Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 7) Regulations 2004
- Act Code: SFA2001-S277-2004
- 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 277/2004
- Commencement: 14 May 2004
- Key Provisions: Section 2 (Definitions); Section 3 (Exemption)
- Status: Current version as at 27 Mar 2026 (per provided extract)
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 7) Regulations 2004 (“Stabilising Exemption Regulations”) create a targeted regulatory carve-out within Singapore’s market conduct framework. In essence, the Regulations recognise that certain “stabilising actions” taken around the issuance and early trading of bonds can be legitimate and market-supportive, even though general market conduct rules may otherwise restrict such dealings.
Singapore’s Securities and Futures Act (“SFA”) contains provisions designed to prevent market manipulation and improper conduct. Among these are restrictions that can apply to dealings in securities during periods where price formation may be sensitive. However, stabilisation mechanisms are commonly used in capital markets to reduce volatility and support orderly trading immediately after issuance. This subsidiary legislation therefore provides a narrow exemption for stabilising activities relating to a specific bond issue.
Importantly, the exemption is not general. It is tied to a defined set of “Bonds” (a particular 5-year fixed rate convertible bond programme issued by Jubilant Organosys Limited) and to stabilising actions taken by a specified stabilising entity (ABN AMRO Bank N.V., Singapore branch, and its related corporations). The exemption is also time-limited and subject to conditions concerning the counterparties involved.
What Are the Key Provisions?
Section 1 (Citation and commencement) confirms the legal identity of the instrument and its effective date. The Regulations may be cited as the “Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 7) Regulations 2004” and came into operation on 14 May 2004. For practitioners, the commencement date matters because market conduct compliance often depends on whether conduct occurred before or after the exemption became available.
Section 2 (Definitions) is central because it precisely circumscribes what conduct qualifies for the exemption. Two defined terms drive the scope:
- “Bonds” are defined as the 5-year fixed rate convertible bonds due May 2009 issued by Jubilant Organosys Limited for a principal amount up to US$40 million, including bonds issued pursuant to an option of up to US$5 million. The bonds are convertible into either (a) fully paid equity shares of Jubilant Organosys Limited (par value of 5 Indian Rupees each) or (b) global depositary shares, where each share 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 stabilisation activity must be (i) directed at the specified bond issue, and (ii) carried out by the specified stabiliser (ABN AMRO Singapore branch or related corporations). If a different financial institution conducts similar stabilising purchases, the exemption would not automatically apply.
Section 3 (Exemption) is the operative provision. It provides that, subject to paragraph (2), sections 197 and 198 of the SFA shall not apply to any stabilising action carried out in respect of any of the Bonds with certain counterparties. The exemption therefore suspends the operation of those market conduct provisions for qualifying stabilisation conduct.
Section 3(1) sets two categories of counterparties with whom stabilising actions may be undertaken without triggering sections 197 and 198:
- Persons referred to in section 274 of the Act; and
- A sophisticated investor as defined in section 275(2) of the Act.
While the extract does not reproduce sections 274 and 275(2), the legal effect is clear: the exemption is conditional on the identity/qualification of the counterparty. This is a common regulatory approach—stabilisation is permitted only where counterparties are within defined investor categories, reducing the risk that stabilisation could be used to disadvantage retail investors or create misleading market signals.
Section 3(2) (Time limitation) imposes a strict temporal boundary: the exemption does not apply to stabilising actions carried out at any time after the expiry of the period of 30 calendar days from the date of the issuance of the Bonds. This is a key compliance checkpoint. Even if the counterparty is within the permitted categories, stabilising purchases or offers to buy made after the 30-day window would fall outside the exemption and could expose the stabiliser to the underlying prohibitions in sections 197 and 198.
Practitioners should note the interaction between the “issuance date” and the 30 calendar day period. In practice, the “date of issuance” may require careful factual determination (e.g., the date the bonds are issued/allocated, or the date of the first tranche). For enforcement risk management, firms typically document the issuance timeline and monitor stabilisation activity against the calendar cut-off.
How Is This Legislation Structured?
The Regulations are concise and follow a standard subsidiary legislation structure:
- Section 1 provides the citation and commencement details.
- Section 2 sets out definitions for “Bonds” and “stabilising action”. These definitions are essential because they determine whether particular securities and particular stabilising actors are within scope.
- Section 3 contains the exemption, specifying (i) which SFA provisions are disapplied (sections 197 and 198), (ii) the permitted counterparty categories, and (iii) the 30-calendar-day limit.
There are no additional parts or schedules in the extract provided, reflecting the Regulations’ purpose as a targeted exemption instrument rather than a comprehensive regulatory code.
Who Does This Legislation Apply To?
The Regulations apply to stabilising actions relating to the defined “Bonds” and carried out by the defined stabiliser. In practical terms, this means the exemption is relevant primarily to:
- ABN AMRO Bank N.V., Singapore branch, and its related corporations, when they engage in stabilisation activities (buying, or offering/agreeing to buy) for the specified convertible bond issue; and
- Counterparties to those stabilising transactions, insofar as the exemption depends on whether the counterparty is within the categories referenced in sections 274 and 275(2) of the SFA.
Because the exemption is conditional, the stabiliser must ensure that both the counterparty qualification and the timing requirements are satisfied. If either condition fails, the exemption will not apply and the stabilising conduct may be subject to the general market conduct restrictions in sections 197 and 198.
Why Is This Legislation Important?
This instrument is important because it illustrates how Singapore’s market conduct regime can accommodate legitimate market practices while maintaining safeguards against manipulation. Stabilisation can support orderly trading and reduce extreme price swings in the immediate aftermath of issuance. However, without an exemption, stabilising purchases could be construed as conduct prohibited under market manipulation rules.
From a practitioner’s standpoint, the Regulations provide a clear compliance pathway: identify the bond issue, confirm the stabiliser’s identity, verify that counterparties fall within the permitted investor categories, and ensure stabilisation activity occurs within the 30-calendar-day window. The exemption is therefore not merely conceptual; it is operational and time-sensitive.
In enforcement terms, the time limit and counterparty conditions are likely to be focal points. Regulators and compliance teams typically assess whether stabilisation was conducted for the permitted purpose (stabilising or maintaining market price) and whether the stabiliser complied with the boundaries set by the exemption. Documentation—such as trading records, counterparty classification evidence, and issuance-date calculations—will be critical in demonstrating that the stabilising activity falls within the exemption.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular, sections 197, 198, 274, 275(2), and the authorising provision 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 determining the applicable instrument date)
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. 7) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.