Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 9) Regulations 2005
- Act Code: SFA2001-S333-2005
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289), specifically section 337(1)
- Enacting authority: Monetary Authority of Singapore (MAS)
- Citation: SL 333/2005
- Commencement: 2 June 2005
- Status: Current version (as at 27 Mar 2026)
- Key provisions: Section 1 (citation and commencement); Section 2 (definitions); Section 3 (exemption)
- Regulatory focus: Exemption from market conduct provisions for stabilising actions relating to specified convertible bonds
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Bonds) (No. 9) Regulations 2005 (“Stabilising Exemption Regulations”) is a targeted regulatory instrument made by MAS under the Securities and Futures Act (SFA). In plain terms, it creates a narrow exemption that allows certain market participants to take “stabilising action” in relation to a specific bond issue without being caught by particular market conduct prohibitions in the SFA.
The legislation is best understood as a practical carve-out for a common capital markets technique: stabilisation. When a new bond is issued, issuers and their advisers may seek to support or maintain the bond’s market price in the immediate aftermath of issuance. This can reduce volatility and support orderly trading. However, stabilisation can also resemble conduct that market conduct rules generally seek to regulate or prohibit—hence the need for a statutory exemption.
Importantly, the exemption is not general. It is limited to stabilising action taken in respect of a defined set of bonds (the “Bonds” are precisely identified) and limited to a defined time window (within 30 days from the date of issue). It also limits who may be involved, by reference to persons specified in the SFA and to “sophisticated investors” as defined in the SFA.
What Are the Key Provisions?
Section 1 (Citation and commencement). This provision confirms the short title and the 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. 9) Regulations 2005” and came into operation on 2 June 2005. For practitioners, this matters because the exemption’s availability depends on the timing of the stabilising action relative to the bond issue and the statutory window.
Section 2 (Definitions). The Regulations define two key terms: “Bonds” and “stabilising action”. The definition of “Bonds” is highly specific. It refers to 5-year fixed rate convertible bonds due June 2010 issued by Amtek Auto Limited for a principal amount of up to US$150 million, convertible into ordinary shares of Amtek Auto Limited with a par value of 2 Indian Rupees each. This specificity signals that the exemption is issue-specific rather than product-category based.
The definition of “stabilising action” is also carefully framed. It means an action taken in Singapore or elsewhere by Barclays Bank PLC 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 inclusion of “offer or agree to buy” is significant: it captures not only completed purchases but also commitments that could influence market expectations. The “in order to” language indicates a purpose-based element—stabilisation must be the objective of the dealing activity.
Section 3 (Exemption). This is the operative provision. It states that sections 197 and 198 of the SFA 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 carried out by a person falling within one of two categories: (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 sections 197 and 198, the structure indicates that those sections contain market conduct restrictions that would otherwise apply to dealings. The exemption therefore functions as a statutory “safe harbour” for stabilisation conduct that would otherwise be prohibited or restricted. Practically, the exemption is conditional: it applies only if (i) the action is stabilising action as defined; (ii) it is taken in respect of the specified Bonds; (iii) it occurs within the 30-day period; and (iv) the dealing is undertaken by the relevant category of persons.
For a lawyer advising on compliance, the key legal work is to map the facts to each condition. The exemption is not triggered by intention alone; it must be supported by the nature of the action (buying or agreeing to buy), the identity of the stabilising party (Barclays Bank PLC or related corporations), the instrument (the defined convertible bonds), and the timing (within 30 days from issue). The additional reference to section 274 persons and sophisticated investors further narrows the permissible counterparties or participants.
How Is This Legislation Structured?
The Regulations are structured as a short, three-section instrument:
Section 1 provides the citation and commencement date.
Section 2 sets out definitions that control the scope of the exemption, particularly the identity of the Bonds and the meaning of stabilising action.
Section 3 contains the exemption itself, specifying which SFA provisions are disapplied and the conditions under which the exemption applies (instrument, time window, and relevant persons).
Notably, the Regulations do not create additional procedural requirements in the extract provided; instead, they rely on the statutory definitions and the conditional disapplication of SFA provisions. In practice, however, market conduct regimes often include broader compliance expectations (e.g., record-keeping, disclosure, and adherence to stabilisation mechanics). Even where the exemption disapplies certain prohibitions, firms typically still need to ensure that stabilisation is conducted consistently with the overall regulatory framework.
Who Does This Legislation Apply To?
The exemption is directed at stabilising action in relation to the specified Amtek Auto Limited convertible bonds. The defined “stabilising action” is limited to actions taken by Barclays Bank PLC or its related corporations. Therefore, the primary regulated entities are those within the Barclays group that conduct stabilisation activities.
However, the exemption’s application also depends on the category of person involved, by reference to section 274 of the SFA and to sophisticated investors under section 275(2) of the SFA. This means that even if a stabilising party is acting within the Barclays definition, the exemption will only apply where the stabilising action is taken with (or involves) persons meeting those statutory categories. For practitioners, this is a critical compliance checkpoint: counterparties and participants must be assessed against the SFA’s definitions and eligibility criteria.
Why Is This Legislation Important?
This legislation is important because it provides a controlled legal pathway for stabilisation of a bond issue in Singapore (and potentially in other jurisdictions) without triggering the prohibitions contained in sections 197 and 198 of the SFA. In capital markets practice, stabilisation can be commercially desirable and sometimes necessary to manage post-issuance trading dynamics. Without an exemption, stabilising purchases or commitments could be treated as market manipulation or otherwise unlawful market conduct.
From an enforcement and risk perspective, the Regulations reduce uncertainty by clearly identifying the instrument, the stabilising actor, and the time limit. The 30-day window is particularly significant: it reflects a policy choice to permit stabilisation only during the period when price discovery is most sensitive and when stabilisation is most likely to be justified as part of the issuance process.
For legal practitioners, the Regulations also illustrate how Singapore’s market conduct framework uses issue-specific subsidiary legislation to tailor exemptions. Rather than relying solely on broad exemptions, MAS can disapply particular SFA provisions for a defined bond issue and defined stabilisation conduct. This approach requires lawyers to pay close attention to the exact bond description, the identity of the stabilising party, and the statutory time and person-based conditions.
In practical terms, counsel should ensure that any stabilisation programme is documented and structured to fit within the exemption’s definitions. This includes confirming that the relevant bonds match the statutory description (including maturity, issuer, and conversion features), that stabilising activity is limited to the specified period from issue, and that the stabilising party and counterparties fall within the relevant SFA categories.
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 statute metadata)
- Stabilising Act (as referenced in the statute 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. 9) Regulations 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.