Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 6) Regulations 2004
- Act Code: SFA2001-S267-2004
- Type: Subsidiary Legislation (sl)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Authorising Provision: Section 337(1) of the Securities and Futures Act
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Citation: SL 267/2004
- Commencement: 11 May 2004
- Status: Current version as at 27 Mar 2026 (per the legislation portal)
- 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. 6) Regulations 2004 (“Stabilising Action Exemption Regulations”) is a targeted regulatory instrument. It creates a specific exemption from certain market conduct rules under the Securities and Futures Act (the “SFA”) for stabilising activities carried out in relation to a particular bond issuance.
In plain terms, the Regulations recognise that, in some bond offerings, market stabilisation may be permitted to help maintain orderly trading and reduce excessive volatility immediately after issuance. However, stabilisation can also resemble conduct that the SFA generally seeks to regulate—particularly where it may affect market price or create misleading impressions. This Regulations therefore carves out a narrow exemption, but only for stabilising actions that meet defined conditions.
Importantly, the exemption is not general. It is tied to a defined set of “Bonds” (a specific 5-year zero coupon convertible bond issuance by Mahindra & Mahindra Limited) and a defined “stabilising action” (actions by ABN AMRO Bank N.V., Singapore branch, or its related corporations, to buy or offer to buy the Bonds to stabilise or maintain their market price). The exemption is also time-limited and applies only to stabilising dealings with specified counterparties.
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the formal title and states that the Regulations come into operation on 11 May 2004. This matters for practitioners because the exemption is only available for stabilising actions carried out within the relevant regulatory timeframe and in relation to the issuance described.
Section 2 (Definitions) is central to understanding the scope. It defines two key terms:
- “Bonds” are defined very specifically as the 5-year zero coupon convertible bonds due May 2009 issued by Mahindra & Mahindra Limited for a principal amount of up to US$115 million, including any bonds issued pursuant to an option of up to US$15 million. The definition also specifies the conversion mechanics: the bonds are convertible into either (a) fully paid equity shares of Mahindra & Mahindra Limited (par value of 10 Indian Rupees each) or (b) global depositary receipts, where each receipt represents one fully paid equity share.
- “stabilising action” means an action taken in Singapore or elsewhere by ABN AMRO Bank N.V., Singapore branch (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.
From a compliance perspective, these definitions mean that the exemption is unavailable if the stabilising activity is carried out by a different entity, or if the instrument is not the specified bond issuance. Likewise, the exemption is limited to stabilisation-related buying or offers to buy—conduct outside that purpose may not qualify.
Section 3 (Exemption) is the operative provision. It provides that, subject to paragraph (2), sections 197 and 198 of the Act shall not apply to stabilising action carried out in respect of any of the Bonds with certain counterparties.
Although the extract does not reproduce sections 197 and 198, the structure indicates that those sections impose market conduct restrictions that would otherwise constrain stabilising purchases. The Regulations therefore suspend the application of those provisions for qualifying stabilising actions.
Under Section 3(1), the exemption applies to stabilising action carried out with either:
- a person referred to in section 274 of the Act; or
- a sophisticated investor as defined in section 275(2) of the Act.
Practically, this means the stabilising activity must be conducted with counterparties that fall within the SFA’s defined categories (as referenced by sections 274 and 275(2)). For lawyers advising issuers, arrangers, or stabilising agents, the key task is to confirm the counterparty classification and ensure that trades or offers to buy are executed only with eligible persons.
Section 3(2) imposes a further limitation: the exemption does not apply to any stabilising action carried out after the expiry of the period of 30 calendar days from the date of issuance of the Bonds. This is a hard stop. Even if the counterparty is eligible, stabilisation beyond the 30-day window would fall outside the exemption and would therefore be subject to the general SFA market conduct rules.
Accordingly, the exemption is best understood as a three-part filter:
- Instrument filter: only the defined Mahindra & Mahindra convertible bonds.
- Actor/purpose filter: stabilising buying or offers to buy by ABN AMRO Bank N.V., Singapore branch, or its related corporations, to stabilise or maintain market price.
- Counterparty and time filters: trades must be with eligible persons (section 274 persons or sophisticated investors) and must occur within 30 calendar days from issuance.
How Is This Legislation Structured?
The Regulations are concise and structured around a standard legislative template for exemptions:
- Section 1 sets out the citation and commencement.
- Section 2 provides definitions that tightly circumscribe the regulated subject matter (the Bonds) and the relevant conduct (stabilising action).
- Section 3 contains the exemption, specifying (i) which SFA provisions are disapplied (sections 197 and 198), (ii) the eligible counterparties, and (iii) the time limitation.
There are no additional parts or schedules in the extract, reflecting the Regulations’ purpose as a targeted, issuance-specific exemption rather than a broad regulatory framework.
Who Does This Legislation Apply To?
Although the exemption is framed as applying to “stabilising action” carried out in respect of the Bonds, the practical beneficiaries are the entities conducting stabilisation and the parties on the other side of those stabilising transactions. The definition of stabilising action restricts the relevant actor to ABN AMRO Bank N.V., Singapore branch and its related corporations. Therefore, the exemption is effectively designed for that stabilising agent and its group entities.
On the counterparty side, the exemption is limited to stabilising dealings with persons falling within section 274 of the SFA or with sophisticated investors as defined in section 275(2). This means that stabilising purchases from retail investors or other non-eligible categories would not be covered by the exemption, even if the stabilising agent and instrument match.
Why Is This Legislation Important?
For practitioners, the significance of these Regulations lies in how they reconcile two competing regulatory objectives: (1) allowing stabilisation to support orderly markets during the immediate post-issuance period, and (2) preventing conduct that could undermine market integrity or mislead investors.
By disapplying sections 197 and 198 of the SFA for qualifying stabilising actions, the Regulations provide legal certainty to stabilising agents and transaction counterparties—provided they comply with the strict conditions. The counterparty restrictions and the 30-day time limit are particularly important. They create clear compliance checkpoints: eligibility of counterparties must be verified, and stabilisation activity must be monitored to ensure it does not extend beyond the permitted window.
From an enforcement and risk-management perspective, the Regulations also highlight that stabilisation is not a blanket permission. If stabilising action occurs outside the defined period or with non-eligible counterparties, the exemption will not apply, and the stabilising conduct would be assessed under the general SFA market conduct regime. Lawyers advising on bond offerings should therefore treat this exemption as a compliance “safe harbour” that must be actively managed.
Related Legislation
- Securities and Futures Act (Cap. 289) — particularly sections 197, 198, 274, 275(2), and the regulation-making power in section 337(1).
- Futures Act (as referenced in the provided metadata context).
- Stabilising Act (as referenced in the provided metadata context).
- Legislation Timeline (for version control and amendment history, as indicated by the portal interface).
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. 6) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.