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 (SFA) (notably section 337(1))
- Enacting authority: Monetary Authority of Singapore (MAS)
- Regulation number: SL 333/2005
- Citation and commencement: Comes into operation on 2 June 2005
- Key provisions: Section 2 (definitions); Section 3 (exemption)
- Subject matter: Exemption from market conduct prohibitions for “stabilising action” in relation to specified convertible bonds
- Current version status: Current version as at 27 Mar 2026 (per the legislation portal display)
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 Action Exemption Regulations”) is a targeted set of rules made under the Securities and Futures Act (SFA). Its core function is to carve out a narrow exemption from certain market conduct provisions—specifically, sections 197 and 198 of the SFA—so that stabilising activity can occur without triggering those prohibitions.
In plain language, the Regulations recognise that, in certain bond issuances, market participants may conduct limited buying (or arrangements to buy) shortly after issuance to help stabilise the trading price. Such activity can be commercially important for orderly trading and investor confidence. However, stabilising conduct can resemble prohibited market manipulation if it is not clearly authorised and constrained. This legislation therefore creates a legal “safe harbour” for stabilising action, but only for a specific bond issue and only within a defined timeframe and against defined counterparties.
Importantly, the exemption is not general. The Regulations define “Bonds” very precisely: they refer to a particular 5-year fixed rate convertible bond due June 2010 issued by Amtek Auto Limited, with a specified maximum principal amount and conversion terms. The exemption also defines “stabilising action” by reference to the stabilising actor: Barclays Bank PLC (and its related corporations), and the action must be taken to stabilise or maintain the market price of the bonds in Singapore or elsewhere.
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the short title and states that the Regulations come into operation on 2 June 2005. For practitioners, this matters when assessing whether conduct falls within the regulatory regime at the relevant time.
Section 2 (Definitions) is the backbone of the Regulations because it tightly limits the scope of the exemption. Two defined terms are crucial:
(a) “Bonds” means the 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 means that stabilising action in relation to other bonds—whether similar in structure or issued by the same issuer—would not automatically qualify.
(b) “Stabilising action” 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. This definition is actor- and purpose-driven: it is not enough that a party buys bonds; the buying must be connected to stabilisation/market maintenance, and the actor must be Barclays (or its related corporations).
Section 3 (Exemption) sets out the operative legal effect. It provides 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, provided the stabilising action is taken 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.
From a practitioner’s perspective, Section 3 is best understood as a three-part filter:
- Time filter: stabilising action must occur within 30 days from the bond issue date. Conduct outside this window would not benefit from this exemption.
- Instrument filter: the action must relate to the defined “Bonds” (the Amtek Auto Limited convertible bonds due June 2010, up to US$150 million, with the specified conversion terms).
- Counterparty filter: the stabilising action must be taken with persons falling within section 274 of the SFA or with sophisticated investors under section 275(2). This is a critical limitation: the exemption is not designed to apply broadly to retail counterparties.
Although the extract does not reproduce sections 197 and 198 themselves, the exemption’s structure indicates that those sections contain market conduct prohibitions that would otherwise restrict stabilising-like trading. The Regulations therefore function as a statutory permission to engage in otherwise restricted conduct, but only under the conditions stated.
How Is This Legislation Structured?
The Regulations are concise and consist of an enacting formula followed by three substantive provisions:
- Section 1 (Citation and commencement): sets the legal identity of the instrument and its effective date (2 June 2005).
- Section 2 (Definitions): defines “Bonds” and “stabilising action” with high specificity, thereby limiting the exemption’s reach.
- Section 3 (Exemption): provides the exemption from SFA sections 197 and 198, subject to timing and counterparty conditions.
There are no additional parts or schedules in the extract. The legislative design is therefore “definition-led”: by defining the instrument and the stabilising actor/purpose, the Regulations ensure that Section 3 operates only in the intended factual scenario.
Who Does This Legislation Apply To?
In practical terms, the Regulations apply to parties who may engage in stabilising action in relation to the specified Amtek Auto Limited convertible bonds. Because “stabilising action” is defined as action taken by Barclays Bank PLC or its related corporations, the exemption is effectively directed at Barclays and its corporate group entities (and any related corporation acting within that definition).
However, the exemption’s availability also depends on who the stabilising trades are with. Section 3 requires that stabilising action be taken within 30 days of issue and with either persons referred to in section 274 of the SFA or with sophisticated investors under section 275(2). Accordingly, even if a qualifying actor conducts stabilising trades, the exemption would not apply if the counterparty does not fall within those categories.
Why Is This Legislation Important?
This Regulations matters because it addresses a classic tension in securities regulation: stabilising trades can support orderly markets, but they can also be misused to create an appearance of demand or price support. By exempting stabilising action from specific SFA prohibitions, the Regulations provide legal certainty for market participants involved in bond issuance and post-issuance trading.
For practitioners, the key significance lies in the precision of the safe harbour. The exemption is not a blanket permission to stabilise any bond at any time. Instead, it is constrained by: (i) the exact bond issue (instrument-specific definition), (ii) the exact stabilising actor (Barclays and related corporations), (iii) the exact timeframe (within 30 days of issue), and (iv) the exact counterparty categories (section 274 persons or sophisticated investors). This structure is typical of market conduct exemptions designed to mitigate manipulation risk.
From an enforcement and compliance perspective, these constraints mean that legal teams should focus on evidence and documentation: confirming the bond issue date, ensuring trades fall within the 30-day window, verifying counterparties’ status (section 274 category or sophisticated investor), and confirming that the trading activity is genuinely stabilising action within the defined purpose and actor scope.
Related Legislation
- Securities and Futures Act (SFA) (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 legislation metadata)
- Stabilising Act (as referenced in the legislation metadata)
- Legislation Timeline / MAS legislative timeline (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. 9) Regulations 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.