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
- Legislation Type: Subsidiary legislation (SL)
- Authorising Act: Securities and Futures Act (SFA) (notably section 337(1))
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Legislative Citation: SL 850/2005
- Commencement: 27 December 2005
- Status: Current version as at 27 March 2026 (per the provided extract)
- 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 that creates a specific exemption from certain market conduct rules under the Securities and Futures Act (SFA). In practical terms, it addresses a common feature of bond issuance and trading: price stabilisation.
When new bonds are issued, market prices can fluctuate sharply in the early days of trading. To mitigate volatility and support orderly trading, certain market participants may undertake stabilising purchases or offers to buy. However, stabilisation can resemble conduct that market conduct laws often prohibit—such as manipulative trading or misleading market activity. This regulation resolves that tension by carving out a limited exemption, but only for stabilising action that meets strict conditions.
Importantly, the exemption is not general. It is tailored to a particular bond issue: the 5-year and 1-month 1% convertible bonds due January 2011 issued by Shiv-Vani Oil & Gas Exploration Services Ltd. The regulation defines the bonds precisely and then limits the exemption to stabilising action taken within a specified time window after issuance, and by specified categories of counterparties.
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the formal legal identity of the Regulations and states that they came into operation on 27 December 2005. For practitioners, this matters when assessing whether stabilising trades were conducted within the legal framework at the relevant time.
Section 2 (Definitions) is central because it determines the scope of the exemption. The Regulations define three key terms:
- “Bonds”: The exemption applies only to the 5-year and 1-month 1% convertible bonds due January 2011 issued by Shiv-Vani Oil & Gas Exploration Services Ltd. The definition is highly specific, including the maximum principal amount (up to US$55 million) and the conversion feature into equity shares (par value of 10 Indian Rupees each). This specificity prevents the exemption from being used for other bond issues.
- “securities”: This adopts the meaning in section 239(1) of the SFA, ensuring that the broader statutory framework is engaged consistently.
- “stabilising action”: This is defined as action taken in Singapore or elsewhere by Barclays Bank PLC (or its related corporations) to buy, or to offer or agree to buy, the Bonds in order to stabilise or maintain the market price of the Bonds in Singapore or elsewhere. The definition ties stabilisation to a particular stabilising entity (Barclays Bank PLC and related corporations) and to the purpose of price stabilisation.
Section 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 the Bonds, but only if the stabilising action is taken within 30 days from the date of issue of the Bonds and only if the stabilising action is with certain counterparties.
While the extract does not reproduce sections 197 and 198 of the SFA, the structure indicates that those sections contain prohibitions or restrictions relevant to market conduct (commonly, rules against market manipulation or misleading conduct). The exemption therefore functions as a statutory “safe harbour” for stabilising conduct that would otherwise fall within the prohibitions.
Section 3 then sets out three categories of persons with whom stabilising action may be taken:
- (a) an institutional investor
- (b) a relevant person as defined in section 275(2) of the SFA
- (c) a person who acquires the Bonds as principal, subject to a minimum consideration threshold: the consideration for the acquisition must be 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 $200,000 threshold is particularly significant. It is designed to ensure that stabilisation is conducted with sufficiently sophisticated or substantial counterparties, and to reduce the risk that stabilising activity is used to influence retail or small-scale trading in a way that could mislead the market.
Finally, the exemption is time-limited. Even if the counterparty category and transaction size requirements are met, stabilising action must occur within 30 days from the date of issue. This temporal limitation is a key compliance checkpoint for any trading desk, compliance team, or counsel advising on stabilisation programmes.
How Is This Legislation Structured?
The Regulations are structured in a straightforward, three-section format:
- Section 1 sets out the citation and commencement.
- Section 2 provides definitions that determine the scope of the exemption—especially the precise identification of the Bonds and the definition of stabilising action.
- Section 3 contains the exemption from specified SFA provisions, including the 30-day limit and the counterparty/transaction conditions.
There are no additional parts or schedules in the extract, reflecting the Regulations’ purpose as a narrow, issue-specific exemption instrument rather than a comprehensive code.
Who Does This Legislation Apply To?
Although the exemption is framed as an exemption from the SFA’s market conduct provisions, it effectively applies to parties involved in stabilising action in relation to the defined Bonds. The definition of “stabilising action” is particularly important: it is limited to action taken by Barclays Bank PLC or its related corporations. Therefore, the exemption is not a general permission for any market participant; it is tied to the stabilising actor identified in the Regulations.
In addition, Section 3 restricts the exemption to stabilising action conducted with specified categories of counterparties: institutional investors, relevant persons (as defined in the SFA), or principal acquirers meeting the $200,000 per transaction minimum consideration requirement. Accordingly, the practical compliance question is not only “is the trade stabilisation?” but also “who is the counterparty, and does the transaction meet the statutory conditions?”
Why Is This Legislation Important?
This Regulations matters because it provides legal certainty for stabilisation activities in the context of a specific convertible bond issuance. Without an exemption, stabilising purchases or offers to buy could be argued to fall within market conduct prohibitions. By expressly exempting stabilising action from sections 197 and 198 of the SFA (subject to conditions), MAS reduces regulatory ambiguity and supports orderly capital market functioning.
From a practitioner’s perspective, the regulation is a reminder that stabilisation is not “free trading.” It is permitted only within a carefully bounded framework: a defined bond issue, a defined stabilising actor, a defined time window (30 days), and defined counterparties and transaction size thresholds. These constraints are designed to balance market stability objectives against the integrity concerns that market conduct rules seek to address.
In enforcement and compliance terms, the exemption’s conditions create clear audit trails. Trading records should show (i) that the Bonds traded were the defined issue; (ii) that the stabilising action was taken by the relevant entity (Barclays Bank PLC or related corporations); (iii) that trades occurred within the 30-day period from issuance; and (iv) that counterparties fall within the statutory categories and, where relevant, meet the $200,000 minimum consideration requirement.
Related Legislation
- Securities and Futures Act (Cap. 289) — including sections 197, 198, 239(1), 275(2), and the enabling power in section 337(1)
- Stabilising Act (as referenced in the provided metadata)
- Futures Act (as referenced in the provided metadata)
- Legislation Timeline (for version control and amendment history)
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.