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 (SFA) (Cap. 289)
- Authorising Power: Section 337(1) of the Securities and Futures Act
- Regulation Number / SL No.: SL 745/2004
- Commencement: 15 December 2004
- Enacting Date: 3 December 2004
- Key Provisions:
- Regulation 1: Citation and commencement
- Regulation 2: Definitions (including “Bonds” and “stabilising action”)
- Regulation 3: Exemption from sections 197 and 198 of the SFA for specified stabilising action
- Status: Current version as at 27 March 2026 (per the legislation portal)
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. In plain terms, it creates a narrow exemption from certain market conduct rules in the Securities and Futures Act (SFA) for a specific kind of trading activity—namely, “stabilising action”—carried out in relation to a particular bond issue.
Stabilising action is a practice used in some capital markets transactions to help manage short-term volatility in the price of newly issued securities. The law recognises that stabilisation can be legitimate when conducted within defined limits and by specified parties. However, stabilisation can also resemble conduct that market conduct provisions seek to prevent (for example, manipulative or misleading trading). This is why the SFA contains prohibitions, and why exemptions are sometimes granted by subsidiary legislation.
This set of Regulations does not create a general authorisation for stabilisation across all bonds or all issuers. Instead, it is bond- and party-specific: it defines the “Bonds” precisely and defines “stabilising action” by reference to a particular stabilising entity (Credit Suisse First Boston (Hong Kong) Limited and its related corporations). It also limits the time window during which stabilisation may occur to qualify for the exemption.
What Are the Key Provisions?
Regulation 1 (Citation and commencement) is straightforward. It provides the short title and confirms that the Regulations came into operation on 15 December 2004. For practitioners, this matters when determining whether stabilising trades fall within the legal framework applicable at the relevant time.
Regulation 2 (Definitions) is the heart of the instrument because it determines the scope of the exemption. Two definitions are crucial:
- “Bonds” are defined with high specificity: 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. The bonds are guaranteed by SapuraCrest Petroleum Berhad and are convertible into ordinary shares in SapuraCrest Petroleum Berhad with a par value of RM0.20 each.
- “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.
These definitions mean that the exemption is not available to other bond issues, and not available to stabilising activity by other market participants. Even if a party has a similar role in a different transaction, the exemption will not apply unless the activity fits the defined “Bonds” and the defined “stabilising action”.
Regulation 3 (Exemption) provides the operative relief. 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 stabilising action carried out:
- by a person referred to in section 274 of the Act; or
- by a sophisticated investor as defined in section 275(2) of the Act.
Practically, this is a conditional exemption. It has at least four gating requirements:
- Subject matter: the trading must be in the defined “Bonds”.
- Nature of conduct: the activity must be “stabilising action” as defined (buying or agreeing to buy to stabilise/maintain price).
- Time limit: it must occur within 30 days from the date of issue.
- Eligible actors: the stabilising action must be taken by a person within section 274 or by a sophisticated investor within section 275(2).
For a lawyer advising on compliance, the most important work is typically mapping the proposed stabilisation programme to these conditions. In particular, the “within 30 days” requirement is often operationalised through trade logs, deal calendars, and evidence of the “date of issue” used for the calculation.
How Is This Legislation Structured?
The Regulations are structured in a simple, three-regulation format:
- Regulation 1 sets out the citation and commencement date.
- Regulation 2 provides definitions that tightly delimit the scope of the exemption.
- Regulation 3 contains the exemption clause, specifying which SFA provisions are disapplied, the time window, and the eligible persons.
There are no additional parts or schedules in the extract provided. The drafting approach is typical of Singapore market conduct exemptions: rather than restating the underlying market conduct rules, the subsidiary legislation identifies the specific prohibitions being disapplied and then constrains the exemption by reference to defined securities, defined conduct, defined actors, and defined timing.
Who Does This Legislation Apply To?
Although the Regulations are made under the SFA and therefore sit within a broader regulatory framework, their direct effect is on persons who engage in stabilising action in relation to the defined bond issue. The exemption is available only where the stabilising action is carried out by eligible persons—either those falling within section 274 of the SFA or sophisticated investors as defined in section 275(2).
In addition, the definition of “stabilising action” limits the relevant stabilising activity to actions taken by Credit Suisse First Boston (Hong Kong) Limited or its related corporations. This means that, even if another entity is a person under section 274 or qualifies as a sophisticated investor, the exemption will not cover stabilisation unless the conduct fits the defined stabilising action by the specified stabilising entity (or its related corporations).
From a compliance perspective, advisers should treat the Regulations as a “permission with boundaries”. The exemption is not a blanket safe harbour for all market participants; it is a narrow carve-out that must be supported by documentary evidence showing that each condition is satisfied.
Why Is This Legislation Important?
This legislation is important because it demonstrates how Singapore balances two competing objectives in securities regulation: (1) preventing market abuse and manipulative conduct, and (2) allowing legitimate market stabilisation in connection with new issues. Stabilisation can support orderly trading and reduce disruptive price swings during the early trading period of a bond. At the same time, stabilisation can be misused, which is why the SFA contains prohibitions that would otherwise capture such trading.
The Regulations provide a controlled exemption from sections 197 and 198 of the SFA for stabilising action in respect of a specific bond issue. For practitioners, the key significance lies in the drafting technique: the exemption is achieved by disapplying specified SFA provisions rather than by rewriting the market conduct rules. This makes the exemption easier to apply in legal analysis—once the conditions are met, the disapplied provisions do not apply to the qualifying conduct.
In practical terms, the Regulations affect how underwriting syndicates, stabilising agents, and transaction counsel structure stabilisation programmes. They must ensure that stabilising trades are conducted within the 30-day post-issue period, that the trades relate to the exact bond instrument, and that the stabilising activity is carried out by eligible actors consistent with the definitions and cross-references to the SFA. Failure to meet these conditions could expose the conduct to the underlying market conduct prohibitions.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular:
- Section 197 (market conduct provision disapplied by the exemption)
- Section 198 (market conduct provision disapplied by the exemption)
- Section 274 (persons referred to for eligibility)
- Section 275(2) (definition of “sophisticated investor” for eligibility)
- Section 337(1) (authorising power for making these Regulations)
- Futures Act (listed in the platform metadata as related legislation)
- Stabilising Act (listed in the platform 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. 24) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.