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
- Commencement: 11 May 2005
- Legislative Status: Current version as at 27 Mar 2026 (per the provided extract)
- Key Provisions: Section 2 (Definitions); Section 3 (Exemption)
- Primary Regulatory Focus: Exemption from market conduct restrictions for stabilising actions in relation to specified bonds
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 essence, it carves out a narrow exemption from certain market conduct provisions—specifically, sections 197 and 198 of the SFA—so that stabilising activity can occur in connection with a particular bond issuance without triggering the prohibitions that would otherwise apply.
In plain language, the Regulations recognise that, in some bond offerings, market stabilisation may be necessary to help maintain orderly trading and reduce abrupt price volatility immediately after issuance. Stabilising actions are typically undertaken by a financial institution (or its related corporations) acting in a controlled manner. The Regulations therefore permit stabilising dealing in the specified bonds for a limited time window, subject to the conditions stated in the Regulations.
Importantly, this is not a general stabilisation regime for all bonds. It is an exemption “in respect of dealings in bonds” that is tied to a defined set of instruments and a defined set of stabilising conduct. The scope is further limited by (i) the identity of the persons who may take the stabilising action (by reference to the SFA’s categories) or (ii) the counterparty/investor status (a “sophisticated investor” as defined in the SFA), and (iii) a strict 30-day period from the date of issue.
What Are the Key Provisions?
1. Citation and commencement (Regulation 1)
Regulation 1 provides the short title and commencement date. 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 come into operation on 11 May 2005. For practitioners, this matters because the exemption is time-bound and must be assessed against the issuance date and the 30-day stabilisation window.
2. Definitions (Regulation 2)
Regulation 2 defines two critical terms: “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. They 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. This level of specificity is a hallmark of Singapore’s exemption regulations: the exemption is instrument-specific, not merely product-type general.
“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 is therefore both (i) conduct-specific (buying or offering/agreeing to buy) and (ii) purpose-specific (stabilising or maintaining market price), and (iii) person-specific (UBS AG or its related corporations).
3. The exemption from sections 197 and 198 (Regulation 3)
The operative provision is Regulation 3. It states that sections 197 and 198 of the SFA shall not apply to any stabilising action taken in respect of any of the Bonds, within 30 days from the date of issue, with stabilising action being permitted only if it is taken with one of the following counterparties:
- (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.
For a practitioner, the key legal work is to map these references back to the SFA’s framework. While the extract does not reproduce sections 197, 198, 274, or 275(2), the structure indicates that the SFA contains market conduct prohibitions (sections 197 and 198) and that the SFA also contains categories of persons (section 274) and a threshold-based investor classification (section 275(2)). The exemption is therefore conditional: stabilising dealing is not broadly permitted with any market participant; it is permitted only when the stabilising action is taken with the specified categories of persons.
4. Time limitation and compliance implications
The exemption is expressly limited to stabilising action taken within 30 days from the date of issue. This is a critical compliance point. Even if the stabilising activity is otherwise consistent with the definition (UBS AG or related corporations; buying or offering/agreeing to buy; purpose of stabilising price), it will fall outside the exemption if it occurs after the 30-day period. Practically, this requires careful record-keeping of trade dates, settlement dates, and the “date of issue” (which may be defined in the offering documentation or determined under the SFA’s interpretive approach).
How Is This Legislation Structured?
The Regulations are concise and consist of an enacting formula and three substantive provisions:
- Regulation 1 (Citation and commencement): establishes the short title and the commencement date (11 May 2005).
- Regulation 2 (Definitions): defines the specific bond instrument (“Bonds”) and the permitted stabilising conduct (“stabilising action”).
- Regulation 3 (Exemption): provides the exemption from sections 197 and 198 of the SFA for stabilising actions in respect of the defined bonds, subject to the 30-day limit and the counterparty conditions (section 274 persons or sophisticated investors under section 275(2)).
There are no additional parts or schedules in the provided extract, reflecting the Regulations’ purpose as a targeted exemption rather than a comprehensive market conduct code.
Who Does This Legislation Apply To?
Although the exemption is framed as an exemption from the SFA’s market conduct provisions, it effectively applies to the persons who may take stabilising action and the counterparties with whom stabilising action may be taken. The definition of “stabilising action” restricts the conduct to actions taken by UBS AG or its related corporations. Therefore, the exemption is not available to other dealers or issuers acting independently.
Additionally, Regulation 3 restricts the exemption to stabilising actions taken with either (a) a person referred to in section 274 of the SFA or (b) a sophisticated investor under section 275(2). This means that even where UBS AG (or a related corporation) undertakes stabilising trades, the exemption hinges on the legal status of the counterparty. Practitioners should therefore treat the counterparty classification as a gating requirement for reliance on the exemption.
Why Is This Legislation Important?
This Regulations is important because it illustrates how Singapore regulates market conduct while allowing controlled flexibility for capital markets transactions. Stabilising activity can be commercially beneficial in bond offerings—particularly exchangeable bonds—where liquidity and price discovery may be fragile immediately after issuance. Without an exemption, stabilising dealing could be characterised as conduct prohibited under the SFA’s market conduct provisions.
From an enforcement and compliance perspective, the Regulations provide a clear legal pathway for market participants to conduct stabilisation in a manner that is intended to be consistent with regulatory objectives. However, the exemption is narrow: it is limited to a specific bond issue, a specific stabilising dealer (UBS AG and related corporations), a specific type of dealing (buying or offering/agreeing to buy), and a strict time window (30 days from issue). This narrowness reduces regulatory ambiguity and helps the Monetary Authority of Singapore (MAS) assess whether stabilising trades fall within the intended safe harbour.
For practitioners advising issuers, lead managers, or trading desks, the practical impact is that reliance on the exemption requires a structured compliance analysis: (i) confirm the instrument matches the defined “Bonds”; (ii) confirm the stabilising activity fits the definition of “stabilising action”; (iii) confirm the stabilising trades are within the 30-day window; and (iv) confirm the counterparties are within section 274 or are sophisticated investors under section 275(2). Failure on any of these points may expose the stabilising conduct to the prohibitions in sections 197 and 198 of the SFA.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular, sections 197, 198, 274, 275(2), and the regulation-making power in section 337(1).
- Futures Act (as referenced in the provided metadata context).
- Stabilising Act (as referenced in the provided metadata context).
- Legislation Timeline / MAS subsidiary legislation register (for version control 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.