Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 17) Regulations 2004
- Act Code: SFA2001-S573-2004
- Legislation Type: Subsidiary legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Commencement: 10 September 2004
- Regulation Number / Citation: SL 573/2004
- Key Provisions: Section 1 (Citation and commencement); Section 2 (Definitions); Section 3 (Exemption)
- Status: Current version as at 27 March 2026 (per the legislation record)
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 17) Regulations 2004 (“Stabilising Action Exemption Regulations”) is a narrow, transaction-specific regulatory instrument. In essence, it creates an exemption from certain market conduct restrictions in the Securities and Futures Act (“SFA”) for stabilising activities carried out in relation to a particular bond issue.
In plain language, the Regulations recognise that, in some bond offerings, market stabilisation may be used to support orderly trading and mitigate volatility immediately after issuance. However, stabilisation can also resemble conduct that market conduct rules are designed to prevent—such as manipulative or misleading trading. The Regulations therefore carve out a controlled exception, allowing stabilising action to occur without triggering specified prohibitions, provided the stabilisation falls within the defined scope.
Importantly, the exemption is not general. It is limited to stabilising action taken in respect of a specific bond (the “Bonds” as defined) and within a defined time window (within 30 days from the date of issue). It also limits the categories of persons who may be involved, by reference to the SFA’s investor and dealing framework.
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the legal identity and timing of the Regulations. It states that the Regulations may be cited as the “Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 17) Regulations 2004” and that they come into operation on 10 September 2004. For practitioners, this matters when assessing whether conduct occurred within the regulatory framework and whether any transitional or retrospective issues could arise (though, in this case, the Regulations are straightforwardly prospective from their commencement date).
Section 2 (Definitions) is the core of the Regulations’ precision. It defines two key terms: “Bonds” and “stabilising action”. The definition of “Bonds” is highly specific: it refers to 10-year fixed rate senior unsecured bonds due September 2014 issued by Lopro Corporation, for a principal amount of up to ¥15,000,000,000. This specificity is a hallmark of MAS exemptions: the exemption is tied to a particular issuance, not a class of bonds generally.
Section 2 also defines “stabilising action” as an action taken in Singapore or elsewhere by Deutsche Bank AG London (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 significant for two reasons. First, it identifies the stabilising actor(s): Deutsche Bank AG London and its related corporations. Second, it clarifies the permitted conduct form: buying (or offering/agreeing to buy) the Bonds, for the purpose of price stabilisation.
Section 3 (Exemption) sets out the legal effect. It provides 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, provided the stabilising action is taken 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.
From a practitioner’s perspective, Section 3 is the operative “gatekeeper”. The exemption is conditional on (i) the stabilising action being within the defined bond issue, (ii) the stabilisation being carried out within the 30-day post-issuance period, and (iii) the counterparty category being limited to persons within section 274 or sophisticated investors under section 275(2). The conditionality is crucial: even if the stabilising actor and the bond match, the exemption may fail if the stabilising trades are conducted outside the permitted counterparty categories.
While the extract does not reproduce Sections 197 and 198 of the SFA, the structure indicates that those sections contain market conduct prohibitions relevant to dealing and trading. The Regulations effectively suspend the application of those prohibitions for the specified stabilising conduct. In practice, counsel should treat this as a targeted “safe harbour” (or exemption) rather than a blanket permission: stabilising action must remain within the defined parameters to avoid falling back into the general prohibitions.
How Is This Legislation Structured?
The Regulations are structured in a simple, three-section format:
- Section 1 sets out the citation and commencement.
- Section 2 provides definitions that precisely identify the bond issue and the stabilising conduct and actor.
- Section 3 establishes the exemption from specified SFA provisions, including the time limit (30 days from issue) and counterparty limitations (section 274 persons or sophisticated investors under section 275(2)).
This minimalist structure is typical of MAS exemptions: the legal work is done through careful definition and conditional exemption, rather than through extensive procedural requirements.
Who Does This Legislation Apply To?
The Regulations apply to stabilising action in relation to the defined “Bonds” (Lopro Corporation’s specified 10-year fixed rate senior unsecured bonds due September 2014, up to ¥15,000,000,000). The stabilising action must be taken by Deutsche Bank AG London or its related corporations, and it must be directed at stabilising or maintaining the market price of the Bonds in Singapore or elsewhere.
Additionally, the exemption is not available for stabilising action conducted with any counterparty. Section 3 restricts the exemption to stabilising action taken “with” either (a) persons referred to in section 274 of the SFA or (b) sophisticated investors under section 275(2). Accordingly, the practical compliance question for market participants is not only “are we stabilising?” but also “who is on the other side of the stabilising trades?”
Why Is This Legislation Important?
This Regulations is important because it illustrates how Singapore’s market conduct regime balances two competing objectives: (1) preventing market manipulation or improper dealing, and (2) allowing legitimate market practices that support orderly trading during the early period after issuance. Stabilisation can be commercially valuable in bond markets, where liquidity and price discovery may be thin immediately after launch.
At the same time, the exemption is intentionally narrow. It is limited to a specific bond issue, a specific stabilising actor (Deutsche Bank AG London and related corporations), a defined stabilising method (buying or agreeing to buy), and a strict time window (30 days from issue). It also limits the counterparty categories. These constraints reduce the risk that the exemption becomes a general loophole for conduct that would otherwise be prohibited under the SFA.
For practitioners advising issuers, arrangers, dealers, or compliance teams, the Regulations provide a concrete framework for assessing whether stabilising trades can be structured to fall within the exemption. In particular, counsel should focus on: (i) confirming that the bond issue matches the statutory definition; (ii) tracking the issuance date and ensuring stabilising activity occurs within the 30-day period; (iii) documenting that the stabilising actor is within the defined group; and (iv) verifying that stabilising trades are executed with permitted counterparty categories under sections 274 and 275(2) of the SFA.
Finally, because the exemption operates by excluding the application of specific SFA provisions (Sections 197 and 198), it is essential to consider whether other SFA provisions or other regulatory requirements may still apply. An exemption from one set of prohibitions does not necessarily immunise conduct from all other legal duties (for example, general disclosure, licensing, or other market conduct obligations). Therefore, the Regulations should be treated as a targeted compliance tool within a broader regulatory landscape.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular Sections 197, 198, 274, and 275(2)
- Futures Act (as referenced in the legislation metadata)
- Stabilising Act (as referenced in the legislation metadata)
- Timeline (legislation versioning and amendment timeline reference)
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. 17) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.