 sets out the citation and commencement provisions.
- Section 2 provides definitions that determine the scope of the exemption—specifically, the identity of the Bonds and what constitutes stabilising action.
- Section 3 contains the exemption from the SFA’s market conduct provisions (Sections 197 and 198), subject to time and eligibility constraints.
There are no additional parts, schedules, or procedural requirements in the extract. The Regulations therefore operate as a narrow legal “switch” that turns off specified SFA provisions for a defined stabilisation activity.
Who Does This Legislation Apply To?
While the Regulations are made under the SFA and refer to categories of persons within the SFA (sections 274 and 275(2)), the practical beneficiaries and compliance stakeholders are typically:
- UBS AG and its related corporations conducting stabilising activity in relation to the Bonds; and
- Eligible counterparties or participants who fall within section 274 of the SFA, or who qualify as sophisticated investors under section 275(2).
Because the exemption is limited to stabilising action “taken in respect of any of the Bonds” within 30 days from issue, it does not apply to unrelated market activity, nor does it apply to stabilisation outside the defined timeframe. It also does not apply to stabilising action by persons other than UBS AG or its related corporations, given the definition of “stabilising action”.
Why Is This Legislation Important?
This Regulations matters because it addresses a recurring tension in securities markets: stabilisation can support orderly trading and reduce price dislocation after issuance, but it can also raise concerns about market manipulation or unfair dealing. By exempting stabilising actions from specified SFA provisions, MAS provides legal certainty for a narrow set of transactions and participants.
For practitioners—particularly those advising issuers, underwriters, trading desks, and compliance teams—the key value is the precision of the exemption. The Regulations are not a blanket permission to trade; they are a carefully bounded exception. A lawyer advising on stabilisation must therefore verify, at minimum:
- the instrument is exactly the defined “Bonds” (including issuer, guarantee, maturity, and exchangeability features);
- the stabilising activity falls within the definition (buy/offer/agreement to buy by UBS AG or related corporations, aimed at stabilising or maintaining market price);
- the activity occurs within the 30-day post-issue window; and
- the stabilising action is taken by a person within section 274 or by a sophisticated investor under section 275(2).
From an enforcement standpoint, the exemption reduces exposure to breaches of the SFA provisions that would otherwise apply. However, it does not necessarily immunise all conduct. If stabilisation falls outside the defined parameters—wrong bond, wrong actor, wrong timeframe, or wrong purpose—then the exemption would not apply, and the underlying market conduct provisions (Sections 197 and 198) could be engaged.
Finally, the Regulations illustrate MAS’s approach to market conduct regulation: rather than relying solely on general prohibitions and discretionary enforcement, MAS can create targeted exemptions that align legal treatment with market practice, provided the conditions are met.
Related Legislation
- Securities and Futures Act (Cap. 289) — particularly Sections 197, 198, 274, 275(2), and the regulation-making power in Section 337(1)
- Futures Act (as referenced in the provided metadata context)
- Stabilising Act (as referenced in the provided metadata context)
- Timeline (legislation timeline reference as provided in the source interface)
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. 16) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.