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: Section 337(1) of the Securities and Futures Act
- Citation: SL 850/2005
- Commencement: 27 December 2005
- Status: Current version as at 27 March 2026 (per the legislation record)
- Key Provisions: Section 1 (Citation and commencement); Section 2 (Definitions); Section 3 (Exemption)
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 is a targeted regulatory instrument. In plain terms, it creates a narrow exemption from certain market conduct rules in the Securities and Futures Act for a specific kind of trading activity—“stabilising action”—carried out in relation to a particular bond issue.
Market conduct rules in the Securities and Futures Act are designed to prevent manipulation and improper conduct that could mislead investors or distort market prices. However, in certain capital market transactions, stabilisation is a recognised practice: market participants may buy (or offer to buy) securities shortly after issuance to help maintain orderly trading and reduce excessive price volatility. This set of Regulations permits that stabilisation activity for a defined bond issue, but only within strict boundaries.
Importantly, the Regulations do not create a general exemption for all bonds or all stabilisation activities. Instead, they define “Bonds” very specifically (the 5-year and 1-month 1% convertible bonds due January 2011 issued by Shiv-Vani Oil & Gas Exploration Services Ltd., up to a specified principal amount) and define “stabilising action” by reference to a particular stabilising participant (Barclays Bank PLC and its related corporations). The exemption is time-limited and applies only to specified categories of counterparties and minimum consideration thresholds.
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the legal citation and states that the Regulations come into operation on 27 December 2005. For practitioners, this matters because the exemption in Section 3 is tied to a post-issuance window (“within 30 days from the date of issue of the Bonds”). Establishing the commencement date helps confirm the regulatory framework applicable at the time of the bond issuance and any stabilisation activity.
Section 2 (Definitions) is the backbone of the Regulations because it tightly constrains what is covered. The definition of “Bonds” identifies the exact instrument: the “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,” convertible into equity shares with a par value of 10 Indian Rupees each. This specificity is crucial: stabilising action in relation to other bonds—whether similar in structure or issued by the same issuer—would not automatically fall within the exemption.
Section 2 also defines “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. Two practical implications follow. First, the stabilisation activity can occur outside Singapore as well as within Singapore, but it must still be undertaken by the specified stabilising entity (Barclays or its related corporations). Second, the definition includes not only actual purchases but also offers or agreements to buy—meaning compliance teams must consider documentation and communications that could constitute an “offer or agree to buy,” not merely executed trades.
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 any of the Bonds, within 30 days from the date of issue, with specified categories of counterparties and a minimum consideration threshold.
While the extract does not reproduce Sections 197 and 198, the exemption’s structure indicates that those provisions likely restrict or prohibit certain market conduct behaviours (commonly, conduct that could be characterised as market manipulation or improper trading). The Regulations carve out stabilisation activity from those prohibitions, but only if the stabilisation is directed to or undertaken with the following categories:
(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, 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 work is to ensure that stabilising trades fall within these categories and that the transaction consideration threshold is met where the counterparty is a principal acquirer. The threshold is per transaction, and it applies regardless of whether consideration is paid in cash or via exchange of securities or other assets. This means that deal structuring, trade confirmations, and settlement documentation must be reviewed to confirm that the “not less than $200,000” requirement is satisfied in the relevant currency equivalent.
Finally, the exemption is time-limited: it applies only to stabilising action taken “within 30 days from the date of issue of the Bonds.” This is a hard boundary. Even if stabilisation is otherwise consistent with market practice, activity outside the 30-day window would not benefit from the exemption and could therefore attract the underlying prohibitions in Sections 197 and 198.
How Is This Legislation Structured?
These Regulations are short and structured around three provisions:
Section 1 sets out the citation and commencement date.
Section 2 provides definitions that determine the scope of the exemption—particularly the definitions of “Bonds” and “stabilising action.”
Section 3 contains the exemption itself, specifying which statutory provisions are disapplied, the time period for stabilisation, and the categories of counterparties (including the $200,000 minimum consideration threshold for principal acquisitions).
Who Does This Legislation Apply To?
The Regulations apply to stabilising action in relation to the defined “Bonds” when carried out by Barclays Bank PLC or its related corporations. In practice, this will typically involve the stabilising manager, syndicate participants, and any related entities authorised to conduct stabilisation activities under the transaction arrangements.
However, the exemption is also conditional on who the stabilising trades are with. Section 3 limits the exemption to stabilising action involving counterparties that are (i) institutional investors, (ii) “relevant persons” as defined in section 275(2) of the Securities and Futures Act, or (iii) principal acquirers meeting the minimum consideration threshold. Accordingly, the compliance scope extends beyond the stabiliser to the transaction counterparties and the nature of the consideration exchanged.
Why Is This Legislation Important?
This Regulations is important because it demonstrates how Singapore law balances two competing policy objectives: preventing market misconduct while allowing legitimate stabilisation practices in connection with securities issuance. Without an exemption, stabilising trades could be characterised as prohibited market conduct under the Securities and Futures Act. With the exemption, stabilisation can proceed within a defined regulatory perimeter.
For legal practitioners, the value lies in the precision of the exemption. It is not a broad “safe harbour” for all stabilisation. Instead, it is a bespoke exemption tied to a specific bond issue, a specific stabilising participant, a specific post-issuance timeframe, and specific counterparty/consideration conditions. This means that counsel must verify factual and documentary elements: the bond instrument identity, the stabiliser’s role, the timing of trades, the counterparty classification, and—where relevant—the $200,000 minimum consideration threshold.
From an enforcement and risk perspective, the time limit and the counterparty conditions are likely the most common failure points. Stabilisation activity that drifts beyond 30 days from the bond issue date, or stabilisation trades that do not fit within the institutional/relevant person/principal-with-threshold framework, may fall outside the exemption and expose the stabilising entity (and potentially related persons) to regulatory scrutiny under the disapplied provisions.
In addition, because the definition of stabilising action includes offers or agreements to buy, legal review should not be limited to executed trades. Communications, term sheets, and any commitments that could be construed as offers or agreements to buy may need to be assessed for compliance with the exemption’s conditions and the underlying statutory framework.
Related Legislation
- Securities and Futures Act (Cap. 289) — including Sections 197, 198, 239(1), 275(2), and the authorising provision in Section 337(1)
- Futures Act (as referenced in the legislation metadata)
- Stabilising Act (as referenced in the legislation metadata)
- Timeline (legislation timeline reference for version control)
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.