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
- Legislative Type: Subsidiary Legislation (sl)
- Authorising Act: Securities and Futures Act (Cap. 289), section 337(1)
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Citation and commencement: Comes into operation on 12 October 2005
- Key Provisions:
- Section 1: Citation and commencement
- Section 2: Definitions (including “2016 Bonds”, “2035 Bonds”, and “stabilising action”)
- Section 3: Exemption from sections 197 and 198 of the Securities and Futures Act for specified stabilising action in respect of specified bonds
- Status: Current version as at 27 March 2026
- Amendments: Amended by S 468/2021 with effect from 1 July 2021
- 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 is a targeted regulatory instrument that creates a limited exemption from certain market conduct prohibitions under the Securities and Futures Act (SFA). In plain terms, it allows specified market participants to take “stabilising action” in relation to two particular bond issues—without breaching the SFA provisions that would otherwise restrict or prohibit such conduct.
The legislation is not a general stabilisation regime for all securities. Instead, it is bond-specific and time-bound. It defines two bond series issued by the Republic of Indonesia—“2016 Bonds” and “2035 Bonds”—and permits stabilising activity in respect of those bonds within a narrow window after issuance. The exemption is designed to facilitate orderly market functioning during the early trading period of a bond issue, while still preserving overall market integrity.
From a practitioner’s perspective, the Regulations are best understood as a compliance “permission slip” tied to (i) the identity of the stabilising actors, (ii) the specific instruments, (iii) the timing (within 30 days from the date of issue), and (iv) the categories of persons who may conduct the stabilising action. Outside these parameters, the general SFA market conduct rules would apply.
What Are the Key Provisions?
Section 1 (Citation and commencement) is straightforward. It provides the short title and states that the Regulations come into operation on 12 October 2005. This matters mainly for determining whether the exemption could apply to stabilising actions taken after commencement.
Section 2 (Definitions) is central because it sets the boundaries of the exemption. It defines:
- “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.
- “stabilising action”: an action taken in Singapore or elsewhere by specified stabilising entities (Citigroup Global Markets Inc., Credit Suisse First Boston (Europe) Limited, Merrill Lynch, Pierce, Fenner & Smith Incorporated, or their related corporations) to buy, or to offer or agree to buy, the 2016 Bonds or 2035 Bonds in order to stabilise or maintain their market price in Singapore or elsewhere.
Two practical points follow from these definitions. First, the exemption is limited to stabilising action by the named institutions (or their related corporations). Second, stabilising action is defined functionally: it must be undertaken to stabilise or maintain market price, not merely to trade or manage inventory.
Section 3 (Exemption) provides the operative relief. It states that sections 197 and 198 of the SFA shall not apply to stabilising action taken in respect of the 2016 Bonds or 2035 Bonds within 30 days from the date of issue of the relevant bonds, provided the stabilising action is taken with or by certain categories of persons.
The exemption is therefore conditional. It is not enough that the action is “stabilising action” as defined; it must also fall within the permitted timeframe and involve one of the listed counterparties/participants. Section 3 then enumerates a broad set of eligible persons, including:
- Licensed financial institutions: banks licensed under the Banking Act (sections 7 or 79), merchant banks (including those treated as having been granted a merchant bank licence), and finance companies licensed under the Finance Companies Act.
- Insurance and trust entities: insurers registered under the Insurance Act and companies registered under the Trust Companies Act.
- Public and institutional investors: the Government or statutory bodies; pension funds or collective investment schemes.
- Capital markets services licence holders: persons holding a CMS licence for specified activities, including dealing in securities, fund management, providing custodial services for securities, securities financing, and trading in futures contracts.
- Bond dealers and investor categories: persons carrying on the business of dealing in the 2016/2035 Bonds with accredited investors or with persons whose business involves acquisition/disposal/holding of securities.
- Prescribed specific classes of investors: an institutional investor referred to in regulation 3(1) of the Securities and Futures (Prescribed Specific Classes of Investors) Regulations 2005.
- Principal acquirers meeting minimum consideration thresholds: persons acquiring the bonds as principal where aggregate consideration is not less than $200,000 (or equivalent) for each transaction.
