Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 8) Regulations 2005
- Act Code: SFA2001-S296-2005
- 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 296/2005
- Commencement: 11 May 2005
- Key Provisions: Section 2 (definitions); Section 3 (exemption)
- Regulatory Body: Monetary Authority of Singapore (MAS)
- Status (as provided): Current version as at 27 Mar 2026
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 8) Regulations 2005 (“Stabilising Action Exemption Regulations”) is a targeted regulatory instrument made under the Securities and Futures Act (SFA). In plain language, it creates a limited exemption from certain market conduct rules when specific parties undertake “stabilising action” in relation to a particular bond issue.
Stabilisation is a common feature of certain bond and securities offerings. During the initial period after issuance, market makers or underwriters may take steps to support or maintain the trading price of the securities. The policy rationale is to reduce volatility and facilitate orderly trading, especially when liquidity is thin immediately after issuance. However, stabilisation can also raise concerns about market manipulation or misleading price formation. Singapore’s market conduct framework therefore regulates such activity.
This legislation resolves that tension by carving out a narrow exemption: it allows stabilising purchases or offers to be made in respect of defined “Bonds” within a defined time window, and only by specified categories of persons (or in favour of specified investor types). The exemption is expressly linked to the SFA provisions that would otherwise restrict or prohibit the relevant conduct.
What Are the Key Provisions?
1. Citation and commencement (Regulation 1)
Regulation 1 provides the short title and states that the Regulations come into operation on 11 May 2005. For practitioners, the commencement date matters because the exemption is time-bound: stabilising action must occur within 30 days from the date of issue of the Bonds. Any argument about whether conduct falls inside or outside the exemption will typically turn on precise dates.
2. Definitions of “Bonds” and “stabilising action” (Regulation 2)
Regulation 2 is crucial because the exemption is not generic. It is tied to a specific bond instrument and a specific stabilisation concept.
“Bonds” are defined as the 5-year guaranteed exchangeable bonds due May 2010 issued by YTL Power Finance (Cayman) Limited for a principal amount of up to US$300 million. The bonds are guaranteed by YTL Power International Berhad and are exchangeable into ordinary shares of YTL Power International Berhad with a par value of RM0.50 per share.
“stabilising action” is defined as an action taken in Singapore or elsewhere by UBS AG (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.
Two points are particularly important for legal analysis:
- Party specificity: the stabilising actor is limited to UBS AG and its related corporations.
- Conduct specificity: the permitted actions are buying, offering to buy, or agreeing to buy—i.e., stabilisation through purchase-related commitments.
3. The exemption from SFA market conduct sections (Regulation 3)
Regulation 3 is the operative provision. It states that Sections 197 and 198 of the Act 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 two specified categories of persons.
The exemption applies where stabilising action is taken with:
- (a) a person referred to in section 274 of the Act; or
- (b) a sophisticated investor as defined in section 275(2) of the Act.
Although the extract does not reproduce Sections 197, 198, 274, or 275(2), the structure indicates that the SFA’s general market conduct rules would otherwise apply to the relevant transactions. The Regulations therefore function as a targeted “permission” to conduct stabilisation without triggering those prohibitions—so long as the conditions are met.
Practical implications of the 30-day window
The exemption is explicitly limited to stabilising action within 30 days from the date of issue. For practitioners, this means:
- Documenting the issue date of the Bonds is essential.
- Trade records must show that stabilising purchases/offers/agreement-to-buy occurred within the permitted period.
- Any stabilisation activity outside the window would likely fall back under the general SFA regime, with potential enforcement exposure.
Practical implications of the “with” requirement
Regulation 3 conditions the exemption on stabilising action being taken “with” either a section 274 person or a sophisticated investor. This wording suggests that the exemption is not merely about who stabilises (UBS AG/related corporations) but also about the counterparties or the relevant investor category involved in the stabilising transactions. A careful reading of the SFA provisions referenced would be required to determine how “with” is operationalised (e.g., whether it refers to counterparties, clients, or persons in the transaction chain).
4. Making and signature
The Regulations were made on 10 May 2005 by Heng Swee Keat, Acting Managing Director of MAS. This is standard for subsidiary legislation and can be relevant when assessing the legal history or the intended scope of the exemption.
How Is This Legislation Structured?
The Regulations are concise and structured around three provisions:
- Regulation 1 (Citation and commencement): sets the name and effective date.
- Regulation 2 (Definitions): defines the specific bond issue (“Bonds”) and the stabilisation activity (“stabilising action”).
- Regulation 3 (Exemption): provides the exemption from SFA sections 197 and 198, subject to the 30-day limit and the specified categories of persons (section 274 persons or sophisticated investors).
There are no additional parts or schedules in the extract provided, reflecting the Regulations’ purpose as a narrow, instrument-specific exemption rather than a broad regulatory framework.
Who Does This Legislation Apply To?
The Regulations apply to stabilising action in respect of the defined “Bonds” undertaken by UBS AG or its related corporations. In other words, the exemption is directed at the stabilisation conduct of that particular financial group in relation to that particular bond issue.
However, the exemption is also conditional on the stabilising action being taken “with” either a person referred to in section 274 of the SFA or a sophisticated investor under section 275(2). Practically, this means that even if UBS AG undertakes stabilisation within 30 days, the exemption may not be available if the relevant counterparties or involved persons do not fall within those categories.
Why Is This Legislation Important?
This legislation is important because it demonstrates how Singapore’s market conduct regime balances two competing objectives: (1) allowing legitimate market stabilisation to support orderly trading after issuance, and (2) preventing stabilisation from becoming a vehicle for market abuse.
For market participants—especially underwriters, dealers, and compliance teams—the Regulations provide a clear compliance pathway. If stabilising activity is structured to fall within the defined “stabilising action,” is undertaken by the specified stabiliser (UBS AG/related corporations), is carried out within the 30-day period, and involves the specified categories of persons, then the stabilising transactions are exempt from the otherwise applicable SFA provisions in Sections 197 and 198.
From an enforcement and risk perspective, the narrowness of the exemption is equally significant. Because the exemption is instrument-specific (the Bonds are precisely identified) and time-bound (30 days from issue), conduct that deviates from the defined parameters—such as stabilising other instruments, stabilising outside the window, or transacting with persons outside the section 274/sophisticated investor categories—may not be protected. Practitioners should therefore treat this as a “checklist” exemption requiring careful evidence: trade dates, counterparties, documentation of investor status, and confirmation that the activity is genuinely stabilisation (buying/offering/agreement to buy) rather than other forms of market conduct.
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)
- Stabilising Act (as referenced in the provided metadata)
- Timeline (legislation timeline reference for version control)
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. 8) Regulations 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.