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 (SFA), specifically section 337(1)
- Enacting Authority: Monetary Authority of Singapore (MAS)
- 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 the legislation record)
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 Action Exemption Regulations”) is a targeted regulatory instrument. It creates a specific exemption from certain market conduct rules under the Securities and Futures Act (SFA) for stabilising activities relating to a particular bond issue.
In plain language, the Regulations recognise that, in some bond offerings, market participants may take steps to support or “stabilise” the trading price and liquidity of the bonds shortly after issuance. Such stabilising actions can reduce volatility and help the market absorb a new issuance. However, stabilising conduct can also resemble prohibited market manipulation if not carefully bounded. The Regulations therefore carve out a narrow exemption, allowing stabilising action only within defined limits.
Importantly, the exemption is not general. It is tied to a particular set of “Bonds” (a defined convertible bond issue by Jubilant Organosys Limited) and to stabilising actions taken by a specified stabiliser group (ABN AMRO Bank N.V., Singapore branch, and its related corporations). The exemption also has a time limit: it does not apply after 30 calendar days from the date of issuance.
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the formal name of the Regulations and states that they came into operation on 14 May 2004. For practitioners, this matters when assessing whether stabilising activity occurred within the regulatory framework.
Section 2 (Definitions) is central because the exemption depends entirely on the defined scope of both the instrument and the stabiliser.
“Bonds” are defined as the 5-year fixed rate convertible bonds due May 2009 issued by Jubilant Organosys Limited for a principal amount of 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 5 Indian Rupees each) or (b) global depositary shares where each depositary share represents one fully paid equity share.
“Stabilising action” is defined as 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. This definition is practitioner-relevant because it captures not only actual purchases but also offers or agreements to buy—conduct that could otherwise be scrutinised under market manipulation or improper trading provisions.
Section 3 (Exemption) is the operative provision. It provides that, subject to the conditions in paragraph (2), sections 197 and 198 of the SFA shall not apply to stabilising action carried out in respect of any of the Bonds with either:
- (a) a person referred to in section 274 of the SFA; or
- (b) a sophisticated investor as defined in section 275(2) of the SFA.
While the extract does not reproduce the content of sections 197 and 198, the structure indicates that those sections impose prohibitions or restrictions on certain market conduct. The Regulations therefore suspend those prohibitions for the specified stabilising activity, but only when the stabilising transactions are carried out with the specified categories of counterparties.
Section 3(2) (Time limitation) is the second critical constraint. The exemption does not apply to stabilising action carried out at any time after the expiry of the period of 30 calendar days from the date of issuance of the Bonds. This is a bright-line rule: even if the stabiliser and counterparties fall within the defined categories, stabilising conduct outside the 30-day window would not benefit from the exemption.
For legal practice, the combination of (i) defined bonds, (ii) defined stabiliser, (iii) defined counterparties, and (iv) a strict 30-day limit means the exemption is best treated as a compliance “checklist” rather than a broad permission.
How Is This Legislation Structured?
The Regulations are short and structured around three provisions:
- Section 1 sets out the citation and commencement date.
- Section 2 provides definitions that determine the scope of the exemption—particularly the definitions of “Bonds” and “stabilising action”.
- Section 3 contains the exemption itself, including the conditions and the 30-day time limit.
There are no additional parts or schedules in the extract provided. The Regulations operate as a targeted carve-out within the broader market conduct framework of the SFA.
Who Does This Legislation Apply To?
In practical terms, the Regulations apply to parties involved in stabilising activities relating to the defined Jubilant Organosys convertible bond issue. The exemption is specifically linked to stabilising actions taken by ABN AMRO Bank N.V., Singapore branch or its related corporations. Therefore, the exemption is most relevant to the stabilising manager/arranger and its corporate group entities that may conduct purchases (or offers/agreements to buy) of the Bonds.
However, the exemption also depends on who the stabilising transactions are with. Section 3(1) limits the exemption to stabilising action carried out with either (a) persons referred to in section 274 of the SFA or (b) sophisticated investors under section 275(2). Accordingly, even where the stabiliser is within the defined group, the exemption would not apply if the stabilising trades were conducted with counterparties outside those categories.
Why Is This Legislation Important?
This Regulations matters because it illustrates how Singapore regulates market conduct while allowing controlled market support measures in capital markets transactions. Stabilising actions can be legitimate in the context of new bond issuances, but they can also raise concerns about misleading price signals or improper influence on trading. By exempting stabilising action from specific SFA provisions, the Regulations provide legal certainty for permitted stabilisation—so long as the strict conditions are met.
From an enforcement and compliance perspective, the exemption’s narrow tailoring is significant. The defined “Bonds” and the defined “stabilising action” ensure that the carve-out cannot be stretched to other instruments or other stabilisers. The counterparty limitation (section 274 persons or sophisticated investors) further constrains the exemption to transactions with investors that meet the SFA’s sophistication thresholds or statutory categories. Finally, the 30-day limit is designed to prevent stabilisation from becoming a continuing practice that could distort market pricing beyond the initial issuance period.
For practitioners advising issuers, arrangers, or trading desks, the Regulations should be treated as a compliance gating document. Key diligence questions include: (1) whether the instrument traded is within the defined “Bonds” (including the option-related amount); (2) whether the stabilising activity is undertaken by ABN AMRO Bank N.V., Singapore branch, or its related corporations; (3) whether the counterparties fall within section 274 or qualify as sophisticated investors under section 275(2); and (4) whether the trades occurred within the 30 calendar days from the date of issuance.
In addition, because the exemption operates by excluding the application of sections 197 and 198 of the SFA, counsel should also consider what other SFA provisions may still apply to stabilising conduct. Even where an exemption exists, market conduct regimes often contain multiple overlapping prohibitions and disclosure/record-keeping expectations. A careful reading of the broader SFA framework is therefore essential when advising on stabilising transactions.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular:
- Section 337(1) (authorising power for MAS to make these Regulations)
- Sections 197 and 198 (market conduct provisions from which the exemption applies)
- Sections 274 and 275(2) (counterparty categories referenced in the exemption)
- Futures Act (referenced in the legislation metadata)
- Stabilising Act (referenced in the legislation metadata)
- 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. 7) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.