Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 30) Regulations 2005
- Act Code: SFA2001-S850-2005
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting Power: Made under section 337(1) of the Securities and Futures Act
- Commencement: 27 December 2005
- Regulation No.: SL 850/2005
- Status: Current version as at 27 March 2026 (per the legislation record)
- Key Provisions:
- Regulation 1: Citation and commencement
- Regulation 2: Definitions (including “Bonds” and “stabilising action”)
- Regulation 3: Exemption from sections 197 and 198 of the Securities and Futures Act for specified stabilising action
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 30) Regulations 2005 (“Stabilising Exemption Regulations”) is a targeted regulatory instrument that creates a narrow exemption from certain market conduct prohibitions in the Securities and Futures Act (the “SFA”). In plain terms, it allows specified parties to take “stabilising action” in relation to a particular bond issue without breaching the SFA’s general rules against improper market conduct.
Stabilisation is a common feature of certain securities offerings. When a new bond is issued, market liquidity and pricing may be volatile. Market participants sometimes take limited steps—such as buying the bonds or offering to buy them—to help maintain orderly trading and reduce abrupt price swings. However, regulators are concerned that such activity could be used to manipulate prices or mislead the market. The SFA therefore contains provisions that restrict conduct that could amount to market manipulation or misleading market behaviour.
This legislation resolves the tension by carving out an exemption for stabilising action, but only for a specific bond and only within a limited timeframe after issuance. It also restricts who may conduct the stabilising action and sets minimum consideration thresholds for certain categories of participants. The result is a controlled permission: stabilisation is allowed, but only under conditions designed to reduce the risk of abuse.
What Are the Key Provisions?
Regulation 1 (Citation and commencement) is straightforward. It provides the short title and states that the Regulations come into operation on 27 December 2005. For practitioners, this matters because the exemption only becomes available from the commencement date and must be assessed against the timing of the stabilising activity.
Regulation 2 (Definitions) is the core interpretive section. It defines the scope of the exemption by defining (i) the specific “Bonds” covered and (ii) what counts as “stabilising action”. The definition of “Bonds” is highly specific: it refers to 5-year and 1-month 1% convertible bonds due January 2011 issued by Shiv-Vani Oil & Gas Exploration Services Ltd. for a principal amount up to US$55 million. These bonds are convertible into equity shares of the issuer, with a stated par value of 10 Indian Rupees each. This specificity is crucial: the exemption is not a general stabilisation regime for all bonds; it is an issue-specific carve-out.
The Regulations also define “stabilising action” as an action taken in Singapore or elsewhere by Barclays Bank PLC (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 does two things. First, it limits the actor: stabilising action must be taken by Barclays Bank PLC or its related corporations. Second, it limits the conduct: the stabilisation must involve buying or offers/agreements to buy the Bonds. Other forms of market activity (for example, selling, spreading information, or other trading strategies) are not captured by the definition as provided in the extract.
Regulation 3 (Exemption) is the operative provision. It states that sections 197 and 198 of the SFA shall not apply to stabilising action taken in respect of any of the Bonds, within 30 days from the date of issue of the Bonds, with respect to stabilising action undertaken with certain categories of counterparties/participants. In other words, the exemption is time-bound and counterparty-conditioned.
Regulation 3 provides three categories of persons/transactions that qualify for the exemption:
(a) an institutional investor;
(b) a “relevant person” as defined in section 275(2) of the SFA; or
(c) a person who acquires the Bonds as principal, provided that the consideration for the acquisition is not less than $200,000 (or its equivalent in a foreign currency) for each transaction, whether paid in cash or by exchange of securities or other assets.
For practitioners, the key compliance takeaway is that the exemption is not automatic for any stabilising trade. It depends on (i) the timing (within 30 days from issue), (ii) the identity of the stabilising actor (Barclays or related corporations, per the definition), and (iii) the identity/characteristics of the counterparty or acquirer (institutional investor; relevant person; or principal acquirer meeting the minimum consideration threshold). The $200,000 threshold is particularly important because it functions as a safeguard against small-lot participation that could increase the risk of manipulative effects or retail-style distribution dynamics.
Although the extract does not reproduce sections 197 and 198 of the SFA, the exemption’s structure indicates that those sections impose prohibitions or restrictions that would otherwise capture stabilising conduct. The Regulations therefore operate as a legal “permission” that neutralises the risk of contravention for the specified stabilising activity.
How Is This Legislation Structured?
The Regulations are concise and consist of an enacting formula followed by three substantive regulations:
Regulation 1 sets out citation and commencement.
Regulation 2 provides definitions that determine the scope of the exemption, including the precise bond issue and the meaning of stabilising action.
Regulation 3 creates the exemption by disapplying sections 197 and 198 of the SFA for stabilising action conducted within a defined period and with specified categories of counterparties/acquirers.
There are no additional parts or schedules in the provided extract, reflecting the Regulations’ purpose as an issue-specific carve-out rather than a comprehensive market conduct framework.
Who Does This Legislation Apply To?
The exemption is directed at stabilising action in relation to the defined “Bonds” and is therefore relevant primarily to the parties involved in the bond issuance and any stabilisation programme. The definition of “stabilising action” restricts the stabilising actor to Barclays Bank PLC and its related corporations. As a result, the exemption is not a general permission for any market participant to stabilise the bonds; it is tied to Barclays’ stabilisation activities.
However, Regulation 3 also conditions the exemption on the nature of the counterparties or acquirers. Stabilising action must be taken in respect of the Bonds within 30 days from issue, and the exemption applies when the stabilising action is with (i) an institutional investor, (ii) a relevant person under section 275(2) of the SFA, or (iii) a principal acquirer meeting the minimum consideration threshold of $200,000 (or equivalent) per transaction. Practically, this means that compliance teams must assess not only the stabiliser’s identity and timing, but also the classification of the counterparty and the transaction economics.
Why Is This Legislation Important?
This Regulations is important because it provides legal certainty for a stabilisation strategy in a specific bond offering. Without such an exemption, stabilising trades could potentially fall within the prohibitions in sections 197 and 198 of the SFA, exposing the stabilising entity and related parties to regulatory enforcement risk. By disapplying those provisions for qualifying stabilising action, the Regulations allow the market to function with less uncertainty during the early post-issuance period.
From a practitioner’s perspective, the value lies in the precision of the carve-out. The Regulations are issue-specific (the “Bonds” are precisely identified), actor-specific (Barclays and related corporations), and time-specific (within 30 days from issue). Additionally, the counterparty/acquirer conditions (institutional investor, relevant person, or principal acquirer with a minimum consideration threshold) create a structured compliance checklist.
In practical terms, legal and compliance teams advising on stabilisation programmes should treat this Regulations as a gating document. It should be read alongside the SFA’s market conduct provisions and the definition of “relevant person” in section 275(2) of the SFA. It also implies that stabilisation documentation, trade booking, and counterparty classification must be capable of demonstrating that each stabilising transaction falls within the exemption’s conditions—particularly the 30-day window and the $200,000 per transaction threshold where the counterparty is a principal acquirer.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular sections 197, 198, 239(1), 275(2), and the enabling provision section 337(1)
- Futures Act (as referenced in the legislation metadata)
- Stabilising Act (as referenced in the legislation metadata)
- Legislation Timeline / SFA2001-S850-2005 versions (for confirming the applicable version as at the relevant date)
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. 30) Regulations 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.