Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 24) Regulations 2005
- Act Code: SFA2001-S652-2005
- Type: Subsidiary Legislation (sl)
- Enacting Authority: Monetary Authority of Singapore (MAS), under powers conferred by section 337(1) of the Securities and Futures Act (SFA)
- Commencement: 12 October 2005
- Current Version (as stated): Current version as at 27 March 2026
- Key Provisions: Section 1 (Citation and commencement), Section 2 (Definitions), Section 3 (Exemption)
- Relevant SFA Provisions Exempted: Sections 197 and 198 of the Securities and Futures Act
- Related Legislation (as indicated): Banking Act, Finance Companies Act, Futures Act, Insurance Act, Stabilising Act
- Notable Amendment: Amended by S 468/2021 with effect from 1 July 2021 (notably in relation to certain categories of market participants)
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 24) Regulations 2005 is a targeted regulatory instrument. In plain terms, it creates a limited exemption from certain market conduct rules under the Securities and Futures Act for stabilising actions taken in relation to two specified bond issues: the “2016 Bonds” and the “2035 Bonds” issued by the Republic of Indonesia.
Stabilisation is a practice used in some bond and securities offerings to help manage short-term price volatility after issuance. It typically involves authorised market participants buying (or offering to buy) securities in a controlled manner to support the market price during the initial period after the bonds are issued. However, because stabilisation can resemble trading that affects price, regulators impose strict market conduct rules to prevent manipulation. This Regulations document addresses that tension by carving out an exemption—but only for stabilising actions that meet the defined conditions.
Accordingly, the Regulations do not broadly legalise market manipulation. Instead, they provide a time-bound and participant-specific safe harbour: stabilising actions may be carried out without the application of the exempted SFA provisions, provided the actions are taken within a specified window and by persons falling within enumerated categories.
What Are the Key Provisions?
Section 1 (Citation and commencement) confirms the legal identity of the instrument and its effective date. The Regulations may be cited as the “Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 24) Regulations 2005” and came into operation on 12 October 2005.
Section 2 (Definitions) is crucial because it precisely defines the scope of the exemption. Two bond series are identified:
- “2016 Bonds”: fixed rate bonds due January 2016 issued by the Republic of Indonesia for a principal amount of up to US$900 million.
- “2035 Bonds”: fixed rate bonds due October 2035 issued by the Republic of Indonesia for a principal amount of up to US$600 million.
The Regulations also define “stabilising action” as an action taken in Singapore or elsewhere by specified stabilising parties—namely Citigroup Global Markets Inc., Credit Suisse First Boston (Europe) Limited, and Merrill Lynch, Pierce, Fenner & Smith Incorporated (and their related corporations)—to buy, or to offer or agree to buy, the 2016 Bonds or 2035 Bonds in order to stabilise or maintain market price in Singapore or elsewhere.
This definition is a gatekeeper. It means that stabilisation is not just any trading activity; it must be performed by the named stabilising entities (or their related corporations) and must be directed to stabilising or maintaining market price.
Section 3 (Exemption) is the operative provision. It states that Sections 197 and 198 of the SFA shall not apply to stabilising actions taken in respect of the 2016 Bonds or 2035 Bonds within 30 days from the date of issue of the relevant bonds.
The exemption is conditional in two main ways:
- Time condition: stabilising action must occur within 30 days from the issue date of the relevant bonds.
- Person condition: the stabilising action must be taken “with” one of the enumerated categories of counterparties/participants.
The “with” language is significant for practitioners. It implies that the stabilising action must be undertaken in conjunction with (or involving) one of the listed persons. The categories include a broad range of regulated financial institutions and investors, such as:
- Banks licensed under the Banking Act (sections 7 or 79).
- Merchant banks licensed (or treated as having been granted a merchant bank licence) under the Banking Act.
- Finance companies licensed under the Finance Companies Act.
- Insurers registered under the Insurance Act.
- Trust companies registered under the Trust Companies Act.
- The Government or a statutory body.
- Pension funds or collective investment schemes.
- Holders of a capital markets services licence for specified activities, including dealing in securities, fund management, custodial services, securities financing, and trading in futures contracts.
- Persons dealing in the 2016/2035 Bonds with specified investor types (accredited investors or persons whose business involves acquisition/disposal/holding of securities).
- Institutional investors under the Securities and Futures (Prescribed Specific Classes of Investors) Regulations 2005.
