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
- Legislation Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting Power: Section 337(1) of the Securities and Futures Act
- Commencement: 11 May 2005
- Regulation Number: SL 296/2005
- Status: Current version as at 27 Mar 2026 (per legislation database)
- Key Provisions: Regulation 1 (Citation and commencement); Regulation 2 (Definitions); Regulation 3 (Exemption)
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 Exemption Regulations”) is a targeted regulatory instrument. It creates a narrow exemption from certain market conduct rules in the Securities and Futures Act (“SFA”) for stabilising transactions involving a specific bond issue.
In plain terms, the Regulations recognise that, in certain bond offerings, market participants may need to undertake “stabilising action” to help maintain orderly trading and reduce excessive price volatility immediately after issuance. However, stabilising conduct can resemble prohibited market manipulation if not carefully bounded. The Regulations therefore carve out a controlled exception for stabilising activities relating to a defined set of bonds, within a defined time window, and only by specified categories of persons.
The instrument is not a general authorisation for all stabilisation. It is an “issue-specific” exemption: it applies only to the particular bonds described in the definition of “Bonds” and only to stabilising actions taken within 30 days from the date of issue. The exemption is also limited to stabilising actions undertaken by UBS AG (or its related corporations) and to stabilising actions carried out by persons falling within the relevant SFA categories (including certain regulated persons and sophisticated investors).
What Are the Key Provisions?
Regulation 1: Citation and commencement. This is the formal provision that identifies the Regulations and sets the date they come into operation. The Regulations may be cited as the “Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 8) Regulations 2005” and they commenced on 11 May 2005. For practitioners, this matters when assessing whether stabilising conduct occurred within the regulatory framework and whether any enforcement analysis would treat the exemption as available at the relevant time.
Regulation 2: Definitions. The Regulations define two central concepts: “Bonds” and “stabilising action”.
“Bonds” are precisely identified 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, guaranteed by YTL Power International Berhad, and exchangeable into ordinary shares of YTL Power International Berhad (par value RM0.50 per share). This level of specificity is crucial: the exemption is not available for other bond issues, even if they are similar in structure or issuer group.
“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. The definition therefore focuses on purchase-related conduct (including offers or agreements to purchase) and ties the purpose to stabilisation/price maintenance.
Regulation 3: Exemption from Sections 197 and 198 of the SFA. This 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, with stabilising action taken by 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.
For a practitioner, the key legal effect is that the stabilising conduct—if it meets all conditions—falls outside the scope of the prohibitions or restrictions contained in Sections 197 and 198. While the extract provided does not reproduce those SFA sections, the structure indicates that those provisions are part of the SFA’s market conduct framework (typically dealing with prohibited market manipulation or improper dealing practices). The exemption is therefore a statutory “safe harbour” for stabilisation, but only within the strict boundaries set out in the Regulations.
Time limitation: 30 days from the date of issue. The exemption is time-bound. Stabilising action taken after the 30-day period would not benefit from the exemption, even if it otherwise resembles stabilisation. This is a common enforcement focal point: firms must be able to evidence the date of issue and the timing of stabilising trades or commitments.
Person limitation: section 274 persons or sophisticated investors. The exemption is also person-limited. Stabilising action must be taken by a person within the relevant SFA category (section 274) or by a sophisticated investor (section 275(2)). This requirement is particularly important where trading desks, syndicate members, or related entities execute transactions. Counsel should map the executing entity against the SFA categories and ensure the exemption is not inadvertently relied upon by an entity that does not qualify.
How Is This Legislation Structured?
The Regulations are compact and consist of three main provisions:
- Regulation 1 sets out the citation and commencement.
- Regulation 2 provides definitions that determine the scope of the exemption—especially the precise identification of the bond issue and the definition of stabilising action.
- Regulation 3 contains the exemption, specifying which SFA sections are disapplied, the time window, and the qualifying persons.
From a drafting and compliance perspective, the Regulations follow a typical subsidiary-legislation pattern: define the subject matter, define the relevant conduct, and then disapply specific statutory provisions if conditions are met. The absence of additional parts or detailed procedural requirements suggests that the exemption is intended to be applied directly based on the factual matrix (bond identity, stabilisation purpose, timing, and executing party).
Who Does This Legislation Apply To?
The Regulations apply to stabilising actions taken in respect of the defined YTL Power bond issue and undertaken by UBS AG or its related corporations, as captured by the definition of “stabilising action”. In practice, this will be relevant to investment banks and their group entities involved in underwriting, syndication, and post-issuance market support activities.
However, the exemption’s availability also depends on who takes the stabilising action. Regulation 3 restricts the exemption to stabilising action taken by either (i) persons referred to in section 274 of the SFA or (ii) sophisticated investors under section 275(2). Therefore, even if the trading activity is conceptually “stabilising action”, the exemption may not apply if the executing party does not fall within the qualifying categories. For legal teams, this means entity-level due diligence is as important as transaction-level analysis.
Why Is This Legislation Important?
This legislation is important because it demonstrates how Singapore balances two competing regulatory objectives: (1) preventing market misconduct and improper dealing, and (2) allowing legitimate market stabilisation in the context of bond issuance. By disapplying specific SFA provisions for a limited period and defined circumstances, the Regulations provide legal certainty to market participants who engage in stabilising activities that are intended to support orderly trading rather than to mislead investors.
For practitioners, the Regulations are particularly significant in compliance and enforcement risk management. Stabilising trades can be scrutinised under general market conduct rules. The exemption offers a structured defence—but only if all conditions are satisfied. Counsel should therefore advise on: documenting the stabilisation rationale; ensuring trades occur within the 30-day window; confirming the bond issue matches the statutory definition; and verifying that the executing entity qualifies under section 274 or is a sophisticated investor under section 275(2).
Finally, the Regulations are a reminder that exemptions in securities regulation are often narrowly tailored. An exemption for one bond issue and one stabilisation mechanism does not automatically extend to other instruments, other issuers, or other stabilisation strategies. This is especially relevant for groups with multiple bond programmes and for desks that may execute similar activities across different products.
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 platform’s metadata context).
- Stabilising Act (as referenced in the platform’s metadata context).
- Timeline / Legislation timeline (for version verification and amendment history).
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.