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)
- Authorising Act: Securities and Futures Act (Cap. 289), section 337(1)
- Enacting date: 11 October 2005
- Commencement: 12 October 2005
- Current version status: Current version as at 27 March 2026
- Key provisions: Section 1 (citation and commencement); Section 2 (definitions); Section 3 (exemption)
- Amendments noted: Amended by S 468/2021 with effect from 1 July 2021 (notably updates to certain categories in the exemption)
- Related legislation: Banking Act; Finance Companies Act; Futures Act; Insurance Act; Stabilising Act
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 (“Stabilising Exemption Regulations”) creates a targeted regulatory carve-out from certain market conduct restrictions under the Securities and Futures Act (the “SFA”). In plain terms, it allows specified market participants to take “stabilising action” in relation to particular bond issues without triggering the prohibitions that would otherwise apply.
The regulations are narrow by design. They do not provide a general exemption for stabilisation in all securities. Instead, they focus on two specific bond series issued by the Republic of Indonesia: the “2016 Bonds” and the “2035 Bonds”. Stabilising action is defined as buying (or offering/agreeing to buy) those bonds in order to stabilise or maintain their market price in Singapore or elsewhere.
Practically, the regulations recognise that stabilisation is a common feature of certain bond issuance and market-making processes. However, because stabilisation can resemble prohibited market manipulation, the SFA contains restrictions. This subsidiary legislation provides a lawful pathway for stabilisation—provided the stabilising activity occurs within a specified timeframe and is undertaken by eligible persons.
What Are the Key Provisions?
Section 1 (Citation and commencement) confirms the legal identity of the regulations and states that they come into operation on 12 October 2005. For practitioners, this matters when assessing whether a stabilisation programme was authorised at the relevant time.
Section 2 (Definitions) sets the regulatory vocabulary. Two bond categories are defined:
- “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 definition of “stabilising action” is also crucial. It refers to actions taken in Singapore or elsewhere by specified financial institutions—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 to stabilise or maintain their market price in Singapore or elsewhere. This definition ties the exemption to particular stabilisation participants and to the specific purpose of stabilising price.
Section 3 (Exemption) is the operative provision. It states that sections 197 and 198 of the SFA shall not apply to stabilising action in respect of the 2016 Bonds or 2035 Bonds, within 30 days from the date of issue of the relevant bonds.
From a compliance standpoint, there are three “gates” that must be satisfied:
- Subject matter gate: the stabilising action must relate to the defined 2016 Bonds or 2035 Bonds.
- Time gate: the action must occur within 30 days from the date of issue.
- Eligible person gate: the stabilising action must be taken with or by one of the categories listed in paragraphs (a) to (m) of section 3.
The exemption then enumerates eligible persons in detail. The categories include regulated financial institutions (banks, merchant banks, finance companies), insurers, trust companies, and public bodies, as well as persons holding relevant capital markets services licences and certain investor classes.
Notable eligible categories include:
- Banks licensed under the Banking Act (section 7 or 79) and merchant banks licensed (or treated as licensed) under the Banking Act. (These categories were updated by S 468/2021 with effect from 1 July 2021.)
- 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.
- Capital markets services licence holders for specified activities: dealing in securities, fund management, providing custodial services for securities, securities financing, or trading in futures contracts.
- Persons dealing in the 2016/2035 Bonds with accredited investors or with persons whose business involves acquisition/disposal/holding of securities.
- Institutional investors as defined by regulation 3(1) of the Securities and Futures (Prescribed Specific Classes of Investors) Regulations 2005.
- Principal acquirers meeting minimum consideration thresholds: aggregate consideration not less than $200,000 (or equivalent) per transaction.
- Principal acquirers meeting wealth/income thresholds (for individuals) or net asset thresholds (for corporations), with detailed reference to audited or certified balance sheets.
- Officers and close family of a person making an offer in respect of the bonds (including spouse, parent, siblings, and children), where the officer is an individual.
For lawyers, the most practical reading is that section 3 creates a structured exemption that is both time-limited and person-limited. Even if a stabilisation strategy is commercially justified, the exemption will not apply unless the stabilising conduct falls within the defined window and is undertaken by (or for) an eligible category.
How Is This Legislation Structured?
The regulations are short and deliberately focused. They consist of:
- Section 1: Citation and commencement.
- Section 2: Definitions of “2016 Bonds”, “2035 Bonds”, and “stabilising action”.
- Section 3: The exemption from SFA sections 197 and 198, including the 30-day limit and the detailed list of eligible persons.
There are no additional parts or schedules in the extract provided, reflecting the nature of a targeted exemption instrument rather than a comprehensive market conduct code.
Who Does This Legislation Apply To?
The regulations apply to stabilising action relating to the specified Indonesian bond issues (the 2016 and 2035 Bonds). The exemption is relevant to participants who may otherwise be constrained by the SFA’s market conduct provisions—particularly those involved in underwriting, distribution, or market stabilisation activities during bond issuance.
However, the exemption is not available to everyone. It applies only when stabilising action is taken within 30 days from the date of issue and when the stabilising action is carried out with or by persons falling within the enumerated categories in section 3. This includes a mix of regulated intermediaries (banks, merchant banks, finance companies, insurers, trust companies), licensed capital markets service providers, and certain investor classes defined by accreditation, licence status, or financial thresholds.
Why Is This Legislation Important?
From a market integrity perspective, the SFA’s market conduct restrictions are designed to prevent manipulation and unfair trading practices. Stabilisation can be legitimate, but it also carries the risk of being perceived as artificial price support. This subsidiary legislation addresses that tension by providing a controlled exemption—allowing stabilisation while maintaining a legal boundary around when and by whom it can occur.
For practitioners advising issuers, arrangers, underwriters, or trading desks, the key value of the regulations lies in their compliance clarity. They identify the exact bond series and define stabilising action in a way that ties the exemption to specific institutions and to the purpose of maintaining market price. They also impose a clear 30-day post-issue window, which is often the critical operational parameter for stabilisation programmes.
Additionally, the detailed eligibility list in section 3 is a reminder that exemption analysis is not merely “what is being done?” but also “who is doing it (and under what capacity)?” Lawyers should therefore ensure that trading activity, contractual arrangements, and internal authorisations align with the listed categories—especially where stabilisation may involve multiple entities within a group or where investors acquire bonds in different ways (for example, as principal meeting thresholds versus as licensed intermediaries).
Related Legislation
- Securities and Futures Act (Cap. 289), particularly sections 197 and 198 (the provisions from which exemption is granted)
- Banking Act (Cap. 19)
- Finance Companies Act (Cap. 108)
- Futures Act
- Insurance Act (Cap. 142)
- Stabilising Act (as referenced in the legislation metadata)
- Securities and Futures (Prescribed Specific Classes of Investors) Regulations 2005 (G.N. No. S 369/2005), regulation 3(1)
- Trust Companies Act (Cap. 336)
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.