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), specifically powers under section 337(1)
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Commencement: 15 December 2004
- Regulation Number: SL 745/2004
- Status (as provided): Current version as at 27 March 2026
- 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 made under the Securities and Futures Act (SFA). In plain terms, it creates a narrow exemption from certain “market conduct” restrictions in the SFA for a specific kind of activity—namely, stabilising action—carried out in relation to a particular bond issue.
Stabilising action is a common feature of some bond and securities offerings. During the early period after issuance, market makers or arrangers may take steps to support or maintain the trading price of the securities, typically to reduce volatility and facilitate orderly trading. However, stabilisation can also raise concerns about market manipulation or unfair price support. The SFA therefore contains provisions that regulate or prohibit certain conduct that could distort market prices.
This set of Regulations addresses that tension by carving out an exemption. It allows stabilising action to be taken without the SFA provisions in question applying, but only where strict conditions are met: the action must relate to the defined bonds, must occur within a specified time window (30 days from issuance), and must be undertaken by specified categories of persons (or by a sophisticated investor, as defined by the SFA).
What Are the Key Provisions?
Section 1 (Citation and commencement) is straightforward. It provides the short title and confirms that the Regulations come into operation on 15 December 2004. For practitioners, this matters mainly for determining whether the exemption was available for stabilising actions taken after that date.
Section 2 (Definitions) is where the Regulations become highly specific. It defines two critical terms: “Bonds” and “stabilising action”.
“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 specified par value. This definition is not generic; it is tailored to a particular issuance. As a result, the exemption is effectively “issue-specific” and does not extend to other bonds or other issuers.
“stabilising action” is defined as an action taken in Singapore or elsewhere by Credit Suisse First Boston (Hong Kong) Limited (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 also restrictive in two ways: (1) it limits the actor to Credit Suisse First Boston (Hong Kong) Limited and its related corporations; and (2) it limits the purpose to stabilising or maintaining the market price.
Section 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, with stabilising action carried out by 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.
From a practitioner’s perspective, the key elements to verify in any stabilisation programme are: (i) the stabilising action must be within the 30-day period from the bond’s date of issue; (ii) the action must be in respect of the defined Bonds; (iii) the action must fall within the defined concept of stabilising action (including the permitted actor and purpose); and (iv) the person taking the action must be within the permitted categories under section 3—either a section 274 person or a sophisticated investor under section 275(2).
Although the extract does not reproduce sections 197, 198, 274, and 275(2), the structure indicates that the exemption is designed to neutralise the application of specific prohibitions or restrictions in the SFA that would otherwise capture stabilisation-like conduct. The exemption is therefore best understood as a regulatory “permission” that prevents the stabilising conduct from being treated as a breach of those particular SFA provisions, provided the statutory conditions are satisfied.
How Is This Legislation Structured?
The Regulations are short and consist of an enacting formula and three substantive provisions:
- Section 1 sets out the citation and commencement.
- Section 2 provides definitions that precisely identify the Bonds and the stabilising action, including the permitted stabiliser (Credit Suisse First Boston (Hong Kong) Limited and related corporations) and the stabilisation purpose.
- Section 3 provides the exemption from the application of sections 197 and 198 of the SFA, limited by time (30 days from issue) and by the category of person taking the stabilising action (section 274 persons or sophisticated investors).
In practical terms, the Regulations operate like a “switch” that turns off the effect of certain SFA market conduct provisions for a narrowly defined stabilisation activity in relation to a specific bond issue.
Who Does This Legislation Apply To?
The exemption is directed at parties involved in stabilising action in relation to the defined convertible bond issue. While the Regulations do not list a broad class of regulated entities in the way some market conduct rules do, the definitions and exemption conditions effectively narrow the field.
First, the stabilising action must be taken by Credit Suisse First Boston (Hong Kong) Limited or its related corporations, because that is how “stabilising action” is defined. Second, the exemption in section 3 applies only where the stabilising action is taken within 30 days from the date of issue and is undertaken by either a person referred to in section 274 of the SFA or by a sophisticated investor as defined in section 275(2). Accordingly, the Regulations matter most to the stabilising arranger/market participant and any other person who might be involved in executing stabilisation trades within the permitted window.
Why Is This Legislation Important?
This Regulations is important because it provides legal certainty for a specific stabilisation strategy in a specific bond issuance. Without an exemption, stabilising trades—particularly those involving offers to buy, agreements to buy, or actual purchases—could potentially fall within the scope of SFA provisions that are intended to prevent market manipulation or unfair price support.
For practitioners advising issuers, arrangers, or trading desks, the value lies in the combination of specificity and conditionality. The Regulations do not create a general stabilisation regime for all bonds. Instead, they define the bonds and the stabilising actor with precision and impose a strict temporal limit (30 days from issue). This means compliance is largely an exercise in confirming factual alignment with the defined instrument, the permitted stabiliser, and the timing of trades.
From an enforcement and risk perspective, the exemption also signals MAS’s approach: stabilisation may be permissible, but only under controlled circumstances. In practice, counsel would typically pair this exemption with internal compliance controls (trade documentation, monitoring of the stabilisation period, and ensuring that any stabilising activity is properly authorised and recorded). Even where an exemption exists, firms should assume that other regulatory requirements may still apply—such as disclosure obligations, general market conduct expectations, and any other SFA provisions not expressly switched off by the exemption.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular:
- Section 197 and Section 198 (market conduct provisions exempted by section 3 of these Regulations)
- Section 274 (persons referenced in section 3(a))
- Section 275(2) (definition of “sophisticated investor” referenced in section 3(b))
- Section 337(1) (power under which MAS made the Regulations)
- Futures Act (listed in the provided metadata; relevant context may exist depending on cross-regulatory frameworks)
- Stabilising Act (listed in the provided metadata; may refer to a stabilisation framework or related instrument in the broader regulatory ecosystem)
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.