Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 3) Regulations 2006
- Act Code: SFA2001-S24-2006
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting Power: Section 337(1) of the Securities and Futures Act
- Commencement: 16 January 2006
- Key Provisions: Section 2 (Definitions); Section 3 (Exemption)
- Regulatory Status: Current version as at 27 March 2026
- Regulatory Focus: Exemption from market conduct prohibitions for “stabilising action” in relation to specified convertible bonds
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 3) Regulations 2006 (“Stabilising Action (Bonds) Regulations”) creates a targeted regulatory exemption within Singapore’s market conduct framework. In plain terms, it allows certain market participants to take stabilising steps in connection with a specific issuance of convertible bonds without breaching particular statutory restrictions on market conduct.
Stabilisation is a common feature of securities offerings. When new bonds are issued, their market price may fluctuate sharply. Stabilising action is intended to support orderly trading—typically by permitting limited buying (or offers to buy) to help maintain price levels during an initial period after issuance. However, stabilisation can resemble prohibited market manipulation if not carefully bounded. These Regulations therefore carve out a narrow exemption, balancing investor protection with practical market functioning.
Importantly, the exemption is not general. It is tied to a defined set of “Bonds” (the 5-year convertible bonds issued by Bilcare Limited) and to stabilising actions taken by a specified stabiliser (Jefferies International Limited and its related corporations). The exemption also applies only within a defined time window and only for specified categories of counterparties and transaction sizes.
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the legal identity and effective date of the Regulations. The Regulations may be cited as the “Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 3) Regulations 2006” and come into operation on 16 January 2006.
Section 2 (Definitions) is crucial because it determines the scope of the exemption. Three defined terms drive the operation of the Regulations:
(1) “Bonds” are precisely identified as the 5-year convertible bonds due December 2010 issued by Bilcare Limited for a principal amount of up to US$50 million. The bonds are convertible into fully paid ordinary shares of Bilcare Limited with a par value of 10 Indian Rupees each (or global depositary shares if issued at the time of conversion).
(2) “securities” adopts the meaning in section 239(1) of the Securities and Futures Act. This ensures that the exemption sits coherently within the Act’s broader definitional architecture.
(3) “stabilising action” is defined as an action taken in Singapore or elsewhere by Jefferies International 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. This definition is both actor-specific (Jefferies and related corporations) and purpose-specific (stabilising/maintaining price).
Section 3 (Exemption) is the operative provision. It states that Sections 197 and 198 of the Securities and Futures Act shall not apply to stabilising action taken in respect of the Bonds, provided the stabilising action meets all conditions listed in Section 3.
In practical terms, Sections 197 and 198 of the Act are the statutory prohibitions that would otherwise restrict or penalise certain market conduct. While the extract does not reproduce those sections, the exemption makes clear that the Regulations are meant to prevent stabilising activity from being treated as unlawful market conduct—so long as the activity is within the permitted boundaries.
The exemption is subject to three main constraints:
(1) Time window: the stabilising action must be taken within 30 days from the date of issue of the Bonds. This is a classic stabilisation limitation: it confines the exemption to the early post-issuance period when price support is most relevant and when the risk of improper market effects is greatest.
(2) Permitted counterparties: the stabilising action must be taken with one of the following categories of persons:
- (a) an institutional investor;
- (b) a relevant person as defined in section 275(2) of the Act;
- (c) a person who acquires the Bonds as principal, subject to an additional consideration threshold.
(3) Transaction size threshold (for principal acquisitions): where the counterparty is a person acquiring the Bonds as principal, the consideration for the acquisition must be not less than $200,000 (or its equivalent in a foreign currency) for each transaction. The Regulations clarify that the consideration may be paid in cash or by exchange of securities or other assets. This threshold is designed to ensure that the exemption does not facilitate stabilisation through small retail-sized transactions that could distort the market or undermine investor protections.
