Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 5) Regulations 2006
- Act Code: SFA2001-S30-2006
- 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
- Citation: SL 30/2006
- Commencement: 18 January 2006
- Status (as provided): Current version as at 27 March 2026
- Key Provisions: 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. 5) Regulations 2006 (“Stabilising Action Exemption Regulations”) creates a targeted regulatory carve-out from certain market conduct rules in the Securities and Futures Act (the “SFA”). In plain language, it allows specified parties to take “stabilising action” in relation to a particular bond issuance without breaching the SFA provisions that would otherwise restrict or prohibit those activities.
The legislation is narrow in both subject matter and time. It is not a general framework for stabilisation across all bond issues. Instead, it defines a specific set of “Bonds” (the 7-year fixed rate convertible bonds due December 2012 issued by Oceana Gold Limited) and permits stabilising conduct only within a limited window: within 30 days from the date of issue of the Bonds. This reflects a policy balance: stabilisation can be legitimate in the context of new issues (for example, to reduce volatility), but it must be controlled to avoid market manipulation.
Practically, the Regulations operate as an exemption from sections 197 and 198 of the SFA. Those sections are part of Singapore’s market conduct regime, which is designed to prevent improper trading practices and ensure fair and orderly markets. By carving out stabilising action that meets the Regulations’ conditions, the Monetary Authority of Singapore (“MAS”) enables market participants to perform stabilisation activities while maintaining regulatory oversight through defined eligibility criteria and temporal limits.
What Are the Key Provisions?
Section 1: Citation and commencement. This section provides the short title and states that the Regulations come into operation on 18 January 2006. For practitioners, the commencement date matters because it determines whether the exemption is available for stabilising action undertaken after the Regulations take effect. Given that the Regulations are dated and made in January 2006, they align with the relevant bond issuance timeline.
Section 2: Definitions. This is the heart of the Regulations because it precisely identifies (i) the Bonds and (ii) what counts as “stabilising action.” The definition of “Bonds” is highly specific: it refers to the 7-year fixed rate convertible bonds due December 2012 issued by Oceana Gold Limited for a principal amount of up to AUD 55 million, convertible into ordinary shares of Oceana Gold Limited. This specificity is significant: stabilising action in relation to other instruments, other tranches, or different issuers would not automatically fall within the exemption.
The definition of “stabilising action” is also carefully framed. It means 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 matters for compliance because it limits the exemption to stabilisation actions by Barclays (and related corporations) and to conduct involving buying (including offers or agreements to buy). It does not, on its face, cover other forms of market support (such as selling, or derivative hedging strategies) unless those actions can be characterised as “buy” or “offer or agree to buy” within the definition.
Section 3: Exemption from sections 197 and 198 of the SFA. This 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, provided the stabilising action is taken with one of the following categories of counterparties/participants:
- (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, where the consideration is not less than $200,000 (or its equivalent in foreign currency) for each transaction, whether paid in cash or by exchange of securities or other assets.
For practitioners, the exemption is therefore conditional on both time (within 30 days from issue) and counterparty/transaction characteristics (institutional investor, relevant person, or principal buyer meeting the minimum consideration threshold). The $200,000 threshold is particularly important: it is a quantitative gatekeeper designed to ensure that the exemption does not extend to small-lot retail-type transactions. The threshold applies per transaction and covers consideration paid in cash or by exchange of securities or other assets, which is relevant for structured or asset-swap arrangements.
In addition, the exemption is framed as removing the application of specific SFA provisions (sections 197 and 198). While the extract does not reproduce those sections, the legal effect is clear: stabilising action that meets the Regulations’ conditions is not treated as falling within the prohibitions or restrictions contained in those SFA sections. However, this does not necessarily mean stabilising action is unregulated altogether; other market conduct provisions, disclosure requirements, and general prohibitions may still apply depending on the broader legal framework.
How Is This Legislation Structured?
The Regulations are structured in a conventional, short-form manner typical of targeted exemptions. They contain:
(i) Enacting formula (MAS’s power under section 337(1) of the SFA);
(ii) Section 1 on citation and commencement;
(iii) Section 2 defining key terms (“Bonds,” “securities,” and “stabilising action”); and
(iv) Section 3 setting out the exemption and its conditions (time window and eligible counterparties/transaction thresholds).
Notably, the Regulations do not create a separate compliance regime (such as reporting obligations) within the text provided. Instead, they function as a narrow legal switch: if stabilising action fits the defined scope, the specified SFA sections do not apply.
Who Does This Legislation Apply To?
The Regulations apply to stabilising action in relation to the defined Oceana Gold convertible bonds. The definition of “stabilising action” restricts the conduct to actions taken by Barclays Bank PLC or its related corporations. Accordingly, the practical beneficiaries of the exemption are the stabilising banks and their corporate groups acting in Singapore or elsewhere.
However, the exemption also depends on the identity of the counterparties involved in the stabilising transactions. Section 3 requires that the stabilising action be taken “with” one of the specified categories: an institutional investor, a relevant person (within the meaning of section 275(2) of the SFA), or a principal acquirer meeting the $200,000 minimum consideration per transaction threshold. This means that even if the stabilising bank is acting, the exemption may not apply if the stabilising trades are executed with counterparties outside these categories or if the consideration threshold is not met.
Why Is This Legislation Important?
This legislation is important because it provides legal certainty for stabilisation activities in a specific bond issuance. In capital markets practice, stabilisation is often used to manage short-term price dislocation after issuance. Without an exemption, stabilising trades could be scrutinised under market conduct rules that are designed to prevent manipulation or improper trading. By carving out stabilising action that meets defined conditions, the Regulations help market participants structure stabilisation programmes that are consistent with Singapore’s regulatory expectations.
From an enforcement and compliance perspective, the Regulations also demonstrate how MAS calibrates exemptions: the exemption is limited to (i) a particular bond issue, (ii) a defined stabiliser (Barclays and related corporations), and (iii) a strict 30-day post-issue period. These constraints reduce the risk that stabilisation becomes a broad loophole. The counterparty conditions further narrow the exemption to transactions involving institutional or otherwise regulated participants, or principal investors meeting a meaningful minimum consideration threshold.
For lawyers advising issuers, arrangers, stabilising banks, or trading desks, the key practical impact is that compliance assessments should be structured around the Regulations’ elements: confirm the instrument matches the definition of “Bonds”; confirm the stabiliser is Barclays (or related corporations); confirm the activity is “buy” (including offers or agreements to buy) for stabilisation purposes; confirm the timing is within 30 days from issue; and confirm the counterparty/transaction meets one of the Section 3 categories. Where any element is missing, the exemption may not apply, and the stabilising trades could be subject to the SFA provisions that the exemption otherwise disapplies.
Related Legislation
- Securities and Futures Act (Cap. 289) — particularly sections 197, 198, 239(1), 275(2), and the enabling provision 337(1)
- Futures Act (as referenced in the provided metadata)
- Stabilising Act (as referenced in the provided metadata)
- Timeline (legislation timeline reference as provided in the 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. 5) Regulations 2006 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.