Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 6) Regulations 2006
- Act Code: SFA2001-S46-2006
- Legislation Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Power Used: Section 337(1) of the Securities and Futures Act
- Commencement: 25 January 2006
- Regulation Number: SL 46/2006
- Status: Current version as at 27 March 2026 (per provided extract)
- 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. 6) Regulations 2006 (“Stabilising Action Exemption Regulations”) creates a targeted regulatory exemption for certain market-stabilisation activities carried out in relation to a specific bond issue. In plain terms, it recognises that, in some capital markets transactions, stabilising purchases or offers may be permitted to help maintain orderly trading conditions—provided strict conditions are met.
At the core of the Regulations is a narrow carve-out from market conduct prohibitions in the Securities and Futures Act (the “SFA”). The SFA contains rules designed to prevent manipulative or misleading market behaviour. However, stabilisation activities—when properly structured and disclosed—are often treated differently from unlawful market manipulation. These Regulations implement that policy by exempting specified stabilising action from two particular SFA provisions.
Importantly, the exemption is not general. It is limited to (i) a defined set of “Bonds” (a particular convertible bond issue by Adlabs Films Ltd), (ii) stabilising action taken by a specified stabiliser group (Barclays Bank PLC and related corporations), and (iii) a time window and minimum consideration threshold. This makes the Regulations highly relevant for practitioners advising on underwriting, distribution, and post-issuance market conduct compliance.
What Are the Key Provisions?
1. Regulation 1 (Citation and commencement) is straightforward. It provides the short title and states that the Regulations come into operation on 25 January 2006. For practitioners, the commencement date matters when assessing whether stabilising action occurred within the regulatory timeframe and whether the exemption was available at the time of the relevant trades or offers.
2. Regulation 2 (Definitions) is where the scope is effectively “locked down.” The Regulations define “Bonds” and “stabilising action” with considerable specificity.
“Bonds” are defined as the 5-year and 1-day zero coupon convertible bonds due January 2011 issued by Adlabs Films Ltd, for a principal amount of up to EUR 84 million. The bonds are convertible into ordinary shares of Adlabs Films Ltd with a par value of 5 Indian Rupees each. This definition is critical: stabilising action must be in respect of these particular instruments. If the stabiliser trades in other bonds or related instruments not captured by the definition, the exemption would not apply.
“Stabilising action” is defined as an action taken in Singapore or elsewhere by Barclays Bank PLC (or any of its related corporations) to buy, or 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 two reasons. First, it identifies the permitted stabiliser: the exemption is tied to Barclays and its related corporations. Second, it clarifies the permitted conduct: buying, offering to buy, or agreeing to buy, for stabilisation purposes.
3. 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, provided the stabilising action is taken with one of the specified categories of counterparties and meets a minimum consideration requirement.
While the extract does not reproduce the text of Sections 197 and 198, the practical effect is clear: those sections impose prohibitions or restrictions on certain market conduct. The Regulations carve them out for qualifying stabilising action. The exemption is therefore a “safe harbour” (or more precisely, a statutory exemption) that reduces the risk that stabilisation trades are treated as prohibited conduct.
The exemption is conditioned on the stabilising action being taken within 30 days from the date of issue. This is a strict temporal limitation. For compliance, firms should ensure they can evidence the date of issue and maintain trade records showing that stabilisation activity occurred within the permitted window.
Regulation 3 then specifies three categories of persons with whom the stabilising action may be conducted:
- (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, but only if 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.
The inclusion of the $200,000 threshold for principal acquisitions is particularly important. It suggests that the exemption is intended to apply to transactions of a certain size and sophistication, reducing the likelihood of small-lot trading that could be used to disguise manipulative activity. For practitioners, this means the exemption is not simply about the stabiliser and the bond issue; it also depends on the counterparty type and the economics of each transaction.
Finally, the Regulations require that the stabilising action is “in respect of any of the Bonds.” This phrasing supports the view that the exemption applies to stabilisation trades involving the defined bonds, even if only part of the issue is traded. However, the definition of “Bonds” remains the gatekeeper—if the instrument is outside that definition, the exemption cannot be relied upon.
How Is This Legislation Structured?
The Regulations are structured as a short instrument with three substantive provisions:
- Regulation 1 (Citation and commencement): establishes the name and effective date.
- Regulation 2 (Definitions): sets the scope by defining “Bonds,” “securities,” and “stabilising action.” The “Bonds” and “stabilising action” definitions are the most consequential for eligibility.
- Regulation 3 (Exemption): provides the exemption from SFA Sections 197 and 198, subject to time limits, counterparty categories, and (for principal acquisitions) a minimum consideration threshold.
Notably, the Regulations do not include additional procedural requirements in the extract (such as reporting, disclosure, or record-keeping). In practice, however, market conduct compliance typically involves broader obligations under the SFA and related regulatory guidance. The exemption should therefore be treated as one component of a wider compliance framework.
Who Does This Legislation Apply To?
The exemption applies to stabilising action taken by Barclays Bank PLC or its related corporations, in relation to the defined Adlabs Films Ltd convertible bonds. Accordingly, the primary beneficiaries are the stabilising entity (and its corporate group) and any parties involved in transactions with that stabiliser during the stabilisation period.
Counterparties matter because Regulation 3 limits the exemption to stabilising action conducted with institutional investors, relevant persons (within the meaning of section 275(2) of the SFA), or principal acquirers meeting the $200,000 minimum consideration threshold per transaction. Therefore, advisers should assess not only the stabiliser’s conduct but also the identity and status of the counterparties and the transaction consideration structure (including whether consideration is paid in cash or via exchange of securities or other assets).
Why Is This Legislation Important?
This Regulations is important because it provides legal certainty for a specific type of market activity—stabilisation of bond prices—by carving out otherwise applicable market conduct prohibitions. For issuers, underwriters, and financial institutions, the ability to rely on a statutory exemption can materially reduce regulatory risk when conducting stabilising trades around a new bond issuance.
From an enforcement and compliance perspective, the Regulations demonstrate how Singapore’s market conduct regime balances two competing objectives: (i) preventing manipulative or improper trading, and (ii) permitting legitimate stabilisation practices that support orderly markets. The strict conditions—limited bond scope, specified stabiliser, a 30-day post-issue window, and counterparty/consideration thresholds—reflect an intent to confine the exemption to circumstances where stabilisation is most likely to be consistent with market integrity.
For practitioners, the most practical impact is on deal execution and documentation. Advisers should ensure that stabilisation strategies are structured so that trades fall within the exemption’s definitions and conditions. This includes confirming that the instruments traded match the statutory definition of “Bonds,” that the stabiliser is within the Barclays group, that trades occur within the 30-day period from the date of issue, and that counterparties and transaction consideration meet the categories and thresholds in Regulation 3.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular:
- Section 197 (market conduct prohibition subject to the exemption)
- Section 198 (market conduct prohibition subject to the exemption)
- Section 275(2) (definition of “relevant person” referenced in Regulation 3)
- Section 337(1) (power to make the Regulations)
- Futures Act (referenced in the provided metadata context)
- Stabilising Act (referenced in the provided metadata context)
- Timeline (legislation versioning reference)
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 2006 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.