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 745/2004
- Citation: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 24) Regulations 2004
- Commencement: 15 December 2004
- Key Provisions: Regulation 1 (Citation and commencement); Regulation 2 (Definitions); Regulation 3 (Exemption)
- Status: Current version as at 27 March 2026 (per provided extract)
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 (“Stabilising Action Exemption Regulations”) creates a targeted regulatory carve-out from certain market conduct prohibitions under the Securities and Futures Act (SFA). In practical terms, it permits specified stabilising activities in relation to a particular bond issue during a limited post-issuance period, provided the stabilising trades are carried out in defined circumstances.
Market conduct rules in the SFA are designed to protect investors and maintain fair, orderly markets. They typically restrict conduct that could distort price discovery or mislead investors. However, stabilisation is a recognised market practice in some capital markets contexts: an issuer, underwriter, or other market participant may buy or offer to buy securities shortly after issuance to support liquidity or reduce volatility. The law therefore balances investor protection with the legitimate mechanics of underwriting and distribution.
This set of Regulations is narrow and issue-specific. It does not create a general stabilisation regime for all bonds. Instead, it defines “Bonds” as a particular 5-year fixed rate guaranteed convertible bond programme issued by SapuraCrest Dana SPV Pte Ltd (up to US$100 million), guaranteed by SapuraCrest Petroleum Berhad, and convertible into ordinary shares of SapuraCrest Petroleum Berhad. It also defines “stabilising action” as stabilising purchases (or offers/agreements to buy) undertaken by Credit Suisse First Boston (Hong Kong) Limited (and its related corporations). The exemption then applies only to stabilising actions taken within 30 days from the date of issue, and only when the counterparty is a person specified by the SFA or a sophisticated investor.
What Are the Key Provisions?
Regulation 1 (Citation and commencement) provides the formal citation and states that the Regulations come into operation on 15 December 2004. For practitioners, this matters because the exemption is time-bound and tied to the bond issuance timeline; confirming the commencement date helps determine whether stabilising trades fall within the legal framework.
Regulation 2 (Definitions) is the core interpretive gateway. It defines two terms that control the scope of the exemption: “Bonds” and “stabilising action”. The “Bonds” definition is highly specific. It identifies (i) the maturity (5-year fixed rate guaranteed convertible bonds due December 2009), (ii) the issuer (SapuraCrest Dana SPV Pte Ltd), (iii) the maximum principal amount (up to US$100 million), (iv) the guarantor (SapuraCrest Petroleum Berhad), and (v) the conversion feature (convertible into ordinary shares in SapuraCrest Petroleum Berhad, with a par value of RM0.20 each). This specificity indicates the exemption is not meant to be extended by analogy to other issues.
The definition of “stabilising action” is equally constrained. It covers actions 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. Two practical points follow. First, the exemption is limited to a particular stabilising actor (Credit Suisse First Boston (Hong Kong) Limited and related corporations). Second, it includes not only actual purchases but also offers or agreements to buy—meaning that conditional or forward commitments may fall within the definition and therefore within (or outside) the exemption depending on how they are structured.
Regulation 3 (Exemption) 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 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.
Although the extract does not reproduce Sections 197 and 198, the structure indicates that those sections contain prohibitions or restrictions relevant to market conduct—likely including rules against market manipulation, misleading transactions, or improper trading practices. The Regulations therefore operate as a statutory exemption: they suspend the application of those prohibitions for the defined stabilising conduct, but only within the defined boundaries.
Key conditions to note:
- Time window: stabilising action must be taken within 30 days from the date of issue of the Bonds. This is a hard limit; stabilisation outside the window would not benefit from the exemption.
- Subject matter: the stabilising action must be “in respect of” the defined Bonds. Trades involving other securities would not be covered.
- Counterparty category: stabilising action must be taken with either a person under s 274 or a sophisticated investor under s 275(2). This requirement is significant because it limits the exemption to transactions with certain investor classes, reflecting a risk-based approach.
- Actor limitation: by virtue of the definition of “stabilising action”, the stabilising activity must be undertaken by Credit Suisse First Boston (Hong Kong) Limited or its related corporations.
How Is This Legislation Structured?
The Regulations are structured in a straightforward, three-regulation format:
- Regulation 1 sets out the citation and commencement.
- Regulation 2 provides definitions that precisely identify the Bonds and the stabilising action covered.
- Regulation 3 contains the exemption, specifying which SFA provisions are disapplied, the relevant time period, and the permitted counterparty categories.
From a practitioner’s perspective, this structure means the legal analysis largely turns on interpreting the definitions and verifying compliance with the conditions in Regulation 3. There are no additional schedules or procedural requirements shown in the extract; the exemption is therefore likely to be applied directly by reference to the statutory text and the factual circumstances of the trades.
Who Does This Legislation Apply To?
The Regulations apply to stabilising actions undertaken by the defined stabilising actor—Credit Suisse First Boston (Hong Kong) Limited and its related corporations—in relation to the defined bond issue. While the exemption is drafted as a disapplication of SFA sections, in practice it is relevant to the parties conducting stabilisation, their compliance teams, and any persons involved in executing or documenting stabilising trades.
Additionally, the exemption is conditioned on the counterparty being within a specified category: either a person referred to in s 274 of the SFA or a sophisticated investor under s 275(2). This means that even if the stabilising actor and the bond issue match, the exemption may not apply if the stabilising trades are executed with investors outside those categories. Lawyers advising on execution strategy, trade documentation, and investor eligibility will therefore need to confirm counterparty status.
Why Is This Legislation Important?
This legislation is important because it provides legal certainty for a specific stabilisation practice in a specific bond issuance. Without an exemption, stabilising purchases or related conduct could potentially fall within the prohibitions in Sections 197 and 198 of the SFA, exposing market participants to regulatory enforcement risk. By disapplying those provisions, the Regulations allow stabilisation to occur within a controlled framework.
For practitioners, the significance lies in the precision of the exemption. The Regulations are not a broad permission to stabilise markets generally; they are an issue-specific, actor-specific, and time-limited carve-out. This precision is a hallmark of Singapore’s approach to market conduct: exemptions are granted where the regulator can identify the exact securities, the exact stabilising arrangements, and the investor risk profile. As a result, compliance advice must be fact-intensive.
In practical terms, the Regulations affect how stabilisation programmes are implemented. Lawyers should expect to see these provisions referenced in legal opinions, underwriting documentation, compliance procedures, and trade monitoring frameworks. The 30-day limit from the date of issue is particularly critical for operational compliance: stabilising activity must be tracked against the issuance date, and any extension beyond the window would require separate legal basis or regulatory clearance.
Finally, the counterparty restriction (s 274 persons or sophisticated investors) underscores that the exemption is designed to manage investor protection concerns. Even sophisticated investors may not be treated identically to retail investors, and the SFA’s definitions reflect that risk-based differentiation. Counsel should therefore ensure that eligibility determinations are documented and that the stabilising trades are executed only with counterparties meeting the statutory criteria.
Related Legislation
- Securities and Futures Act (Cap. 289) — particularly Sections 197, 198, 274, and 275(2), and the authorising power in section 337(1).
- Stabilising Act (as referenced in the provided metadata)
- Futures Act (as referenced in the 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.