Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 24) Regulations 2004
- Act Code: SFA2001-S745-2004
- Legislation Type: Subsidiary legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Commencement: 15 December 2004
- Legislative Instrument No.: SL 745/2004
- Status: Current version as at 27 March 2026 (per 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. 24) Regulations 2004 is a targeted regulatory instrument that creates a narrow exemption from certain market conduct restrictions under the Securities and Futures Act (the “SFA”). In essence, it allows specified persons to take “stabilising action” in relation to a particular bond issue without breaching the general prohibitions that would otherwise apply.
In plain terms, when a new bond is issued, market participants may sometimes engage in stabilisation—typically buying (or offering to buy) the bonds—to help maintain an orderly market price during the early trading period. However, stabilisation can resemble prohibited conduct if it is not properly authorised or carved out. These Regulations therefore provide legal certainty by exempting stabilising activity from the relevant SFA provisions, but only if strict conditions are met.
Importantly, the exemption is not general. It is tied to a specific set of “Bonds” (defined with detailed issuer, instrument characteristics, and maximum principal amount) and to a defined stabilisation actor (Credit Suisse First Boston (Hong Kong) Limited and its related corporations). The exemption is also time-limited: it applies only within 30 days from the date of issue of the Bonds.
What Are the Key Provisions?
1. Citation and commencement (Regulation 1)
Regulation 1 provides the short title and confirms that the Regulations came into operation on 15 December 2004. For practitioners, this matters because the exemption can only be relied upon for stabilising action occurring after the Regulations’ commencement (unless the underlying SFA framework provides otherwise). The instrument is therefore part of the legal architecture governing market conduct for the relevant bond issuance around that period.
2. Definitions: “Bonds” and “stabilising action” (Regulation 2)
Regulation 2 is the core scoping mechanism. It defines two key terms:
- “Bonds” are defined with precision: they are the 5-year fixed rate guaranteed convertible bonds due December 2009 issued by SapuraCrest Dana SPV Pte Ltd for a principal amount of up to US$100 million, guaranteed by SapuraCrest Petroleum Berhad, and convertible into ordinary shares in SapuraCrest Petroleum Berhad with a par value of RM0.20 each.
- “stabilising action” means an action taken in Singapore or elsewhere by Credit Suisse First Boston (Hong Kong) Limited (or any of its related corporations) to buy, or 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.
From a compliance perspective, these definitions are not merely descriptive—they determine whether a particular transaction qualifies for the exemption. For example, if stabilisation is undertaken by a different entity (not within the defined Credit Suisse First Boston group) or relates to a different bond series, the exemption would likely not apply. Similarly, the stabilising purpose must align with the definition: the action must be taken to stabilise or maintain the market price.
3. The exemption from SFA sections 197 and 198 (Regulation 3)
Regulation 3 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, provided the stabilising action is taken with one of the following counterparties:
- (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.
Practically, this means the exemption is conditional on who the stabilising trades are with (or, more accurately, the relevant category of persons involved in the stabilising action). The Regulations do not reproduce the content of sections 274 and 275(2) in the extract, but they clearly rely on the SFA’s investor classification framework. For a lawyer advising a stabilisation manager or dealer, the key task is to confirm that the counterparty fits within the relevant statutory category.
Time limitation is equally critical. The exemption applies only to stabilising action undertaken within 30 days from the date of issue. This is a common feature of stabilisation regimes: it prevents indefinite market support and reduces the risk that stabilisation becomes a tool for manipulation rather than a temporary market-making measure. Therefore, transaction logs, trade dates, and documentation should be reviewed to ensure the stabilisation activity falls inside the 30-day window.
How Is This Legislation Structured?
These Regulations are structured in a very concise format, consisting of:
- Regulation 1 (Citation and commencement): sets the short title and commencement date.
- Regulation 2 (Definitions): defines “Bonds” and “stabilising action” with detailed specificity.
- Regulation 3 (Exemption): provides the exemption from the application of SFA sections 197 and 198, subject to the 30-day period and the specified categories of persons (section 274 persons or sophisticated investors under section 275(2)).
There are no additional parts or schedules in the extract. The legislative design is therefore “scoping-first”: it defines the relevant instrument and stabilisation actor, and then applies a narrow exemption with clear temporal and counterparty conditions.
Who Does This Legislation Apply To?
The Regulations primarily affect market participants involved in stabilising the defined Bonds—most notably the stabilisation actor identified in the definition of “stabilising action” (Credit Suisse First Boston (Hong Kong) Limited and its related corporations). However, the exemption’s practical reach also extends to the counterparties involved in the stabilising trades, because Regulation 3 requires that the stabilising action be taken with a person falling within section 274 or with a sophisticated investor under section 275(2).
Accordingly, while the exemption is framed as an exemption from the application of SFA sections 197 and 198, the compliance burden will typically fall on the stabilisation manager, dealer, or arranger to ensure that (i) the stabilising activity is within the defined scope of “stabilising action,” (ii) it relates to the defined “Bonds,” (iii) it occurs within the 30-day period from issue, and (iv) the counterparties meet the statutory categories.
Why Is This Legislation Important?
This Regulations is important because it provides a legal safe harbour for a specific stabilisation scenario. Without such an exemption, stabilisation conduct could potentially be caught by prohibitions in the SFA relating to market conduct—particularly those that aim to prevent misleading price formation, improper trading practices, or other forms of market abuse. By carving out stabilising action, MAS enables legitimate stabilisation practices while maintaining regulatory control through strict conditions.
For practitioners, the value lies in the precision of the exemption. The Regulations do not attempt to create a broad stabilisation regime for all bonds or all dealers. Instead, it is a bond-specific and actor-specific exemption. This means that advice must be highly fact-specific: counsel should verify the bond terms, the identity of the stabilisation entity, the timing of trades, and the counterparty classification.
Finally, the Regulations illustrate how Singapore’s market conduct framework balances market integrity with practical issuance mechanics. Stabilisation can support orderly trading in the immediate post-issue period, but it must be constrained. The 30-day limit and the requirement that stabilisation be conducted with specified categories of persons are key compliance levers that reduce the risk of stabilisation being used to distort markets beyond what is necessary for price discovery and liquidity formation.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular, Sections 197, 198, 274, and 275(2) (as referenced by these Regulations)
- Futures Act (listed in provided metadata)
- Stabilising Act (listed in provided metadata)
- Timeline (legislation timeline reference in provided metadata)
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. 24) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.