- Principal acquirers meeting wealth/income/net asset thresholds: individuals with net personal assets exceeding $2 million or income in the preceding 12 months of at least $300,000; and corporations with net assets exceeding $10 million, determined by reference to audited accounts or certified accounts (with a timing constraint for the balance-sheet date).
- Connected persons of offer officers: an officer of a person making an offer (and certain family members) if the officer is an individual.
The 2021 amendment (S 468/2021, effective 1 July 2021) refined the wording of certain categories, particularly around merchant banks. For practitioners, this underscores the importance of checking the current version when assessing whether a particular counterparty qualifies.
Finally, note the exemption’s scope: it is limited to stabilising action “within 30 days from the date of issue” of the bonds. This is a hard temporal boundary. If stabilising purchases or offers occur outside the 30-day window, the exemption would not apply and the SFA market conduct provisions would need to be analysed for compliance.
How Is This Legislation Structured?
The Regulations are concise and structured around three sections:
- Section 1: Citation and commencement.
- Section 2: Definitions that identify the specific bond instruments and the specific stabilising actors and conduct.
- Section 3: The exemption clause, which links the exemption to the SFA market conduct provisions (sections 197 and 198), the 30-day post-issue period, and the enumerated categories of eligible persons.
There are no additional Parts or complex procedural requirements in the extract provided. The legal analysis therefore turns primarily on interpreting the defined terms and mapping the facts of a stabilisation programme to the categories in section 3.
Who Does This Legislation Apply To?
In substance, the Regulations apply to stabilising activity involving the defined Indonesian bond issues. The “stabilising action” definition identifies the stabilising entities permitted to take such action (Citigroup Global Markets Inc., Credit Suisse First Boston (Europe) Limited, Merrill Lynch, Pierce, Fenner & Smith Incorporated, or related corporations). Thus, the exemption is aimed at stabilisation conducted by those institutions (or their related corporations).
However, section 3 also focuses on with or by whom the stabilising action is taken. The exemption is available only where the stabilising action is taken within the 30-day period and involves one of the listed categories of persons—ranging from regulated banks and CMS licence holders to accredited/institutional investor categories and certain principal acquirers meeting specified thresholds.
For lawyers advising issuers, arrangers, dealers, or investors, the key is to identify both (i) whether the stabiliser is within the defined stabilising entities and (ii) whether the counterparty/investor fits within the section 3 list. A mismatch on either point can defeat the exemption.
Why Is This Legislation Important?
This Regulations matters because stabilisation activity sits at the intersection of market practice and market conduct law. Without an exemption, certain stabilising behaviours—such as purchasing or offering to buy to support price—could be characterised as prohibited conduct under the SFA market conduct provisions. By carving out a specific exemption, the Regulations provide legal certainty for stabilisation programmes that are conducted in a controlled and time-limited manner.
For practitioners, the practical impact is compliance risk management. Trading desks and legal teams must ensure that stabilising orders, communications, and transactions are:
- undertaken by the permitted stabilising entities (or their related corporations);
- directed at the specific bond instruments (2016 Bonds and/or 2035 Bonds as defined);
- carried out within the 30-day post-issue window; and
- conducted with eligible counterparties/investors falling within section 3’s categories.
In addition, the detailed investor thresholds (e.g., $200,000 per transaction; $2 million net personal assets; $300,000 income; $10 million corporate net assets) mean that documentation and customer classification are crucial. Where a counterparty relies on wealth/income/net asset criteria, the legal team should ensure that the relevant financial information is collected, verified, and retained in a manner consistent with the Regulations’ measurement approach.
Finally, the Regulations illustrate how Singapore’s market conduct framework can accommodate legitimate market-making/stabilisation practices through targeted exemptions, rather than through broad, open-ended permission. This approach supports market integrity while enabling standard capital markets techniques during bond distribution.
Related Legislation
- Securities and Futures Act (Cap. 289) — particularly sections 197 and 198 (market conduct provisions from which exemption is granted) and section 337(1) (power to make 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), regulation 3(1)
- Stabilising Act (as referenced in the legislation 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.