From a practitioner’s perspective, the exemption is therefore “conditional and bounded”: the stabiliser must be within the defined actor group; the instrument must be the defined Bilcare convertible bonds; the action must occur within the 30-day window; and the counterparties (and, for principal acquisitions, the minimum consideration) must satisfy the statutory criteria.
How Is This Legislation Structured?
The Regulations are short and structured around a simple framework:
Part/Section 1 covers citation and commencement, establishing when the Regulations take effect.
Section 2 provides definitions that determine the scope of the exemption—particularly the definitions of “Bonds” and “stabilising action”.
Section 3 sets out the exemption from specified provisions of the Securities and Futures Act (Sections 197 and 198). It also lists the conditions that must be satisfied for the exemption to apply, including the 30-day limit and the categories of permitted counterparties.
Who Does This Legislation Apply To?
The Regulations apply to stabilising action in relation to the specified Bilcare convertible bonds. However, because “stabilising action” is defined by reference to the actor—Jefferies International Limited and its related corporations—the practical compliance burden primarily falls on that stabiliser group and any entities acting on their behalf in Singapore or elsewhere.
The exemption also concerns the counterparties with whom stabilising transactions may be conducted. Therefore, institutional investors, “relevant persons” (as defined in the Act), and principal acquirers meeting the minimum consideration threshold are the categories of persons that can be involved in stabilising transactions under the exemption.
Other market participants (for example, persons who are not within the stabiliser definition) would not automatically benefit from the exemption, even if they trade in the same bonds. Similarly, even for the stabiliser, the exemption will not apply if the stabilising action is outside the 30-day period or if the transaction counterparties do not meet the statutory categories and thresholds.
Why Is This Legislation Important?
This legislation is important because it operationalises a controlled form of market support while preserving the integrity of Singapore’s market conduct regime. Stabilisation can be legitimate, but it must be carefully regulated to avoid crossing into prohibited manipulation. By exempting stabilising action from Sections 197 and 198 of the Securities and Futures Act, the Regulations provide legal certainty to the stabiliser and counterparties—reducing the risk that ordinary stabilisation practices are treated as unlawful conduct.
For practitioners advising issuers, lead managers, stabilising agents, or institutional counterparties, the Regulations highlight several compliance “checkpoints”:
- Instrument specificity: the exemption is limited to the defined Bilcare bonds (including the conversion mechanics and principal amount cap).
- Actor specificity: stabilising action must be taken by Jefferies International Limited or related corporations.
- Temporal limitation: stabilisation must occur within 30 days from the bonds’ issue date.
- Counterparty and deal-size constraints: counterparties must be institutional investors, relevant persons, or principal acquirers meeting the $200,000 per transaction minimum (or equivalent).
From an enforcement perspective, these constraints are likely designed to ensure that stabilisation remains transparent, limited, and confined to professional market participants and meaningful transaction sizes. In practice, counsel should ensure that trading records, deal documentation, and internal compliance procedures can demonstrate that each stabilising transaction falls within the exemption’s conditions—particularly the timing and counterparty qualification requirements.
Finally, because the Regulations are a “No. 3” set of stabilisation exemptions, they also reflect a broader regulatory approach: Singapore may issue multiple, bond-specific exemption instruments depending on the issuance and market conduct context. Practitioners should therefore verify whether other stabilisation exemptions exist for other bond issuances or whether the same stabiliser is operating under different exemption instruments.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular, Sections 197 and 198 (market conduct prohibitions) and Section 337(1) (making power); also Section 239(1) (definition of “securities”) and Section 275(2) (definition of “relevant person”).
- Futures Act — referenced in the legislation metadata as part of the broader regulatory landscape.
- Stabilising Act — referenced in the legislation metadata as part of the stabilisation framework.
- Timeline — the legislation timeline indicates the instrument date (16 January 2006) and the version status as at 27 March 2026.
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. 3) Regulations 2006 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.