Beyond institutional categories, the exemption also extends to certain principal investors and high-net-worth or high-asset persons, using monetary thresholds and asset/income tests. For example, the Regulations exempt stabilising actions with a person who acquires the bonds as principal where the aggregate consideration is not less than $200,000 (or equivalent) per transaction. They also exempt acquisitions by persons meeting net personal assets or income thresholds (e.g., net personal assets exceeding $2 million or income in the preceding 12 months of at least $300,000), and corporations meeting net assets thresholds of $10 million based on audited or certified balance-sheet information.
Finally, the Regulations include an exemption for officers of a person making an offer in respect of the bonds, and certain close family members (spouse, parent, brother, sister, son or daughter). This reflects a practical approach: stabilisation arrangements often involve offers and allocations through intermediaries, and the Regulations ensure that stabilising actions are not inadvertently constrained by the identity of related individuals.
Practitioner note: The Regulations are not a general exemption for all market participants. The exemption is tightly drafted around (i) the specific bond issues, (ii) stabilising actions by the defined stabilising entities, (iii) a 30-day post-issue window, and (iv) counterparties falling within the enumerated categories and thresholds.
How Is This Legislation Structured?
The Regulations are short and structured around three provisions:
- Section 1 sets out the citation and commencement.
- Section 2 provides definitions, including the precise identification of the bond series and the definition of “stabilising action” (including the named stabilising entities).
- Section 3 contains the exemption from specified SFA market conduct provisions, including the time limit and the list of eligible persons/participants.
Because the instrument is narrowly tailored, it functions like a bespoke safe harbour for a particular issuance. There are no Parts or complex schedules in the extract provided; the operative content is contained entirely within Section 3.
Who Does This Legislation Apply To?
In practical terms, the Regulations apply to parties involved in stabilising actions in relation to the specified Indonesian bond issues. The exemption is triggered only where stabilising actions fall within the definition in Section 2—meaning the stabilising actions must be taken by the named stabilising entities (Citigroup Global Markets Inc., Credit Suisse First Boston (Europe) Limited, Merrill Lynch, Pierce, Fenner & Smith Incorporated) or their related corporations.
However, the exemption also depends on the identity of the other party “with” whom the stabilising action is taken. Section 3 enumerates a wide set of eligible counterparties, including licensed financial institutions, certain regulated intermediaries, institutional investors, and principal investors meeting specified thresholds. Therefore, the Regulations are relevant not only to stabilising arrangers and dealers, but also to the compliance teams of issuers, lead managers, and investors who need to understand whether their participation falls within the safe harbour.
Why Is This Legislation Important?
This Regulations instrument is important because it clarifies when stabilisation trading can occur without breaching Singapore’s market conduct prohibitions. Stabilisation is often commercially necessary in bond markets, particularly for managing liquidity and price discovery immediately after issuance. Without an exemption, stabilising activity could expose participants to regulatory risk under the SFA provisions that address market misconduct.
From an enforcement and compliance perspective, the Regulations provide a structured compliance pathway. A practitioner advising a stabilising dealer or an investor must check at least four elements: (i) whether the bonds are the specified 2016 or 2035 bonds, (ii) whether the action qualifies as “stabilising action” under the definition (including the named stabilising entities), (iii) whether the action occurs within the 30-day window from issue, and (iv) whether the counterparty/involved person fits within one of the enumerated categories and thresholds.
Because the exemption is time-bound and participant-specific, it also affects documentation and operational controls. Market participants should ensure that stabilisation activity is properly authorised, recorded, and linked to the relevant bond issuance and eligible counterparties. Where thresholds apply (e.g., $200,000 per transaction; $2 million net personal assets; $300,000 income; $10 million corporate net assets), compliance teams should maintain evidence supporting eligibility at the time of acquisition or offer.
Related Legislation
- Securities and Futures Act (Cap. 289) — particularly sections 197 and 198 (market conduct provisions exempted by this Regulations)
- Banking Act (Cap. 19)
- Finance Companies Act (Cap. 108)
- Futures Act
- Insurance Act (Cap. 142)
- Trust Companies Act (Cap. 336)
- Securities and Futures (Prescribed Specific Classes of Investors) Regulations 2005 (G.N. No. S 369/2005)
- Stabilising Act (as referenced in the 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 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.